Starting a business without conducting market research can adversely impact your chances of success. Take for instance Microsoft, which released a portable media player named Zune, positioned as a direct competitor to iPod. However, Microsoft had to discontinue the product in 2011 as customers were unable to differentiate the product from iPod. One of the primary reasons for the same was the poor market research conducted prior to the launch.
Market research matters because it provides valuable insights into a variety of things such as:
- Who is your potential customer;
- Common issues faced by such customers;
- Which competitors are popular with your audience;
- What are the new trends in your industry; and
- What are the key factors that drive purchase decisions for your customers.
These factors have a direct bearing on how to shape strategy to propel your business forward. Additionally, as a new business owner, market research can be particularly useful for:
- Identifying niche customers;
- Brainstorming on new ideas for products or services that can benefit your customers;
- Figuring out the correct strategy for market positioning;
- Helping you understand emerging trends in your target market.
In other words, good market research can differentiate a successful business idea from a failed one. If you are wondering how to conduct market research for your brand new business idea, here are some tips:
Know what’s happening in the industry
Knowing the current state of your industry where you wish to operate is the first step.
It helps you to tweak your strategy and make suitable changes to the service or product you are planning to launch. Obtaining information about market size and the projected growth in the industry can also help you to target the right set of investors when you decide to raise funds.
Nail down the target customer and create a persona
Unless you know who is your target customer, you will be shooting in the dark.
You need to survey the market to understand to find out the potential customer base. Factors such as age, gender, location, occupation, income, and educational qualification, etc., can help you learn more about the type of customers who are likely to benefit from your product or service.
But don’t stop at simply gathering the information — use the data to create a buyer persona. Regardless of the industry, a detailed persona can help you to understand the pain points of the target customers and serve them better. It can also help you to work out the correct communication strategy to deliver your message.
Engage with market participants
It is time to get the conversation started with the actual customers.
Identify a set of customers based on the marketing persona and try to sense how they feel about your product or service. There are several ways to do this. You can offer free trials or samples of your product or service to a focus group and encourage the participants to share their feedback. You can prepare research questions and send surveys to potential customers. You can conduct polls on the social media profiles of your business. You can even do one-on-one telephonic interviews.
Regardless of the medium you choose, ensure that you are asking meaningful questions to the customers to make the market research count.
Find out about the competition
Knowing about your competitors can help you improve your product and overall strategy. Start with identifying your top ten competitors, assessing what each competitor is offering, and who are their target customers. Create detailed profiles of each competitor to understand why a customer would choose your competitor over you.
Knowing the strengths and weaknesses of your competitors can help you identify opportunities in the market and develop a strategy to minimize the risks.
Look for additional data
The more information you are able to gather, the more useful is your market research.
Apart from mining data from primary sources such as interactions with prospective customers, look at secondary sources for additional information. These could be trade journals, findings from interviews with other focus groups in your industry, and news articles.
Compile the data
A large quantity of data can be overwhelming and difficult to process. That’s why it is crucial to convert the data into a readable format such as a market research report. Make sure to include essential information such as the motivation to conduct the market research, brief background about the market research participants, buying trends, the decision-making process followed by a typical buyer, and a list of actionable items for you.
Get the analysis to work for you
Unless you put the analysis into action, the time spent on conducting elaborate market research will go to waste.
Instead of simply filing the data, evaluate it, and assess the changes you need to make to your current business plan. For instance, if you find that a lot of customers prefer the competitor over you because of the price, check if you can cut down the cost to maximize sales.
Get an expert business consultant to mentor you for market research
Given the rapidly changing times that we live in, entrepreneurs need to be armed with the right data and insights about the market to run their business successfully. However, doing everything on your own can be taxing and that’s why you need the guidance of an experienced business consultant. Business consultants can advise on multiple issues concerning your business including strategy and marketing. Irrespective of the stage of your business, a qualified mentor can facilitate your growth and help you adapt to the market dynamics.
Centurion Consulting LLC offers end to end business consulting services in the UAE. The services offered include market research, entry strategy, corporate structuring, regulatory compliances, incorporation services, and a lot more. With qualified business and finance experts on board, Centurion Consulting LLC can offer you an unbiased view of your business plan, evaluate the viability, handhold you through effective implementation to set up a profitable business in the UAE and in the region. Set up a 45 min free online or offline consultation session right away.
