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Understanding Market Potential

Dr. Nikolai Reynolds und Frank Schüler, Ipsos InnoQuest, in p&a international market research, 1/2013

All innovations are introduced into a competitive environment as almost everything we buy can be substituted by an alternative product. Surprising, therefore, many innovations are evaluated in a research setting without considering the competitive environment. The reasons given are that the competition can be hard to define or that incorporating competition is too complex. These barriers are valid but can be overcome. For the past 40 years at Ipsos, all methodologies evaluating innovations incorporate competition. There are a number of ways to incorporate competition such as exposing consumers to competitive positioning, having consumers evaluate competitors, or asking consumers to make choices from a shelf. Another way is understand the amount of competition in the markets in which innovations enter (what we call market structure). The focus of this article is to provide a perspective on the influence of market structure on the long-term success of innovations. But before we go into detail on market structure, let us examine the other key drivers of innovation performance (see Figure 1).



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