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Market research is an important step that every project needs to do before getting into it, regardless of the sector. Good market research will decide if your business or project will be a success or a failure.
Before discussing market research, let’s first understand what ‘research’ is. It is doing a study or an investigation on the topic of interest to get a better understanding and collect new information and arrive at better conclusions.
“Marketing research is the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company”
Kotler & Keller
Market research can be done for many different reasons. It is used to better understand the audience that they are trying to introduce the product or service to. It is important, companies spend billions every year to ensure they get the highest quality market research.
Market research is not only used for large projects. It can also be used on small projects. For example, if you’re planning on baking cupcakes for your classmates, you can conduct market research on your class to find out what kind of cupcakes they like and their favorite color of icing.
Benefits of Conducting Market Research
1. It helps to spot market opportunities and threats.
If market research is done right, you will be able to spot the opportunities available in the market ahead of time. This will allow you to penetrate the market early and will be a huge advantage to your business. Being able to spot threats early on will also allow your business to take the necessary precautionary measures to avoid surprises in the future.
2. It helps to understand your own and your competitors’ strengths and weaknesses.
Market research enables businesses to understand themselves and their competition easily. A business needs to recognize its own as well as its competitors’ strengths and weaknesses. You should be focusing on your own strengths to grow the business while taking the necessary steps to get rid of your weaknesses that could potentially harm your business in the long run.
3. It helps to keep up with upcoming trends.
Doing market research allows companies to be updated on the latest trends in the market. While this opens up the business to market opportunities, being aware of the latest trends helps the business to modify its current products and services to suit the times.
4. It minimizes investment risk tremendously.
Investment risk will always exist in every business. It can never be 100% risk-free. However, doing proper market research before you start your business will allow you to use your funds efficiently on the right things. Therefore, this strong market research analysis will minimize investment risk greatly and allow investors to have much more confidence in your business.
5. It helps businesses to stay ahead of the competition.
The competition will always show you their current standard of the goods and services that exist in the market. With this information and the new data that you gather about consumer preferences, you can constantly be ahead of the competition by curating your products and services to suit their taste.
The Market Research Process
Step 1: Define the problem and research objectives
There are two main types of research done in this step: Problem identification and problem-solving research.
As the first step, you will need to identify what the actual problem is. For this, you can do ‘Problem Identification’ research. You can do this personally by discussing with decision-makers, or by having interviews with industry experts. You can also refer to pre-existing research done by others to get the data that you need.
If you already know a problem that exists within the market, you can come up with a solution by conducting ‘Problem Solving’ research.
Once you’ve come up with the solution, you can get to listing down what exactly you want to achieve out of conducting this market research.
Step 2: Develop the research plan
To make the research plan, first, decide on the different data sources that you want to use. You can go with primary data, which is collecting data on your own, or secondary data, which is referring to data collected by others.
Then, think about the sampling plan. It is close to impossible to do global research. It takes a lot of money and time to conduct large-scale market research. So, you must narrow it down. Decide on how large of a group you want to research on. Usually, it’s a specific age group, a specific country, or a group of people with similar interests.
It is important to understand how you’re going to connect with the audience. You can connect with them through E-mail, telephone, or even personally. You can reach your audience online as well. Choose the most efficient and effective contact method.
Then you will need to think about the research approaches that you want to use. The most common is by observing the audience. You can also have focus groups, conduct surveys, collect behavioral data or conduct experiments.
Lastly, decide on the research instrument. Questionnaires are the most popular and you can also make use of qualitative measures and technological devices to fine-tune your research.
Step 3: Collect the information
You can collect information through online surveys, telephone surveys, interviews, or in-home surveys. Collect all the information that you need through any of those methods until you’ve gathered sufficient data to analyze.
Step 4: Analyze the information
Once you have all your information, it will most likely be a mess – it will be in many different forms and your findings will be all over the place. Not all the data that you’ve gathered is important to your research. Sort them by finding their credibility and their accuracy and analyze which data is useful and which ones aren’t.
Step 5: Present the findings
The analyzed raw data still needs to be arranged accordingly. Therefore, it is important that you first organize all the data that you have found and derive the information that you were trying to look for in the beginning. Once you’ve got that, put it in a proper document and display your findings in a way that is very clear and easy to understand.
Step 6: Make the decision
Use the research that you have found to make the marketing decision. The research should be used to guide the decisions that you will be making. They should not be used to support decisions that you have already made. You can, however, use market research to confirm hypotheses.
So this is exactly how you conduct market research and the benefits you can get from doing it. Like I mentioned earlier, market research is not something that is only done for large business projects. It will really help you if you do good market research even for small projects that you have in mind.
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