A business idea is not enough in itself; you have to go beyond just having it in mind. The conception of a business idea should be followed by empirical research. One area of research that should be dealt with is market research. In principle, a business idea must have a market for it, and the best way to ascertain that is through research. The research is not just to ascertain market availability but to also study its characteristics. In this article, we shall be exploring how best you can conduct market research for your business plan.
Why Market Research Is Done?
Let us start off by discussing why market research is done. We have already highlighted that the business idea comes first. As you muse on the idea you might come up with products you think would be best to offer. In some cases, you might have an idea and not be sure which products would be ideal to offer. All that can be found out through research. Market research will also be aimed at figuring out what prospective customers specifically want.
The other aspect is to look at the demographic characteristics of the market. You may look at things like age groups, income levels, buying patterns, population densities, and so on. Exploring your competition is also part of market research. Subsequently, you will need to devise a marketing strategy or plan – it will be informed by the findings of market research. Since marketing will culminate in conversions it means market research is indispensably important.
Employ Research Methods
Conducting market research essentially involves research – so you have to employ research methods. Basically, research entails data collection which is then followed by data analysis. Data collection is done in two ways namely, primary data collection and secondary data collection. Primary data collection involves designing ways to actively collect data from people. Some of those ways are questionnaires, interviews, or focus group discussions. Secondary data collection entails getting data from pre-existing sources. Some of such sources are publications, news, reports, or books, just to mention a few. The reason why we had to emphasize the need for research methods is that you are dealing with research.
Low-Cost Methods One Can Use
In conducting your market research, there are 4 basic methods that you can use that are low-cost. These are literature reviews, direct interfaces with competitors, engaging the public, and using social media. These 4 methods will enable you to conduct primary and secondary data collection. Literature reviews can be done by going through books, publications, news content, and so on. As for the competitors, you can get so much information just by asking them (posing as a customer) or simply observing their businesses. Engaging the public can be done through things like observation, interviews, or focus group discussions. Social media entails engaging the public in ways such as online surveys or polls. It can even be through posting posts that call upon people to respond. By putting together these 4 methods you come up with powerful market research.
Practical Steps To Follow In Market Research
Lay Out The Objectives
This is the first thing before anything else. That is why earlier we highlighted the reasons for which market research is done. By knowing that, you can clearly come up with objectives that will guide you in conducting market research. Broadly, your two major focuses in conducting the research are customers and the respective industry you are operating in. Your objectives must cater to them because you need details on both. Two examples of objectives can be to explore customer income levels and to find out about customer buying habits.
Study Your Respective Industry
When you have a business idea it will fall under a particular industry. The industry could be agriculture, health, or fashion, just to give you a perspective. You then have to study to know the trends and noteworthy details regarding the industry. In so doing you will also get to know about any regulatory frameworks in place. If you scan wide enough you can even know about significant players in the industry. Ultimately what you unearth here will help you assess your business idea in light of the respective industry in question.
Find About Customer Dynamics
This is one of the most important areas that you must devote time to. Seek to find out what people consider when looking to buy things related to your business idea. You also get to pick their minds on what their sentiments are regarding what is already being offered by other players if any. Find out from them what their expectations are i.e. the kind of products they would want. You must also explore pricing issues and their bearing on their spending habits. This implies that you must figure out a way to know their income levels. Learn as much as you can about the customers or prospective customers because they are at the center of business success.
Explore Your Competition
It is literally impossible to not have competitors. You do well to investigate competitors in your industry. Get to know about their products and generally how their businesses are constituted. What are the prices of their products? Find out about their supply and value chains. Do they have any suppliers, if any? Who are they? How do these competitors market their products? How big are their businesses? The questions are many but these were just some to give you the picture. Gather as many details as you can about your competitors.
Synthesize Your Findings
After doing all of the above you will be in possession of so much data or information. You then have to analyze it for it to all make sense. Draw insights from it that you can use to scrutinize, review, enhance or fine-tune your business idea.
If you internalize the simple details and steps we discussed herein you will get tremendous results. Remember it is always wise to make informed (borne out of empirical investigation) decisions.