Launching a business may be as easy today as registering a website. But winning a share of the market will remain tricky as long as that business is subject to customer preferences, channel demands, and competitive offerings.
To increase their chances of success, both traditional and e-businesses have long relied on market research. In its ideal form, market research is a "learn and confirm" loop, similar to scientific research.
First, we collect relevant market data. Then we use our observations to form hypotheses about who our most-promising prospects are and how they prefer to buy. Finally, we test our hypotheses by studying prospective customers' (and sometimes also the channel's and the competition's) response.
We then use what we learn to make decisions, while continuing to observe, influence, and test buying behavior to further refine our approach.
When used systematically, market research is not simply a predictor of the success or failure of a product idea; rather, it is an ongoing two-way communication between the business and its target audience. Treated as such, market research becomes a constant source of information about opportunities for improvement and innovation.
Until recently, however, only a handful of the largest companies could afford to thoroughly research all aspects of buying behavior. But even those companies fell short of continual dialogue with their entire markets.
Enter the connectivity and behind-the-scenes data capture of today's Internet. Now a whole generation of e-businesses is finding itself with a direct round-the-clock link to every potential customer via the Web.
Online market researchers are "wired" into their world, not unlike a day trader or a cybergames whiz kid. Product releases, such as software updates, and promotions, such as website and media content, can be made instantly available to the entire market via browser-based applications.