Almost every entrepreneur has heard about market research. Properly conducted, it can become a guide for further business development.
In this article, we will discuss how to conduct effective market research and apply the results to your business.
What Is Market Research?
If you’re an entrepreneur, you have probably already conducted different types of market research. Indeed, you have communicated with your target markets and analyzed the prices of similar products. However, to obtain more accurate information about your business playing field, you’ll need to conduct such research systematically.
Conducting market research refers to gathering information about potential customers and competitors. It will help you to analyze the market situation in your niche and to improve business planning accordingly.
So, why is it important to do market research?
There are no doubts that a business cannot be successful without knowing its customer or market segmentation. Your company should create a product or service that will satisfy the needs of people within your target market. That is why you should conduct market research and identify the opportunities for further business development.
Identifying Which Research Method is Right for You
If you want to know how to do market research, you’ll have to understand the various methods.
You can identify which method is right for you by identifying your goals and the type of information you are interested in. For example, there are quantitative methods like surveys, depth interviewing, or questionnaires which will collect numerical data for you. On the other hand, qualitative research will determine the customers’ attitude.
We can divide all methods into two categories depending on the way the information is collected: primary research and secondary research methods.
Primary Research Methods
During the primary (or field) research, you will be obtaining the information directly from your target market. Survey and observe your potential customers, conduct some interviews and determine focus groups and your research budget. These methods will then yield information according to your demand.
The data obtained from primary research is vital for your business. At the same time, such methods require more time and money compared to secondary research.
Want to send a survey to a highly targeted segment of contacts? Nimble enables you to tag contacts in order to segment them into strategic lists, to which you can then send templated trackable group messages such as surveys and questionnaires.
Secondary Research Methods
The secondary (or desk) methods use published sources of information. To conduct this kind of research you can search for information on the internet, analyze your stock and customer databases, or use the results of existing types of market research. It will provide you with an understanding of the market situation along with knowledge about the processes within your own business.
Secondary research sometimes can be hard to conduct, especially if you are looking for a specific information that requires specific questions. Remember to use only information which is trustworthy and up-to-date.
Defining Your Market Research Goals
To make the research more effective, you have to prepare before collecting any data. You need to analyze your business and marketing plan to set proper goals for further market research. Remember: you will never know how to find new business opportunities without it.
Adequately formed goals for research will help you to concentrate on the vital questions for your business. You need to have a clear understanding of what are you looking for and how the obtained information can be applied.
There are three steps to defining research goals:
- Find key objectives – concentrate on the information related to your product or service and determine the most critical fields.
- Form questions – analyze the key objectives and develop a list of questions for your research.
- Analyze potential issues – think how you can use the results of market research.
Remember that you should start researching the market only after you understand what you are looking for. What is more, you should limit the time and budget for your research to prevent extra expenditures.
How to Conduct Market Research
There are various recommendations on how to do market research available on the internet. However, the strategy is always the same.
In the beginning, you need to conduct some initial investigation and preparation. Determine the research goals, check if you can gather all the information by yourself or if you need to hire professionals. Don’t be afraid to reconsider the funding for your research while developing your goals. Do everything you can to be sure that you will get informative results.
When you know what are you looking for and have a plan, you can start collecting information. Search for the most detailed and complete data available, however, keep monitoring the budget. Keep in mind your research goals throughout the entire process.
After that, you can start processing the obtained information. Try to arrange it for further interpretation. For example, you may use tables and graphs for visualization. Remember to summarize every block of data to determine tendencies.
Finally, you can use the analyzed information to make some conclusions and to determine the opportunities for your business development.
Five Key Stages of Market Research
The results of your market research will tell you how to identify new business opportunities. That is why it is so important to systematically analyze all spheres related to your product.
You need to be certain about which market you are targeting. Take into account all available information including demographics and geographical details. Identify the typical behavior of your target market and try to understand their values.
Furthermore, you should be aware of the possible variations on the market, like a change in the number of clients. Analyze population trends to catch the tendency.
Investigating possible competitors will help you obtain valuable knowledge about the situation in your business niche. Research which products and services they offer, how long they have been on the market, and how their companies developed.
You can use such information to find a sphere in which you can compete. Furthermore, you can adapt some successful techniques and tactics according to your needs.
The situation on the market can change rapidly – so you should develop your strategy according to these changes. Think about how you can apply new technologies to your business. Analyze social media resources and new inventions.
Try to determine the trends and identify future opportunities for your company.
You should know your target audience. Identify the preferences of your potential customers. Ask their opinion before actually selling your product.
What is more, analyze the willingness to pay for your product or service. Use some statistics or conduct a survey to get the most precise data.
If you conduct these key stages of research, you will obtain a wide range of information related to the market. The next essential step is to think about how to do a market opportunity analysis.
The results of the research will lead you to the understanding of the market potential. Collect numerical data related to the size of the market, growth tendencies, competition, and target customers. This information will help you predict the overall demand for your production.
When you finish the market research, business opportunities will be easy to determine. The most convenient way to process the results is to conduct a SWOT analysis.
SWOT can be interpreted as:
Analyze the results to determine the strong and weak sides of your strategy. Identify the features of your product or service which are interesting for your customers. Moreover, you should investigate all the possibilities to develop the business.
Tools To Help You Conduct Market Research
Surveys are not the only way to conduct primary research. You can always use some tools that will save your valuable time.
For example, Google Trends will help you with trend analysis. You can also investigate the current trends using social media, so a platform like Social Mention or Pew Research Center will be useful.
To correctly determine your target market, use the services provided by MyBestSegments or Think With Google. Furthermore, there are special tools that will make surveying your demo easier than ever, such as SurveyMonkey.
Finally, you can use some data visualization tools like Tableau or Stats IQ.
Other Ways to Identify Sales Opportunities
The described methods and tools cover all the fields of market research. However, you can always ask a question: how can I find business opportunities in alternative ways?
Here are some ideas for you.
You can analyze the development of your market. If you know past trends, you will have an understanding of future tendencies.
Another way is to listen to your customers. They can quickly point out problems and give you a hint of how you need to develop your business. Provide people with different options to communicate with you. Conduct surveys, use social media or speak to them in person to gather valuable feedback.
Last, but not least: read everything you can get your hands on. There are many books devoted to market strategies, so you can surely find something applicable to your company.
With proper market research business opportunities open to you much more often. Thankfully, market research is not a complicated thing if you know the right ways to go about it. We hope that our article will help you analyze the market situation and determine how to effectively develop your business.