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For a business to succeed, they need to identify and fulfil a ‘gap in the market’. However, to correctly identify that gap, a business can’t just rely on instincts and assumptions but objective research that proves their value. This is where Market Research comes into play. Market research doesn’t just verify your business plan for investors but it also helps a company to better understand its customers. This creates an opportunity to improve their products and services, better their marketing and identify new gaps in the market.
First and foremost, let’s define what market research is. Market research is the process of gathering and analyzing data that relates to a market and/or your product/service. There are two types of market research; primary and secondary research. Primary research is about gathering new data that has not been collected before. Secondary research involves gathering data that has already been compiled. Secondary research includes research from public reports, government-funded studies, statistical databases etc. Secondary research is useful for narrowing the scope for your primary research, while primary research can answer the exact questions you have about your business idea.
There are many steps to conducting market research but the following list are the most important steps involved.
Before starting your research, you need to know what you want out of your research. As mentioned above, market research can do a lot, it can improve your product, identify new customers or just refine a marketing campaign. However, you can’t address these issues all at the same time. Narrow your scope and define your objectives before starting your research. If you are a new company, you want to make sure there is a demand for your product/service, if you are a big company, your objective may be to discover the best way to market your product towards younger people.
Early in your market research, you should conduct some secondary research yourself. This can be as simple as reviewing news articles and exploring web sites to gather information on the industry or customer base that you are hoping to target. This helps you to add context to your market research and also gives you ideas on how best to tackle your own objectives.
Identify your target audience and then decide on your sample size. Why do you need a target audience? Different audiences have different characteristics and may answer questions differently. It’s also important to narrow your scope to get the most out of our research.
Your target audience depends upon your objectives. Obviously, you should look at your customer base before deciding, you should also see what customers go to your competitors. Don’t be afraid to get specific when it comes to your target audience. In a past blog, we delve into the types of targeting in consumer panels and thanks to technology, you can target and reach very niche audiences.
Why is the sample size important? Even though you are interested in the entire target audience, aka the population, you realistically can’t get answers from everyone. Therefore, you take a sample of the population, however, the size of the sample is very important for getting accurate, statistically significant results and running your study successfully.
If your sample is too small, you may include a disproportionate number of individuals which are outliers and anomalies. These skew the results and you don’t get a fair picture of the whole population. If the sample is too big, the whole study becomes complex, expensive and time-consuming to run, and although the results are more accurate, the benefits don’t outweigh the costs. If you are confused by sample sizes, there are plenty of online calculators that can guide you in your decision.
The most important goal for this step is to ensure your questions are neutral and not leading. You should also have a few open questions but avoid having too many. Open questions are useful but having too much qualitative data can make it difficult to analyse the data. We explored other tips and methods when it comes to creating research questions in previous blogs.
Once your data is collected, you need to analyse that data and make decisions based on it. This analysis is very important and could take up another blog post. It’s important to note that market research isn’t just a one-time activity. A successful business performs market research continuously. The business environment is constantly changing; new competitors emerge, consumer behaviours change and new customers are identified. Market research allows companies to keep on top of these changes.
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