Market research is the process of gathering information about a certain market in a given industry. Market analysis is not a feat you can achieve overnight and is essential to the growth of your small business.
This tool helps you understand how large your target market is, their purchasing power, spending habits, and your competitor’s strengths and weaknesses. If you are looking for a guide to conducting market research for your small business, you have come to the right place.
Market research is usually done through a series of surveys and questionnaires. The questionnaire is structured to make the audiences point out certain issues about the brand, which the business wants to know about and address. In recent years, online questionnaires have become very popular and are being used by brands aggressively. Plus, questionnaires are super-versatile and can be tailored to certain methods, such as Gabor Granger, to help you understand more about how your audience feels about a specific thing (those who use Gabor Granger, for example, will be researching attitudes towards pricing for a certain product). Sometimes, businesses incentivise customers who are willing to fill in the questionnaire.
Establish the purpose for your research
Determine whether your market research will serve internal or external purposes. Internal purposes for conducting market research include reducing risk and improving cash flow, while eternal purposes include acquiring loans from investors. Having a purpose in mind will keep you on track and prevent you from forgetting why you started.
Identify your target market
It is not realistic to try and get everybody to love and buy your product. Instead, it would be wise to conduct a target market analysis and focus your efforts on the percentage that is most likely to be interested in your product. Consider age, education, gender, location, occupation, and interests when analyzing your target market.
Gather data from reputable sources
There is no such thing as too much data when it comes to marketing research. Make use of tools such as market research software to gain insight into public opinion on your product. Ensure your data is factual and is derived from credible sources.
Organize and analyze your data
Compile all the data you have collected and organize it into elements such as industry outlook, industry’s projected growth, customer spending habits, and the business’ projected market share percentage.
Understand your competition
Market analysis involves understanding your competition and who its target market is. Find out what your competitors have to offer, where they have decided to locate themselves, and some of the challenges they face while operating in the market. Go a step further and analyze their strengths and weaknesses using a technique known as SWOT analysis.
Research on the current state of the industry
You need to know your industry like the back of your hand. Ensure you are up to speed with emerging trends, size of the industry, and you can project how fast the industry will grow. Understanding your industry will make investors and lenders more confident in your business and make them more willing to work with you.
Incorporate your analysis into the business
Find out what strategies you can apply in your business to make marketing more effective. If your market research is for external purposes, ensure that you present the lenders with easy to understand and digest data. Retain the data from previous analysis and create a yearly calendar reminder to keep up with emerging trends in the market.
Market research helps you reduce risks as you start up your business, helps you identify emerging opportunities and trends, and gives you a competitive edge against other businesses in the same field. By setting yourself apart, you will reel in new customers and maintain your old clients.