Market research is the necessary process of finding out the customers’ needs and wants and gathering information about the marketplace — including the standing of competitors — that you’re breaking into to measure the feasibility of a new business venture.
It gives you an overview of the growth opportunities open and the problem points that might hinder your growth in any aspect. That’s why market research is best done before launching. However, it should be a never ending process even after years into the business.
The marketplace is unpredictable. You could be trending one day and irrelevant the next. Market research is the key to staying level with the market or even hacking yourself towards immense growth. Either way, we have enumerated the ways market research could help you grow your business.
Build a Solid Business and Marketing Strategy
Big companies or corporations never miss market analysis in their business plans. This may or may not be relevant to all small business owners. Some may have done the most sophisticated research of their target market and still closed. Meanwhile, others who have started on a whim without little to no business plans at all thrived to a wide success.
Even so, it’s highly advisable to get this step in the planning process completed because the information you gather here can ease your decision-making from the beginning. As you go further into the business, the information grows and you can use it to polish your business and marketing strategies.
What Should Be Included In Your Market Research
The type of information you gather will be different depending on the industry and business type. These are some general information that I think will be helpful for a wide range of entrepreneurs and business owners:
- Industry Environment, Trends, and Practices
- Target Market
- Lead Time - how long it takes for a lead to make a purchase
- Competitive Analysis
- Product Pricing
Predict Consumer Wants and Needs
Market research is the best way to understand the demands of your target customers. Knowing their level of customer awareness and where your business is in terms of market sophistication are two major things that can already inform you how well your business will perform.
What makes your customers happy?
What are their deepest desires?
Are they in a position to be able to afford and want your product enough to get it?
All these things are important questions that your market research should be able to answer. It can impact how you communicate to your market (customer service), how you develop your product, and know how to deliver your product, from when is the right time to introduce it to how you can interrupt the common trends to make a ripple in the market, especially if there are brands and companies that are already faring well in your industry.
How to Predict Consumer Wants and Needs
If you don’t have the budget to perform rigorous research with the most accuracy, the best way is to create an ideal customer avatar. Be the customer, or so they say.
Another easy way to do this research is to interview people or conduct a survey. You may even start with friends who you think would be interested in your product. You only have to be willing to do the hard work.
Better Product Testing
The last point leads to this one. Market research is not the passive act of gathering information and keeping it in a note or file for future reference. You need to test the product out!
The goal of this is to gauge the success rate of your product without committing to a large-scale production or full launch. You want to know how well the market will react to it first, if at all, when is the right timing to introduce it to the market, and how do they want to get it.
You will also know from this process if your product has any chance for longevity. Will there be an opportunity to expand and improve your product? What’s the market’s contingency of developing a demand for new features and upgrades?
Testing your product is an important aspect of market research. It will save you money if it turns out your product doesn’t resonate with the market. This is also a chance for you to know more about your market, what they want, and how they want to receive it.
How to Test Your Product Effectively
Feedback is the most crucial aspect of testing your product. Like in predicting your customers’ wants and needs, surveys and interviews are also helpful in getting actual customers’ sentiments.
Take into consideration the good and the bad, and don’t disregard even one bad review. Since the number of people tested is limited, every feedback can represent a group of people in your actual market.
Facebook groups are a great tool in gathering potential customers and getting initial feedback from them without spending too much on this part of the market research.
Adaptability to the Market
Market research is a form of planning for your business and it doesn’t stop after your launch. We’ve always heard about the saying, “Those who fail to plan, plan to fail.” The risk of not planning is higher when it comes to building a solid business.
Skipping the thorough market research stage of business planning is what leads most entrepreneurs to inevitable bankruptcy. They don’t know how to keep up with the fast-paced market, which can happen in almost any industry.
It’s always moving on to the next catch that can keep people’s attention, so if you don’t know how to ride the trends and stay relevant even with new products and brands coming out, you won’t last long in the roster.
How to Adapt to the Market
Your market research should inform you of the industry trends and demands. Use that information to decide how you’re going to survive through the off season.
Remember that it’s okay to just maintain your sales once in a while and not grow all the time. Business plateaus happen and they’re not entirely harmful, unless you are allowing the market to move faster than you do. Then your business is declining.
Identify Potential Business Opportunities
Just like feedback is the most important aspect of testing your product, evaluation is the most important aspect of the bigger process of market research.
After you’ve gathered all necessary information, performed product testing and have collected enough feedback, this is the time to evaluate the alignment of everything. You analyze the probability of success of your new brand or product, including the possibility and options for expansion.
If you’re doing market research for an already existing brand or product, then this is still a valuable process to inform your next steps in the business. Market research then becomes even more comprehensive because you have actual experience and results to compare to.
Now how can you improve? You can be more specific in the actions you will take. What changes need to be implemented in your marketing strategies? Sales process? Are you ready to take on more employees?
Things like these are decided when you have a feel for what the market is like and how the business will fare well in it.
How to Identify Growth Opportunities
SWOT analysis is a popular method of evaluation. It’s commonly used in business and even personal growth evaluations. It stands for strengths, weaknesses, opportunities, and threats.
Those four quadrants can categorize almost every piece of information in your market research. The most relevant in this step is opportunities.
Growth opportunities can include getting into a partnership with other businesses or developing upgrades to your brand or product. Whatever your future plans, your past experience and market research should help you decide on what’s best.
Market research is one of the most powerful tools in a business plan, whether it’s an aspiring entrepreneur or a seasoned businessman who’s conducting it. Since building a business is much like jumping from a building without a safety net, market research acts as the foam beneath that can soften the blow of failure if it ever comes to that. These are the basic concepts and ideas that makes your market research the most valuable information you can obtain before and after launching your business.