How To Do Market Research On A New Business Idea

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Standing in between idea generation and idea execution is quality market research. A market research helps you ascertain the viability of an idea.

While the idea may sound good to you, the profits to be earned are superb, and you are in ecstasy as a result of the possibilities the company could offer, it might be a different reality to others. Without good market research, you could be working on the wrong idea, for the wrong people, and in the wrong industry.

Many startups have failed because of their lack of diligence toward market research. Interestingly, even well-known brands have failed to capture remarkable market share with products that were never appreciated by the intended consumers. To avoid falling into the same trap, you should carry out a good market research.

Market research focuses on comprehending the reasons a consumer will purchase your product by studying the consumer behavior, and how such behavior is influenced by political, cultural, social, and economic factors. There are two types of market research: primary research and secondary research. In primary research, your aim is to directly study your consumers using such techniques as interviews, questionnaires, online survey, et cetera. Secondary research studies consumer behavior using ready-made reports, sales reports, blogs, et cetera. You can use any medium or combine both to generate a quality market research.

Now that you understand the different ways of conducting a market research, how do you go about it, what are the questions to ask, what exactly are you meant to focus on? Read them below.

  1. Identify Your Target Market

Every business has a target market. Your product can’t be for everyone, no business offers that. Your target market comprises the group of individuals you will be selling to; not just those who would love to buy your product, they are those who can pay for your product, those who have the financial power and the need for it.

For a good definition of what your target market is, you need to answer such questions as:

  • What is the demography of my target market?

This question has a wide range of sub-questions. By identifying the demography of your target market, what you aim to understand includes: the age range of your ideal consumer; the gender of your ideal consumer, male or female; their marital status; et cetera.

  • What are Their Interests?

It is never enough to know the demography of your consumers. You need to go further by knowing if they have interests in buying your product. This interest could be in two ways. One, do they need your product? If they don’t, they won’t have any interest in buying your product. Two, they need the product but,will they buy from you? They might be passionate about buying from another seller.

  • Their Level of Needs

This is basically their level of demand for a product. If there is a high demand for your product, there will surely be a space for you in the market. A low demand will mean you should weigh your options.

  1. Analyze the Needs

After you have identified your target market and have collected enough information, you can go further by analyzing what you offer and aligning it to the market need. In this phase, all you have to do is add more features or reduce some features from your product. Your selling point should be a strong one.

Initially, you could be working on a general product that offers general benefits without having a strong point in anything it offers. By analyzing the need, you refine your product in such a way that you now have a product that meets specific needs of the people. For instance, the simplicity of your product, the price, high quality, durability, flexibility, and more are selling points you could integrate into your product.

  1. Ask Your Potential Consumer

The product has been modified to market demands. Now, the market research has to focus on asking your ideal consumer questions that will give insights to the strong and weak points of the product. These questions are:

  • What in particular do you like or don’t like about this product?
  • What do you consider when buying this product?
  • What improvement can be made to this product?
  • At what price do you think this product should be sold?
  1. Analyze the Competition

The success or failure of your product can be determined by the competition. Analyze the strengths and weaknesses of your competition. You should know the companies that are new or old, those who are good with price or service, their ownership structure, the ones in the same location as you, as well as the relativity in the sizes of the companies.

For example, competing with a global company in the same market can be tough for new companies especially when it comes to price offering. Big companies can take a loss for longer years than startups that run on small capital. Big corporations can scale their business with intelligence that could be hard for startups to attain. If your company is just starting up, you can only compete with big companies by offering superb service and quality products.

Final note: In all the interviews and polls you make, ensure that you are communicating with the target consumers. Also, your audience should be honest, avoid using family and friends to gather market research.

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