When speaking about conducting market analysis, the phrase ‘easier said than done’ seems really apt.
Market analysis can seem like a very daunting task if you’re just starting a business venture and don’t have much experience in the field.
To make it a little simpler given below is a breakdown of the steps you need to follow to conduct a thorough market research.
The first thing to remember before jumping into the research process is to target information that will provide you with actionable insights.
Don’t waste your time and resources on gathering information that in no way can inform your strategy. Stay focused on what you need and work smarter not harder.
Below are some questions that a good market research will answer.
⦁ How much will the expected market share be in terms of volume and value?
⦁ What is market saturation level?
⦁ What trends exist within customer behaviour towards the product?
⦁ What value can your product add to the market?
⦁ What is the price range?
⦁ Who are the big names in the business? Can your product find a place among theirs?
Let’s move on to a step-wise process of how effective market research can be conducted. Hopefully, this will give you an idea about where to start.
Develop a Model for Research following these steps:
1. Identify opportunity
You being here and reading this tells us that you probably already have identified an opportunity. This is just the idea you have for a product or service.
It is not really a part of the market research process. This is where it all starts. Business ideas have to be practical, of course, and practicality demands that your offering should serve an end.
For this purpose, you should always look for an opportunity to serve a purpose of some kind. Those are the ideas that will bring you the most returns.
Scrutinizing a particular market to identify that gap/opportunity is the beginning of your market research.
2. Identify target audience
This is the immediate next step because this is what your whole strategy will be based on.
Marketing, product design, pricing- all should be based on your targeted demographic.
Some key points you need to identify when narrowing your audience are:
⦁ Annual/monthly income
There are others, but when it comes down to it, these really are the main points.
Age will help you predict their behaviour patterns. We have talked about social media habits before and discussed that they are different for different age groups.
Narrowing the age group means that you will be able to find them online more easily when marketing.
Gender shows you what sort of thing is bound to work. Although of course there are no set rules when it comes to gender, knowing who will be more interested in what you’re offering helps the brand appeal to that sensibility.
When we say the idea has to be practical, we mean that it should ideally solve a problem for someone. It should add value to their lives. When you are aware of the targeted gender you can market your product to show them that it will solve a problem they regularly face.
There surely are issues that are specific to males and those that are specific to females. Just like different age groups, the media they consume might be slightly different from each other too and so you can reach them using those channels.
Location is their physical presence on the map of the world. You want to be where your customers are, of course.
Income tells you what the majority of your customers will be willing to pay for your service. Knowing this from the get-go means that you will invest accordingly. Being aware of the kind of returns you’re looking at help you maintain your profit margin.
Investing too much into a product only to bump up the price and then find that no one is willing to buy it at that rate is an extremely demoralizing process. So, keep track of the finances from the very beginning.
3. Develop a survey
Developing a survey for customers can give you a lot of insights about the industry you’re stepping into and not just the consumer side of it, but also the supplier’s side.
A good survey should gather information on the following subjects:
– What grievances do customers have with the current industry situation? )Through this you will be able to identify the gap you need to fill)
– How much are they paying and what they are willing to pay? (This will tell you how much you should invest)
– Which aspect of the product/ service is most important to the buyer?
– Which marketing methods do they mostly respond to?
In this way, by finding out what the consumer thinks of them, you can also find out information about the performance of your competitors.
There are other ways to gather information. For example, take a look at online analytics to find about what people are searching for. Your marketing team should be able to use tools such as Google Analytics and SEMrush etc.
4. Gather information on competitors.
First you will need to find out who the big players in the business are. This should not be hard if you were able to develop a strong survey. Common answers will tell you which brands are most popular and most liked by the consumers.
Once you have your list of competitors, conduct SWOT analysis on all of them. Find out their strengths, weaknesses, opportunities, and threats.
This will help you figure out where you stand in comparison and which of their weaknesses your product/service can make up for. Those weaknesses are basically your ticket into that market.
Other than this, you need to use the information you gather to form an informed general view of the industry and its growth rate.
These processes will help you narrow your options down to the few that will be the most effective. Anticipating market reactions and hurdles, is very important in successful business planning.
This was all about the planning and development of a research model. In the next section we will focus on surveys as they can make or break a research project.
When speaking about conducting market analysis, the phrase ‘easier said than done’ seems really apt. Market analysis can seem like …