1. 48 February 2016
Management Magazine
New Knowledge
By SAMUEL NJIHIA
S
Successful businesses conduct research on a
continual basis to keep up with market trends
and maintain a competitive edge.
Businesses without
research are bound to fail
48
Management Magazine
sight. You are so passionate about it that you believe
its merits will be self-evident to prospective custom-
ers—that the innovation is so superior it will sell itself.
The next natural step is to jump right in and milk that
opportunity from here to the galaxies. Don’t! Natural
is overrated.
What you need to do is invest a little more time
and perhaps money to understand your market; to
determine the market size, the market purchasing
power and competitor pricing, the form and design of
alternatives available and the ecological dynamics of
o, it is your light bulb moment and you have
developed a product or a service that will move
and shake the market and make you loads of
money; a product or service that is bound to win the
hearts, minds and wallets of consumers at its very

2. 49February 2016
Management Magazine
New Knowledge
the market. Quite simply, you must conduct market
research.
Email: snjihia@kim.ac.ke
Don’t make anything until you sell it.
Get people really interested in buying it
before you invest too much time and effort,”
Anonymous Entrepreneur.
From the onset, modestly put; a business cannot
survive and thrive in the absence of the relevant
information and data which has to be both timely and
accurate. An entrepreneur must, therefore, be prepared
to gather as much information as they can relating to
the entire spectrum of the marketing mix including
people, product, pricing, promotion and place before
they venture into business or launch a new product.
Empirical evidence
Studies abound on the strong positive correlation that
exists between market research and positive busi-
ness performance. “A lot of companies skim over the
important background information because they are so
interested in getting their product to the market,” says
Donna Barson, president and owner of Barson Market-
ing Inc., a marketing, advertising and public relations
consulting firm. “But companies that do the best are
the ones that do their homework.”
Prof. V. Onyemah, Prof. R.M. Pesquera and Prof. A.
Ali from Babson College, in Wellesley, Massachusetts
writing for the Harvard Business Review in May 2013
about their study of entrepreneurs in Hong Kong,
Kenya, Mexico, Nigeria, the United Kingdom and the
United States note the following; “More than half our
interviewees fully developed their products before
getting feedback from potential buyers. In hindsight,
most viewed this as a mistake, echoing one of the
mantras of Eric Ries’s ‘lean start-up’ philosophy: Get
in front of prospects from day one. As one CEO told
us, “You will learn more from talking to five customers
than you will from hours of market research at a com-
puter.” The goal should be to gauge customer reaction
to the general concept you plan to build. “Don’t make
anything until you sell it,” advised one entrepreneur.
“Get people really interested in buying it before you
invest too much time and effort.”
It is continuous
And don’t be fooled, market research is important for
every business, both small and big and should not be
just a one-off activity. Successful businesses conduct
research on a continual basis to keep up with market
trends and maintain a competitive edge. Regardless of
whether you are starting or expanding your business,
market research is vital to understanding your target
market and increasing sales. It applies to both small
and big businesses in much the same way.
In developing economies like Kenya and the rest of
Africa, in the past, investment in formal research by
entrepreneurs has not been a central theme, but that
is not to mean it was not happening. Start-ups would
engage potential consumers informally through social
According to Pirouz, before you invest in a business
or a new product and spend your hard-earned money
on a new venture, consider conducting market research
first. Doing so will allow you to discover among other
things; the feasibility of your business, the marketabil-
ity of your product or service, the size, need, lifestyle
and preferences of your target market, the correct
niche and positioning of your business, the required
resources to play competitively in the market and the
possible obstacles you will encounter when your busi-
ness is launched.
Market research will not only save you months
of headache, but will also help structure your busi-
ness plan. Going into business without researching a
particular target market is like going through a maze
blindfolded, and not investing in it to save money and
time is akin to stopping your watch and hoping to save
time.
market, current prices of similar products, saturation of
the industry, age brackets of potential consumers and
customers’ expectations in your industry. To gather an
overall scope on your industry, it is advised to study
your potential customers, the competition and the
environment.
Time and patience
According to Alex Pirouz of Business Review Australia,
doing market research is fairly easy; it just requires
time and patience.
An entrepreneur’s market research may want to look
at parameters such as: the profitability of your product
or service, location, demographic profile of the target
The trend is, therefore, changing with start-ups
increasingly engaging in pre-launch market research
and older businesses investing heavily in customer and
market surveys to continually make sure their strategic
decisions are data driven rather than whimsical.
interactions. For example, when a local real estate
entrepreneur targeting Diaspora buyers was start-
ing up, he talked to his networks of friends through
social media platform and fashioned products that
were informed by their feedback. Less than five years
later of relatively great success littered with recogni-
tion from his peers and the industry, this particular
entrepreneur says his journey is now heavily reliant on
market research in informing product, pricing, place
and promotion.