Market Research for Startups · 2020-05-20 · Dr Preet Deep Singh Market Research for Startups. Recap Drake’s Equation Doing a Live Case: Baby Product, StrollerWay Forward Basics

Market Research for StartupsSession 2

Dr Preet Deep Singh

May 18, 2020

Recap Drake’s Equation Doing a Live Case: Baby Product, Stroller Way Forward

Basics

What is Market Research?

Who will buy your product?

Dr Preet Deep SinghMarket Research for Startups


Basics

When do we do Market Research?

ALL THE TIME

People ChangePreferences ChangeCompetitors Emerge



Basics

When do we do Market Research?

ALL THE TIMEPeople ChangePreferences ChangeCompetitors Emerge



Knowing the Pyramid Technique

How to do it?

Total Population

Those who can payThose who can affordThose you can reachOther factors

LoyaltyTrendLaw




How to do it?

Total PopulationThose who can pay

Those who can affordThose you can reachOther factors

LoyaltyTrendLaw




How to do it?

Total PopulationThose who can payThose who can afford

Those you can reachOther factors

LoyaltyTrendLaw




How to do it?

Total PopulationThose who can payThose who can affordThose you can reach

Other factorsLoyaltyTrendLaw




How to do it?

Total PopulationThose who can payThose who can affordThose you can reachOther factors

LoyaltyTrendLaw




How to do it?

Total PopulationThose who can payThose who can affordThose you can reachOther factors

LoyaltyTrendLaw



STP

Segment Target Position

1 Segmentation:

Divide the population into parts2 Target: Decide on which part is relevant for you3 Position: What your product should convey



STP


1 Segmentation: Divide the population into parts2 Target:

Decide on which part is relevant for you3 Position: What your product should convey



STP


1 Segmentation: Divide the population into parts2 Target: Decide on which part is relevant for you3 Position:

What your product should convey



STP


1 Segmentation: Divide the population into parts2 Target: Decide on which part is relevant for you3 Position: What your product should convey



Estimating the Number of Intelligent Civilizations in the Universe

Revisiting Drake’s Equation

Figure: Visual representation of Drake’s equation to calculate theprobability of coming across Extra-Terrestrial Life from SETIInstitute.




Revisiting Drake’s Equation

Figure: Visual representation of Drake’s equation to calculate theprobability of coming across Extra-Terrestrial Life from SETIInstitute.




Using this in Market Sizing

Size = Population∗PPay ∗PReach∗PInterest ∗POtherFactorsWhat proportion of the population can pay for thisservice?

What proportion of population might be interested? This depends on SegmentationWhat percentage you can reach with yourgeographic spread? Other factors include: trendsand other barriers(dependent upon product)





Size = Population∗PPay ∗PReach∗PInterest ∗POtherFactorsWhat proportion of the population can pay for thisservice?What proportion of population might be interested?

This depends on SegmentationWhat percentage you can reach with yourgeographic spread? Other factors include: trendsand other barriers(dependent upon product)





Size = Population∗PPay ∗PReach∗PInterest ∗POtherFactorsWhat proportion of the population can pay for thisservice?What proportion of population might be interested? This depends on Segmentation

What percentage you can reach with yourgeographic spread? Other factors include: trendsand other barriers(dependent upon product)





Size = Population∗PPay ∗PReach∗PInterest ∗POtherFactorsWhat proportion of the population can pay for thisservice?What proportion of population might be interested? This depends on SegmentationWhat percentage you can reach with yourgeographic spread?

Other factors include: trendsand other barriers(dependent upon product)





Size = Population∗PPay ∗PReach∗PInterest ∗POtherFactorsWhat proportion of the population can pay for thisservice?What proportion of population might be interested? This depends on SegmentationWhat percentage you can reach with yourgeographic spread? Other factors include: trendsand other barriers(dependent upon product)



Understanding the Process

Where do we Start?

1 Get clarity on the product

2 Get a plan3 Identify Resources4 Loop Back

Understand that this process is iterative.




Where do we Start?

1 Get clarity on the product2 Get a plan

3 Identify Resources4 Loop Back





Where do we Start?

1 Get clarity on the product2 Get a plan3 Identify Resources

4 Loop BackUnderstand that this process is iterative.




Where do we Start?

1 Get clarity on the product2 Get a plan3 Identify Resources4 Loop Back





Where do we Start?

1 Get clarity on the product2 Get a plan3 Identify Resources4 Loop Back





Clarity on the Product

What is the price point?

2k? 3k? 4k? 10k? 15k?What is the utility? convenience? durability?What is the innovation? new feature? new design?What is the cost to produce?





What is the price point? 2k? 3k? 4k? 10k? 15k?

What is the utility? convenience? durability?What is the innovation? new feature? new design?What is the cost to produce?





What is the price point? 2k? 3k? 4k? 10k? 15k?What is the utility?

convenience? durability?What is the innovation? new feature? new design?What is the cost to produce?





What is the price point? 2k? 3k? 4k? 10k? 15k?What is the utility? convenience? durability?

What is the innovation? new feature? new design?What is the cost to produce?





What is the price point? 2k? 3k? 4k? 10k? 15k?What is the utility? convenience? durability?What is the innovation?

new feature? new design?What is the cost to produce?





What is the price point? 2k? 3k? 4k? 10k? 15k?What is the utility? convenience? durability?What is the innovation? new feature? new design?

What is the cost to produce?





What is the price point? 2k? 3k? 4k? 10k? 15k?What is the utility? convenience? durability?What is the innovation? new feature? new design?What is the cost to produce?





What is the price point? 2k? 3k? 4k? 10k? 15k?What is the utility? convenience? durability?What is the innovation? new feature? new design?What is the cost to produce?


Set of Options

Price Point High Medium LowPositioning Reliability / Con-

venienceAvailability /Freebies / Colorsetc.

Affordability

Utility Flexibility, Brand Quick Fix, Dis-tribution

Does asPromised

Innovation Needs Brand, lit-tle innovation

Needs MediumInnovation

Needs High inno-vation

Durability Complete for 1kid or longer

2 kids 1 kid, multi-use

Segment Rich with kids Middle Class Lower MiddleClass

But... KidsUpper Middleand Above

Avg Middle class Lower MiddleClass

Set of Options

Price Point High Medium LowPositioning Reliability / Con-

venienceAvailability /Freebies / Colorsetc.

Affordability

Utility Flexibility, Brand Quick Fix, Dis-tribution

Does asPromised

Innovation Needs Brand, lit-tle innovation

Needs MediumInnovation

Needs High inno-vation

Durability Complete for 1kid or longer

2 kids 1 kid, multi-use

Segment Rich with kids Middle Class Lower MiddleClass

But... KidsUpper Middleand Above

Avg Middle class Lower MiddleClass


Using Price

Using Price to Narrow Down population

Make an Assumption: What percentage of their monthlyincome would parents spend on a stroller?

At 5% assumption and price point of 25k, we wantsomeone with an income of 25000 ∗ 100/5 = 500000How many people earn INR 500k per month ? Now wherecan we get this data? Think of a proxy...



Using Price


Make an Assumption: What percentage of their monthlyincome would parents spend on a stroller?At 5% assumption and price point of 25k, we wantsomeone with an income of 25000 ∗ 100/5 = 500000

How many people earn INR 500k per month ? Now wherecan we get this data? Think of a proxy...



Using Price


Make an Assumption: What percentage of their monthlyincome would parents spend on a stroller?At 5% assumption and price point of 25k, we wantsomeone with an income of 25000 ∗ 100/5 = 500000How many people earn INR 500k per month ?

Now wherecan we get this data? Think of a proxy...



Using Price


Make an Assumption: What percentage of their monthlyincome would parents spend on a stroller?At 5% assumption and price point of 25k, we wantsomeone with an income of 25000 ∗ 100/5 = 500000How many people earn INR 500k per month ? Now wherecan we get this data?

Think of a proxy...



Using Price


Make an Assumption: What percentage of their monthlyincome would parents spend on a stroller?At 5% assumption and price point of 25k, we wantsomeone with an income of 25000 ∗ 100/5 = 500000How many people earn INR 500k per month ? Now wherecan we get this data? Think of a proxy...


Data from Income Tax

Figure: Google search result

Answers at LiveMint.com

Figure: Google search result


Using Price

Where are we?

There are 1.2 lakh people who earn in our salary range

These are only individuals You must know that IncomeTax Department have SEVEN types of personsCompanies are also included But can a stroller be shownas a Corporate Expenditure? NO. At least you can’t saythat in front of your investors.So this number is broadly fine



Using Price

Where are we?

There are 1.2 lakh people who earn in our salary rangeThese are only individuals

You must know that IncomeTax Department have SEVEN types of personsCompanies are also included But can a stroller be shownas a Corporate Expenditure? NO. At least you can’t saythat in front of your investors.So this number is broadly fine



Using Price

Where are we?

There are 1.2 lakh people who earn in our salary rangeThese are only individuals You must know that IncomeTax Department have SEVEN types of personsCompanies are also included

But can a stroller be shownas a Corporate Expenditure? NO. At least you can’t saythat in front of your investors.So this number is broadly fine



Using Price

Where are we?

There are 1.2 lakh people who earn in our salary rangeThese are only individuals You must know that IncomeTax Department have SEVEN types of personsCompanies are also included But can a stroller be shownas a Corporate Expenditure?

NO. At least you can’t saythat in front of your investors.So this number is broadly fine



Using Price

Where are we?

There are 1.2 lakh people who earn in our salary rangeThese are only individuals You must know that IncomeTax Department have SEVEN types of personsCompanies are also included But can a stroller be shownas a Corporate Expenditure? NO.

At least you can’t saythat in front of your investors.So this number is broadly fine



Using Price

Where are we?

There are 1.2 lakh people who earn in our salary rangeThese are only individuals You must know that IncomeTax Department have SEVEN types of personsCompanies are also included But can a stroller be shownas a Corporate Expenditure? NO. At least you can’t saythat in front of your investors.So this number is broadly fine



Critical Thinking

Questions you should ask your team

Are these people in 1.2 lakh households?

Would these people have babies ? But their kids mightand this could be a personal giftWhere do they buy strollers?What are they looking for ? Are they looking for yourinnovation?Which cities are these people in?

What this does is, it takes you back to the drawing board.



Critical Thinking


Are these people in 1.2 lakh households?Would these people have babies ?

But their kids mightand this could be a personal giftWhere do they buy strollers?What are they looking for ? Are they looking for yourinnovation?Which cities are these people in?




Critical Thinking


Are these people in 1.2 lakh households?Would these people have babies ? But their kids might

and this could be a personal giftWhere do they buy strollers?What are they looking for ? Are they looking for yourinnovation?Which cities are these people in?




Critical Thinking


Are these people in 1.2 lakh households?Would these people have babies ? But their kids mightand this could be a personal giftWhere do they buy strollers?

What are they looking for ? Are they looking for yourinnovation?Which cities are these people in?




Critical Thinking


Are these people in 1.2 lakh households?Would these people have babies ? But their kids mightand this could be a personal giftWhere do they buy strollers?What are they looking for ?

Are they looking for yourinnovation?Which cities are these people in?




Critical Thinking


Are these people in 1.2 lakh households?Would these people have babies ? But their kids mightand this could be a personal giftWhere do they buy strollers?What are they looking for ? Are they looking for yourinnovation?

Which cities are these people in?What this does is, it takes you back to the drawing board.



Critical Thinking


Are these people in 1.2 lakh households?Would these people have babies ? But their kids mightand this could be a personal giftWhere do they buy strollers?What are they looking for ? Are they looking for yourinnovation?Which cities are these people in?




Critical Thinking


Are these people in 1.2 lakh households?Would these people have babies ? But their kids mightand this could be a personal giftWhere do they buy strollers?What are they looking for ? Are they looking for yourinnovation?Which cities are these people in?




Just for Closure

What Size did we arrive at?

Size = Population ∗ PPay ∗ PReach ∗ PInterest ∗ POtherFactorsPopulation * Pay = 1.2 lakhYour Reach could be 0.5 or 50 of the entire marketThe proportion of customers you can break away fromcompetitors = 0.25? or 0.3?Bringing us toSize =: 1.2 ∗ 0.5 ∗ 0.3Size = 0.18lakh18000 is your serviceable market



Just for Closure


Size = Population ∗ PPay ∗ PReach ∗ PInterest ∗ POtherFactors

Population * Pay = 1.2 lakhYour Reach could be 0.5 or 50 of the entire marketThe proportion of customers you can break away fromcompetitors = 0.25? or 0.3?Bringing us toSize =: 1.2 ∗ 0.5 ∗ 0.3Size = 0.18lakh18000 is your serviceable market



Just for Closure


Size = Population ∗ PPay ∗ PReach ∗ PInterest ∗ POtherFactorsPopulation * Pay =

1.2 lakhYour Reach could be 0.5 or 50 of the entire marketThe proportion of customers you can break away fromcompetitors = 0.25? or 0.3?Bringing us toSize =: 1.2 ∗ 0.5 ∗ 0.3Size = 0.18lakh18000 is your serviceable market



Just for Closure


Size = Population ∗ PPay ∗ PReach ∗ PInterest ∗ POtherFactorsPopulation * Pay = 1.2 lakhYour Reach could be 0.5 or 50 of the entire market

The proportion of customers you can break away fromcompetitors = 0.25? or 0.3?Bringing us toSize =: 1.2 ∗ 0.5 ∗ 0.3Size = 0.18lakh18000 is your serviceable market



Just for Closure


Size = Population ∗ PPay ∗ PReach ∗ PInterest ∗ POtherFactorsPopulation * Pay = 1.2 lakhYour Reach could be 0.5 or 50 of the entire marketThe proportion of customers you can break away fromcompetitors =

0.25? or 0.3?Bringing us toSize =: 1.2 ∗ 0.5 ∗ 0.3Size = 0.18lakh18000 is your serviceable market



Just for Closure


Size = Population ∗ PPay ∗ PReach ∗ PInterest ∗ POtherFactorsPopulation * Pay = 1.2 lakhYour Reach could be 0.5 or 50 of the entire marketThe proportion of customers you can break away fromcompetitors = 0.25? or 0.3?Bringing us toSize =: 1.2 ∗ 0.5 ∗ 0.3Size = 0.18lakh18000 is your serviceable market



Just for Closure

Value of Assumptions

Our Market could be 30 times ofthis if we change our assumption

We assumed 5% of monthly income for stroller. If we assume 2%of annual income, then our base size goes toPopulation * Pay = 41 lakhBringing us toSize =: 41 ∗ 0.5 ∗ 0.3Size = 6.15lakh6.15 lakh



Just for Closure


Our Market could be 30 times ofthis if we change our assumptionWe assumed 5% of monthly income for stroller. If we assume 2%of annual income, then our base size goes to

Population * Pay = 41 lakhBringing us toSize =: 41 ∗ 0.5 ∗ 0.3Size = 6.15lakh6.15 lakh



Just for Closure


Our Market could be 30 times ofthis if we change our assumptionWe assumed 5% of monthly income for stroller. If we assume 2%of annual income, then our base size goes toPopulation * Pay =

41 lakhBringing us toSize =: 41 ∗ 0.5 ∗ 0.3Size = 6.15lakh6.15 lakh



Just for Closure


Our Market could be 30 times ofthis if we change our assumptionWe assumed 5% of monthly income for stroller. If we assume 2%of annual income, then our base size goes toPopulation * Pay = 41 lakh

Bringing us toSize =: 41 ∗ 0.5 ∗ 0.3Size = 6.15lakh6.15 lakh



Just for Closure


Our Market could be 30 times ofthis if we change our assumptionWe assumed 5% of monthly income for stroller. If we assume 2%of annual income, then our base size goes toPopulation * Pay = 41 lakhBringing us to

Size =: 41 ∗ 0.5 ∗ 0.3Size = 6.15lakh6.15 lakh



Just for Closure


Our Market could be 30 times ofthis if we change our assumptionWe assumed 5% of monthly income for stroller. If we assume 2%of annual income, then our base size goes toPopulation * Pay = 41 lakhBringing us toSize =: 41 ∗ 0.5 ∗ 0.3

Size = 6.15lakh6.15 lakh



Just for Closure


Our Market could be 30 times ofthis if we change our assumptionWe assumed 5% of monthly income for stroller. If we assume 2%of annual income, then our base size goes toPopulation * Pay = 41 lakhBringing us toSize =: 41 ∗ 0.5 ∗ 0.3Size = 6.15lakh

6.15 lakh



Just for Closure


Our Market could be 30 times ofthis if we change our assumptionWe assumed 5% of monthly income for stroller. If we assume 2%of annual income, then our base size goes toPopulation * Pay = 41 lakhBringing us toSize =: 41 ∗ 0.5 ∗ 0.3Size = 6.15lakh6.15 lakh



Tools you can GoogleIf you Google Market Research it will give you a set ofresources:

R, SPSS, Python, TableauGoogle Analytics, Data website, Site ProfilerSurvey Monkey, MailChimp

These are forPrimary DataSecondary DataVisualization/Presentation of Data




R, SPSS, Python, Tableau

Google Analytics, Data website, Site ProfilerSurvey Monkey, MailChimp





R, SPSS, Python, TableauGoogle Analytics, Data website, Site Profiler

Survey Monkey, MailChimpThese are for

Primary DataSecondary DataVisualization/Presentation of Data













Helpful Skills

Desk ResearchWeb crawlingKnowing where to get whatLogical thinkingGuesstimates



D I Y

Look up people and products

Do this exercise for some known productsPing me in case of any issues @DrPreetDeepThe book on Amazon: Starting Up in India...is Free fortoday



D I Y

Look up people and productsDo this exercise for some known products

Ping me in case of any issues @DrPreetDeepThe book on Amazon: Starting Up in India...is Free fortoday



D I Y

Look up people and productsDo this exercise for some known productsPing me in case of any issues @DrPreetDeep

The book on Amazon: Starting Up in India...is Free fortoday



D I Y

Look up people and productsDo this exercise for some known productsPing me in case of any issues @DrPreetDeepThe book on Amazon: Starting Up in India...

is Free fortoday



D I Y

Look up people and productsDo this exercise for some known productsPing me in case of any issues @DrPreetDeepThe book on Amazon: Starting Up in India...is Free fortoday


Documents

Market Research for Startups · 2020-05-20 · Dr Preet Deep Singh Market Research for Startups. Recap Drake’s Equation Doing a Live Case: Baby Product, StrollerWay Forward Basics