Testing market demand for a new business idea or product
A five-step approach to testing and optimizing new business ideas and value propositions before launch
How will this example plan help me and my business?
Many new businesses, brands, and products fail to achieve product/market fit for their new business ideas. This means that the propositions developed don't meet real-world customer needs and won't support scalable growth.
Many business failures could be avoided by following a more objective and structured ‘test-and-learn’ process to refine the business or product idea among potential customers in the early planning phase. Testing can also save costs and founders' time, energy, and resources that could be more efficiently invested elsewhere if more thorough market testing and analysis had taken place.
Use this guide to gauge product/market fit, develop more commercially viable ideas, and avoid significant investments in ideas that are unlikely to give a profitable return.
Once you have an idea, this guide will help you to:
- Understand your target market and how your business idea relates to their needs
- Clearly articulate your value proposition in a way your target market can understand
- Develop a prototype ready to test in research
- Plan and execute a research test
- Evaluate product/market fit test results and use them to decide whether to proceed, refine or abandon the idea
Who is this guide for?
This guide is aimed at helping these roles:
- Company owners and directors – Test new business/product ideas prior to investment/launch.
- Marketing managers, digital marketing managers – Test new brand/product ideas efficiently and effectively to allocate resources to ideas with stronger potential.
How is the guide structured?
This guide will consider why testing market demand for a new business idea or product/service is important and introduce the test and learn approach. The process for defining the value proposition is covered in these five key steps:
- Step 1: Understand
- Step 2: Scope
- Step 3: Build
- Step 4: Test
- Step 5: Evaluate
- Author: Fiona Lomas
- Format: Online long form
About the author
With over 15 years’ experience gained as a senior marketer developing and turning around leading consumer FMCG brands working in UK, EMEA and Global roles for Beiersdorf (NIVEA), Kraft Foods, Fox’s Biscuits, AVON Cosmetics and Bravissimo, Fiona Lomas (MCIM) founded The Brand Detectives, a strategic marketing consultancy focused on hunting down sustainable growth for courageous consumer brands. Fiona is also a guest lecturer and mentor on the BA Marketing and MSc Brand & Design Management programs at Plymouth University. Connect on LinkedIn.