Prior to starting a business it is essential to conduct a quality research. Through an extensive research one obtains numerous necessary facts and thus is able to predict, at least to some extent, the success of the new venture.
Market research is a systematic, objective collection and analysis of data about a particular market, competition, and/or environment. Data collecting can be divided in primary and secondary research. Primary research includes collecting data directly from respondents. Secondary research also known as desktop research is gathering the existing data from relevant sources, such as institutes, faculties or experts.
Data mining is the process of analyzing data from different perspectives and summarizing it into useful information - information that can be used to increase revenue, cuts costs, or both. It is the process of finding correlations or patterns among dozens of fields in large databases.
In order to start a research one needs to set goals and questions to be answered.
Firstly, one needs to set the part of the target market to research first. When conducting this research it is important to provide statistic analysis for past and present state of the market and future predictions. The research should include the monthly and yearly revenue, the rise and fall of income and expenditures, and also the costs of starting a certain business.
One of the best ways to cover market research is to create a SWOT analysis based on the collected data. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It enables organizations to identify both internal and external influences and makes decision making easier as exemplified below.
One of the most important steps in market research is to thoroughly explore competition and its activities. It is important to list key players in competition and numbers related to their business, prices, samples of their ads and products but also what the customers value and resent in their products.
When researching the customers it is important to include demographics, psychographics, pain points and the customer’s purchasing power.
Demographics include age, gender and social class. Based on demographics one can predict where to e.g. put an ad to reach maximum visibility for the targeted consumers. Sample of demographics of YouTube users is provided below.
Psychographics are closely related to demographics. It is about using the demographic information you have for your buyer persona to figure out more about their lifestyle, their behaviors and their habits. It is the study of personality, values, opinions, attitudes, interests, and lifestyles focused on interests, attitudes, and opinions.
Pain points are problems, real or perceived. When pain points have been defined you can start the next step, which is to find the solution and improve your offer or product.
Social media has a great impact on marketing today, which is why it is important to keep track of the trends in this domain.
We usually include statistics, contacts and posts from social media. Moreover, we grow a database of contacts from these means of communication with large audiences. The so called influencers have a tremendous impact on modern buyers and are followed by millions.
When starting a new venture cover all of the mentioned parts of market research in order to obtain the best results, but also be careful to adapt it to the needs of your products and take into consideration the reliability of your sources.
You should be particularly attentive when using statistics, because overgeneralizing can give you inaccurate and thus not very useful information.