What is Market Research?
Market Research refers to the elaborately organized effort put in by an entrepreneur to gather information about their industry’s target market, customers and competitors to determine the viability of their products. In doing so, they are able to relate to what your consumers want and how their competition is approaching the same market. Market research can be carried out by an individual firm or by employing the help of a market research company. These companies will gather and data relevant information on your competition, distributors, customers and present you with a detailed report.
It is vital that you consider market research because it tells you how and where your target audience do their own research. It shows which of your competitors have the upper hand with your target audience and how they are doing it. This vital process also helps point out the strengths and weaknesses in their current marketing strategy. Doing market research shows your lenders and investors you understand the industry as a whole and gives you credibility.
What types of Market Research exist?
Since this is not a new concept, many market research methods have been developed to make this process more efficient and worthwhile. Some of the most commonly used types of market research are explained in detail below.
Surveys are used in market research to capture self-reported data from participating individuals. It gives insight into the consumers’ opinions and attitudes towards your product while also getting first hand feedback.
Focus groups entail gathering a few carefully selected people to interact with your product then provide feedback or answer a few questions. This method is widely effective as it captures honest real-time reactions and consumer information.
Interviews, whether virtual or in-person, allow for face to face conversations which allow for data collection from the given interviewee responses and body language. This method is preferable for small groups but may collect biased information given interviewee’s awareness.
This method entails sitting back and watching your target market interact with your products without directly interacting with them. While it may give accurate deductions, this method may omit vital information which can’t be collected without interaction.
How do you start with Market Research
In order to thrive in any industry, it is vital that one knows how to do market research. The market research process requires a lot of time and resources, which means it can’t be rushed. The steps listed below can be used as a guide to help you get started.
Determine the purpose of your research
Market research may be done to create opportunities, assess business risks or reduce problems. It may also be carried out for either internal purposes such as improving business operations and cash flow or for external reasons such as seeking investors and lenders. It is vital that the entrepreneur knows the prime purpose of their research so as to ensure relevance.
Determine the industry’s Current outlook
This means that you should have a detailed outlook of the current state of your industry. This is done by looking at market size and trends and determining its projected growth path.
Know your customers
Not everyone happens to be your customer. Understanding your customers will better place you to provide ultimate utility to them. This is achieved by looking at things like income, age, location, gender, education level, occupation and family status.
Know your competition
It is vital to understand your competitors’ goals and who their target audience is. This is achieved by understanding their choice of location, pricing, offers, target customers and what their challenges may be. This may give you advantage over them by helping you use your strengths to exploit their weaknesses.
Analyse your findings
This entails sifting through the collected information and making sure it is relevant. Analyse the information based on industry size, market share, trends, growth paths and customer groups to determine how to apply your strengths to the market.
Act on your findings
This final step entails using the collected and reviewed information to adjust your product to efficiently meet the market needs and standards.
In conclusion, what is market research? This basically means gathering information about consumer needs and preferences and using it to strengthen or improve your position in the industry. Through market research, you will be able to understand and influence market trends, the challenges facing your industry and what influences your target audience to buy.