WHY SHOULD YOU DO MARKET RESEARCH BEFORE CREATING A PRODUCT?
The importance of market research should never be underestimated, especially for those starting a new business. Market research builds a sturdy foundation for a business to be built upon, preparing the company for any threats or weaknesses that may arise as the business grows. From getting to know your target audience to explore potential competitors, market research gives businesses a competitive edge, allowing them to thrive in new environments.
What Is Marketing Research?
Before you can understand the importance of marketing research, you need to know what it is. Market research isn’t about a specific method or activity, it’s just what businesses call their attempt to learn more about their target customers.
While tasks like surveys and focus groups can help, they aren’t absolutely necessary, and they aren’t the only things you can do to research your target market. Here are some tasks that can be part of your market research:
- Have short conversations with contacts who are part of your target market. Let’s say you’re looking to launch a wedding photography service. Talk to your contacts who have been married or who are engaged and ask them about their experience in hiring and working with a wedding photographer. Even a five-minute conversation can give you insights on how to run your business.
- Look up Facebook groups relevant to your target market. This can help provide you a free, low-effort way to reach target customers online and ask them questions. Eventually, you can go back to these groups to promote your business, if the group rules allow for it.
- Add a survey form to your website. If you already have a website for your small business, you can offer potential customers a small discount in exchange for filling up a survey.
The above activities are just a handful of tasks that could be part of your market research. In fact, you can classify any task as a market research activity as long as you end up knowing your target market’s needs, behaviors, and preferences.
The importance of Marketing Research
1. Easily spot business opportunities
After you’ve done your market research, it’ll be clear to you who you want to reach out to (your target customers), where you can reach them (your marketing channels), and what they’re interested in. Once you’ve defined these, you’ll be able to easily spot business opportunities.
2. Lower business risks
Around half of businesses with employees don’t survive past the fifth year, according to data from the Bureau of Labor Statistics. The way to make sure that your business survives for longer is to ensure that you’ve got a steady stream of sales and customers. To do that, you need market research.
Regular market research will be your way to check in with your current customers and potential customers to ensure that you’re still meeting their needs.
3. Create relevant promotional materials
If you’ve ever wondered what text or images to put on your flyers, website, or social media accounts, with thorough market research, you’ll know exactly what to do. Since target customers have already expressed all their wants, needs, and frustrations with you, you’ll know exactly what to address and how to address it when you start creating your marketing materials.
4. Know where to advertise
One of the problems that small business owners face is a limited budget. Because of this, your marketing budget should be optimized to give you the best returns possible. Your market research can help ensure that you’re reaching your intended audience in the channels where they’re most likely to see your message.
5. Outsell competitors
The business that knows their customers more tends to win more. If you can beat your competitors at finding out your customers’ needs and you aim to fulfill those needs, you’ve got a better chance of standing out from the competition.
6. Set better goals for your business
When business owners set goals for their business, it’s typically related to growth in sales or customers. But without market research, you won’t be able to know if your goal is achievable and how to achieve it in the first place.
You might say that you want to double sales by the end of the next quarter. How would you know if this goal is feasible if you don’t know whether the size of your target market is more than twice the size of your current customer base? Without knowing the current size of your potential market, you’ll just be setting arbitrary goals.
7. Decision-making becomes simple
The need for and importance of marketing research frequently comes up when making tough business decisions. Instead of having arbitrary criteria for the decisions you make as a business owner, you can always go back to your market research report. Based on that report, will this decision lead to more customers? Will you be able to reach more people who are likely to buy from you? Will it be clear to them that your business can meet their needs?
Market research builds a sturdy foundation for a business to be built upon
Right Time to Undertake Market Research
The right time for a business venture to undertake market research is before the launch of a new business or venture. In case everything looks positive, a business can go ahead and launch its new venture.
With a few days of entering the market, a business can go for a second round of market research to gain an understanding about the acceptance of its already undertaken initiative.
A business should include market research as a continuous and an inbuilt plan of its business. This helps a business to gain knowledge about its market standing in the most challenging, competitive and ever changing dynamic environment.
How to conduct Market Research?
You should always ensure the end goals and objectives are clear. Your target audience, business objectives, challenges and end customer should be at the heart of it.
- Set out clear objectives and goals before beginning the research
- Identify your target audience and market size
- Make sure your sample size is representative of the audience you are targeting. This means there should be enough respondents in the research sample that reflect, as accurately as possible, the larger target audience population
- Choose the most suitable market research and data collection methodologies based on objectives
- Create your research questions – this is applicable regardless of which data collection method you choose
- Ensure the questionnaire is neutral and is not leading. – Remain impartial throughout the process
- Build in questions that validate other parts of the questionnaire
- In a qualitative focus group setting include open ended questions and allow for flexibility for respondents to freely speak on a topic that might not have been covered in the questionnaire
- Once data have been gathered employ robust analysis skills to interrogate and decode the findings
- When research findings are determined, make sure to not take these in isolation. Examine the macro environment also (such as language, cultural, economic, political situations) to validate the findings
You should always ensure the end goals and objectives are clear
It is clear that market research is vital when developing your marketing strategy. It provides great insights to your business and on the wider marketplace. Market research can identify how customers and potential customers might view your business and identify gaps in customer expectations. This is powerful information to have when completing your marketing strategy. Having good market intelligence helps to minimize risks when making key business decisions.
There are too many benefits to conducting good market research for it to be ignored as part of your marketing strategy.