Market Research Techniques for PMs

While user research focuses on the user's needs, market research focuses on the business opportunity. It helps Product Managers answer critical questions like: How big is this market? Who are our main competitors, and what are their strengths and weaknesses? What technological or cultural trends could affect our product? Without this understanding, you risk building a product that users might love but that has no viable path to business success. Market research helps you find your unique position in the market, de-risk your strategy, and identify opportunities that competitors have missed.

Key Market Research Techniques:

• Competitive Analysis: A systematic review of your competitors.

  Process:

  1. Identify your direct and indirect competitors.
  2. Analyze their product features, pricing, target audience, and marketing strategy.
  3. Use a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to summarize your findings for each competitor.
  4. Identify gaps in the market or areas where competitors are weak. This is where your opportunity lies.
• Market Sizing (TAM, SAM, SOM): Estimating the potential revenue opportunity.

  Process:

  1. TAM (Total Addressable Market): The total market demand for a product or service. (e.g., The entire global market for CRM software).
  2. SAM (Serviceable Available Market): The segment of the TAM targeted by your products and services which is within your geographical reach. (e.g., The market for CRM software for small businesses).
  3. SOM (Serviceable Obtainable Market): The portion of SAM that you can realistically capture. (e.g., Your target for the first 2-3 years).

  This helps you understand the scale of the opportunity and set realistic business goals.

• Trend Analysis: Identifying shifts in technology, culture, and regulation.

  Process:

  1. Use tools like Google Trends to see what people are searching for.
  2. Read industry reports from firms like Gartner, Forrester, and Nielsen.
  3. Follow relevant industry publications, blogs, and influencers.
  4. Identify emerging trends that could create new opportunities (e.g., the rise of AI, the shift to remote work) or threats for your product.
• Surveys: A quantitative method for gathering data from a large sample of your market.

  Process:

  1. Define your research question.
  2. Design a clear, unbiased survey using tools like Typeform or SurveyMonkey.
  3. Distribute it to a representative sample of your target market.
  4. Analyze the data to find statistically significant patterns and insights about market needs and preferences.

Tools & Recommended Resources:

• G2 / Capterra: For reading user reviews of competitor products.
• Google Trends / SimilarWeb: For analyzing market trends and competitor website traffic.
• Statista: A great source for market data and statistics.
• Typeform / SurveyMonkey: For conducting market surveys.

Example in Action: Sizing the Market for a New Project Management Tool

You have an idea for a new project management tool specifically for freelance graphic designers.

• TAM: The total global market for project management software (e.g., $5 billion).
• SAM: The portion of that market that is for freelancers and small businesses (e.g., $1 billion).
• SOM: The portion you can realistically capture. You estimate there are 1 million freelance designers in your target countries, and you believe you can capture 5% of them in the first two years. If your product costs $10/month, your obtainable market is 1,000,000 * 5% * $10 * 12 = $6 million/year.

This analysis tells you that while the total market is huge, your specific niche has a substantial and viable revenue opportunity, making it an attractive market to enter.