A market study will allow you to measure how viable your business idea is and where to direct your steps with a greater chance of success. If you plan to launch new products or start your brand, you have to consider the characteristics of the sector before investing in advertising strategies. We tell you how to do it!
It is common to think that carrying out a market study is typical of large companies or that you will need too many resources to carry it out. But today we present 5 steps so you can do one in a practical way for your business.
This is how we started this journey!
What is a market study?
A market study is a type of research that is carried out in order to know the specific conditions of a niche or sector in which a company wishes to position its products or services before launching.
This market analysis is developed by collecting data from potential consumers, the commercial conditions of the sector and the competition to know the characteristics of the industry and how it works.
The success of a market study also lies in knowing how to identify the risks that may affect your business proposal. By better understanding the trading landscape, you will take the .
What is a market study for?
A market study serves to validate the economic profitability of a business, the viability of an activity, the attraction of investment and the ability to respond in advance to customer behavior.
Doing a market study is useful to set the course of your steps as an entrepreneur or businessperson. So, among the most suitable functions to perform 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 studies will give you a more accurate picture thanks to the hard data that will help you evaluate options and, if necessary, make adjustments to achieve your goals.
2. Visualize the competitors
When you do an investigation or market study, you get to know the other competitors and you can get an idea of the scope and knowledge that you are going to have. For example, how many parts is the market divided into, how difficult will it be to stand out, or what are your competitive advantages.
3. Define your potential customer
At this point, you will identify the needs of your company, understand what they expect from the products or service you offer and know their expectations. In short, it will help you understand who can be your client and who cannot.
4. Find new opportunities
Thanks to a good market study you can broaden your outlook and find business opportunities that you did not distinguish at first sight. Whether in your service, your distribution, your product or your ideal client. Carrying out this analysis will help you to define new possibilities and improvements in your project.
5. Establish a marketing plan
Once you have studied your market, you can create better ones by defining the profile of your consumer, the means or channels to communicate with him, the messages necessary to achieve it, the budget and the efforts that you will need to implement within your sector.
Types of market research of a company
Knowing how to choose the type of market study for your organization is a fundamental step to move forward.
Next, we explain what each one is about:
Qualitative research
It is aimed at discovering the socio-cultural characteristics of the consumer, their , desires and behaviors. Among the instruments that you can apply to carry out this study, the following stand out: in-depth interviews, surveys and advertising tests.
Quantitative investigation
This research gives you hard facts and statistics. That is, through this technique you will know how many people are interested in the product, how many of them buy it, etc. In short, it consists of a series of systematic and standardized methods.
Field research
With this study, you will be able to analyze the competition and know how it moves in the current market, what strategies it implements and even what the average ones are.
Know your competition and follow these recommendations:
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continuous research
This analysis is carried out in a specific period of time and in the same place of residence of the sample. Its main objective is to determine what changes have been experienced in that range and take them into account for future campaigns.
Applied research
It is an effective alternative to identify errors and problems in your marketing or advertising strategies.
experimental research
This study involves a group of volunteers who undergo certain tests and experiences to assess their reactions to a given situation.
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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 or businessmen who venture to materialize their ideas without doing a study and do not corroborate that they are really profitable.
This is one of the problems of startups and many companies, because they fail in their first attempts because they are unaware of their business environment.
Now, you can have a great product or brand idea, but the most important thing is that there is a market with consumers willing to buy that idea.
Also, if as an entrepreneur or businessman you have plans to look for investors who bet on your business, the market study is one of the main documents that you are going to present for .
📌Note: if you don’t do a market study, you even run the risk of losing resources, both economic and time and energy, because you can’t work on a project that isn’t viable from the start.
When to do a market study?
In general, market studies are done before the launch of a product or service and are part of a company or enterprise. It is handled as one of the fundamental pillars to develop cost, marketing and cost strategies.
However, it is advisable to continue periodically analyzing the market and the competition to keep abreast of new trends in the field of our business.
Most companies do not plan this analysis twice a year to assess variations in customer consumption habits, the dynamics in the sector or if there is any risk factor for the organization, for example, when a new legislation or a decree such as mandatory preventive social isolation due to COVID-19.
According to the Argentine Chamber of Electronic Commerce (CACE), internet consumption patterns in April 2020 were different from those of August of that same year due to the pandemic. According to statistics, e-commerce increased its turnover by 84% during the first few months.
This type of research seeks to generate new market studies when planning a brand expansion or entering a market other than the one already managed, for example, a new country or region or a different sector of the population. .
How to do a market study for my company in 5 steps
1. Definition of objectives
The first point to make your analysis is to define what you want to obtain. Typically, a market study seeks to understand how likely it is that a product or service can be brought to market and how attractive the offer will be to consumers before it is launched.
But, as we discussed earlier, the objectives can be variable depending on when the study is done.
For example, if there is already a business with a specific market, what you would need is to validate a new target audience for a diversification strategy, or determine how much competition there is in a region you want to reach.
It is important that you be able to define the objectives, since it will be the starting point for all your research and we recommend that you pose them with specific questions or that respond to indicators such as:
2. Research
In this part it corresponds to plan how you are going to arrive at the answers or results that you are looking for. In addition, it is where you will choose the tools and means that you will use to collect all the information.
Plan what works best for your data and interviews and structure your research with a calendar.
Also, think about who your sample audience will be, what characteristics it should have, what its geographical location is and how you are going to approach them.
What instruments are you going to use to apply your market study?
They can be questionnaires for your surveys, questions for a discussion group or focus group or the field observation method.
It is also time to define the type of questions in the instruments; whether they will be open or multiple choice, the tools you are going to use, whether it is an online analysis or the number of people you need to apply the survey.
📌Tip: You can use it to do quick and free surveys or go a step further and try the tool
The size of your market is also a point to take into account when planning your research.
With this in mind, you are going to delimit the location by country or region, find out if there is any regulation in that sector, what is the turnover volume of said item, its evolution or technological biases, and understand the growth trends and projections in the near future. years.
In turn, understanding who your competition is is something you have to define from the start. Therefore, we recommend that you take the time to focus on investigating them at this stage.
Also, look for direct and indirect competitors and establish what you need to know about each one. Be realistic and think that your competition must be in the same range, both in price and market, so that you can follow their steps and understand what works for them or where they have a weakness.
3. Data collection
In this stage of the market study you are going to look for the answers to the questions that you asked yourself in the investigation. Do it in the most organized way possible. As for the application of surveys, plan well how many you can carry out per day or how many you need per week to reach your target sample.
Another tip is to schedule these actions in stages, as it is useful to have a more global vision of the time each one will take.
Dedicate the necessary time to the collection and if along the way you identify that you lack data, be flexible; The information you collect will be of great value for your next processes, so it’s worth the…
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