Market Research For A 4x4 Truck Technology Company
For a successful market entry, KXI needed a cost effective way to determine the potential market size in Canada and which of the four industries were the most viable to enter. KXI was able to get a reliable market sizing to share with their investors, and strong validation of the product before investing more money in the prototype.
The Situation
KXI Wildertec is a technology innovation company who created a specialized technology to transport workers from road to off-road locations for commercial purposes. Arriving at job sites often includes driving through tough and dangerous terrain. KXI’s advanced suspension technology provided a way for workers to tackle steep slopes and the dangerous wilderness, through increased truck stability. The stability created by the technology not only allows for easier access to difficult areas, but also increases the comfort, ease and safety of workers.
KXI believed the technology had advantages that were not seen in the market before and that the technology would be good for different industries who operate in the wilderness.
The Challenge
KXI Wildertec wanted to bring its advanced truck suspension technology to market in various commercial segments that would result in early financial success. “Our market is a ‘niche inside of a niche’ and we need help to size key verticals and undertake some early validation,” said KXI’s CMO, Brian McKenzie. KXI had four priority industries, but wanted to determine which were the best to pursue. Due to the pressures of investors and their own capacity, KXI needed to determine which markets to enter that would offer the best return on investment. Investing to test in all four segments required high costs and would be an inefficient use of the company’s time and resources.
In order to achieve a successful market entry, KXI needed to find a cost effective way to determine the potential market size in Canada and which of the four industries were the most viable to enter.
What Changed
CTRS was retained to complete a market assessment by conducting a detailed market analysis in order to develop insights into this complex market. Using a phased approach, the work began with secondary research into narrowing down to three priority market segments.
PHASE 1
Phase one was focused on using desk research (also known as “open source intelligence”) to find relevant insights for the four industries that are doing commercial all-terrain travel. This research helped to determine the approximate size of each potential market, forecasting sales, and calculating the market share KXI could achieve, ultimately providing numbers for the Total Available Market (TAM), Serviceable Obtainable Market (SOM) and Serviceable Available Market (SAM). A competitive analysis was also completed identifying both direct and indirect competitors and their product offering. In addition, CTRS found viable channel partners for KXI Wildertec to explore business opportunities with.
PHASE 2
Phase two focused on taking the top market segments from phase one and conducting primary research. The methodology was in-depth interviews which helped to validate go to market assumptions from phase one, map out the typical customer buying cycle, approximate budgets and clarify the sales processes. In total, 21 in-depth interviews with professionals holding decades of experience in the industry, provided invaluable knowledge into purchasing behaviour.
All together, the market assessment included a total of 250 hours and gave KXI clarity on which of the three industries would be the best beachhead market for this innovative technology.
The Result
Working with CTRS, KXI was able to get a reliable market sizing of TAM, SAM, SOM to share with their investors, and strong validation of the product which was instrumental before investing more money in the prototype.
“Not only did they discover the answers to difficult market questions, they helped us discover new questions,” said Brian McKenzie, KXI’s CMO.
CTRS provided key channel partners that KXI had not previously considered were brought forward as viable business opportunities. Over a dozen organizations and associations in a few key industries were listed out as potential partners to work with and build credibility as a growing company. With the extensive research on competitors, KXI was able to better understand alternatives available in the market that their potential customers might consider and these insights were later validated through the in-depth interviews.
The insights from the in-depth interviews revealed which potential customers would be interested and willing to spend on KXI’s technology. The biggest insight was that one of the industries previously thought to be a good prospect wasn’t a fit and the in-depth interviews helped identify why. The in-depth interviews also gave insights on pricing that was invaluable to the planning and use case development for KXI.
“We had a great time working with CTRS. They understood our space quite well even when we're a niche inside of a niche,” said Brian.