Informed Decisions with Market Research
Market research has repeatedly proven its worth in making business strategies and user requirement choices more effective. According to the Small Business Administration (SBA), a successful business is significantly contributed to by gaining knowledge about customers, competitors, and the associated industry.
Market research for new ideas
Research becomes especially important for market entry and product development in order to:
- define, validate and refine new ideas;
- establish target users; and
- manage or reduce risks.
Market research is a systematic and objective approach to gathering and interpreting market data, based on fact-finding as opposed to assumption-making. In the ideation stage (previously discussed here), many assumptions about the market and target audience needs may be made, but these must be validated and refined before embarking on planning and committing budgets.
In order to evaluate and validate new business ideas, market research gives a better understanding of target markets and the competitive landscape. Its ultimate aim is to help businesses make informed choices about future decisions, while managing risks and focusing on the most cost-effective and relevant option for their business and budget.
There are a variety of methods (online and offline) that can be used, and knowing how they are done, and their costs and benefits, will be useful in deciding how to conduct market research. The research methods most relevant to market entry and product development are:
- Concept validation
validating new ideas with respect to the target market/users
- Requirements validation
validating and determining features that are priority to target users
- Competitor analysis
understanding the benchmark and competitors in the market
Steps in market research
First, there needs to be a clear aim of what you are trying to achieve, and what information is needed for this goal. For example, you would need to know what target markets to test, and what issues or questions you want answered through data collection.
With this focus, methods and content can be created to collect and manage the relevant data. A market researcher will design and implement research methods, interpret and analyze resulting data, and provide a report of findings and implications to the client often combined with recommendations on how best to proceed.
The market research report may confirm the idea’s viability such as target audience interest and needs, or highlight new issues. This would direct future action on proceeding (or not) with the project as-is or with adjustments as needed to meet the actual target audience needs.
After product launch, regularly planned