Market research is a process of analyzing, the market and evaluating its feasibility for the product and services. It is very helpful to minimize business expenses, increase sales, and help to target potential customers. Market research is a very crucial step before launching any product, service, and business but, many investors and entrepreneurs underestimate market research strategy. However, many times, they realize their mistake only after their business has experienced a heavy loss. The studies show that many successful business owners owe their achievements to the market research strategy. Regular market research activities help investors know their target market, understand customer behavior/expectations, identify customer problems and recognize real competitors.
A business can conduct market research at various stages of its business cycle, whether from the planning stage, pre-launch stage or post-launch, and beyond. Acquiring a better understanding of the industry and market right from the beginning creates a conducive environment for the business. It enables the structuring of a sound business strategy that can further help to establish and grow your brand into something that your competitors may envy.
Objectives of Your Market Research
Here is what you learn from the market analysis:
- Who are your potential customers?
- What are your prospective customer’s buying habits and expectations?
- What is the size of your target market?
- What is the buying capacity of your potential customers?
- Who are your competitors?
- What are your competitors’ strengths and weaknesses?
- What are the external factors influencing your market?
The above objectives also specify the types of market research you need to carry out to be successful.
The two types of market research that you will need to conduct:
- Primary Market Research
- Secondary Market Research
Steps Covered in Primary Market Research
- Observing sale efficacy
- Assessing competitors’ quality of services
- Identify the communication channels of competitors
- Evaluate the competitions that are active within the market
Steps Covered in Secondary Market Research
- Published company reports data
- Existing surveys and studies
- Newspaper reports
- Government data
Any individual or business can conduct primary market research to collect unique data with the purpose of using that data to improve its product line, services, and overall business processes and operations.
Whereas in secondary market research, businesses can rely on the data that is already available from various sources, mostly government surveys or reports published in newspapers or surveys published by established companies or it can be the company’s own existing data too.
Key Steps of Successful Market Research
Four necessary steps for successful market research are:
- Find out if similar research has been conducted earlier.
- If yes, study the existing data that aligns with your business objectives, only if it is within your budget.
- Decide how you are going to use the existing data and who will be using it.
- Is it necessary for you too to conduct your own primary market research? If yes, then with whom?
Know the Different Types of Customers You Will Meet
Usually, most new businesses face three different types of customers. With the help of market research, you will learn to understand how your prospective customers behave, think and adapt to new products/services. This understanding will help you in making them your regular customers and even brand promoters. If you can meet their expectations they will happily recommend your products and services in their network. So, it is very important to understand what your customer is expecting from you.
The Three Types of Customers are:
1. Concerned About the Cost
These types of customers are not much bothered about the quality or usefulness of a product or service. They aim to find products that are available at the best possible price. These customers are most plausibly aware of all the prices offered by all major competitors in the market with a similar product line. Therefore, here is when you will need to conduct secondary market research to find out what prices your products or services can have for a competitive edge in the market.
If it occurs that your products and services are not on the cheapest list, you will need to provide irresistible facts to your target buyers about why they should become your regular customer, what is your unique selling proposition (USP), and probably quality and reliability should be the deciding factors.
2. Market Influencers
Market influencers are highly knowledgeable and aware of your market trends and target market. They possess the capacity to influence other potential buyers who rely on their views.
Industry experts are more concerned about the value and quality of a product or service instead of focusing on or recommending based on the price tag.
Industry influencers can become the most appropriate candidates for primary market research. You can offer your products or services to them, and in return ask them to share their opinions on them and also their views about the overall market of the same product. It will create interest in your potential buyers.
3. The End-Users
End-users are the actual users of your products or services daily. End users can also become great candidates for primary market research. You can understand their expectations, their limitations, and their frustrations about a certain product or service. If you are still in the stage of developing and designing your new products, end users’ feedback can be of great help to maintain a competitive edge in the market.
What is the Value of a Market Research Report?
Apart from talking to your influencers and your potential buyers, you can also study the published market reports by established publishers to understand the market value for your business. You can find them in business groups, trade associations, and libraries.
These reports are extremely useful to keep you well aware of the market trends, changing market dynamics, and finding new market opportunities. However, do check the publication dates (in this fast-changing market scenario even a year old data may be obsolete). Also, be careful about the applicability of the same in your target market. All publications may not be suitable for all markets and businesses, and may not serve the consumer demands in your industry or area.
Further, if you have concluded that you have already understood the market needs, you must put your idea into the experiment against what is already available on the market. Positioning your product is an essential part to get maximum market exposure.
However, if you are confused about how to go about it, it is recommended that you hire a professional business feasibility study consultant to help you in identifying a viable business plan. A market research company can identify and find all the necessary information that will help deliver faster and more effectively.
Market analysis may appear complicated, but it is an essential step if you want to grow and lead your business in the right direction.
A market research study can make or break your business or proposed project. Market analysis helps in reducing risks as it is believed to be an ideal way to understand your competitors, your prospective buyers, and market situations.
Whether you are starting a new business or launching a new product or planning to expand your existing business, a market research study can help take your business goals to the next level.