Market Research Informs a Business Idea
Sally E. Smith, President, Smith and Associates, Inc.
Launching my first entrepreneurial venture was the result of what may be best described as a treasure hunt, with market research serving to reveal important clues along the way.
This approach, which I coined "reverse marketing," was all about the process, one in which the clues led us to certain conclusions or premises that then required some decision or action. Whatever our decision, the outcome would lead us down yet another path, in turn uncovering the next clue and informing a subsequent conclusion or action.
As such, we didn't start with any preconceived notions about the product or service that was to be the core of our business. Rather, we kept on the hunt, month after month, applying different research until we reached the treasure—the realization of the business we were meant to start.
If someone had told me my first entrepreneurial venture would be starting a mail-order specialty meat company, I never would have believed them. But when all of the clues were uncovered and all of the dots connected, that's exactly what we did. In 1989, we launched Chops of Iowa based out of Des Moines.
And it turned out to be a very wise decision. After only four years of solid growth, my partner and I successfully deployed our exit strategy and sold the company to a regional corporation.
Our research process lasted about a year. Most of my career, I've worked either launching products that didn't previously exist or retooling ones that did. So I was very comfortable using information and data to execute.
We started with a list of possible ideas gleaned from endless reading and following of trends. We knew baby boomers were a big target and were key. We looked at numerous trade and consumer publications, talked with various specialists, and networked with local chambers of commerce, economic development agencies, and trade associations. This was not too tight of a process—we merely had some inkling of what we thought we wanted or what might work.
Every day we made movement, drilling down toward a factual understanding about a particular idea. Given that it was the late '80s, we used library archives and microfiche to look at history to understand if we'd be catching a trend or whether something would likely be a fad. We'd find connecting pieces leading to the next drill down. We'd look for a clue—whether a product was growing or climaxing, who was buying it, whether there was a worldwide application.
Many ideas didn't make it through the early stages of this process and were discarded. For those that stayed in, we continued to research and get increasingly more tactical. It was all part of seeing if an idea was viable. Then we'd identify products that would fit.
As we continued the process of drilling down, we uncovered more clues. We were very aware that the world was opening up. Consumers were purchasing goods that were essentially landlocked. If people wanted something—no matter where they were located-they were finding a way to get it.
At the same time, we knew that people's time was becoming increasingly valuable. As a result, televised home shopping, such as QVC, was becoming popular. More important, we learned the mail-order industry was outpacing other marketing and distribution vehicles, and food was the best-selling category for catalog retailers.
We looked at large, privately held companies, including Omaha Steaks®, Harry and David®, and The Honey Baked Ham Company®, who were selling through direct mail. All clues were starting to make sense. Baby boomers were buying food and, specifically, meat. And here we were, sitting in a state known for its pork.
Next, we visited the National Pork Producers' Association to find out why no one was selling pork through catalogs. They gave us a long list of reasons why it couldn't be done, but they also offered another clue. The industry was about to kick off a $10 million advertising campaign, "The Other White Meat," to boost the image of pork. We saw how we could benefit from those marketing dollars.
The Iowa Pork Producers Association® had trademarked a specific cut of pork known as the "Iowa Chop," which gave us the signature product we needed for an exclusive mail-order meat business. It also sparked the company's name, Chops of Iowa. But a rather large obstacle at the time was our lack of a USDA meat plant, which would have been too expensive to buy. Amazingly, I met a person who had a USDA plant and was already cutting that particular chop—he was immediately interested in being a supplier for us.