You’ve thought of your business idea, but have you spoken to potential customers yet? You need to understand what people want, and what competitors are already offering, before you can move towards business success.
Thorough market research is crucial, and the more research you do, the easier it will be in the future to make decisions about your marketing strategy, pricing, budget and sales target.
It’s important to do market research before committing to starting your own business. A business idea might look very good on paper but until you ask your potential customers you won’t know whether your business idea will work in the real world- where there are competitors and customers to win over.
What is market research?
Market research should help you to identify and find out more about the people most likely to buy your product or service – known as your target market. There are three main sources of good market – customer research, competitor research, test trading – and all three will give you an important insight into the market in which you might start-up.
You can carry out market research by using the following approaches:
- Desk research: Desk research is an easy and often immediate starting point. You can find out a lot just by surfing the internet. sector magazines and government reports as well as directories and books. Relevant scholarly journals are most times the best sources to get facts and valuable insight.
- Field research: Don’t forget about a resource you have on your doorstep too; ask local residents about the location and business sector you hope to set up in – there’s no knowledge quite like local knowledge!
- Test trading: Lots of businesses look good on paper but the only test that matters is whether your product or services sells. Test trading allows you practice whether you can materialise your business conception.
Market research will help you to identify:
- Whether there is a market for your product or service
- How much demand there will be for your product or service
- Who your target customers are in terms of age, gender, location, profession, income, where they currently buy your product or service
- How you will reach your target customers
- How much your product or service is worth to your target customers and how often they will buy
- Who your competitors will be and how they operate