Market research is an essential part of any business that wants to offer products or services that are focused and well-targeted. Good business decisions are based on good market research and intelligence. By researching your market thoroughly, you can minimize the risk to your business, identify new opportunities, while helping you communicate better with your customers.
Market research enables you to test your idea to ensure that people want to buy your products or service and that you can make a living out of providing it. It is essential for understanding the market in which you are about to compete. The following will help guide your thought processes and keep your research on track.
Unique Selling Point (USP)
The Unique Selling Point is what will set you apart from your competitors. It could be product, price, quality or service; or a combination. It's what makes your product or service different and stand out from the crowd.
- Does your business provide something better than what’s already available?
- Will you operate different hours or offer home delivery?
- Will you aim for a specific ‘niche’ group of customers not targeted by other businesses?
- Is your product or service easier to use than your competitors’?
- Will you meet a customer’s need by solving a problem that nobody’s ever solved before?
It is essential to know exactly who you are selling to. It is very probable that you will be selling to more than one type of customer.
- Identify the target market.
- Find out who buys similar products.
- Fund out who is buying from your competitors.
- Create a picture of your target customer and their demographic (age, gender, profession etc.).
- Find out the needs of your customers.
- Ask whether your product or service meets those needs
- Make sure that any potential customers are interested in your product or service
- Find out any concerns and amend your product or service accordingly.
You need to know how much a customer is willing to pay so that you can create your pricing structure.
- Find out what prices are being charged by your competitors.
- Ask your potential customers what they would be willing to pay for your product or service.
- Try out different prices with different customers in a consistent, realistic way to see what your product or service is actually worth.
- Confirm that your business idea is viable.
By finding out what your competitors are doing, you can challenge them on price and service.
- Ask your competitors' customers what they think of their prices and service and what could be improved upon.
- Get information on your competitors from libraries, trade associations, trade publications, market reports, local chamber of commerce and their advertising.
- Phone your competitors and ask them questions.
It is essential to find out what potential customers think of your product. If you are developing a product:
- Develop a prototype and test it.
- Use focus groups to obtain a breadth of opinion.
- Use questionnaires and surveys. Ask questions whereby people offer a score or opinion rather than a yes or no.
- Ensure any questions are clear and cannot be misinterpreted.
- Encourage both positive and negative responses.
- Ask a reasonable number of people to get a better perspective.
- Be impartial and do not try to lead people to a particular answer.
- Be realistic and remember that people don't alway say what they feel.
- Get qualitative data that involve thoughts and feelings.
- Get quantitive data that involve facts and figures that can be measured market research is not something you do just once. You need to make changes and adapt your ideas based on any feedback and then research your amended idea. Continue the process of adapting and researching until you are entirely happy.
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