A market research example

A method is always easier to grasp once applied. Rather than list the steps again, let us run a full study on an ordinary product, from the first figure through to the decision.

One thing first: the figures below are an illustration. They are plausible and consistent with one another, but they are not a reading of a real market: they are there so the reasoning can be followed. The thresholds announced as ours, by contrast, really are the ones MarketRaccoon uses.

The starting point

The idea: selling insulated water bottles online. It is a typical project: a simple product, a market that looks promising, and no certainty whatsoever.

Before looking at anything, write down what you expect. It is the most important precaution in the whole study, and the one most often skipped.

I expect a market between 10,000 and 50,000 searches a month. Below 3,000, I drop it. I expect prices between £15 and £40.

Writing that first changes everything. A number read with no prior expectation always ends up looking acceptable.

Step 1: Demand

First reading: 27,100 searches a month for the main term, plus a few thousand on close variants.

That is inside the expected range and well above the walk-away threshold. First piece of good news.

Notice the difference it makes. “27,100 searches a month” on its own says nothing: is that a lot? A little? Preceded by “I expect 10,000–50,000”, the same figure becomes information.

Our tool sets two floors, and they hold for any method: below 100 searches a month, a market cannot come out as workable whatever the other numbers say; below 300 it stays doubtful at best. Those are our thresholds, and they exist because a market with no demand cannot be rescued.

Step 2: Trend

Twelve months of history show a strongly seasonal pattern: a peak in spring and summer, a trough in November and December.

That is neither good nor bad, but it changes the project. A seasonal market means uneven cash flow, stock to plan months ahead, and quiet periods to get through.

One thing not to misread: if several months show exactly the same value, that is probably not a flat market. Published volumes are rounded into bands, and the rounding swallows small movements. On our side, below 40% distinct values the curve is labelled “volumes given in bands” rather than presented as a plateau.

Step 3: Pricing

Collecting merchant prices gives: lowest £9, middle £24, highest £89.

The middle falls inside the expected range. But the interesting figure is not there: it is in the spread:

• A great many products between £9 and £20
• A substantial group between £20 and £30
• Almost nothing between £30 and £60
• A handful of items above £60

That gap between £30 and £60 is the real find of this step. It is either free space or a place where others tried and left. The rest of the study will say which.

Step 4: Who is already there

The reading turns up about fifty sellers. That number is useless.

What is useful: the largest of them accounts for roughly a quarter of the visible offer. That is below our 30% line, so we label the market fragmented: nobody really holds it.

A second figure, more troubling: more than half the products collected are the same item resold identically by several merchants. In other words, most sellers are not selling anything of their own. So they compete on price, because price is all they have left.

Which explains the gap between £30 and £60. It is not a forgotten space: it is the territory of sellers with something to defend, and there are hardly any.

Step 5: What buyers complain about

Reading the 2 and 3 star reviews surfaces three complaints that keep coming back: the cap leaks, the paint chips in the dishwasher, the stated capacity is optimistic.

This is the most valuable step, and the most neglected. Those three sentences are worth all the rest of the study, because they do not describe the market: they describe what the market is missing.

Step 6: The decision

Putting it together:

• Demand: solid, well above the floor.
• Trend: healthy, but heavily seasonal.
• Pricing: an empty band between £30 and £60.
• Competition: fragmented, and mostly resellers with no product of their own.
• Complaints: three precise, recurring faults.

The verdict is not yes or no. It is conditional, and that is what a good study produces:

This market is workable on one condition: having your own product, sold between £35 and £50, with a cap that does not leak. Reselling the same bottle as everyone else at £19 would mean entering the one fight you cannot win.

Notice what the study did. It did not say whether the idea was good. It turned “I want to sell water bottles” into a precise sentence that can be checked, costed, and abandoned if it does not hold.

What about the PDF?

A lot of people look for a market research example as a PDF, and that makes sense: you want a template to fill in.

The trap is that an empty template gives you the shape without the figures, and the figures are what is missing. Filling twelve pages of headings with estimates produces a document that reassures and decides nothing.

If you want a document, build it in this order: collect first, format afterwards. MarketRaccoon composes the full PDF report from the figures it collected, which is the natural sequence: the document is the result of the study, not its starting point.

To run the same thing on your own idea

The full method, step by step, is in how to do market research. Reading the figures once collected is covered in market analysis, and choosing between several ideas in finding a profitable niche.

One last thing, and it may be the only one that matters: redo the exercise writing down your expectations before each step. It is the only protection against the most common reflex of all: searching until a figure turns up that feels good.