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Market Discovery: An Important Tool For Market-Driven Companies How an adaptation of the legal profession's "discovery" process can steer your technology and business development programs. By Richard A. Siegel The vice president of R&D for a global polymers manufacturer was faced with a sobering business question recently when a development team unveiled a new and interesting version of a common polymer. Should the company continue funding the development process, which had already cost plenty but which was about to cost millions more? Specifically, the executive needed to know if the technology's specs were of any real interest to the market, and if so, what its value could be. A team was dispatched to determine the strongest market segments in which to commercialize the technology, and to select target customers in a world region where the polymer might first be produced. The process included interviews with "industrial opinion leaders" in a selected target market, which revealed interest, but also existence of a new competing technology - unknown to the R&D executive - that offered certain benefits of the new polymer. But the system cost for use of the company's new polymer was analyzed to be lower than the competing technology and less disruptive to the fabrication processes involved. Bottom line: Commercialization of the new material was not only warranted but highly desirable, according to the opinion leaders, who were likely market entry customers for any resulting product. Score another victory for "market discovery," an important tool in obtaining vital market intelligence needed to steer your technology and business development programs. For any high-tech company seeking to adopt or refine market-driven development (MDD) approaches, it is indispensable. (For editor Siegel's perspective on MDD, see the Nov.-Dec. '98 issue of Technology Business.) Wanted: quality information Indeed, dilemmas like this are faced daily by advanced tech companies striving to remain competitive in a fast-paced global market. In the case of the polymer manufacturer, "discovery" validated the need for the new polymer, characterized properties that should be modified to optimize value and enabled a preliminary projection of sales in a key market entry segment. What's more, discovery started the process of converting "technology push" into "market pull." So what exactly is market discovery? Like judicial discovery used by attorneys to support litigation, it is a process for rapidly securing high quality information from the most reliable sources - then using that information to formulate strategy. Also built in part on techniques of market research, discovery operates on a high level of qualitative market intelligence and exploration. More importantly, it uses this intelligence to win new customers. It's not conducted in an adversarial context like the legal profession, but is highly cooperative. It involves high level dialog and cooperation between a technology or product developer and trend setting, market leading companies - often in multiple markets. Unlike market research, discovery is implemented by a cross-functional team of senior people collectively skilled in the given tech or product area, and also skilled in strategic planning, facilitation and communications. Such people ask the tough questions and dig deeply into the fundamental needs of the market to develop real clarity. They're able to interpret remarks and read between the lines when conducting intelligence work so as to understand genuine intent. Many companies have people who currently possess or could be taught such skills. But what discovery practitioners need to bring to the table in the first place is solid business experience and a track record of successful strategy development since discovery's "products" are decisions and strategies. Think of it as a "SWAT" team approach to securing market intelligence and building strategy. For tomorrow, not just today Market discovery also differs from competitive intelligence, another valuable business development tool. Competitive intelligence (CI) is a higher form of secondary market research aimed at assessing the technological position of your competitors relative to yours. CI allows you, through ethical means, to gain information about your competitors and the technologies that support their products. For a company seeking to introduce new technology, CI can reveal competing technologies or approaches and help you assess your potential for competitive advantage. Market discovery, by contrast, focuses on the needs of potential customers and the new technical solutions and products they need to build competitive advantage in their markets. Market discovery's focus is on customers. CI's is on competitors. Since discovery pulls information and insight directly from leading companies, it also offers the opportunity to learn about competing solutions. As a result, dialog with them can also reveal information about competitors and their technologies. In effect, the facilitators of market discovery are market investigators, interrogators and strategists. They work strictly with market leading companies which could benefit from the product or technology in question and influence an entire market to follow suit. Discovery facilitators need to determine utility, fit, product optimization, timing, economic parameters, competitive technologies, competitive advantages and windows of opportunity. To operate cost-effectively, they need to rapidly discover critical factors needed to make commercial development decisions. Their result is design of an implementation plan, or a plan for termination to avoid more unnecessary investment. You'll probably agree that this form of decision-making needs to be based on the most reliable information possible - true facts and solid direction. That's what you want from market discovery. A study in food packaging A market discovery was conducted to determine the attractiveness and value of a new packaging method for a specific dairy product and, to acquire market entry customers for the new system. It was conducted by two individuals conversant in the technology and skilled in market intelligence and investigative techniques with more than 20 years each of development experience. Their first step was to target the six leading food processors/packagers of this particular dairy product in the U.S. and engage their production executives in in-depth discussions about technical and economic characteristics of the new technology. Through these probes, the team was able to cross-examine the needs of the customer and the fit of the technology. It secured the technical data relating to production speeds, material compatibilities and other data required to determine how the new system could be retrofit into existing packaging lines and what advantages it would provide over competing systems. The discovery team profiled the strengths and weaknesses of the new system, suggested changes to the product development department and established the basis for contact among the individuals who would be doing the actual buying and selling. With that accomplished, the team organized and facilitated the face-to-face meetings that launched the first commercial relationships for the system in the U.S. In this instance, discovery validated the need for a new product and actually launched its sales with four of the six leading producers. Here are the tools in the market discovery process:
Richard Siegel is founder and CEO of ISIS International Inc., a Connecticut-based international consultancy specializing in strategic planning, new business development and international technology commercialization. He can be reached at 203/261-5300, Fax 203/261-4911 or rsiegel@isisusa.com. Article republished with permission of Technology Business Magazine. Copyright © 1999 Richard A. Siegel. All rights reserved. |
