A market study It will allow you to measure how viable your business idea is and where to direct your entrepreneurial steps with a greater chance of success. If you plan to launch new products, increase your coverage or start your business, you should keep in mind that making one is something you must do.
It is commonly thought that performing a market study it is only typical of large companies or that you will need too many resources to carry it out. But today we’re going to give you five actionable steps so you can do one in a practical way for your business.
What is a market study?
A market study It is a type of research that is carried out in order to know specific conditions of a niche or sector in which a company wishes to place its products or services. It is done by collecting data from potential consumers, the commercial conditions of the sector, the competition, etc.
What is a market study for?
Make a market study It is useful to mark the course of your steps as an entrepreneur or businessman and among the most useful functions of doing it are the following:
1. Know the viability of your business idea
It is important that you can evaluate the idea you have for your business and validate how possible it is to market or generate income from it. Market research will give you an overview with hard data that will help you evaluate options and, if necessary, make adjustments to achieve your goals.
2.Visualize the competitors with whom you will face
when you make a Market research you get to know the other line competitors and you can get an idea of the scope you will have, how many parts the market is divided into, how difficult it will be to stand out or what your competitive advantages are.
3. Define your potential customer
You will be able to identify the needs of your target audience and understand what they expect from the products or service you offer and know their expectations. It will definitely help you understand who can be your customer and who can’t.
4. Find new opportunities
Thanks to a good Market research you can expand your panorama and find opportunities that at first glance you do not distinguish. Whether in your service, your distribution, your product or your ideal client. Doing so will help you define new possibilities and improvements.
5.Establish a marketing plan
Once you have studied your market, you will be able to generate better marketing strategies, since you will be able to define the profile of your consumer, the means by which you can reach them, the messages necessary to achieve it, the budget and the efforts that you require within your line of business and sector.
What happens if we do not do a market study?
Having a business idea is important, but validating it is essential. There are many entrepreneurs who venture to materialize their ideas without doing a study and do not confirm that they are really profitable.
This is one of the great entrepreneurial problems and why many companies fail in their first attempts. There may be a great idea for a product or service, but the most important thing is not that, but rather that there is a market with consumers willing to buy that idea.
In addition, if as an entrepreneur or businessman you have plans to bet on your business, the market study It is one of the main documents that you must present to give context to your project.
📌Note: If you don’t do a market studythere is even a risk of losing resources, both financial, time and energy, because we can work on a project that is not viable from the beginning.
When to do a market study?
Usually the Market studies they are made before the launch of a product or service and are part of the business plan of a company or enterprise. It is handled as one of the fundamental pillars to develop cost, marketing and sales strategies.
However, it is recommended to continue periodically analyzing the market and the competition to keep abreast of new trends in the field of our business, changes in consumption habits and new opportunities that arise in the sector where our business operates. .
It is also important to generate new studies when planning to do the launch of a new product, a brand expansion or intending to enter a different market to the one already handled, for example a new country or region or a different sector of the population.
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How to do a market study for my company in 5 steps
1.Definition of objectives
The first point for your study is to define what you want to obtain. Usually a market study seeks to understand how likely it is that a product or service can be marketed and how attractive the offer will be to consumers before it is launched.
But as we discussed above, the objectives can be variable depending on when the study is done, for example, perhaps the business already exists with a specific market and what is required is to validate a new audience for a diversification strategy, or how competitive is a region that we want to reach.
Regardless of the objectives, being able to define them will be the starting point for all your research and we recommend that you approach them with specific questions.
2.Research
In this part we plan how we are going to get to the answers we are looking for and it is where we choose the tools and means that we are going to use.
Plan what works best for your data and interviews, and structure your research with a calendar.
Think about who your sample audience will be, what characteristics it should have, what its geographical location is and how you can approach them.
What instruments will you use? They can be questionnaires for your surveys, questions for a focus group, points to analyze if you use the field observation method. It is also time to define the type of questions, whether they will be open or multiple choice, the tools you will use if it is online or the people you need to apply the survey.
✨Tip: It is possible to use it to do quick and free surveys or go a step further and try
The size of your market is also a point that you must take into account when planning your research. By this I mean to delimit the location by country or region, to know if there is any regulation in that specific sector, what is the turnover volume of said sector, its evolution or technological biases and to understand the growth trends and projections in the coming years. .
Who your competition is is something that you must know how to define from the start, so I recommend that you take the time to focus on investigating them at this stage. Look for direct and indirect competitors but define what you would need to know about each one. Be realistic and think that your competition must be in the same price and market range so that you can follow their steps and understand what works for them or where they have a weakness.
3.Data collection
This is the part where we will dedicate ourselves to looking for the answers to the questions that we raised in the investigation. Be as organized as possible regarding the application of surveys, plan well how many you can do per day or how many you need per week to reach your target sample.
Scheduling by stages is very useful to have a more global vision of the time that each one will take. Devote the necessary time to the collection and if along the way you find that you need more, be flexible; the information you collect will be of great value for your next processes, so it’s worth it.
✨Tip: if you conduct 1-on-1 surveys, ask permission to record them on video, you can then analyze the expressions of your interviewees and broaden your view.
4.Analysis of results
This is one of the most critical moments in the market study. It is the final part and consists not only in downloading the surveys but also in finding key points within your research.
To have a deep analysis, I recommend that in addition to drawing the general graphs of your answers, you generate a presentation where you systematically present the most relevant of those results.
Be careful, it is not a report but a last little investigation that presents us with interesting findings from the data obtained. For example, trends by gender or age of the interviewees, percentage of acceptance or rejection of some relevant idea of your service, behavior of your market in previous years, competitors over the years, etc.
5.Next steps
Once you finish market study what you can do is start taking actions according to the results you got. It’s time to plan your pricing strategy, your marketing strategy and develop your sales and penetration plan.
You will be able to choose more fundamentally the channels you will use, the audience you are targeting and the messages you need to create to achieve your goals. This is when you will see that the fruit of the investigation is an indispensable pillar for your business.
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Market study example
It is very important to learn how to structure your market study, example This is the following table that we prepared with some key points that you could take into account.
In this example, the study is for a coffee distributor located in another state of the republic and who wants to start selling to restaurants in Mexico City through an online store.
Objective Determine how viable it is to sell coffee at home through my website. Only to restaurants. It shows 45 restaurants in CDMX, in the Roma, Condesa, Juárez and Narvarte neighborhoods. Instrument Online survey Key points of the study
- Know if restaurants are willing to order online
- Know how often an order is placed and how many kilos they buy
- Know how many current providers use home delivery
- Understand the purchasing dynamics and the approximate delivery days that restaurants have with other suppliers
- Determine the shipping cost and from how many kilos it is profitable
In this example we show you a first approach with the established objectives of the research and what you want to achieve. It would be necessary to generate the specific questions and determine if the sample is the correct one, in addition to starting the scheduling of shipments to the restaurants.
After obtaining said data, it would be necessary to make a report and determine if the points that we wanted to understand about our new sales strategy in another city were clear. It’s not that complicated, right?
Conclusions
The main advantage of doing a market study is that we have the opportunity to anticipate possible scenarios that we will find when starting a business or launching a product for sale.
If we manage to collect first-hand data, we will have on our side the power to better manage our strategies, achieve our objectives and…
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