How to Conduct Market Research for Your New Business
What is Market Research?
Market research is gathering of information regarding the needs and wants of customers and putting it together for better understanding of the business. Conducting Market research is necessary to all business organisations. It helps with providing valuable information for identifying and analysing probable pitfalls and market opportunities for your business, competitors analysis, better marketing strategies to put mileage on to your business.
Market research is conducted by both prospective entrepreneurs and established businesses. A typical market research process includes:
- Planning or outlining the process of market research;
- Market research process; and
- Analysis of the results
Planning About Market Research:
- Layout a set of goals for your research
- Develop a plan for gathering information efficiently
- Investigate and deliberate on your findings and decide on a course of action
Market research process:
There are two types of market research – Primary research and secondary research.
Primary Research: In this research, new data is gathered directly by the company or their researchers using different techniques such as:
- Interviews (face-to-face or telephonic)
- Surveys (online or email): Conducting market surveys has become very easy using online tools. There are several free online tools used for surveys that will provide you with statistical research data of your target audience. For example, try Surveymonkey.com, instant.ly, getinstant.co, etc.
- Questionnaire (online or mail) – Several free resources for questionnaire template are available on for example, try templatelab, tidyforms etc.
- Focus groups: In this, you will be interviewing a sampling of potential customers or people and getting their feedback.
- Conduct product/service tests: This is where you offer products or services for free, or give a demo to sample customers or people for testing and getting feedback from them.
In this type of research, you collect and analyse secondary data that has already been published (books, statistical reports, top market research magazines, etc.). There are two methods for collecting this data. They are:
- Quantitative methods: This method employs the statistical analysis and require a large sample size. For example, one of the tools which shows the quantitative results of your website statistically is Google web Analytics. This tool gives a complete information of where your leads coming from, how long there are been on website, no. of pages they visited, etc.
- Qualitative methods: This method is used to get an understanding of reasons, opinions and motivations. It provides insights into the problem or helps to develop ideas or hypothesis for your potential quantitative research by a small sample size. Qualitative research can be done by:
Participant observation: In this, a researcher acts as a customer and collects the data.
Direct observation: In this, a researcher collects the data by just watching rather than taking part. For example, videotapes can be used for this purpose.
Unstructured Interviews: In this, direct interaction takes place between the researcher and respondent or group of respondents. Unstructured interview indicates that no particular questions are framed to ask the respondents. It is rather difficult to analyse the data from unstructured interviews as each interaction with respondents is different.
Case studies: Here you study specific individuals or a specific context. There is no single way to conduct a case study, so a combination of methods ( unstructured interviews, direct observation, etc.) can be used.
For secondary research, data can be collected from sources like
- Government Sources of industry data
- Trade Associations
- Trade Publications
- Academic Institutions
- Third-party Sources
If you are running short of time and resources to do this exercise, you can think of outsourcing the process to agencies like channelplay, lumiere solutions, crosstab, intageindia, etc.
Results of the market research process are analysed by comparing the data you have collected to the goals you set originally while planning your market research and performing SWOT (Strength, Weakness, Thread, Opportunities) Analysis. The findings of this research, coupled with the strategies from the SWOT analysis, will aid you in deciding further course of action.
Importance of Market Research:
Market research should be done in a regular basis for better understanding of different market opportunities, change in customer preferences and update according to the customer demands. Here are the points that explains the need and importance of market research to a company to sustain and grow in the market.
- Identifying problem and opportunities in the market
- Formulating market strategies
- Determining consumer needs and wants
- For effective communication mix
- For sales forecasting
- To revitalize brands
- Determine export potentials
- Managerial decision-making
- To facilitate smooth introduction of new products
- Better Customer Management.
- Increased Sales.
- Keep a tab on your competitors
- Minimize loss in your business