Back in the day, when you were looking to get stoned, you paid for a bag of weed and got what you got. Today, we have the endocannabinoid system and…
The post How To Get Product Development Right By Nailing Market Research appeared first on Cannabis Business Executive – Cannabis and Marijuana industry news.
Back in the day, when you were looking to get stoned, you paid for a bag of weed and got what you got. Today, we have the endocannabinoid system and the promise that cannabis can help ease many mental and physical issues.
Retail data proves cannabis consumers favor low-cost, high THC products in today’s marketplace. But, their product preferences will change as they become more educated on how terpenes, specific cannabinoids, and strains can affect your high. And as innovation sparks new cultivation, extraction, and consumption methods, we will have even more choices when buying weed.
In addition to using retail data to inform product development, Lara Fordis, CEO of Fordis Consulting, recommends conducting additional market research to see the big picture and essential information that could make or break a product.
Lara adds that retail data illuminate consumer behavior, wants, and needs, but she warns that other factors can throw a wrench into that information. She thinks flawed research is worse than no research because it gives you a false sense of security.
I interviewed Lara to get her tips on going deeper into market research for product development and how you can prepare your brand for success in the marketplace.
Why do you think retail data is skewed when it comes to market research?
Through several surveys I conducted last year, I discovered that 50% of the people coming into a dispensary are buying for other people- I call these “invisible shoppers.” Sophisticated CPG marketers know these shoppers create a faulty assumption that the purchaser and consumer are the same. Companies that rely on retail data alone have a deflated sense of how many people are consuming and an inflated sense of how much they use.
I consider the “invisible shoppers” the ones to influence the dispensary purchase decision without physically being there. I liken it to a grocery shopper where someone other than the consumer is typically doing the actual shopping.
What mistakes do you see entrepreneurs make during product development?
Many small companies go on hunches and gut feelings to identify their target market.
For example, my client developed a vacuum-sealed canister to store weed directed at the cannabis connoisseur who cared about their weed’s precision dampness, and dryness. But when we started testing it, parents who didn’t want their kids to smell weed in the house were primarily interested in the product and offered a much more robust and financially viable opportunity.
And that’s not the first time that’s happened, where people make presumptions about their target audience, and there are multiple target audiences, and one of them might be better suited to them than the others.
The cannabis user includes a wide range of people of all ages and walks of life. What data do you use to identify a target consumer?
First, by appealing to everybody, you end up appealing to nobody because you’re not differentiating yourself, you’re not focused, and you don’t have a unique selling proposition if you’re trying to appeal to everybody. So I encourage businesses to dial it in and focus on what’s differentiating their product.
Conventional ways of looking at research don’t apply to cannabis. And an example of that would be the household income question. Everyone wants a household income question.
If you’re making $100,000 and you’re a family in New York City, you’re probably living like paupers. Whereas if you’re living in Birmingham, Alabama alone, that looks very different.
And someone making $40,000 a year who spends 10% on cannabis vs. someone who makes a quarter million dollars a year and spends even less on cannabis. So I don’t even ask the household income question because it’s not an accurate gauge and not actionable.
I also focus on attitudinal and psychographic data than on strict demographics. Not to say that there aren’t categories of consumers who are value driven and purchase for the most THC and lowest price.
Again, retail data doesn’t measure drivers of purchase intent and reasons people buy what they buy and why they’re buying for other people.
What kind of questions do you ask in your consumer surveys?
I ask what their typical monthly budget is for cannabis, and those don’t typically correlate with household income. That’s why I don’t think using those as criteria is smart.
What is it that prompts you to consume cannabis? Chronic pain, anxiety, reproductive health, depression, ADHD? My questions tend to be more why-driven. I won’t waste time asking about something that retail data could capture.
Please give us an example of a project you are working on now.
I’m working with a company launching an edible in California in November. It’s a cannabis product for work-enhancing activities like focus and calm, but they don’t know the optimal dosage. So I’m working with them to distribute and test the product for different doses and measure the greatest appeal.
Since edible effects are not linked to weight but biological, gender, and other factors, we also measure that, look at those different user populations, and determine doses for women versus men.
Is it going to be optimized for every single person? No. But there are ways to figure out what’s the optimal dose for the majority of people who are in your target audience.
What questions do you ask new clients to prepare for your market research?
I ask them what they need to know to facilitate product development to achieve their end goal. I want to know what keeps them up at four in the morning. Often, they have two or three directions to go in, and they don’t know the right one. Market research provides answers and guidance.
What tips would you give someone conducting market research?
Don’t launch a survey on your Facebook or Instagram group and assume it represents your potential audience. It can be a useful survey if you are looking for opinions on new flavors you are launching, but not for extensive research into a target market that is not your friends. It’s just that it’s limited in terms of its greater applicability to a larger population.
Thank you, Lara, for sharing your knowledge on market research with us.
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