Starting a new business is exhilarating. Prior to immersing in the process, you need to do research work and have knowledge. First, get market research done for the company. It is helpful to learn the competitive landscape, and most importantly, try to outwit it.
In fact, market research is essential to your success whether you have entered a new market, looking for customers, or introducing a new product. Market research helps you find opportunities to grow business with target customers.
What Is Market Research?
Market research is where you collect information and data about your target customers, demographics, and selling products. This research collects information about potential customers, knowledge of your competitors, and geography.
Small businesses conduct research to gauge the feasibility of a business idea or new product in geography they may not be all too familiar with. Research includes finding if they would even have the potential to be funded. Market research may be to develop a robust plan of action in marketing towards consumers or competitors within the industry.
Why is it Important?
The ultimate goal of market research is to support you in making the best decision to grow your small business and sales.
It is also important in e-commerce businesses to build an online presence and formulate growth strategies.
Market research helps to develop brand credibility and customer satisfaction.
A sound market research program can help identify key areas, including market segments, target customers, and sales probability.
Types of Market Research
- Primary Research
Primary research is done firsthand, you will go out and either meet or call potential customers. Here you ask them about their preferences, get a sense of their interests and motivations, promote your product, etc. It needs your investing time, and potential expense, but is the most exact, accurate, and reliable form to use.
- Secondary Research
Secondary research includes data and information that you obtain through other sources. Here you conduct the research that has already been published by other people and institutions.
Second-hand research is sometimes free of charge or you must pay for it. While it is typically less expensive than primary research, it does have an inherent challenge.
Steps to do Market Research for Small Business Budget
- Identify Business Goals
Before you complete any research, write your primary business goals and what you hope to achieve with it. Be specific about the information you are trying to learn, and how you could use it for the company’s advantage. Also, determine certain challenges that the company currently has. Focus on specific aims and effective business communication in order to find solutions for each particular goal.
- Know Your Target Audience
When developing a product, you are aware of the target audience although you may specify or narrow down your audience later. Consider categorizing the target audience by:
Age
Occupation
Size and structure of families
Individual habits/preferences/interests
Income
Purchasing habits, etc.
Know the purpose of creating multiple buyer personas. Be sure to conduct research with each audience group separately, since different buyers may ultimately have different goals and motivations.
- Market Segments Analysis
Market segments are groups of people in the market having specific demographics, behaviors, or priorities.Market segments lends itself to finding groups of potential customer samples who you may interview and research.
Your ideal sample customer is who has purchased something, or has specifically chosen not to purchase the product in question. These customers generally fall within your business’s buyer persona. Ask them about completing surveys, as well as participating in focus groups, or phone interviews.
- Identify Competitors
Researching your competitors and where they fall in the market represents a very important aspect of market research. You may want to identify all potential competitors and their competitive relation to each other.
Learn about what makes them unique, or understand the reasons customers may prefer one company over another. Consider isolating their market share, market reach, product scope, and customer service.
- Create a Report on Market Research
Your market research is not done until you pull out actionable insights from the data collected. Consider your audience, as well as the context of your industry and product, you should be able to draw conclusions.
Make a list and identify actions that you may be able to execute to address some of the challenges or outcomes. They may be executed in future for small business growth.
Common Market Research Mistakes
Depending on Secondary Data
Lots of organizations fall into the trap of forgoing a primary research method, in other words, collecting data from an audience directly, by conducting surveys, interviews, or observations of your audience.
Using Poor Data Quality
Surveys that are poorly designed, bias questions, or errors in collecting information will result is inaccuracy and therefore unreliable. This is why committing time to designing surveys, or other data collection methods, is good.
Skipping Competition Analysis
Even without a competitive knowledge, could easily put decisions in danger. However, without real and detailed understanding means you would just need to rely upon the competition.
Conclusion
Market research is the foundation of a company’s research & development stage. As an entrepreneur, executing market research helps you make better business decision than pursuing trials without research, then it just becomes guesswork, that costs high. Hence give time for researching and come up with unique business strategies.
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