2. Structuring Market Research

Market research is essential for product development, providing a foundation for making informed decisions. However, without proper planning and structure, the research process can become overwhelming or superficial, leading to missed deadlines, excessive data, or inconclusive results. In this document, we will outline the key steps to effectively structure market research to ensure it provides valuable insights for decision-making.

Key Steps for Structuring Market Research

To prevent research from becoming ineffective or unfocused, it is crucial to follow a structured approach. This includes setting clear objectives, organizing supporting arguments, identifying the right questions, and aligning the research with business goals. Here are the four steps to help structure a successful market research project:

1. Define the Core Hypothesis

The first step in structuring market research is to define the core hypothesis—the foundational assumption that drives the research. Every market research project is typically motivated by a hypothesis that needs to be validated or invalidated.

The core hypothesis is determined by the product and market scenario you are working in. It is often helpful to refer to the Product Market Research Matrix to understand your product-market fit. There are four main scenarios within this matrix, each with a corresponding core hypothesis:

• Scenario A: New product in a new market (e.g., SpaceX). Hypothesis: "We believe we can create a product that satisfies a need in a new potential market."
• Scenario B: New product in an existing market (e.g., Nubank launching a debit product). Hypothesis: "We believe we can create a new product in an already existing market."
• Scenario C: Existing product in a new market (e.g., Zé Delivery expanding into beverage delivery). Hypothesis: "We believe we can adapt our product to win in a new market."
• Scenario D: Existing product in an existing market (e.g., Mercado Livre expanding through partnerships). Hypothesis: "We believe our product can increase market share in an existing market."

Once you identify the scenario that fits your product, it is essential to refine and specify your hypothesis further. The more specific and tailored it is to your business context, the better the research focus and outcomes will be.

2. Organize Supporting Arguments

After defining the core hypothesis, the next step is to organize the supporting arguments. These are the key factors or assumptions that support your hypothesis and need to be validated or invalidated through research. The goal is to determine whether these assumptions hold true based on data collected during the research process.

For example, let’s consider the Zé Delivery scenario (Scenario C: adapting an existing product for a new market). The core hypothesis is that they can adapt their product for a new potential market in beverage delivery. The supporting arguments for this hypothesis might include:

• There is a growing trend in app-based delivery services.
• The current market does not adequately serve the need for beverage delivery.
• There are no major competitors specializing in beverage delivery.
• Due to partnerships with suppliers (e.g., Ambev), Zé Delivery can offer lower prices than competitors.

3. Identify Key Intelligence Questions (K.I.Qs)

The third step is to identify Key Intelligence Questions (K.I.Qs). These are the essential questions that must be answered to validate or invalidate the supporting arguments. K.I.Qs help ensure that the research gathers the right amount of data to make informed decisions, avoiding both excessive data collection and missing critical information.

K.I.Qs guide the research process and help narrow down what data is needed to answer specific questions. Returning to the Zé Delivery example, some K.I.Qs might include:

• What is the size of the delivery market in Brazil?
• What percentage of the total market is represented by app-based deliveries?
• Is the market for app-based deliveries growing or shrinking?
• Who are the main competitors in the delivery space, and what is their market share?
• Are there many new entrants into the market, and what are their focuses?
• Can Zé Delivery truly offer lower prices due to partnerships?

Each K.I.Q should be directly tied to one of the supporting arguments. Answering these questions will help validate or invalidate the assumptions, which in turn will help determine whether the core hypothesis holds.

4. Develop an Action Plan and Align Expectations

The final step is to develop a clear action plan. This involves identifying the constraints and challenges that may arise during the research process and setting realistic expectations for the project's scope, timeline, and resources. It’s also crucial to communicate this plan with stakeholders to ensure alignment and avoid unexpected delays.

The action plan should address the following:

• Limiting Factors: What are the potential constraints, such as budget, time, or resources, that might impact the research?
• Inputs and Deliverables: What inputs are required from other teams or departments, and what are the expected deliverables?
• Surveys and Iterations: Will you need to conduct surveys or other forms of primary research, and when should they be done?
• Timeline: What are the key milestones and deadlines for the research? Ensure that the timeline aligns with the broader business or product development schedule.
• Stakeholder Communication: Align with key stakeholders early to ensure expectations are clear regarding timelines, deliverables, and the scope of the research.

Conclusion

Structuring market research is essential for ensuring that it provides actionable insights and avoids common pitfalls like collecting too much irrelevant data or ending up with superficial conclusions. By following these four steps—defining the core hypothesis, organizing supporting arguments, identifying K.I.Qs, and developing an action plan—you can create a well-structured research process that will help validate or invalidate hypotheses and guide product decisions effectively.

Properly structured market research supports strategic product development and helps align product vision with market opportunities, reducing risk and increasing the likelihood of success.