Why Market Research is Important for New Business Ideas
Market research is highly essential and shouldn’t be overlooked. A quote by Forbes sums up why market research should be a priority for new business ideas.
If you’re going to spend your time making a product, then spend your time making sure it’s the right product for the right market.
New businesses can enjoy both success and longevity with the right market research because such businesses may have adequately identified their target market, understand the business environment, know their competitors, and sought ways to understand customers' problems. Many businesses with promising ideas have failed because business owners failed to find out the extent of demand for their products.
According to experts, the failure rate on new products is believed to be about 95%. Although these statistics may be on the high side, the fact remains that most new products become surplus to requirement and may be dumped in clearance bins. Let us use Nokia as a case study.
According to Harri Kiljander, Nokia’s director of user experience, consumers returned about one in seven Nokia handsets in six months. His 2007 review also showed that about two out of three Nokia handsets were broken even though nothing else was wrong. He also revealed that the company lost about $20billion in usability and also missed their sale cost.
Though these stats may seem frightening to potential business owners, the good news is that you can avoid loss and guarantee productivity through effective market research. Let’s learn more about market research and its importance for new business ideas.
What is Market Research?
Market research may be defined as a systemic process of gathering data, analyzing, and interpreting consumers, competitors, target market, and the industry. The outcome of market research is provided in a detailed report and is used to assist new and old business owners in making informed decisions.
Market research report is also beneficial for strategy implementation, improvement in operations, and promotion of customer growth. Market research helps you understand the dynamic preferences, consumers needs, industry trends, and other factors that can help you streamline your resources and efforts. If you deal in the sales of fabrics, for example, and you find out that more customers purchase fabrics using coupons; you may want to send a promotional coupon to your mailing list to test their purchase response.
Define the Purpose of Your Marketing Research
One effective way to carry out market research is to define the purpose of your marketing research. Without a clearly defined purpose, your market research may fail to meet the demands of your target audience and the ever-changing business environment. To define your marketing research purpose, we shall look at three different aspects, including:
– Market research for attracting investors
One of the purposes of market research is to attract investors. For most potential business owners who may need the help of angel investors to get their idea into a salable reality, conducting effective market research may be a great idea.
You can pitch your business to potential investors and provide sterling business proposals by conducting good market research.
– Market Analysis for Searching for an Idea
The significance of market analysis in helping potential business owners develop great business ideas should not be overlooked. With proper market analysis, you can find out the latest industry trend or problems around you that you can solve and make money in the process.
– Market research for testing Ideas
Most great businesses of today began with an idea. But the truth is that not all idea is viable irrespective of how promising they may be. How then can you determine the viability of an idea? To determine if an idea is viable, you may have to carry out market research.
You can do a survey to find out if your product or services may be in high demand by your potential customers.
Market research may be defined as a systemic process of gathering data, analyzing, and interpreting consumers, competitors, target market, and the industry. The outcome of market research is provided in a detailed report and is used to assist new and old business owners in making informed decisions.
Market research report is also beneficial for strategy implementation, improvement in operations, and promotion of customer growth. Market research helps you understand the dynamic preferences, consumers needs, industry trends, and other factors that can help you streamline your resources and efforts. If you deal in the sales of fabrics, for example, and you find out that more customers purchase fabrics using coupons; you may want to send a promotional coupon to your mailing list to test their purchase response.
Define the Purpose of Your Marketing Research
One effective way to carry out market research is to define the purpose of your marketing research. Without a clearly defined purpose, your market research may fail to meet the demands of your target audience and the ever-changing business environment. To define your marketing research purpose, we shall look at three different aspects, including:
– Market research for attracting investors
One of the purposes of market research is to attract investors. For most potential business owners who may need the help of angel investors to get their idea into a salable reality, conducting effective market research may be a great idea.
You can pitch your business to potential investors and provide sterling business proposals by conducting good market research.
– Market Analysis for Searching for an Idea
The significance of market analysis in helping potential business owners develop great business ideas should not be overlooked. With proper market analysis, you can find out the latest industry trend or problems around you that you can solve and make money in the process.
– Market research for testing Ideas
Most great businesses of today began with an idea. But the truth is that not all idea is viable irrespective of how promising they may be. How then can you determine the viability of an idea? To determine if an idea is viable, you may have to carry out market research.
You can do a survey to find out if your product or services may be in high demand by your potential customers.
Study Types of Market Research
It is essential to know that selecting the right type of market research may determine the success of the research. We shall identify and compare different market types you can employ before bringing your new products or services to life.
The research may be conducted through interviews, surveys, focus groups, etc. Conversely, secondary research is a form of market research that isn't carried out by you or a third party on your behalf. Instead, it is research done by someone else for a similar or different purpose.
Secondary research may involve reading journals, reviews, and other materials regarding your field. Although secondary research is cheaper than primary research, the results may not fit your unique business needs since the research was conducted for a different business.
It is a rigorous and time-consuming research method. One other drawback of the offline market research is that you may not have access to the updated information in some libraries or bookstores. On the other hand, online market research involves information gathering from the internet.
A business researcher can find thousands of online information about different business niches, including journals, reviews, surveys, white papers, etc. It saves time, money, and effort to carry out offline market research. However, there is more misleading information online, and a researcher should be able to sieve information to get the right one needed for the business.
At Geerafe, we have outstanding service products designed to help you create ideal product with perfect market fit, validate your business ideas and supply your investors with market insights. Our service products include:
Check Industry Trends (Drivers and Barriers)
When carrying out market research, it is critical to understand the current industry trend to know what would drive your business or stand as a barrier to the Sucess of your potential business.
Compare Your competitors
Knowing your competitors before you start a business will help you identify their weaknesses and strengths so you can use them to your advantage.
Create Your Ideal Customer Profile
Your customer profile should stand out as your unique selling point and should be able to attract potential customers and investors.
Choose Your Market Research Method/Methods
There are several market research methods you can select. However, when selecting a market research method, ensure you choose one that can help you to achieve maximum output. Check out the pros and cons of each research method to enable you to choose the one that best suits you.
Check if There is Secondary Market Research Available
While it is great to conduct primary market research, finding a secondary market research that suits your business needs can help you save cost, time, and energy since you do not have to reinvent the wheel.
Ask The Right Questions
When carrying out market research, it is vital to ask the right questions to enable you to arrive at the best conclusions. You can use "WH" questions that start with "why, where, what, how, when."
Learn About Tools for Doing Market Research online
Several online market research tools are available to help aid your market research work. Some essential online market research tools include. Google trends, Typeform, Google Analytics, Surveymonkey, etc.
Conclusion
Market Research can help understand the complexities, trends, and variabilities of business niches before starting product development , it supplies with the market insights and customers’ demands which are valuable on either stages of product development from the scratch or its improvement. Data gathering and market analysis are highly important for every business owner. At Geerafe, we have successfully conducted countless market research on different industries, including banking, real estate, smart city, health, technology, etc.
We help in creating success of the product consciously, based on a data-driven and informed decision approach by extensive expertise in connecting digital product development to market research outputs. Invest in market research today to grow your business.
It is essential to know that selecting the right type of market research may determine the success of the research. We shall identify and compare different market types you can employ before bringing your new products or services to life.
- Primary or Secondary Market Research
The research may be conducted through interviews, surveys, focus groups, etc. Conversely, secondary research is a form of market research that isn't carried out by you or a third party on your behalf. Instead, it is research done by someone else for a similar or different purpose.
Secondary research may involve reading journals, reviews, and other materials regarding your field. Although secondary research is cheaper than primary research, the results may not fit your unique business needs since the research was conducted for a different business.
- Online versus offline Research
It is a rigorous and time-consuming research method. One other drawback of the offline market research is that you may not have access to the updated information in some libraries or bookstores. On the other hand, online market research involves information gathering from the internet.
A business researcher can find thousands of online information about different business niches, including journals, reviews, surveys, white papers, etc. It saves time, money, and effort to carry out offline market research. However, there is more misleading information online, and a researcher should be able to sieve information to get the right one needed for the business.
At Geerafe, we have outstanding service products designed to help you create ideal product with perfect market fit, validate your business ideas and supply your investors with market insights. Our service products include:
- Research
- Test
- Design
Check Industry Trends (Drivers and Barriers)
When carrying out market research, it is critical to understand the current industry trend to know what would drive your business or stand as a barrier to the Sucess of your potential business.
Compare Your competitors
Knowing your competitors before you start a business will help you identify their weaknesses and strengths so you can use them to your advantage.
Create Your Ideal Customer Profile
Your customer profile should stand out as your unique selling point and should be able to attract potential customers and investors.
Choose Your Market Research Method/Methods
There are several market research methods you can select. However, when selecting a market research method, ensure you choose one that can help you to achieve maximum output. Check out the pros and cons of each research method to enable you to choose the one that best suits you.
Check if There is Secondary Market Research Available
While it is great to conduct primary market research, finding a secondary market research that suits your business needs can help you save cost, time, and energy since you do not have to reinvent the wheel.
Ask The Right Questions
When carrying out market research, it is vital to ask the right questions to enable you to arrive at the best conclusions. You can use "WH" questions that start with "why, where, what, how, when."
Learn About Tools for Doing Market Research online
Several online market research tools are available to help aid your market research work. Some essential online market research tools include. Google trends, Typeform, Google Analytics, Surveymonkey, etc.
Conclusion
Market Research can help understand the complexities, trends, and variabilities of business niches before starting product development , it supplies with the market insights and customers’ demands which are valuable on either stages of product development from the scratch or its improvement. Data gathering and market analysis are highly important for every business owner. At Geerafe, we have successfully conducted countless market research on different industries, including banking, real estate, smart city, health, technology, etc.
We help in creating success of the product consciously, based on a data-driven and informed decision approach by extensive expertise in connecting digital product development to market research outputs. Invest in market research today to grow your business.
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