Market research is something that should never be overlooked. Many long-lasting new firms have owners who undertake systematic market research to understand their target market better, uncover customer concerns, and discover credible rivals.
Measuring up your company’s potential is the simplest way for you as an entrepreneur to stay on top of industry developments and preserve a competitive advantage.
Market research may be conducted at any point of a company’s life cycle, from pre-launch to post-launch. Knowing your market better from the outset can help you develop a strong business plan for establishing and growing your brand into one that outperforms the competition.
Define Your Market Research Objectives
Market research can help you figure out who your customers are, how to bring in more prospects, and the most effective way of marketing your products. Before you jump into conducting market research for your company, it’s critical to first state the sort of information you want.
For example, do you want to conduct primary research to ask your questions of a survey population? Or do you want to conduct secondary research, where you refer to publicly available information from sources such as the U.S. Census Bureau? In addition, if conducting primary research is not affordable for your start-up budget, consider hiring a market research firm specialising in providing the services you need, including market research data.
To have a respectable company that offers quality products or services, performing market research can help you determine your target customers and what they want from you. Furthermore, a start-up needs to understand its target audience and its competitors. The competition will play a huge part in market research.
Why Should Startups Conduct Market Research?
A start-up should do market research for a variety of reasons. Here are a few of the more notable ones:
Uncertainty: A start-up, according to Eric Ries’ book “The Lean Startup,” is “a human institution intended to produce a new product or service under conditions of high uncertainty.”
Because there is uncertainty regarding the product, the supply chain, the target client group, the business model, and nearly every other component, the firm is prone to changing circumstances. Extreme uncertainty is one of the distinguishing qualities of a start-up.
Despite this uncertainty, start-up firms overlook the relevance of market research for their business (due to a lack of knowledge of the ROI) and assume it is exclusively for giant multi-national corporations.
No room for self-analysis: Most founders and team members feel they have come up with a brilliant concept or an excellent product that will change the world, which is fantastic!
The product fails due to a lack of adequate marketing research since the target audience does not share your vision, and this is why the product does not register with the target market and generates a negative response.
Catering to customers and identifying competition: If a start-up does not have a deep knowledge of its customers’ needs, it may not be solving a real problem in the most effective way.
Similarly, if, as a firm, you do not invest in having a dialogue with your customers about your product, you will miss out on the potential to tailor the product to their requirements and enhance the product’s chances of success.
Your firm cannot size the market opportunity and future growth unless it conducts a thorough study of the market competition.
Pricing, marketing, and sales strategies must be developed based on a thorough understanding of the target consumers (by asking the appropriate questions to the right audience) and studying the business’s competition in the future.
Raising Funds: Getting major corporations or angel investors to invest in your idea and vision for the product is key to some firms’ success.
It’s difficult to ground and explain why your product would be successful in the market, as well as why you should spend a large amount of money from an investor without conducting proper marketing research.
So, whether you are growing your start-up or getting ready to launch a new product, market research should be the foundation of your company’s plan.
Microsoft Corporation was one among those who didn’t conduct market research initially; hence they lost out to Google, which has now become the most powerful brand globally with billions of dollars in revenue and value.