Conducting market research is an extremely important precursor to getting a patent. It is the process that answers the question “Is this even worth it?” Indeed, without conducting market research, you are in essence making a blind guess that someone, somewhere will want to buy whatever it is you ultimately make. This is a costly error, and it is also a needless one. By taking the time to research your market, you can firm up exactly who that someone is and how they will buy your product. You can then proceed to market to them with the confidence that only real knowledge and insight can offer.
So what exactly is market research, and how do you conduct it? The best way to think about market research is answering a series of questions. Each one you answer will unlock some more of the puzzle that is creating and profitably selling something from your patent. That said, you should conduct market research in phases. The first phase is market information.
In this phase, you want to immerse yourself in trade journals, spec sheets, and periodicals about the industry your patent pertains to. You want to discover the prices of various commodities in the market that you will traffic in, the supply and demand patterns that determine the flow of the market. The goal of all this fact-finding is answering the following questions:
1. Who are my customers? (age, sex, income, etc.)
2. Where are they and how can I reach them? (what magazines/newspapers do they read?)
3. What quantity (and quality) do they want? (are there surveys that gather this data?)
4. What is the best time to sell? (Seasonal, yearly, etc.)
The importance of gathering information about your market cannot be stressed enough. As evidence, just imagine trying to seriously go out and sell a product to a market you know nothing about. How would you know where to sell? How would you know how to package it, and in what quantity? How would you know what warranties or guarantees to offer? None of these questions need to be mysteries to you, and if you are going to succeed, they cannot be.
Another important aspect of market research is market trends. This is the upward or downward movements of your specific market during a period of time. Now, the size of a market is obviously more difficult to determine if your product is brand new. But even in this case, you will have to derive your figures from the number of customers in an existing market. Let’s say you have invented a chip that gets implanted into your brain so you can control the TV with your thoughts. This is a new product, to be sure, but you can and must use existing markets to gauge your likelihood of success. For example, you would seek sales figures and segment data about the universal remote control market, which is arguably the closest comparison to what you have invented and want to sell.
In addition to market size, you want to determine information about your competitors. Are your major competitors growing in profitability and size, or shrinking? Which customers are they trying to reach? What are their profit margins? What channels do they advertise through? This information can be obtained by first-hand observation (ie, studying their fliers or commercials, interviewing present and former employees, etc.) or through other sources.
As mentioned earlier, industry trade journals are an excellent source of market research data. Most public and college libraries offer massive electronic databases where these journals can be read, studied, and printed for your analysis. These are often considered the definitive sources for conducting market research, so you would be well-advised to consult them.
In addition to libraries, many trade journals and industry sources can be accessed via the Internet. Yahoo, for example, offers an abundance of such material segmented by industry. Simply click the industry you want to research (law, jewelry, automotive, etc.) and you can browse a list of sources pertaining to them.