How to Conduct Market Research?
Market research is a crucial tool in gaining an advantage over your rivals in the industry. It helps you understand your rivals, your customers/clients, and the industry in general.
Before this article delves into the process of conducting market research, it’s essential you know why you should conduct market research.
Reasons You Should Conduct Market Research
Key to a Successful Business Venture
If you want your business to be successful, you need to conduct research on the market. It should take precedence before you even draft a business plan.
Market research doesn’t just give your business a direction; it also lets you know exactly what your customers want and how you can satisfy their needs.
The Evaluation of a Product or Business Idea
Market research will help you know the market’s response to a specific business idea or product that you have been nurturing. Furthermore, it helps minimize risk because you’ll know beforehand if a product or business idea will receive a massive acceptance or be side-lined.
To test the feasibility of that idea, you need to hit the brakes first and conduct market research.
The Possibility of Expansion into a New Location or Market
Conducting market research will help you know if the time is right to expand into a certain location or market. For instance, a water filter company may want to expand into the bottled water market or establish a new branch in another city or country.
Conducting market research will help you know the rate of patronage of bottled water in that location or if it’s the right time to move into a new market yet.
Economic or Industrial Influences
There are other factors in play as well. Conducting market research will help you know precisely what these influences are. Knowing these influences is key to knowing if they will work for or against you. It will also help you understand how to chart your business plan having that in mind.
How to Conduct Your Market Research?
To properly conduct market research and get the data you need, you should ask the right questions in the proper manner and to the right respondents.
This will give you the correct data, and you can use it to determine the direction or vision of your business and meet customers’ needs.
Outline and Define the Objectives of your Research
This is the first step to go through when researching the market. To define the objectives of your research, consider the following:
- The key information you wish to unearth through your market research
- What do you exactly wish to know or understand about the market, your existing and potential customers?
Having these two things in mind while outlining your research objectives will enable you to make your research effective, have pinpoint accuracy, and have a center of focus.
Build your Research Questions
It is essential to know the three elements of your market research: your rivals, customers, and the industry or market itself. There should be three categories of questions for each of them. You should use your research objectives to develop your questions.
Examples of good questions for your market or industry includes:
- The demographics of the market (gender, age)
- If you have a business idea or a product idea, how exactly will your launch or introduction affect the customers and the industry in general?
- Does the location of your operation have a secure economy?
Examples of the ideal questions to ask your customers:
- Can you identify your target customers?
- What’s their behavior like?
- Where can they be found?
- What should constitute the ideal customer profile for your business?
Examples of the ideal questions to ask your rivals or competitors:
- What should constitute the profile of a business rival?
- What are the strong points of your competitors?
- What are the main weaknesses of your competitors?
Collate your Research Data
There are two kinds of data to be collated, and both can be derived or generated through questions asked. They include:
- Qualitative Data: This kind of data is investigative in nature, and it requires a small number of respondents. Examples of qualitative data gathering are in-depth interviews and focus groups.
- Quantitative Data: This kind of data is used to draw certain conclusions, and it usually involves a huge number of respondents (surveys and questionnaires).
There are some commonly-used techniques to generate data for your research. You can use any or some of the following:
- Polling via telephone
- Mailed questionnaires
- Online surveys
- Face to face interviews
Some methods are suitable for a straightforward answer. Some methods such as interviews are best suited if you want detailed answers.
There are also some cost-effective ways to generate data for your research, such as free survey sites or Google Forms.
Interpret the Findings of your Research
At this stage, you have to make your data presentable. How? By first organizing it and then interpreting it. Ensure that this data is organized and classified, having the order of your research objectives in mind.
Seek ways to enhance the organization of your data because it will make the conclusion of your findings much easier.
Below are some helpful tips:
- Use tools such as diagrams, tables, lists, and mind-maps to organize and display your data and identify significant trends.
- Utilize your marketing plan to analyze data to highlight strengths, weaknesses, opportunities, and threats. The SWOT analysis should be a crucial part of your business plan.
Knowing how to interpret findings is key to your market research. Knowing what the research data is communicating to you helps you understand what you were trying to research.
Make Inferences and Decisions Based on Your Findings
To do this, ask yourself:
- What are the implications of these findings for my business?
- What should be done about it?
The trick is to arrive at conclusions and decisions that align with your research and business objectives.
Lastly, review your data to ensure that there’s no loophole in your data or its presentation. Also, examine the dominant problems or trends in your industry. Carefully analyze your strengths, weaknesses, opportunities, and threats. Using your research data, decide on the strategies that will constitute your marketing mix.
Without conducting market research, you’re entering your market or industry blind and oblivious to what may work for or against you. Therefore, new and existing businesses should conduct research on their industry to understand the inner workings and stay on top.