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As the saying goes, “knowledge is power,” and getting the right information about your market, its competitors and those all-important customers is vital throughout the lifetime of your company. For startups in particular, hitting the ground running is necessary in today’s fast-paced, demanding marketplace. Whether you are new to your field, or a veteran with plenty of industry experience, gaining a comprehensive view of the current market is integral to the long-term success of your new company.
Here, we offer an essential guide for entrepreneurs eager to get started.
The importance of market research
The economic, social and cultural context of your target market has never been more important. Companies of all shapes and sizes are refining their operations like never before, which can mean a tough road ahead for startups looking to enter a sector and grab some of their own market share. Conducting in-depth market research during the planning phase of your business and before the launch of your product or service can have a fundamental impact.
According to the Business of Evidence 2016 report, the “business of evidence” market now generates £4.8billion for the UK economy alone. Alongside emerging methods such as wearables research, behavioral economics and neuroscience, key areas of growth within the market research sector include qualitative research, online and mobile surveys, social media and web traffic monitoring, and data analytics, the latter of which has seen the highest growth rate with 350 percent more use in 2016 than in 2012.
So if you want to keep up with so many competitors in researching the market, where do you start?
Understanding and segmenting your market
Secondary research gathered from resources that have already been published or are accessible online offer an easily digestible and readily available introduction to your market. You can now harvest a sizeable amount of useful data from the internet, magazines, newspapers, office research and government research. Internal sources can also be used to collect data and produce reports of financial and operational metrics of your own business.
Even for niche markets, segmenting by product or service type, as well as by customer base, helps to ensure information you’re looking at is relevant. For example, you may need to select an appropriate subset of global or national statistics. For each segment, consider the measurability, accessibility, potential development and size, so you can ascertain the attractiveness of the segment for your business to find customers. This will also stand you in good stead when developing your marketing strategy for each customer persona you identify.
Exploring primary research methods
Getting to know your market first hand is what will set the quality of your market research apart from your competitors. Often referred to as “field research,” primary research focuses on liaising with potential consumers directly, which you can do via a variety of methods, including:
- Surveys and questionnaires
- In-depth interviews
- Focus groups
- Test marketing
Primary research will give you huge advantages over your competitors, allowing you to tap into market needs and trends, establish a communication with customers early on, identify potential pitfalls and minimize risk.
In particular, talking to an expert is often a time- and cost-efficient method of qualified research: insights from those with relevant, first-hand experience in your market can provide a deep and nuanced understanding of the current landscape, the challenges faced by businesses entering the sector, and potential opportunities you can capitalize on.
Using competitor data to your advantage
Understanding the competitive landscape is a market research must that can provide invaluable information to startups. Competitor analysis can provide a great template for business success; doing what has worked well for other companies, and avoiding what has not, is a good place to start. A few questions can help you define your approach to this:
- Who are the companies you will compete with?
- How are they positioned (primary customer base, main products/services, stated USP, pricing)?
- How well are they doing (market share, growth)?
- What kind of reviews do they have online from customers and employees?
- What marketing strategies have they used?
- Given all the above, what do their strengths and weaknesses seem to be?
If you’re able to answer these questions in detail, you’re likely to gravitate toward where you want to play in the market, and how you might deliver that in terms of your operating model, marketing strategy and brand.
Analyzing consumer behavior
Last but not least, you absolutely must research your customers. Getting to product-market fit starts with understanding what is in demand, and from whom. Maslow’s hierarchy of needs is as relevant to consumer behavior today as it has ever been, so don’t be afraid to spend time understanding the physical and emotional states of your consumer at various points during the buying journey. Analytics can obviously help, including social and web traffic monitoring, to discover what influences customer behavior, buying habits and current trends.