When researching a possible new customer market for your manufacturing operation, you need to identify the business decision you are trying to make before making a selection as to what type of survey or other form of research you want to do. Before selecting the research method you wish to pursue, you need to define what you want to find out, and how those answers could potentially impact your next move.
A packaging manufacturer who is thinking of marketing their packaging products to customers in the food industry might ask, "Is this a good market?" But that is way too ambiguous. A more meaningful first question could be: What is the sales potential for our packaging products in this market, and which existing competitors currently supply these buyers? That defines the objective of your research and enables your organization to narrow down the types of information related to your decisions.
Connect the research to a decision
Before choosing how you will gather information, you need to decide how you will use the findings. This is known as an "action standard." In order to collect data, management must first agree upon what they would do if certain types of data were collected. As an example, if there was evidence of demand that the manufacturer could meet, then that would likely support further development. If the evidence showed little opportunity to compete, then the manufacturer might elect to continue looking into alternative markets. The intention is to develop an objective means of evaluating the potential opportunity and not simply to affirmatively conclude that expanding is a viable option.
Start with the information you have
Once you've defined what you need to know and why you're doing the study, you'll want to review what's available. This includes internal sales records, previous customer contacts (inquiries), any prior research done on similar subjects, as well as publicly available industry reports. All of these are considered secondary sources since all of the information already exists. Once you've reviewed all of the available secondary sources, you can determine what remains unknown and thus what additional, primary research may be necessary. This will save you from having to spend time/money to collect information that already resides within your organization.
Allow time to use the findings
Time is also important. Based upon when you expect to make your final decision regarding entering a new market, you'll want to back track far enough so that you have sufficient time to collect/analyze/dissect the data and report it back to management. If you provide this data after a decision has been made regarding entry into a new market, then the likelihood of influencing that decision diminishes greatly.
Compare the expected benefit with the cost
Finally, you should also determine whether or not the potential benefits justify the costs associated with gathering that information. Will knowing better information significantly enhance your ability to effectively expand into a new market? If so, then conducting this research could be worthwhile; otherwise, perhaps not.
I believe that a successful research project begins with a clearly defined decision point, focused objectives and a well-defined plan for utilizing the results. By employing this methodology, manufacturers can more rationally expand into new customer markets while recognizing that there will always be some degree of uncertainty involved.
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