What is Market Research?
Updated August 2016.
Market Research is a form of study conducted to collect necessary information for your company, giving you great insight into your customer needs and opinions about your product or service, allowing you to take decisions forward based on the results you gather.
The Characteristics of Market Research
The scope of market research is more or less limitless. It takes into consideration all aspects relating to your business, such as:
Location – geographical location, local markets, regional, national, European or international.
Products – type of products / services studied; a group of products (e.g. cosmetics), a type of product (perfume), or a specific product (brand of perfume given).
Time – the past market, present market or future market.
The profile of buyers – by gender, age, socio-professional category, by level of education …
Profile of intermediaries or end users: resellers, retailers, wholesalers, makers, mothers, children.
Why use Market Research?
Market research is very useful if you are creating or launching a new product or service and you want to adapt it to fit with your consumer or client expectations. It makes sense to run a survey to measure the risks involved and know which direction to develop your product or service. This is a classic form of market research.
The process of conducting market research is not complicated in itself, but many pitfalls can skew the results and lead to false conclusions. There are a lot of considerations to take on before you conduct your market research, such as the choice of survey mode, the number of people to be interviewed, the demographic you want to target, the preparation of the questionnaire and the analysis of data collected, are the keys to running a successful research project.
Steps to a Successful Study
Before launching a new product, a properly conducted investigation in the form of market research can limit your risks and help you know what direction to go in. Here are some of the most important points to consider before starting a market research campaign:
Anticipate the actual needs of your customers.
Consider all information as important.
Learn from the competition.
Take the best information from your customers.
Perform a survey.
Collect as much information as possible by telephone or face-to-face. Define accurately the expectations of your customers.
Estimate figures on your competition more accurately.
Get help from a trusted person who knows about your project.
Measure the potential of your customers.
Perform market research specifically tailored to your product / service.
Look for information at official statistical agencies.
Learn about the demand and competition by region.
Make sure your product / service does not already exist.
Make sure that your target audience is relevant. What are your competitive advantages over other businesses in the same niche? Identifying your customer needs and the potential for success in your relevant sector are the pillars of good market research.
To do this you need to do some thorough sampling. This is the part that is responsible for capturing relevant data from primary sources, or ‘samples’ of the demographic you are targeting with your product or service. You then can analyse and generalise the results to a percentage of the population from which it was extracted.
The idea generally consists of obtaining sufficiently representative samples to generate conclusions that apply to the entire target population. So for example if your target audience for your product or service is women aged 25 to 40, you would focus your market research on as many women that fit this age range as you can, analyse the feedback and draw conclusions from your results.
If 8 out of 10 women surveyed during your market research were positive about your product or service and stated that they would be happy to buy from you once it was available, then you can say from those results that your business is very likely to succeed and do well. However, if the results were opposite and only 2 out of 10 women surveyed actually liked your product or service, then you wouldn’t be advised to launch your business and it would most certainly mean going back to the drawing board with your idea.
Further Points to Consider
Keep up to date with the latest news and market trends for your business niche or sector. Regularly read publications and follow journalists who report on your business sector for all the latest insights that you may find interesting or helpful.
If you can attend networking meetings with professionals in the same industry or who work in a complementary industry to yours, then you may well be able to share market research results and industry knowledge that others have already conducted. You may be able to join forces with another business and pool your resources to conduct a much larger market research project that will benefit the both of you.
Networking can also introduce you to industry experts and seasoned professionals that can offer you great resources and information when you are first starting out. Many business veterans have written books or journals, analysed and published their market research results and finding that you may find very useful, so you can often pick up free or discounted copies of their work to help you even further.
To have a chance of making your own market research valid, you must try to survey at least 500 people to get a really good cross section of results. Even if your new venture is a start-up company, the aspect of conducting good market research should not be dismissed. Using your findings to help you with promotional and marketing campaigns can really give your product or service the boost that is required.
Of course, you don’t have to do every single interview or survey personally! You can hire virtual staff to run the market research for you once you have planned out and finalised your methods. Capital Office can help you with this with our Virtual Office service. For more information about how we can help you build your business contact us today for a friendly chat.