So you have a business idea which you’ve poured your heart and soul into and a product which you think is great, and your friends and family fully support.
Does that mean, however, that there is a demand for your product and that it will be a success? Not necessarily – or not without proper research, anyway.
That’s where market research comes in. To have a thorough business plan, you need to have conducted a thorough market research first.
What is Market Research?
Market research is an information-gathering tool for business (and potential business) owners to gain knowledge about how well their product will do in the current market, what the demand is, and how consumers will react to their product.
The world of the internet has, of course, opened up many methods of conducting market research, whether it’s online surveys, competitor research, a reverse image tool to find similar images, and therefore find whether the same product already exists, or face to face interaction.
How to Conduct Market Research
For entrepreneurs, you should conduct primary market research as soon as possible, as your business plan will rely on it. Market research can help to formulate ideas over demand, expected profit and how exactly to best market your product.
You need to first decide what information you need to know, and then you can formulate a plan regarding the best way to gather the information you need. You can conduct market research alone, as part of a team, or you may want to hire someone specialized to gather the required information for you.
As an entrepreneur, it may be preferable for you to conduct the research alone, not only to keep costs down but to gain a better grip on your product and desired consumer.
Areas to think about are:
- What is my target market? Who will my customers be, and how best do I reach them?
- Do people want or need my product or service? Is there a gap in the market?
- Is there anything that could influence whether customers buy my product or not?
- How much should my product be?
- Is there already a similar product on the market with a specific price tag?
- How do people usually purchase my type of product? Online or in a store, for example?
- Do I have any big competitors?
Methods of Market Research
There are many ways you can conduct market research. You can choose some of the options, or all of them, depending on your time and resources. Obviously, the more information, the better.
Data collection methods include:
- Email contact – this could be surveys or direct email queries to a target market
- Face to face – on the street surveys, in-store questions
- Mail – letters or surveys sent through the post
- Telephone surveys
- Webchat or any other web interaction, such as social media or forums
- In-depth interviews with focus groups
- Indirect observation, such as watching the buying habits and activity of consumers from an outward perspective and looking at trends
It’s important to gather as much information as possible, as early as possible, to give your business the best chance at success.