Design a Winning Business Based on Your Idea
 Email from Susan
 About this assignment
 What's involved in defining a target market?
 What does effective market research involve?
 What do the experts have to say about validating a target market?

What does effective market research involve?

There is a potential to spend more time in this activity than the benefits you receive will warrant. That's why it is critical to focus your market research by first developing a specific list of questions whose answers will help advance your thinking about your particular business idea.

For example, imagine that an entrepreneur plans to launch a business that manufactures and sells a new personal digital assistant (PDA) device. He spends several days conducting exit interviews of customers leaving a major electronics superstore. He takes nearly 15 minutes to conduct each interview and asks each customer questions ranging that range from, “What was the last vehicle you purchased?” to “How much money do you spend each year on personal electronics?” Upon reviewing the information he gathered, our entrepreneur discovers that he neglected to ascertain how important brand was to each customer when they made a personal digital assistant purchase—information that's crucial to helping him build an effective business strategy. If this entrepreneur had taken the time to first create a hypothesis about the buying behaviors of his target consumer, and then designed his interview questions to clearly and succinctly test that hypothesis, he would have uncovered more useful information with a far lower investment of his time and energy.

What Next: Click "What do the experts have to say about validating a target market?"

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