Market Research is one of the most uttered pieces of business jargon among budding entrepreneurs, but it is the least used phenomenon at the same time. Before launching any venture, it is imperative to conduct formal market research to direct the business toward growth. Every business starts from an idea, but moving directly toward the execution could be a catastrophic blunder.
Whether it is the pricing strategy, deciding the marketing segments, or measuring your product or service needs, market research is critical. Additionally, it improves the user experience, indirectly contributing to long-term client retention.
When assessing a business’s potential, investors always consider market research. You cannot even sell 1% of your equity to Kevin O’Leary in Shark Tank without proving the potential of your business which is clearly presented in the market research.
Essential Elements of Market Research
There are several elements in a market research report, such as market size, growth potential, latest trends, consumer analysis, competitive analysis, SWOT analysis, etc. Overlooking all of these aspects results in irregular growth and unforeseen expenses, eventually leading to failure.
But the question is: Why do entrepreneurs overlook conducting market research?
The answer is that they are in a hurry and excited about their business idea being executed. Moreover, conducting market research takes a lot of time. In short, it sounds like a tedious job.
In such a scenario, one must control the urge to execute and outsource this job to some reliable market research experts. There is a crucial need to appreciate that businesses already involved in the market have significantly more knowledge than budding entrepreneurs. The lack of expertise nips such ventures in the bud. Ignoring market research puts your business at risk.
But here are some of the advantages that one may expect after conducting formal market research:
Many entrepreneurs have the tendency to believe deeply in their business idea, but they very quickly realize that their idea was neither original nor was there a need for it in the market. Getting the concept validated saves you precious time and resources.
Impeccable Product Development
Once the idea is validated, the entrepreneurs should conduct a formal survey for the target audience. Doing so helps you understand if the product meets the prospective customer’s needs. This survey could go against the results achieved in the primary research process.
A successful startup converts into sales. The idea and the developed products may be of top quality, but the launch time is not viable. This may result in failure or lack of excitement about prospects for the development. Market research helps find the best time for launch.
No matter how unique your business niche is, there will be competition in the market. Researching the market helps understand the level of business and marketing muscles required to outrank the competition through proper positioning and creating USPs.
Market research is the process by which experts gather information about the customer and the target market. This market research can be accomplished through qualitative and quantitative surveys. The data analysts meticulously examine the small details to determine whether your company’s products or services meet the market’s needs. The data gathered here is primary data, while the data gathered from existing reports is referred to as secondary data.
The purpose of this research is to learn about potential customers and the size of the market. It is possible that the target market is not as large as the business owners anticipated. Furthermore, the potential and number of direct and indirect competitors are important aspects of this research. This allows us to determine whether there is a good supply-demand balance. The effort and resources of the business owners are thus saved.
Successful entrepreneurs only make decisions after gaining clarity. Formal market research helps develop a clear picture and a plan to enter the market. This will ensure long-term growth and sustenance.