You have a wonderful product/service idea. Great. But, unfortunately, that alone is not enough to guarantee success. A business succeeds only when there is a thriving market for a product/service offering. Moreover, the business needs to be able to identify that market, understand its needs, and create or pivot their offering to suit the target market and its pain points. Market research helps businesses do precisely this and more.
By undertaking market research, businesses are able to understand their target customers – their key characteristics and needs along with the many competitors who might be operating within the same industry. These are extremely valuable data points that help businesses make well-informed production and marketing decisions.
Equipped with data-backed knowledge of your customers and competitors, you will be able to invest in more effective marketing techniques. Instead of shooting in the dark hoping people will need your product/service and will resonate with your marketing messages, you let research guide you through these important decisions. It greatly minimizes risk by improving a business’ production, sales and marketing processes. That’s why, in writing a business plan that succeeds, making sure you’ve first conducted your market research is crucial.
The following is a step-by-step guide on how to effectively conduct market research:
Establish Your Purpose
Before committing to any market research, first figure out what your business aims to achieve through this exercise. Do you need to know more about your customer base? Or the industry you operate in? Or your competitors or suppliers? Or perhaps the local area you are based out of? Understand what your most pressing issues are that you want more clarity on. They will become the driving forces of your market research.
Without a goal in mind, your market research efforts will end up generating a lot of information that you will have no idea how to use. It will use your business resources but with little results. So, brainstorm with your marketing team to identify any critical concerns with which your business might be grappling. These will be your market research goals.
Gather Market Data
Once your purpose is established, you must move on to gathering market data. Your research results will be as good as the data you feed it. So, make sure to use a variety of credible sources to gather data relevant to your problem statement. You can use primary methods like surveys, interviews and observation to understand how customers view your product/service and how it fares against similar offerings made by your competitors. This will help your marketing team position your product/service more effectively. And it will allow your sales team to more accurately project anticipated demand and design effective sales tactics.
You may not realize this but you may already have a huge amount of customer data from several sources waiting to be uncovered and used. Tools like customer loyalty programs, sales records, customer complaints’ repositories and website traffic analytics are all treasure troves of information you can use for your market research.
You can also use secondary research methods which involves using existing research undertaken by someone else for a similar or different objective. Several government agencies provide innumerable market and industry statistics you can use for your own research. Many trade associations run publications that include a lot of industry specific statistics, for instance, the size, expected growth rate and important customer segments.
Analyze and Act
Once you collect all the market data, you need to organize it into a presentable format so that it can be reviewed by all the relevant stakeholders. This marketing analysis document will instruct you in creating actionable processes out of all the data and information. The focus now should be on creating a business plan that puts the research into action. If, for instance, your market research shows you losing your market share to your competitors, then you need to translate this information into processes that will help you become more competitive. Market research will be useful to your business plan only if you act on its findings.
Conducting market research can make your company more competitive and more profitable. So figure out the most pressing market research question you must answer and go out and answer it!