So you’ve just begun the exciting process of starting your own business. Congratulations! If you’re anything like me, you probably have a million thoughts percolating in your brain right now: What should I name it? How will I know when it’s ready to launch?
When is it time to start hiring people to join my team? And so on. But one thing that might not be immediately obvious is how crucial marketing research is for building an effective strategy.
Not sure where to begin? Well, look no further than this list of all the different types of market research and why each one matters:
| Takeaways |
|---|
| 1. Gain a comprehensive understanding of various marketing research methods. |
| 2. Learn how to effectively conduct market research to inform business decisions. |
| 3. Explore a wide range of topics related to marketing research techniques and tools. |
| 4. Discover insights into maximizing conversion rates and improving advertising strategies. |
| 5. Access valuable resources to enhance your knowledge and skills in market research. |
Competitive Analysis
Identify The Competitors
a. Identify all your competitors, both current and potential, who may be targeting the same audience as you.
b. Gain a clear understanding of their strengths and weaknesses about yours (e.g., what do they offer that you don’t? What do they offer that you do?).
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Identify Opportunities And Threats
a. Look at any new products or services that could be offered by existing competitors or new entrants into your market segment; how will this affect your business? What are their strategies going forward? What is their plan for growth or decline?
Are there any major competitor mergers/acquisitions imminent which could change the industry landscape dramatically?
Establish market share, growth rate & trends: How much does each company contribute to total industry sales each year;
What percentage does that represent compared to other companies in this space (i.e., if Apple’s iPhone was 10% of global smartphone sales last year but only 8% this year would we say Apple has declined because it fell from 10% down to 8%, even though overall smartphone sales rose from X units sold globally back up again)?
Customer Analysis
If you’re a marketer, customer analysis is the first step to understanding your customers and their needs.
Customer analysis is the process of segmenting customers and identifying their needs, wants, and desires. By doing this you can create a better marketing strategy for your business because you’ll be able to cater to each group of consumers in different ways.
Customer analysis helps you understand:
Your Competition – What is it that the competition does well? How does it position itself against other brands? Is there anything missing from their offering that yours could fill? If so, how might this fit into your overall strategic plan?
Your Industry – What are some recent trends within your industry/sector? Who has been successful at adopting these trends (both positively and negatively)?
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Market Analysis
Market Analysis is the process of collecting information about your target market and how they behave, what they want, and why they buy from you.
Market Research is the process used to collect that information.
Market Segmentation is breaking down a market into smaller segments so that you can better understand them. These smaller segments are called “segments” because they represent different parts of the larger whole.
For example, if I have a business selling bicycles and I sell 100 bikes per month (at $1k each), my total monthly revenue would be $100k/month ($1k x 100 bikes). But if I only sell 20 bikes per month (at $5k each), my total monthly revenue would be only $5k/month ($5k x 20 bikes).
By breaking down my market into segments based on price points (i.e., high-end vs low-end), I can see which group has more potential for growth;
In this case, it would be clear that targeting high-end customers will help me build more sales since fewer people are competing for their attention and thus more money!
Target Market Analysis
A target market analysis is a deep dive into the demographics, psychographics, and behavior of your ideal customers. You will use this information to help you determine what products or services you should offer and how much to charge for them.
The first step in analyzing your target market is to create a list of all possible buyers for your product or service. You can find out who these potential clients are by asking yourself who would be interested in what you’re offering.
The more specific you can get with this question (and the answers), the better off you’ll be later on when it comes time to create marketing materials like brochures or landing pages that speak directly to these clients’ needs.
Once you’ve identified all possible buyers for whatever it is that makes up your business model (i.e., people who own businesses buying marketing research), take some time to think about which groups might make up the majority shares within each segment.
You’ll want plenty of detail here so don’t worry if there are too many choices at first!
If possible, try narrowing down these larger segments even further by identifying smaller subgroups within each group based on shared characteristics such as age range; type of company-owned (large vs small); education level attained; income level, etc…
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Positioning Statement
A positioning statement is a one- or two-sentence description of what your company stands for, in terms of its products and services. A positioning statement answers the question: Who are we?
To create a positioning statement, you must identify your target market by looking at who uses your product or service, how they use it, and where they use it. You should also consider what makes your product or service unique from other similar offerings on the market.
Once you’ve identified these differentiators, create a summary that communicates this information back to consumers. Here’s an example: “We provide emergency dental care at affordable prices to patients throughout [insert city].”
This statement tells customers the business is located in the specified city; emergency care is available (therefore making it appealing), and that affordability is an important factor for them (meaning they have likely searched for low-cost dental options).
The more specific you can be about each category of information within your positioning statement (location/price/type), the better off you’ll be when trying to attract customers who fit into those categories!
Market Forecast
Forecast the market size. This will help you identify the number of people who might be interested in your product and how much money they are willing to spend on it.
Forecast the market share. You need to know what percentage of total sales your company will earn if it enters the market, as well as what percentage other companies have earned up until now.
The first step is finding out what their sales were last year, then forecasting an increase or decrease in those numbers (depending on whether you think yours would be better).
Forecast the market growth rate for each year until 2022 (or however long you want), using historical data from previous years and assuming things won’t change much over time.
Meaning that if this year was 10% growth, next year should be 10%, too!
If some other factors are affecting how fast or slow things are growing right now (a recession), substitute those variables into your calculations instead; otherwise just stick with normal economic growth rates across most industries/categories
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Marketing Mix
The marketing mix is the combination of elements a company uses to promote its products or services. It includes the four Ps: product, price, place, and promotion.
Product
The product includes the physical good or service being offered for sale, as well as its packaging and delivery method (e.g., food).
Price
This includes how much you will charge for your items in addition to any discounts that are available for certain groups of customers (i.e., seniors). Place refers to where you plan on selling your products or services (e.g., online vs traditional brick-and-mortar stores).
Promotion refers to several different tactics used by businesses to advertise their products.
Including advertising through social media platforms such as Facebook or Google Ads; word-of-mouth recommendations from friends; press releases sent out by journalists covering events relevant to one’s industry; etcetera
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Conclusion
The great thing about marketing research is that it’s never-ending. There’s always something new to learn, which makes this a fun and exciting field!
The key takeaway here should be that if you don’t have an understanding of these six areas then consider doing some research on them before going any further with your business plan or strategy.
Further Reading
Here are some additional resources to deepen your understanding of marketing research:
The Buyer’s Journey Guide: Explore the stages of the buyer’s journey and how market research plays a pivotal role in guiding potential customers toward making informed purchasing decisions. Check out the guide on Market Research and the Buyer’s Journey by HubSpot.
Types of Market Research: Gain insights into various types of market research techniques and their applications. Learn more about these techniques and when to use them in your strategies through this article on Different Types of Market Research from Typeform.
Understanding Market Research: Delve into the fundamentals of market research, its significance, and the methods used to gather and analyze valuable data. For a comprehensive overview, read the article on Market Research by Investopedia.
FAQs
What is the significance of market research in the buyer’s journey?
Market research helps businesses understand the needs, preferences, and pain points of potential customers at various stages of their buying journey. By collecting relevant data, businesses can tailor their strategies to meet customer demands effectively.
How can different types of market research benefit my business?
Different types of market research, such as surveys, focus groups, and competitor analysis, provide unique insights into customer behavior, industry trends, and competitive landscapes. Incorporating these techniques allows businesses to make informed decisions and refine their marketing strategies.
What are the key steps involved in conducting effective market research?
Effective market research involves several steps, including defining research objectives, selecting appropriate methodologies, collecting and analyzing data, and deriving actionable insights. Each step contributes to a comprehensive understanding of the market landscape.
How does market research contribute to informed financial decisions?
Market research provides essential data on market trends, customer preferences, and competitor activities. This information empowers businesses to make well-informed financial decisions, allocate resources effectively, and identify opportunities for growth.
How does market research influence product development?
Market research helps businesses identify gaps in the market, understand consumer needs, and gather feedback on existing products. This insight guides product development, ensuring that offerings align with customer expectations and have a higher chance of success in the market.
Costantine Edward is a digital marketing expert, freelance writer, and entrepreneur who helps people attain financial freedom. I’ve been working in marketing since I was 18 years old and have managed to build a successful career doing what I love.