Market research is the process of gathering, analyzing, and interpreting information to help a company or individual assess the viability of a product or service and make sound business decisions. It is of immense importance to entrepreneurs and startup companies to evaluate the feasibility of a business before committing further resources to the venture. Show Market research is critical in accomplishing the following tasks:
In their enthusiasm, many entrepreneurs and startups make the mistake of diving into the market without first conducting thorough market research, thinking that they know what the market wants. This can cause a business to make costly mistakes and is often a recipe for failure. How to Conduct Market ResearchThe starting point for any market research endeavor is to gather data on the relevant market sector. This involves two types of data:
Market research may sound like a lot of work, but it is essential to enable you to get an accurate portrayal of your market. In this guide, we discuss the types of marketing research that can be used and the resources that marketers can employ for this process. Types of Marketing ResearchThere are several methods that can be used to conduct market research, depending on the company’s objectives and marketing strategy. They can be used in isolation for a specific purpose or in combination to build up a more comprehensive picture of the market:
Types of Marketing ResearchCompetitor AnalysisNo business can operate in a vacuum. To reap success, a business has to deal and interact with all sorts of people, including customers, suppliers, and competitors within its market sector. Competitors are defined as companies that meet at least one of the following criteria:
Conducting competitor analysis to know your competitors’ good and bad points will enable you to exploit their weaknesses, undermine their strengths, and anticipate their next moves. In analyzing each of your competitors, you need to gather the following information:
Having gathered this information, you need to formulate a plan that outlines how you intend to compete with each competitor. Do you offer…
Competitor analysis will enable you to identify your unique value proposition (UVP). This is generally a unique aspect of your product or service offering that sets you apart from your competitors. A UVP can be a powerful tool in future marketing campaigns, especially if it meets a customer need that you may have identified through other marketing research endeavors. Competitor analysis forms a critical part of the competitive intelligence process, which uses the information gathered during analysis to strategize and formulate long-term plans for the business. Management can also use competitor analysis to decide how to counter a competitor’s ascendancy, head off perceived threats to the company’s market share, and develop strategies to achieve a greater competitive advantage in the future. InterviewsInterviews are classified as a qualitative method of market research involving a one-on-one interaction between an interviewer and a participant. Interviews are used for exploratory research, and there are a wide range of interviewing formats that can be used, depending on what you want to achieve. Interviews are a form of primary research to learn more about customer needs and opinions. They are particularly useful for the following tasks:
Interviews can be conducted telephonically, online, or face-to-face. They can be entirely open-ended or structured with specific questions to elicit responses that help you to determine opinions and market trends. Interviews can also provide a picture of how market needs change according to demographics or location. Face-to-face interviews generally produce the most accurate results, but they are time consuming, and the cost may be prohibitive. Focus GroupsThe goal of a focus group is to get participants to interact and bounce ideas off each other or discuss a topic. This can be costly, as you need to hire a neutral venue to host the group, and participants are usually rewarded in some way for taking part in the session. A focus group moderator, in collaboration with marketing staff, should prepare for the event by taking the following actions:
During the session, the moderator should encourage participation from everyone in the group and control the meeting so that the process doesn’t stall. It is often a good idea to have a roundtable meeting, which usually prevents one person from trying to dominate proceedings. SurveysSurveys are probably one of the easiest ways to generate information for market research. They can benefit a business by enabling you to accomplish the following goals:
Surveys can be conducted by telephone or by mail. Whichever avenue is chosen, a survey needs to be correctly designed to generate enough interest to ensure participation and to elicit responses that are in line with the survey objectives. Market Research AnalyticsData analysis in market research can be a daunting task, depending on the amount of information gathered. Data organization and data reduction are two techniques that are often necessary to enable meaningful interpretation of the information. There are several statistical methods that are used by marketers to interpret research results:
Target Audience and SegmentationTarget AudienceIn marketing, it is essential to understand your target audience; otherwise, you don’t know which channels to use for your advertising campaigns. You need to know how to reach and resonate with your audience by targeting the demographic that is most likely to be attracted by your product or service. The best way to find a target audience is to analyze the specific needs that your product or service caters to. The more generally used your product would be, the easier it is to advertise and formulate a marketing campaign. It is essential to evaluate the success of any marketing campaign by monitoring the following aspects:
If these results are not satisfactory, you need to alter your advertising message or amend your marketing campaign to target other channels. Market SegmentationEvery company should be striving to gain an edge over its competitors by providing a better level of service. In this way, it can gain a competitive advantage and target new customers. Market segmentation is all about identifying different segments of your market that cater to different types of customers and then tailoring your marketing campaign to each segment accordingly. Good market segmentation will result in the identification of segments where each one contains similar customers but is as different from the next segment as possible. There are different types of segmentation, based on different elements:
Each of these types can be divided further into segments. Consumer Behavior in the Marketing Research ProcessConsumer behavior is the study of customers and organizations to determine how they select and use products and services:
An understanding of these aspects will enable a company to adapt its marketing campaign in a bid to increase its influence over the consumer. Consideration is also given to three kinds of factors:
This is all very well in theory, but how do you go about collecting data on consumer behavior? The following channels are the most useful:
Resources for Marketers to Conduct Market ResearchFor startup companies and entrepreneurs about to launch a new business, it is vital that you source as much information as possible about your market. This will enable you to get a handle on your target market, as well as collect information about geographical locations and recent business trends. It would be very costly to resort to market research companies to do the work for you; however, there are a number of resources that are either free to use or reasonably priced to access. List of Resources for Marketing Research1. Census.gov. The U.S. government collects census data every 10 years and targets the general population. A database search will yield information on:
2. USA.gov. This is another government website that is free to use. It also links to various trade and industry organizations where you can get information on the type of business you intend to start. On USA.gov, you can access information on:
3. SBA.gov. This is the Small Business Administration website, which contains great information and advice on starting your own business, including:
4. FedStats.gov. This federal government site provides access to information on a wide range of topics:
5. ExonomicIndicators.gov. This site updates its information daily, sourced from the Bureau of Economic Analysis and the Census Bureau. You can access information on:
6. SurveyMonkey.com. SurveyMonkey enables you to set up your own survey, which is very user friendly for both the facilitator and the participant. It allows you to include multiple-choice, true/false and essay-type questions, and it enables you to include ratings scales. The responses can be formatted in a number of ways, including graphs and charts. SurveyMonkey also sells target audiences if you don’t have your own email target list. 7. Think with Google. This free website enables you to access its Shopping Insights, Google Trends, and Consumer Barometer to gather information on consumer behavior and product trends. 8. Amazon. This is a great place to access information by filtering data on markets, new products, competitors, and pricing. 9. Social Mention. This platform provides a free service to search and analyze social media content across a wide range of social media platforms, including Facebook, Twitter, YouTube, and Google. You can track what consumers are saying about your company, a new product, or any other topic. 10. Facebook Audience Insights. This tool enables you to learn what matters to Facebook followers through information about their locations, interests, and behaviors. 11. BizStats. BizStats provides all kinds of information on small businesses in the United States. 12. Up Close & Persona. This free tool enables you to create an image of customer types and what motivates them to buy. These are some of the free resources that are available to marketers to conduct market research. There are many others, such as Followerwonk, Proved, UsabilityTools, and Typeform that provide free basic services but charge a premium to use upgraded service plans. Recommended ReadingsWhat You Need to Know About Social Media Marketing 3 Hot Management Trends Shaping The Business World Northeastern University Online MBA Program Sourceshttp://www.studententerprise.ie/phases/phase-2/module4/what-is-market-research/ https://www.investopedia.com/terms/m/market-research.asp https://www.entrepreneur.com/encyclopedia/market-research https://managementhelp.org/marketing/market-research.htm https://www.surveymonkey.com/mp/market-research-surveys/ https://managementhelp.org/marketing/competitors.htm https://www.tutor2u.net/business/reference/the-role-of-competitor-analysis http://www.mymarketresearchmethods.com/an-overview-of-market-research-methods/ http://changingminds.org/disciplines/marketing/market_research/market_research_interviews.htm https://managementhelp.org/businessresearch/focus-groups.htm http://www.swotnot.com/types-of-market-research/ https://www.thebalance.com/market-research-101-data-analysis-2296676 https://www.thebalance.com/what-is-a-target-audience-2295567 https://www.thebalance.com/market-segmentation-2221043 https://www.brandwatch.com/blog/how-understand-influence-consumer-behavior/ https://www.practicalecommerce.com/16-tools-and-resources-for-market-research https://quickbooks.intuit.com/r/professional/5-resources-to-conduct-market-research/ https://www.sba.gov/blogs/conducting-market-research-here-are-5-official-sources-free-data-can-help |