Happy Navratri! Learn something new every day – knowledge keeps the mind young and the business growing.
Don’t start a business without research
Most new products don’t fail because the idea is bad. They fail because nobody checked whether enough customers would pay a fair price. A little research before launch is far cheaper than a big mistake after launch.
The 6 easy steps of new product development
- Find a real problem. Talk to 10–20 potential customers about what they struggle with.
- Generate ideas. List many, then shortlist 2–3 that fit your skills and budget.
- Test the concept. Show a simple description or sketch. Ask: would you buy this, and at what price?
- Estimate demand and price. Use a short survey and simple arithmetic.
- Run a small pilot. Launch a small batch or one area first and learn.
- Launch, measure, improve. Track sales and feedback every month.
The econometric idea in simple words
Econometrics simply means using real-world numbers to understand customer behaviour. The most useful question for a new product is: if I change the price, how much does demand change?
Illustration (example numbers only): out of 100 customers surveyed, 60 would buy at ₹100, 45 at ₹120 and 25 at ₹150. Revenue per 100 customers is ₹6,000, ₹5,400 and ₹3,750 respectively. Always compare with your cost: profit = (price − cost) × buyers.
Quick checklist before launch
- I know my target customer clearly
- I have spoken to at least 10 real customers
- I know what price they accept
- I know my cost and profit per unit
- I have studied 3 competitors
- I have a small pilot plan
Common mistakes to avoid
- Asking only friends and family for opinions
- Fixing the price without testing it
- Launching big on day one instead of a pilot
- Ignoring customer feedback after launch
ARS Market Research Services, Chennai, helps entrepreneurs and companies test ideas, estimate demand and set the right price. Visit arsmrs.in or email admin@arsmrs.in.