How to Use Market Research to Assess a Market
Both new business owners and entrepreneurs make time for a thorough market analysis before taking a dive into starting a new company. Good business decisions are based on an effective market research and intelligence. There are a number of key questions one needs to answer before they fully understand the market of their potential industry.
Market research is an essential part of any business that wants to offer products or services that are focused and well targeted. By researching your market thoroughly, you can minimize the risk to your business, identify new opportunities, while helping you communicate better with your customers. Assessing your market and your market opportunities include the process of investing time and resources to identify whether or not you will fit into all aspects of the market to make your business profitable.
Identify the four questions that researchers must answer to establish a successful market research report.
What’s your target market?
Which customer is paying for your products and services? What’s their spending power and their preferences is critical to your business success?
What is the size of your total market and the addressable market (the population size willing and able to pay)? This will help answer whether the market is big enough to be interested in your business. Identify your potential market based on
- Demographic: Age, gender, Income, Education, Ethnicity, Family size
- Geographic: region, city, neighborhood
- Psychographic: Social class, lifestyle, personality, values, life stage
- Behavioristic: Buying pattern, consumption, loyalty, attitude
Determine the market share which basically means how much percentage of the market your business holds.
Competition is always an aspect you need to continue to research. Understanding your competitors will allow you to understand their successes and failures. Which means you can make better business decisions. Plus, knowing how your consumers feel about the competition can help you, in the long run, to make your product better fit their needs.
It’s important to undertake a competitor analysis of their business failures so that you are better equipped to avoid them. Analysing their failures, their approach to solving a problem and the decisions taken which finally did not resolve the issue will ultimately help you in not repeating the same mistakes.
Current and Future trends
What are the technological opportunities for your business in the future? How relevant is social media for your business success? Are you prepared for facing the strengths, weakness, and threats prevailing in your industry? What are the current and future trends that might influence your bottom line? Having an executable plan that addresses these questions should be researched when starting and operating your business.
Operations and Management
Before starting your business, its vital to establish a basic understanding of your budget, expenses and the operations costs needed. This should forecast the possible over-expenditure and revenues accurately in order to stay on top of your operations and achieve success in your business.
Costs and revenues which should be identified and forecast include Advertising, Rent, Inventory, Revenues, Profits, Wages, and salaries.
Do all the many ways of evaluating your market research results have you confused? Contact Infoholic Research to help you sort through your options and come up with a manageable and profitable market research plan for your business.
– Shantha Kumari
Sr. Technical Writer