For many people who are about to start their own business, the expression «market research» often seems like something far away, referring to large corporations, chain stores or economic scientists.
Meanwhile, without conducting market research, there is no point in even starting a business.
Moreover, you can test your business idea for survival only with the help of marketing research.
The second common misconception is that market research can only be carried out by marketers who make complex calculations, build tables and graphs, and produce results in the form of whole volumes.
Examples of conducting market research before starting a business at the «household level»
In fact, your every shopping trip is a marketing research. After all, you compare prices and quality of goods from different manufacturers and sellers, evaluate stocks and demand for various goods. Without this research, you will not be able to make a successful purchase, you will not find a product quickly.
When starting a business, you must first study the market; evaluate the competition; the price of the product or service you intend to offer; demand for it and possible income and expenses.
Even a hastily conducted marketing research will give a novice entrepreneur a huge amount of useful information and will allow, as they say, «to sink to the ground», to really assess the possibilities of their business idea.
Later we will repeatedly return to the topic of marketing research, to the methods of their conduct. However, at the initial stage, you need to understand the following for yourself:
Marketing research must be carried out BEFORE starting the steps to open your business.
Marketing research should precede every new step in business
That is why large corporations keep entire marketing departments on their staff or spend money on ordering research from specialized firms. These costs subsequently save a lot of money in production and sales organization.
There is no need for a novice entrepreneur to spend money on marketing research, especially in the face of a shortage of funds. It is enough to conduct such a study yourself.
The first, most important, marketing research should include the following mandatory items:
- A study of the demand for the product or service you offer in your region, where you are going to expand your business
- Research market capacity, that is, how many goods or services you can sell to recoup your costs
- Forecast your market share, that is, how intense the competition is, what you need to do in order to sell more products or services than your competitors.
- Defining your market segment, that is, you need to understand who exactly will be your buyer (young or old, men or women, students or retirees). You should also try to predict the behavior of buyers on your offers.
- Outline the distribution channels for your products or services, which is very important for organizing successful sales.
We’ll talk more about how to do this later. In the meantime, you need to understand for yourself the importance of this stage for organizing your business.