What is the objective of a Market Research?
The aim of carrying out market research is that of identifying whether there is a market for the technology itself, or for other technologies, products and services that might be derived from it. In addition it assesses the potential relevant needs, characterised by customer segments and geographical location.
What type of analysis is undertaken?
A market research would initially entail a thorough understanding of the product/service/technology being proposed in order to undertake a primary market research which determines what might be the possible applications of the proposed idea and in which type of market it would fit, and the applicable market segments.
As a result, the analysis would establish the potential impact of the new idea on the market, given other new market ideas and existing products/services/technologies on the market, as well as identify the relevant technology trends and provide details on how different sectors are investing in technological products. Such trends will be based on data obtained from a number of technology market research reports and online qualified industry surveys, blogs and publications, sources of news, trends and market information with a declared methodology.
Subsequently, the market research would assess the perceived differentiating factors and the Unique Selling Points (USPs) of the product/service/technology as well as the establishment of the potential market/markets for the technology, and for products/services/technologies which can be derived from it, categorised into relevant segments for further analysis.
Based on the above assessment, the market research study would then provide an indication of the potential sizes and growth rates of markets and those of any market segments identified as well as the recommended target country markets, that is, the geographical market.
The next step in the market research report is that of establishing the forecasted demand based on sound methodological approaches, including indications of pricing and revenue generation. This should indicate whether there is an existing demand for the proposed products/services/ technologies or whether it can be created.
In addition to the above, this exercise would identify the potential for access to the markets and market segments identified, taking into account regulatory issues, extent of competition and customer readiness. At this stage it will also include a risk assessment with respect to the market situation, and how this may impinge upon demand, pricing and revenue as well as a review of the environmental forces (political, economic, societal and technological) that could influence the success of the products/services/technologies.
What are the main outcomes?
- The possible market in which the idea could fit in and the potential market segments.
- The differentiating factors and the USPs
- The potential market size
- The geographical market
- The demand for the resulting products/services/technologies
- Identification of the ease of access to the identified market and any existing barriers to entry into the market including environmental forces.
Product Development Costing
What are the outcomes of a Product Development Costing?
Many a times one of the first questions asked about a new product or invention is how much will this cost to produce or manufacture. A product development costing exercise will provide initial estimates of the costs involved in order to get the technology being developed on to the market through a defined product/service. This will indicate whether it is financially feasible to invest into the research and innovation proposal.
What type of costs will be calculated?
A product development costing exercise will primarily identify and estimate the costs involved in the production and supply of the identified product, service or technology. This exercise includes an assessment of the dependence of the identified and estimated costs on critical factors, such as the use of essential inputs and transport to different markets.
To this end this exercise would try and identify the direct costsinvolved in the production of the product/service under consideration, including material and process selection as well as labour costs. In addition it would identify the overhead costs, which refer to the indirect costs that are still related to the cost object, but cannot be directly related to the actual production of the product/service. These may include environmental impact costs and regulatory/certification costs, health and safety costs, water and electricity, general administration costs, quality control, and general maintenance. In this regard, a risk assessment will be undertaken to highlight the principal risks to which cost estimates are subject, and their potential effects. In addition, the estimated costs should also cover any technology transfer to be undertaken by the industry acquiring the technology, if any.
The costing assessment will undertake an analysis of the extent to which unit costs depend on scale of production, including an assessment of the technological likelihood that a minimum efficient scale is achieved.
By the end of the exercise it would be possible to have an estimate of the minimum financial breakeven point that would be required in order to fully absorb the identified fixed costs.