If you are launching a new business, developing a new product, or thinking of expanding into a new sector, market research is essential. It is essential because it will save you money. Going straight for a business opportunity without exploring the market can result in you pursuing something that has no realistic chance of success. Even if it does have a chance of success, you will make fewer mistakes if you find out what the market really is and what potential customers really want before you start trading.
Many businesses lose money when they first start up, or when they first launch a product, because the pricing is wrong, or the pitch does not resonate. Maybe the product itself needs slightly tweaked, or maybe there are potential customers in places you haven’t thought of yet. Market research can uncover all these things.
Once you start trading and trying to sell your products, you will effectively do market research – customers will buy or they won’t, and they will tell you their reasons why either way. It is much better to do market research before you invest your hard earned money, though.
Here are three essential steps to help you ensure your market research is as effective as possible.
- Define what you want to find out
The first step is to define exactly what you want to find out, and then start thinking about ways that you can get the information. This includes:
- What size is the overall market?
- Are there competitors?
- What do those competitors offer?
- What do customers think of those competitors?
- What will make customers say yes to you?
- What size is that market – the market of customers likely to say yes to you?
With the questions outlined you can then set about finding the answers.
- Collect the Information
In general, you have to ways gathering the information you need to answer the questions outlined earlier – information you collect yourself, and information you source from third parties. You can collect information yourself in a number of ways including through questionnaires, surveys or focus groups. It can be done face-to-face, in group sessions, or online through your website or social media accounts.
The internet and the ongoing drive towards bigger data means the amount of third party information at your fingertips is huge. You can look at the websites of your competitors, research studies by academics, and statistics, all through simple online searches.
Your market research effort is likely to include a combination of information you have collected and information you source from third parties.
- Analyse the Information
Once you have the information you have to analyse it in a meaningful way. This means you must be impartial. When looking at market research it is often easy to put a positive spin on the results, when the reality is they are telling you that your plan or assumptions are wrong. This is human nature – we focus on the positive. Being honest and impartial, however, will reduce mistakes and lead to better – and more profitable – decision making.
Finally, you should keep an open mind. Just because you were wrong about something doesn’t mean everything is impossible. You might discover that a change to the plan would make it more viable or appealing, or you might discover a whole new opportunity that you hadn’t thought of before.
The objective of market research, after all, is ensuring you make the right decisions for your business, not to prove that those decisions are right.
For more help and advice with your business please contact a member of the Gilroy Gannon team today.