Market research is crucially important when launching a business or new product as it helps you make decisions, understand the risks involved, and determine viability, but it is also beneficial at other times. Even if your business and products are established, it is good to find out what customers (and people who don’t buy from you) really think about you. This can help you identify problems to correct or new opportunities.
What is Market Research?
Market research involves finding out what real customers think about your product, idea, or the problem you want to solve. For example, maybe you have a great product but the packaging, name, and/or pricing is wrong. Maybe you have invested in great packaging and design, but customers do not feel the product meets their needs. You might even have a product that does everything you intended it to but it still isn’t compelling enough for customers to give you their hard earned cash.
What You Need to Find Out
The things you should find out from market research includes:
- Who are your competitors?
- Why do people buy from your competitors?
- Do people want to buy your product?
- If they don’t want to buy it, why are they not interested?
- You should also find out why they are interested if they say they do want to buy it?
- Who is your potential customer? This includes age, gender, where do they live, etc.
- You then need to find out the potential market. This usually involves finding out the potential size of the market and how often people will buy your product.
- How much are your potential customers prepared to pay for the product?
- Can you make a profit?
Where Do You Find This Information?
You will find some of the information through online searches. This includes information on your competitors as well as broad population and demographic information. This is not enough, however, as you also need to ask real people what they think.
One of the mistakes that many business owners make, particularly when planning a new business or product, is to consider the points above without asking anyone else for their opinion. Another mistake is asking the wrong people.
After all, you will have ideas about your product, business, and potential customers, but you are firstly too close to the business to be completely objective, and, secondly, you’re only one person. Just because you think your products are useful/attractive/time-saving/money-saving/money-making/fun/entertaining doesn’t mean enough other people will think the same thing for you to turn a profit.
This means you need the people who you might want to purchase your products to tell you what they think.
It is important, too, that the people telling you this are detached from the company – the greater the detachment, the more reliable the research will be. If you only ask friends, family members, and employees there is a risk they will tell temper their responses.
In next week’s blog we will look at cost-effective ways that small and medium-sized businesses can conduct market research.
If you need any further help or assistance with your business, please contact a member of the Gilroy Gannon team today.