What is Market Research and How To Do It

Basics of Market Research

You’ve heard of market research, but what is it exactly, and how do you do it? Let’s jump in and learn!

The goal of this article is to help you understand the basics of market research and how to do market research for your business idea.

Understanding the Basics of Market Research

Before you start any business, you need to know if your idea is viable.

To do this, you’ll need to go through a process of figuring out whether there is a demand for your product or service. This is where market research comes in.

What is Market Research?

Market research is the process of gathering information about your target market, their needs and preferences, and the competition in your industry. By understanding your market, you can decide whether you feel confident that your business idea and strategy are solid or not.

If your market research tells you that your business idea seems risky, you may not want to spend a couple years of your life trying to make it work.

If you do the research and feel unsure about your idea, it may be time to evaluate those weaknesses and go back to the drawing board to re-envision your plan.

Important tip: Always do the research and validation of your business idea BEFORE you begin building.

This can save you YEARS of time, energy and cost if the idea turns out to be weak after you do the research.

Or maybe it’s time to keep digging, keep learning and get to the bottom of the data you’re seeing…

How to Do Market Research

Now that you understand the importance of market research, let’s talk about how to do it.

Most of it can be done online, in a variety of ways.

Some of it is done offline, but talking to real potential customers, conducting in person surveys and in-person focus groups.

Let’s break down the major approaches and look at some tools you can use to begin.

1. Identify your target market

• Conduct market research online using tools such as Google Trends, SurveyMonkey, and Facebook Insights.
• Gather data about your target market’s demographics, behavior, and preferences to help you refine your business idea and marketing strategy.

2. Analyze the competition

• Research your competition online by visiting their websites, social media accounts, and online reviews.
• Use tools such as SEMrush, SimilarWeb, and Google Alerts to monitor your competitors’ online presence and marketing strategies. 

3. Evaluate the industry

• Visit industry associations’ websites, industry blogs and forums, and government websites like the Bureau of Labor Statistics.
• Use tools such as IBISWorld and Statista to access industry reports and data. Sorry to say, some of these cost money. 🙁

4. Determine demand

• Conduct customer surveys and focus groups to gather data about potential demand for your product or service.
• Research keywords related to your business using tools such as Google Keyword Planner and Google AdWords to see how often they are searched. These Google tools are super helpful and they are free!

5. Develop a pricing strategy

• Analyze the prices of similar products or services in your market.
• Conduct customer surveys and research industry pricing trends to help you develop a pricing strategy.
• Use tools such as Priceonomics and PriceIntelligently to access pricing data and analysis.

6. Create a marketing plan

• Research your target audience’s behavior and preferences, analyze your competition’s marketing strategies, and research industry trends.
• Use tools such as Hootsuite, Buffer, and Mailchimp to manage your social media and email marketing campaigns.

7. Test your idea:

• You can test your idea by conducting surveys and focus groups with potential customers, launching a minimum viable product (MVP) to a small group of users, and analyzing user feedback.
• You can also use crowdfunding platforms like Kickstarter and Indiegogo to validate your idea and gather feedback from potential customers.

Using a SWOT Analysis to assess your business strengths and weaknesses

Another great tool that sort of goes hand in hand with market research is the SWOT analysis.

A SWOT analysis is a strategic planning tool used to identify and analyze an organization’s strengths, weaknesses, opportunities, and threats.

It helps organizations to understand their internal and external environments and to develop effective strategies for success. The acronym SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

A SWOT analysis is a simple yet effective tool to evaluate your business’s strengths, weaknesses, opportunities, and threats. By doing a SWOT analysis, you’ll be able to see where your business is doing well, where it needs improvement, and where it could grow.

To conduct a SWOT analysis, start by identifying your organization’s strengths and weaknesses.

Here’s a sample SWOT analysis – you can draw 4 quadrants on a piece of paper and make your own.

What I suggest is to start by creating a table with four quadrants, one for each category of SWOT analysis. Then, make a list of your business’s strengths, weaknesses, opportunities, and threats, and place them in the corresponding quadrant.

Here’s a link to a very full-featured SWOT analysis template at SCORE.

For example, your business’s strengths could be its experienced staff or innovative products, while its weaknesses could be a lack of financial resources or outdated technology.

As for opportunities, you could think about new markets or partnerships, while threats could include changing consumer preferences or government regulations. By doing a SWOT analysis, you’ll be able to develop a better understanding of your business and make informed decisions about its future.

Try putting together your own SWOT analysis for your business idea – it’s an amazing learning too and could save you from wasting a lot of time, or re-focus your efforts on weaker areas that you need to spend more time on.