Knowledge is power! Whether you’re selling computers, consultations, or online courses, it pays significantly to know and understand your target audience and market. A significant part of market research does require a huge budget. But it’s still affordable for small and medium-sized enterprises to undertake lean and effective research, which offers many benefits. Effective and correct market research is vital for your company’s success, whether you’re launching a new product, looking for customers, or expanding to a new market. Keep reading to discover more about market research, including types, tools, benefits, and more.
What is market research?
Market research involves collecting data about potential customers or target audiences to authenticate expansion to a new market or the success of a new service or product. The market research process also helps a business to iterate on existing services or products or understand the perception of the brand to ensure the company’s value is effectively communicated.
Why is market research important?
Market research provides answers to numerous questions about a given industry’s state. However, it is hardly a crystal ball business owners or marketers can depend on for insights into their target markets or consumers.
Market research provides solutions to questions such as:
- Who’s your customer?
- What’re their purchasing behaviors and spending habits?
- Who’re your competitors?
- What’s the market like?
- What’re your opportunities to expand, build out, or change your business?
- Where should you establish a brick-and-mortar store, and do you need one?
- What about pricing, and where will the market for your services or products go in the future?
If you collect correct, timely and enough information about these questions regarding your business, you’ll be a step ahead of your competitors. And what’s more? You’ll be able to make informed decisions that’ll propel your business ahead – meaning you’ll never miss a sale since you understand your consumers’ wants and needs.
When should I conduct market research?
The right time to conduct market research is before establishing a new product, service, business, or venture. You can also conduct market research before expanding to a new market. Within some days of entering the new market, your business can conduct the second market research round to understand its already undertaken initiative acceptance.
Keep in mind that all successful businesses include effective market research as an inbuilt and continuous plan. Doing so allows these businesses to gain enough knowledge about their market standings in the most competitive, ever-changing, and challenging dynamic environment.
Types of market research
Market research involves two main types: primary and secondary.
Primary research
Primary research involves first-hand data obtained through observation, experimentation, and investigation. A business can carry out primary research or hire an agency or a person to do it on its behalf. It requires going directly to sources, which in this case, are consumers and potential customers in a target market – to ask relevant questions and collect the correct information.
In most cases, primary research involves interviews (face-to-face or telephone), focus groups, surveys (mail or online), visits to rivals’ locations, and questionnaires (mail or online). When conducting primary research, you typically collect two main types of information, including specific and exploratory. While primary research is more time-consuming and costly than its secondary counterpart, it provides correct, reliable, and up-to-date information.
Secondary research
Secondary research involves information collected, compiled, organized, and published by other individuals or third parties. It includes studies and reports by government agencies, other businesses, and trade associations in your market.
Most small businesses depend on secondary research since they usually have limited budgets. Another aspect that makes secondary research ideal for small businesses is the fact that information is easier and faster to obtain, and it’s also more affordable.
Secondary research is available online on the web and offline in magazines, industry publications, reference libraries, trade journals, and contacting trade organizations or industry associations. When dealing with secondary research, always check the publication date to ensure the information is up-to-date.
Market research tools
Market research tools are different mechanisms that enable businesses to find their target audiences or markets and determine how consumers or potential customers feel about their services or products. These tools may include predictive analytics, competitor intelligence, data analytics, and social media monitoring.
Businesses commonly use different types of market research tools, including market data sites, social media monitoring, data analysis software, consumer relationship management software, digital recorder sites and competitive intelligence tools. Additional types of market research tools are surveys, predictive modeling tools, self-service tools, text analytics tools, and business intelligence tools.
How to do market research for a business idea
There is no proven or specific way to carry out market research. You need to start wide and narrow down your market research as you discover more. After that, you need to define buyer persona, understand their unique needs, requirements and pain points, know how your close competitors are positioning themselves in the current and future market, and identify opportunities to remain competitive.
That being said, here are the steps you need to follow to achieve successful market research.
- Define buyer persona: You must first define your target market and audience. And once you know who you’re selling to and their interests, you can always reach out directly through an effective secondary research campaign. From there, create your buyer persona.
- Engage with smaller target samples: Dig deeper into your target audience’s behavior once you define your buyer persona. To achieve that, you can use surveys, emails, phone calls, focus groups, face-to-face, call for participants through social media, and leverage your network to access more candidates.
- Identify your main competitors: By collecting information about your competitors, you can figure out their audiences, how they position themselves, and how they pass their information. Doing so allows you to learn from their failures and successes so that you can utilize their fruitful tactics and efforts.
- Analyze data: Throughout the process, you’ll collect a lot of data, which you need to process and organize. To do that correctly, sort your data into groups, create several unique customer personas, build a matrix chart, and generate a potential customer journey map.
- Summarise your findings: Be sure to summarise your findings in a straightforward and shareable format. End your process with action items and immediate next steps.
Market research example
Many businesses utilize market research to test new services/products or obtain information from consumers about what types of services/products they need or don’t have currently. For instance, a firm planning to manufacture a certain product or offer a new service might carry out market research to test its viability.
If the market research validates consumer interest, the firm can go ahead and launch the product or service. And if not, the firm can use the market research results to make small or huge adjustments to the service or product so that it can blend smoothly with customer needs and requirements.
Establish your company with Workhy
If you want to start a small business, you will need to set up a company after completing the market research. Workhy provides company formation services for entrepreneurs worldwide, allowing you to establish your company online without having to travel to the US, UK and EU. In addition to company formation, Workhy offers a range of services to support your business, including tax ID number applications, online bookkeeping software, tax filing, opening online bank accounts, and providing registered addresses. With Workhy, you can focus on growing your business while leaving the administrative tasks to the experts. For more information about Workhy and its services, visit our website.
