The following is a guest post by Marketest, a market research company that specializes in helping startups and small businesses.
One of the easiest things for startuppers to believe is to launch their new businesses by moving directly into the market. Falling into this trap is not uncommon and has increased the number of failing startup companies. With high risks at stake, market research can provide superior understanding of customers, competitors and the market, whilst also proving the viability of an initial idea.
Let’s start by defining market research: it is the systematic and objective data analysis of a particular target market. Most of the time, data is gathered via people who have agreed to be interviewed, with the aim to have a general idea on what respondents think about that particular market research or topic of interest.
The purpose of any market research project is to increase understanding of a subject. Market researches determine the feasibility of a project and it is an essential tool in adapting a business strategy (communication, pricing policy, products, etc.) for the best results.
So far, every entrepreneur should look at the following steps in order to develop a strong business plan.
1. Defining a Research Objective
A clearly defined market study will ensure focus to the specific question or problems requiring research. This avoids the possibility of developing a study with the wrong focus.
2. Choosing a Research Method
There are two main methods to choose from: primary and secondary market research. Choosing to conduct secondary market research involves looking into published data that has come from previous independent studies. Whilst this method provides an outline to a research topic, bear in mind previous studies may not be able to cover your exact research problem and would therefore require further investigation.
When previous data sources are unable to answer the research objective, then conducting primary market research is a must. Essentially, it is the collection of firsthand data and comes in the form of two types: quantitative and qualitative.
It worth noting the differences between the two; quantitative market research is the collection of numerical data whereas qualitative market research provides reasoning for consumer actions, opinions, wants and needs.
3. Data Collection
This next step in the process is essential when conducting primary market research. This consists of questionnaires or observational studies. It is important to note the quality of your data collection determines the quality of result and its usefulness.
4. Data Analysis
Market researchers analyse the data and fully understand the relationship between findings, competitors and the market trends. These specialists also evaluate and draw conclusions based on the findings to aid entrepreneurs to make important commercial decisions.
5. Written Report
This final step outlines all data recordings in a written and visual format. To illustrate the key points for each question or observation, market researchers will use statistical tests and calculations, to outline the most frequent or average responses.
Understanding the market research process, will not only provide knowledge on how it all works, but also indicate how in-depth research offers you with invaluable intellectual data. Due the high competition into markets, nowadays small businesses and startups need to find out the best way to increase funds for their potential projects.
In order to convince financial partners to invest in their business plans, entrepreneurs need to consider providing firsthand market research information, with the aim to increase the interest of investors.