Conducting Market research will be an important part of any start-up’s preparation and business planning.
The information included will help formulate your marketing, resources and business plan whilst also helping you decide what markets you intend to target and how and what pricing points you will adopt.
Having a good business plan can also help alter your chosen business idea to become more profitable.
There are two forms of effective research that should form part of your market research strategy: desk and field research.
1. Conducting Marketing Research
Social networks and the internet are good platforms to conduct market research. Both offer a supply of secondary data that can be accessed online providing allowing new start-ups to view the size of potential markets and trends
The internet and social networks have driven the accessibility and development of market research. Both platforms offer an ever increasing supply of secondary data including statistics, financial reports and company operating reports. Access to such data allows new start-ups to quantify the size of market sectors they are entering and to determine competition and trends within those markets.
Despite the development and accessibility to such data, interacting with customers directly, market testing your product and building your brand presence through interactions with users is still extremely important when conducting market research.
Field research provides an opportunity to acquire a more in-depth insight into particular regions or towns. Data tends to be more general and does not account for current economic climate changes such as economic downturns which will likely have an immediate impact of buying patterns.
2. Keys Areas of Field Research
Observing your business’ market
Observing your business market can provide valuable insights on how things look from a customer’s perspective. It is worth noting that insights will only be relevant to the period in which the business market was observed. This method of research allows new start-ups the opportunity to find out how customers feel about your product or service and any challenges they face.
Interviewing potential customers
Qualitative research includes methods of talking and listening to current or potential customers. This can be through surveys or interviews. Both forms of research should focus on achieving the data that you need. Basic skills required include good inter personal skills, being sensitive to the people you are interviewing whilst also ensuring that any interviews are conducted at an appropriate time and place. Samples are always vital to successful interviewing so potential customers can share their views on the product or service you are looking to bring to the market.
Surveys are still one of the most common forms of market research and can be used to obtain research on potential markets, gage customer satisfaction and assess the views of current and prospective customers in regards to your product or service.
Surveys can be conducted online, face to face or over the phone. To ensure that your survey is successful, providing an explanatory letter and possible incentives for the recipient to ‘open’ the questionnaire will help drive your success rate. Unsolicited emails (‘spam’) are likely to be deleted or ignored by recipients. The number of questions should be kept to a minimum and made simple for the user to respond.
It is important that your surveys are constructed to obtain statistical data that can then be used to present your research and highlight your findings. Such data will be the foundation for any decisions you make in regards to launching your product or service therefore the questions you ask should be carefully thought-out. This data will also form an integral part of your business plan and will look to convince possible investors on the viability of your business idea backed up by solid market research.
It won’t be possible to include every customer in your research so instead select a sample of people, who represent the whole population being surveyed.
It would never be practical to survey all customers therefore sampling can be a more accurate way of getting accurate data for your market research. There are two forms of sampling, probability sampling and non probability sampling.
Testing the market
Probably the most constructive form of market research is to find real customers to purchase of use your product or service before you invest so much time and capital in setting up your new business idea. This can be achieved by identifying a small limited area of your market and selling your product or service. This may be achieved by buying a small quantity of product as you need to complete the order for testing. This will allow you to test your product on a small group of people where you can acquire feedback on product, price, branding and delivery. It is advisable to select customers that are accessible to you for example if you are going to be testing a photography business, then select potential customers close to your location.