There needs to be more than an innovative idea for a startup. Do you know if people want to buy what you are selling? Is your product or business filling a gap in the market? Are there competitors selling products similar to yours? These are a few extremely critical questions to ask before diving straight into setting up a startup business. Without thinking about these, you risk putting your time, effort, and money into building something that might not take off. After all, when you fail to plan, you plan to fail.
A critical piece of your startup planning is market research. The benefits of researching go beyond knowing whether your product fits your target market. Also, market research is not a one-and-done affair. It is an ongoing process.
Early-stage startups must research their target market thoroughly to identify customer problems and pinpoint competitors, while for established businesses, market research is the best way to stay on top of new trends and emerging market conditions and quickly adapt to them.
What is Market Research?
Market research investigates customers and the market to determine a product or service's viability. There are two types of market research:
Primary research involves gathering data about specific customers or market segments. You'll need this information to create your ideal buyer profile, segment your market, and align your startup's goals to customers' needs.
Secondary research is generally the data you gain from research outside your own, such as industry reports, public databases, and proprietary data of third parties, that you can use to achieve insights into your target market and customers.
Market Research: A Necessity for Startups
Before launching your startup business, you must find your niche, identify consumer needs, and find realistic competitors. The target market for your new product or service includes the consumers or businesses who would consider buying them. Once you identify the potential demand for your products or services, you need to figure out why a consumer or business would choose to purchase from you rather than a competitor. Are you offering the lowest price or unmatched service? Is your product unique and not available elsewhere?
Today, businesses have more tools than ever to back their ideas with ground reality. Customer behaviour, changing trends, opportunities, and challenges are more measurable than ever. All this information comes together to reveal the feasibility of your startup and the solution you are providing, so you won't have to play a guessing game.
Market intelligence also sets you apart from the current market players and helps you understand the point of differentiation to position your startup uniquely and profitably.
In short, you can't afford to skip conducting market research before putting resources into the launch of a startup endeavour. Here are some reasons why.
Too many factors may cloud your vision
Startups often start on shaky grounds. There's a lot of uncertainty about the product, target customer market, supply chain, and all critical aspects of the business. Conducting detailed market research at this stage can eliminate doubts and clean up the canvas for you to start painting the picture. In other words, you can begin to plan your startup with clarity.
You may not be self-critical
Startup founders generally believe they have come up with a novel idea or revolutionary product that could be path-breaking. But the reality could be different. Without market research, it's hard to tell if a similar product exists in the market, or worse, there's no need for your product in the target market. Right market research arms you with information that allows you to look at your startup or product objectively through the lens of hard facts and data.
Increasing competition and customers
In this era of intense competition, consumer needs are changing as fast as companies are coming up to meet those needs. Your startup should be able to predict and adapt to these changes in the market.
If yours is a product-based startup, it's crucial to conduct customer surveys to understand how the product may be received in the target market. Besides unearthing the opportunities, a thorough analysis of the market competition is necessary to know your challenges and shortcomings so that you can address them through pricing, marketing, and sales strategies.
Advantages of Marketing Research
Lowest Risk Factor
Market research helps to calculate the risks associated with applying many decision-based actions. If the research shows a strong indication of success, go ahead. If the market research shows inadequate data, it's best to take a step back and adjust your plan.
Increase in Sales
Market research is the first step to building a good sales plan. Gain a competitive advantage in terms of a better price, superior product, better packaging or more extensive distribution.
Improve Customer Relations and management
Market research involves understanding your potential target customers better and providing them with products or services that match their wants and needs. If you ask business-specific questions to your customers, you can get honest and valuable feedback. Asking customer-related questions will reveal how your customers perceive your products.
Measure Brand Reputation
Market research is the key to determining whether consumers like your brand. Measure your brand reputation in the market through market research. This is an excellent way to track company progress and compare that with competitors' progress to evaluate what is missing or exceptional.
To sum it up, now, more than ever, startup businesses need to conduct proper market research to get a clear picture of the competitive landscape. Market research can be performed at different stages of a business life cycle, starting from pre-launch, launch, and beyond.
There are various layers and types of market research. Some require you to dig into your data or delve into broader data available. Either way, it is a time-consuming process. This is where market research companies can help. Leading market research companies like Kadence USA offer market research services and analysis and provide support at all stages, from ideation and choosing the market to business growth and rise in sales.