Your idea seems revolutionary and could do wonders when launched in the market. It ‘feels’ like the answer to everyone’s problems. This gut feeling is the basis of your new venture, but before you delve further, wouldn’t it be a wise idea to sit back and support your instinct with valuable data.
To take your business idea to the next level, you must have reliable data to back the fact that your solution is really needed in the market and will have takers when launched. It’ll give you a realistic perspective and will help you gauge whether the potential consumers can connect with your product or ideology.
What is market research?
Every startup ought to do a thorough analysis of what the market needs. Market research is a way to go out there (to the market) and determine what the customers really need. It is your unparalleled tool to help you understand what is available in the market and what the actual gap is that you are targeting to bridge. More importantly, it is an exercise that will force you to see clearly whether there really is a niche that you are creating and whether customers are willing to pay for your product/service. It can help you make informed and well-calculated decisions.
Why should you do it?
If you are equipped with good market research data and analysis, then you would have a better chance of proving the viability of your business, hence making it easier for you to spend time/effort and money in the right direction. Market research facilitates you to:
- Have a handle on the customer needs
- Define the scope of your potential business
- Have a knowledge of your potential client’s willingness for your solution
- Be equipped with market trends
- Be ahead of your competitors
- Plan how to position your product/service
- Map your tentative finances and projected cost structure to see whether your business can be sustained with the price customers are willing to pay
- Be on a lookout for alarming and warning signals, so you can take corrective measures before it is too late
You may need to understand what the consumer wants – type of product, pricing etc. Or you may want to know what your competitors are offering, so you can position yourself differently and get an advantage. Market research can help you get that information. It will help you to prioritize practical and achievable opportunities.
When should it be done?
Ideally, market research must be conducted prior to launching a new venture. If all looks promising, you go ahead and launch your business. It is also a sensible idea to conduct another round of market research after you have launched your pilot to garner acceptability of your initial solution. In fact, it should be an ongoing process built into your business plan, such that there is a regular flow of information about how you are placed in the competitive and dynamically changing market.
How should it be done?
Market research is nothing but an information gathering exercise. One way is to do primary research. It would include taking feedback or having informal chats to connect with potential customers. You could conduct interviews, quizzes, surveys, questionnaires, create focus groups and the like. These can help to identify crucial data like the price point and your competitors’ positives or drawbacks.
In more formal secondary research, you could hire experts who conduct detailed research, follow media reports and use marketing information systems to capture and analyze key data.They can help study the customers’ buying habits and the successes of previous product launches in your market’s footprint. There could be useful demographic data for successful projection of your potential business via available tools and experts.
Research could be qualitative as well as quantitative. The more accurate the data, the better position you are in to understand what the market needs.
Time and effort invested in adequate market research will help you stay connected with the ground reality, so you can take proactive steps to start and improve your business, rather than reactively ‘staying afloat’ or spending time and effort on damage control later.
Market research is, hence, not only important, but essential for any startup. In fact, it is a sign of far-sighted and intelligent business management. It shows your stakeholders that you are serious about innovating and re-inventing as per the actual market needs, thereby gaining their faith in you.
Disclaimer: This is a guest post. The statements, opinions and data contained in these publications are solely those of the individual authors and contributors and not of iamwire and the editor(s).