How to do market research before starting a new business? Step by Step
Conducting market research is one of the most vital steps to do before starting a business. A properly conducted market research helps you build your product or service to be a successful one. Because using market research, you identify the market conditions, your customer requirements, etc. and can build a brand to cater to those requirements. But not a lot of us know how to do market research. Properly. A poorly conducted market research leaves you with insufficient data to make decisions while an over-researched market research leaves you with too much of paperwork and the important areas will not be highlighted. Therefore, in this article we are explaining to you the step by step method to conduct an efficient market research before starting your business.
1. Identify Your Buyer
Identifying your buyer is the key factor when starting any market research. This process is also known as identifying your buyer persona. During this step you have identify your buyer based on its characteristics. The main characteristics are, what is the target Age Group for our product? What are their locations? Income Levels? What Gender are they mostly from? What types of Jobs they do? Etc. Once you have identified these factors and more of your buyer persona, then only you can navigate to the next steps of your market research. Without conducting this step, the results from the rest of the steps will not be useful.
2. Conduct Primary Research
When conducting research, the market research falls into two type mainly; primary and secondary. Primary research is the firsthand data you collect from your target buyer. You have to consult your target customer and ask them a series of pre-defined questions to record their response. Bigger the sample size, more effective data you will receive. However, you have to be very careful of the questions you will ask from your target buyer. For this process, first imagine the types of responses you want to receive from your buyer. Then create the questions to get answers for the criteria you determined. Next important step is to determine the primary research conducting method. There are a number of primary research conducting methods such as interviews, questionnaires, online surveys, focus groups, etc. Make sure you select the best method to gather responses.
3. Conduct Secondary Research
Secondary Research is the research that is conducted using the data which are already available such as reports, research articles, market statistics, industry content and sales data. This type of market research is as important as the primary research as you get to learn more about your buyer, your competitors, legal factors and other important external environmental factors. With the internet and the number of sources it has, one can conduct secondary market research from the comfort of its home. Most of the governments too have their data on their websites which a very important tools for the businesses to conduct their secondary research from.
4. Compile Data and Summarize the Findings
The final step of the market research is to compile the data collected and summarize the findings. Depending on the magnitude of your research, it might be a bit of a task to match your primary research with the secondary research findings. This is the part which requires the most time and most effort. Create a document with all the data and use graphs and charts to simulate the findings as graphical representation is considered better to understand data. After this step is complete you can now as the last step gather information from the data collected above to make informed decisions about your product or service.
The main aim of this article while describing the main steps on how to do market research but is also point out how important market research is to your business. Without conducting the above steps, you will be walking blindly into your business and there is a higher probability that you will develop a product that will become useless to your buyer which in turn will be unsuccessful. Therefore, in order to overcome that and create a successful business, make sure to definitely conduct market research.
Read more about most important steps in order to create successful business plan.