The 3 Pillars of Market Research and How they Can Help You Make a Fortune
If you’re anything like the majority of ambitious entrepreneurs who dream of making countless millions, chances are you have a brilliant business idea that you’ve been dying to put into action at the right time. You know exactly what you want to sell, and you’re ready to get going as soon as all your capital is in place. But, before you spend any of your hard-earned cash on building the infrastructure of your business, it’s important to actually investigate whether your ideas would actually appeal to the people you’ll be selling to. The best way to do this is through a process known as Market Research.
What is Market Research?
Market Research is the task of personally interacting with a sample of potential customers in order to gather information about what their needs and preferences are. This can be done through a variety of methods, as long as it creates a bank of information which a business can use to make efficient decisions. Market Research is an integral part of business planning because it gives entrepreneurs the opportunity to test the viability of their products without investing heavily in manufacturing and operations. The more intimately you can understand a customer base through market research, the more you’ll be able to provide them with goods and services that guarantee consumer loyalty by appealing to their individual needs.
Here are three fundamental principles on how to implement a strong Market Research strategy:
- Choose an Appropriate Research Method – Formal Market-Research is usually carried out via four main methods, these are Conversational Interviews, Focus Groups, Questionnaires, and Surveys. The method you choose depends entirely on what type of business you intend to launch. If you’re doing something small-scale in a brick & mortar location, it’s best to interview foot traffic in the immediate surroundings of your expected location. If your business is going to be large-scale and online, then written methods such as surveys would be more helpful.
- Analyze Census Data – Conversations with customers might provide you with psychological insights into their preferences, but it’s also important to understand the big picture of your intended customer base. This is where analyzing demographics comes in. Get hold of as much census data from the government as you can in order to determine the true nature of the exact population you’ll be selling to – especially if your business will be at a brick and mortar location. Census data always includes helpful information such as age-distribution, gender distribution, income levels and so on.
- Scope out the Competition – Businesses don’t take place in a vacuum; it transpires in a dynamic market full of active competitors. No matter how incredible you think your business idea might be, either there’s someone out there who’s thought about it before, or there’s someone out there who’ll undercut everything you do give the chance. Figure out exactly who you’re up against before going into business and develop strategies to cope with the competition. The more you can neutralize or outperform the competition, the longer your business will survive.
The more meticulous your market research is, the more you can protect your business plan from waste and unforced errors. One of the biggest reasons why entrepreneurs fail is because they underestimate how much preparation goes into establishing a sustainable business. Every decision needs to be measured, and all your resources need to be conserved. This ultimately takes a lot of research and assessment every step of the way. Before you ever dive into the deep end with a business idea or a business project, do as much Market Research as possible to avoid making a bad investment.