Thursday, February 7, 2013

Market Research -- What Evidence Do You Have That They Will Buy Your Perfume?

(This article continues thoughts from "Conduct Some Market Research")

At this point you've determined, in some way ("Market Research -- How Large A Following Do You Have?"), the approximate size of your "following" -- your market -- those people who, potentially, might buy perfume from you. But how many of them WILL buy perfume from you? How many of them buy perfume at all?

While we know the ansewr will not be 100 percent and we hope it will not be zero, lacking data we may tend to become overly hopeful.

What happens if only one percent, or three percent, of these people buy your prefume? Will it still be profitable? Or do you need 50 percent or more to buy from you? (Risky!) But how can you fairly judge how many will buy?

Here's where the more sophisticated -- and cautious -- marketers have the advantage. They will devise a relatively inexpensive TEST that will give them some feedback as to the propensity of this market to purchase their perfume.

Alternatively, a marketer -- you, perhaps -- might consider producing only a small amount of your perfume and trying to sell it in a small but focused segment of this market -- say three retail stores, somewhat geographically separated, each catering to a somewhat different consumer demographic.

Setting this up is not easy but the ultimate question is, are you doing a single hit and run promotion (to make gobs of money in a hurry) or are you thinking long range, in which case accurate marketing data will be an enormous help to you.

Without An Accurate Estimate Of Likely Sales ...

It costs money to produce perfume. True, many of the costs go down as your production rises. But if you produce fragrance you can't sell, you wipe out your profits.

So knowing HOW MUCH perfume to produce is important. Don't get carried away by what others are doing. Perhaps you can sell 50 bottles of perfume profitably -- if you only produce 50 to 100 bottles. But if you produce 10,000, you're going to get smashed.

This is where good data -- from market research -- helps to make your perfume promotion profitable.

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