How to Conduct Market Research
Comprehensive step-by-step procedure with tips, best practices, resources and document templates you will need.
You have an untested business idea, or you have an existing business, but you want to try out a new product or service. Before you start production, it is essential to consider conducting some market research. There are many ways to do this and it is imperative for a business to succeed without losing loads of time and money.
Clearly Define the Problem / Opportunity
There are important questions you need to find answers for, so it’s important that you start by listing those questions. What product or service are you trying to sell? What is the potential market? Who is the target customer? What competitive advantage might you have? What is the market like? What method of marketing is most effective?
TIP: Be as precise and exhaustive as possible when addressing those questions. Success or failure could depend on whether you found answers to ALL the relevant questions you needed to ask in the first place.
Worksheets: Business Analysis, Possible Marketing Strategies, Market Study Outline.
Identify Key Research Objectives
What do you want to learn from this research, for example demographics and psychographics? Whether your market wants something new? How customers feel about certain logo colours, website designs, or ad music?
TIPS: Listing the key objectives will help you write all relevant survey questions.
Worksheets: Demographic Analysis.
Surveys: General Market, Market Business to Business.
The market is the customer base. Who are they? This might be part of your key objectives. What is the size of the market? Market size is typically a statistical capital amount. What is the description of the market? What is the geography of the market – where do they live, work, shop. What are the trends in the market? What are the main products being bought? Who are the biggest sellers? Who are the biggest buyers? How is the market segmented?
TIP: This is usually a huge part of your key objectives, because after all what you are doing here is a “Market Research”.
Checklists: Industry Analysis, Trend Analysis, Market Planning.
Worksheets: Target Market.
Your competitors are important, because they can tell you who your market is and what they already like. Who are they? What are their strengths and weaknesses? What are their prices like? What features do they have? How is their service? What kind of marketing strategies do they employ? And maybe most importantly, what differentiates your business and/or products from theirs?
TIPS: You also need to think about indirect competitors, not just obvious competitors. Think about alternative solutions in the marketplace addressing the same problem (solved by your product or service).
Worksheets: Competitor Analysis, Industry and Competitive Forces Analysis, Characteristics of Competitive Strategies.
Who are the Customers?
This is what you will learn at the end of all of your research. But it is important to keep in mind some questions to help you determine who they are. What is their persona or profile? What are their needs? What is the ideal solution to their needs, or more importantly, how can your product or service be the ideal solution to their needs?
TIP: As much as possible you want to know the exact desired specifications, features, and performance the customers want, along with their current tastes and previous desires.
Quantitative research is easily defined by numbers. It is the facts, the stats. This can be very helpful when looking into exact market descriptions. The other type of research is qualitative – quality responses that have to be analysed for meaning. These are the customer comments, the particular feedback, and the emotions of the market.
TIP: 1) Qualitative data will take a lot more time, effort, and capital, but is incredibly useful.
2) In fact, you can’t rely solely on one or the other – quantitative and qualitative – you need both to validate market potential necessary before developing a new product or service.
Know how long you want to do research and when to stop. It might be hard once you start to find a clear ending to the data, but if you set a date ahead of time you will keep on track.
TIPS: 1) Allow time and resources for both qualitative and quantitative research.
2) If one has to be prioritized, most experts will say that talking to customers (qualitative) is generally more important than relying solely on stats and data (quantitative). A key success factor in today’s business world is to build a product (or service) perfectly aligned with exactly what customers want and need.
Secondary research is research that is already done by someone else. This is a good place to start because you have less investment in the process and it can raise red flags right away.
1) Start at the Library: Make yourself familiar with the reference section and be sure to ask for help from the librarian. If you are interested in doing business in the USA, look up the Statistical Abstract of the United States. ThomasNet.com and Harrisinfo.com are interesting sources as well, they target businesses in a particular area.
2) Also, try trade association published works like magazines, newsletters, and other publications.
Start with reputable sites within your industry or try some sites that do research for a fee. You generally can find good reliable information online if you take the time to conduct a serious research and make sure the sources are trustworthy (i.e. big names like Forrester, IDC, Gartner, etc).
TIP: If you realise along the way that you don’t have the time nor the internal resources to conduct a comprehensive market study, you can consider hiring a professional to do so.
Checklists: Possible Financial & Accounting Strategies.
Agreements: Consultant Non-Disclosure, Consultant Confidentiality, Consultant Agreement.
The government intakes a host of data with things like annual censuses. Check out the census bureau, county business offices, any geographical data, the Department of Commerce, the International Trade Association (ita.doc.gov).
TIP: Look for economic indicators, employment statistics, and income and earnings.
Consult professors with knowledge in those specific areas. You can also connect with other businesses in your target area.
TIP: You can even find students that might do the market study for you (sometimes for free!) as part of their program. Ask professors of faculty members.
Maps provide a lot of useful data – geographical groupings, business locations in relation to other business and homes, etc. Find them at Chambers of Commerce, Trade Development Commissions, Industrial Development Boards, local newspaper offices, the library, book store, museums.
TIP: You can even make use of Google Maps, Mapquest and other online mapping sites.
Primary research is research you conduct yourself. There are several ways of doing this. Know that this kind of research may take a lot more time and money but is absolutely crucial prior to making the decision to build a new product or service.
TIP: Figure out all the costs of each method before pursuing them. This is especially important because not all methods work best for specific research.
Make it available online, on your website, send it to customers/potential customers, send it out on social networks, do it over the phone – you have a lot of options.
TIP: 1) It is important to think through each question logically to make sure you get the responses you need to fulfil your goal.
2) Make sure the length of the survey is appropriate for the audience, method of presentation and type of questions, i.e., a web pop-up survey is usually no longer than 5 questions.
Surveys: Brand Loyalty, General Market, Market Business to Business, Quality Scale.
Interviews may be in person, over the phone, via video conference or even over a web chat. These offer the interviewer the chance to follow up on each question, but they also require a lot of time. Keep your key objectives in mind and make use of the surveys/questionnaires you already developed.
TIP: Remember to add up the costs before conducting interviews.
There is little that can compare to watching someone actually use the product and/or service you provide. You may do this by sending the product to a potential or existing client and ask them to film their experience, or you may conduct the research at your office.
TIP: 1) People like free stuff, so treat them to the product, a gift card, etc. Most people will be happy to help.
2) This can also be a Focus Group, which is a group of people interacting with the product or service at the same time.
This is the most important part of the process. What does your data tell you?
TIP: 1) Make sure to combine the primary research results for answers that make no sense or do not properly answer the question. These kinds of answers will throw off your data.
2) After collecting and analysing all this data, the final step is to write a report with your conclusions.
Call, Text, or Book a Call Back!
Absolutely. We begin with an 'empty' document template that is 80% complete and add your relevant information to it. Each client engagement starts with documents that have never been used before.
If so, then you can Hire Me, then we sign the privacy documents and non-disclosure document and client engagement contract. Those documents protect us both. Then we get started on whatever your project involves.
I am a Government Licensed Private Investigator specialising in Factual Investigation. I contract to clients as an Investigator, Field Agent, Business Analyst, Risk Analyst, and WordPress Nerd.
I currently have standing service and support contracts with Corporate and Government clients (references available).
I am a life-long learner. I have two papers left to finish an Advanced Diploma in Psychology (Logotherapy / Meaning Centred Therapy), and four papers to finish a Certified Business Analysis Professional (CBAP) exam prep course.
I have completed Diplomas in Financial Services (Loss Adjusting), Occupational Health & Safety, Government Fraud Control, Government Fraud Investigation, Security & Risk Management. I have finished 9 Certificate IV qualifications including, Government Statutory Compliance, Workplace Training & Assessment.
I became a Microsoft Certified Systems Engineer (MCSE) in 2003.
Since 2002 I have worked as an Investigator / Analyst on dozens of projects in New Zealand and Australia.
I have been building websites since 2003 back when I used Microsoft Front Page to write HTML code. I think testimonials on websites are nonsense. I never read them.
If you want testimonials then Call, Text, or Book a Call Back, and I'll give you the contact details of people I have been working with for years. You can call them directly, and they will tell you about me, my capabilities, and about my limitations.
I'm an Investigator and Analyst, I perform sensitive work for clients. Privacy and discretion are paramount. Nothing I do needs to be on any form of social media.
Plus, I understand what Social Media companies do with your data, and I’m not cool with my data being harvested and sold, just so my thoughts and opinions can then be manipulated.
I build websites so I can be found online within in an online environment that I control 100%.
If you contract me to build a website for you then I am happy to develop an overall social media strategy for you.