Entrepreneurs often don’t succeed as they fail to fully understand their existing or potential customers and/or competition. This frequently leads to optimistic market evaluations based on their personal judgement rather than a market perspective.
Market research helps you to reduce risks by getting the product, price and promotion right from the beginning. It also helps you keep ahead of the competition by better understanding your customers and the market so that you can ensure your product or service meets and exceeds their expectations. Successful market research arrives at an honest conclusion with actionable results.
Typical questions that market research can help answer include:
- Is there a market for the product or service and what is the size of that market?
- What do customers like or dislike about the product or service and what price should it be?
- Who are (will be) the customers of the product or service?
- How should I market the product or service to maximise take-up?
Undertaking successful market research
Market research doesn’t have to be expensive, but it does need to be appropriate for the research challenge. Follow these top tips to ensure a successful research campaign:
Types of research
Examples of qualitative research include in-depth interviews or focus groups (group discussions with 8-10 people). Qualitative research is good for a detailed exploration of attitudes, emotions, behaviours or product development. It could be anything from you visiting competitors, to inviting prospective customers to lunch to comment on your products/services to employing a research professional to moderate interviews or groups for you.
Secondary research is analysing existing data or reports. There is a wide range of readily available data, such as population data from the Census or market reports. These can provide useful context data, but may not adequately address a specific research challenge.
Quantitative research consists of interviews with a large number of people and is useful for market sizing, product refinement and customer segmentation. In order to achieve a sufficiently robust sample cost-effectively for data analysis, you are either going to need a lot of willing volunteers to undertake the interviews or to employ a research agency. Freelancers and small consultancies can offer cost-effective advice and assist you in developing a successful questionnaire and obtaining robust and reliable data.