As a startup, it’s important to understand your target market and what they want. The best way to do this is through sufficient and comprehensive market research, which is an important step before bringing your business idea to real business.
If you establish your service or product without understanding the target market, most probably you are digging your own grave.
Here are 8 steps on how to do market research for a startup.
- 1. Figure Out the Purpose of Your Market Research
- 2. Choose the Right Market Research Methods
- 3. Conduct Your Market Research
- 4. Know Your Target Market and Customers
- 5. Check if There is Really a Demand for Your Products or Services
- 6. Research Your Competitors
- 7. How Can You Differ from Competitors
- 8. Analyze The Data And Use The Findings
- Final Thought
1. Figure Out the Purpose of Your Market Research
Before starting your market research, you first need to determine the purpose of the research. This will help you focus your efforts and resources on the right areas, and avoid wasting time and money on information that’s not relevant to your business.
Some common purposes of market research include:
- Identify a target market
- Know customer needs
- Assess the competition
- Gauge market size and trends
2. Choose the Right Market Research Methods
After defining the purpose of your market research, you can choose the most appropriate research methods. There are several ways to collect market data, so you need to select the methods that will best suit your needs.
Two common market research methods are Primary Research and Secondary Research.
Primary research is the first-hand data that you collect yourself, through surveys, interviews, focus groups, or other direct methods. This type of research is usually more expensive and time-consuming than secondary research, but it’s also more reliable because you’re getting first-hand information from people who are actually in your target market.
If you decide to use primary research, there are a few different methods you can choose from:
- Surveys: You can use online surveys, email surveys, or even in-person surveys to collect data from your target market.
- Interviews: One-on-one interviews are another great way to get insights from people in your target market.
- Focus Groups: Focus groups are basically group interviews, where you gather a small group of people together and ask them questions about your product or service.
Secondary research is data that’s already been collected by someone else, such as market reports, government data, or industry association studies. This type of research is usually cheaper and faster than primary research, but it’s not always as reliable because you’re relying on someone else’s data.
If you decide to use secondary research, there are a few different sources you can tap into:
- Government Sources: The government collects a lot of data about businesses and industries, which is available to the public.
- Industry Associations: Industry associations often conduct market research and publish the results for their members.
- Commercial Databases: There are many commercial databases that sell market research data, such as Hoovers, First Research, and Mintel.
3. Conduct Your Market Research
Once you’ve selected your market research methods, it’s time to start collecting data. This is usually the most time-consuming part of the market research process, but it’s also the most important.
If you’re doing primary research, you’ll need to design your surveys or interview questions, and then collect and analyze the data you’ve collected. If you’re doing secondary research, you’ll need to find and evaluate the data that’s already out there.
4. Know Your Target Market and Customers
This is the first and most important step in conducting market research. You have to know who your target customers are, their needs and pain points, and what you can provide them with that will satisfy those needs and solve their problems.
Keep in mind that your target market is not everyone, but a group of people with specific characteristics who are more likely to buy your product or service.
This step will help you what kinds of products or services you develop will have market demand.
Read The Latest Trend Reports
Knowing the market trend will help you understand the direction that the market is moving in, and this can be helpful in planning your business strategy. There are many different reports you can read, such as industry association reports, government reports, or even commercial market research reports.
Use Google Trend
Google Trend is a tool that lets you see how popular particular keywords are. This can be helpful in understanding what people are searching for, and what’s popular in your industry.
Talk to Industry Experts
You can also know your customers and market by talking to industry experts. These are people who have a lot of experience and knowledge about your industry, and they can give you some valuable insights into the market.
Find Out What Your Competitors Are Doing
Researching your competition is also a good way to learn about your market. Find out what they’re doing, what’s working for them, and what’s not. This information can be helpful in planning your own business strategy.
5. Check if There is Really a Demand for Your Products or Services
Even if you have a great product or service, it won’t be successful if there’s no demand for it. Before you start your business, make sure that there is actually a market for what you’re selling.
You can know this by finding competitors and conducting a market analysis. If there are many competitors in your area or selling the same thing, it’s a good sign that there is demand for what you’re selling.
6. Research Your Competitors
You can learn a lot about your industry and target market by researching your competitors. Take a look at their websites, marketing materials, and social media presence to get an idea of how they’re positioning themselves in the market. You can also talk to customers to see why they choose one business over another.
Having a deep understanding of your competitors will help you understand why they’re successful. For example, you can evaluate your competitors from these factors in your research:
- How big is their market share?
- How many years are they in the market?
- What do customers say about their prices?
- What kind of marketing do they use?
- Do they have any weaknesses that you can exploit?
7. How Can You Differ from Competitors
You’ll find some of your competitors offer the same products or services as you will do. So, how can you differ from them and make your business more successful?
There may be several ways to stand out from the crowd, and here are a few ideas:
- Offer a lower price than your competitors
- Offer a higher quality product or service
- Offer better customer service
- Offer a unique product or service that your competitors don’t have
Apparently, your competitors also know these ideas, you need to think deeply about what your competitors don’t provide but what customers need.
8. Analyze The Data And Use The Findings
After you’ve gathered all your data, it’s time to analyze it and use the findings to help you make decisions about your business. There are many different ways to analyze data, but some common methods include:
- Descriptive analysis: This method simply describes the data that you’ve collected. It can help you in understanding what’s happening in your market.
- Comparative analysis: It compares your data to other data sets. This can be helpful in knowing how your business stacks up against your competition.
- Correlation analysis: This method looks for relationships between different variables. You’ll learn the cause and effect of certain factors in your market from it.
After you’ve analyzed your data, you can use the findings to help you make decisions about your business. For example, you might use the data to:
- Set prices for your products or services
- Choose which products or services to offer
- Develop marketing strategies
- Identify potential new markets
- Plan for future growth
Carrying out market research is an important part of starting a business. It can help you understand your industry, target market & customers, and competitors. It can also help you make decisions about pricing, marketing, and product development. While it takes time and effort to do market research, it’s worth it in the long run.
When conducting market research, be sure to use reliable sources of information. This will help you make the best decisions for your business.