Gaining a competitive advantage over other market players has always been a priority for businesses, and market research provides the needed insight into customer behaviour and the market at large. The results are often implemented in the development of sales and marketing strategies for growth and market domination. Startups, in general, that hope to be successful in an industry must conduct market research.
WHAT IS MARKET RESEARCH?
Market research involves the collection and analysis of information and data relevant to an industry that, in turn, provides insights that aid in the identification of customer needs, opportunities to be exploited, and strategy development. Every effective strategy created is based on accurate data collected during research.
The aim of market research is to help businesses focus on identifying distinct differences between their offerings and alternatives present in the market, customer expectations, customer dissatisfaction, new products to be developed, and uncovering market trends to drive sales.
These strategies would help them to stay ahead of the competition as a result of knowledge about the customer’s needs and dissatisfaction that inherently creates gaps in the market and also the impact of new market trends on customer behaviour and decision-making.
Market research is divided into two broad categories: primary market research and secondary market research. Primary research entails getting first-hand information about clients/customers about your services and products, for example, customer satisfaction, customer complaints, and general opinions about your brand. Primary market research can be conducted using quantitative surveys, focus groups, and one-on-one interviews.
Secondary research involves analyzing third-party data obtained from sources such as market reports, government databases, and industry media, then subsequently drawing objective conclusions about the market and potential customers.
With a focus on competitors, market research helps determine your competitors(both direct and indirect), ascertain what offers are similar to business, and evaluate the sales, marketing and promotional strategies, and clients/customer responses to marketing materials. Competitive market research is targeted at the customers with the aim of identifying how they perceive your brand and their decision amidst alternatives.
HOW SECONDARY MARKET RESEARCH PROVIDES A COMPETITIVE EDGE.
The following steps would provide insights into the market and potential customers when developing growth strategies for your business. They are:
1. Analyze The Market
Identify your competitors, ranging from industry giants to smaller players, as well as both direct and indirect competitors. This analysis will offer valuable information on how market share is distributed and what share of the market is up for grabs.
2. Carry Out A SWOT Analysis Of Your Competitors.
It is essential to analyze the market from the perspective of your competitors, even if it may seem unorthodox. By closely observing their actions and strategies, you can identify their areas of strength and skills that enable them to excel in the market. Additionally, opportunities for competitors may arise from activities such as securing funding for business expansion. On the other hand, weaknesses in a company, such as receiving negative customer feedback, can pose significant threats and challenges to its overall success.
3. Identify How Your Product/Service Fills The Market Gaps.
Once the opportunities to be exploited have been outlined, your product/service must be tailored to meet these needs profitably. Remember you are targeting the same audience with many choices, so your solution must inherently solve their pain points or risk being ignored by the market.
4. Carry Out Market Drivers Research
This analysis will assist in identifying gaps in existing solutions, reasons for initial customer purchases, factors leading to customer churn, the likelihood of repeat purchases, and strategies to improve overall customer satisfaction with the product or service. This provides your business with a better understanding of what your customers want and, conversely, increases customer retention. For example, by analyzing customer feedback, a company might find that a lack of product features is the main reason for customer churn, leading them to develop new features to retain customers.
5. Outline Barriers To Market Entry.
Depending on the industry in which your business operates, you may encounter a diverse range of impediments when it comes to entering new markets. These barriers can take on various forms, such as government regulations, a dearth of technical expertise, or exorbitant costs associated with distribution channels, among numerous others. It is imperative that you carefully consider and incorporate these obstacles into your overall business strategy, not only in the immediate future but also on a long-term basis. By doing so, you can navigate these challenges effectively and ensure the sustained growth and success of your venture.
For example, if you are running a technology start-up looking to expand into international markets, you may face barriers such as stringent data privacy regulations, a lack of local market knowledge, or high import duties. It is crucial to analyze and address these obstacles as part of your business strategy to ensure a successful entry and sustained growth in these new markets.
VALUE OF SECONDARY MARKET RESEARCH TO BUSINESSES.
Secondary research provides businesses with a deep understanding of the market and eventually makes primary market research more effective. It offers insight into the experiences and expectations of customers. It highlights the importance of customers having choices and being willing to switch brands.
This information aids businesses in making informed choices regarding market trends and size. Additionally, it serves as a valuable resource for understanding how customers perceive brands and marketing strategies. It spotlights target customers and their needs.
For example, a startup about to venture into the fintech industry would have to consider the market size, market players/competitors, market share distribution, offers in the market, pricing and perks, online presence, the target audience (broadly speaking whether it’s B2B or B2C), customers reviews, and SWOT analysis of its competitors when conducting secondary market research. Noteworthy is the fact that secondary market research for product-based businesses would vary from that for service-based businesses. For instance, you cannot review the product requirement document for a service-based business because it applies only to product-based businesses and even businesses that offer their services using digital products.
Done successfully, this would reveal market voids stemming from customer discontent as well as emerging market patterns. This analysis would allow the new business to address critical issues and ultimately shape its market positioning to become the leading provider of solutions in the industry.
Furthermore, these results would determine the viability of the startup and, consequently, the business model it implements, which would be best suited to the identified gap in the market that it plans to exploit. The scalability of the startup is tied to properly conducted secondary market research which determines the foundation of the business.
To eventually obtain the best result for your business, a combination of both primary market research and secondary market research is necessary. Apart from having clear objectives for secondary market research, it is essential for it to be performed regularly as markets are always changing, and new trends would subsequently arise.
It is absolutely essential for businesses to prioritize secondary market research in order to fine-tune their strategies, operations, and product offerings. By delving into consumer needs, preferences, and behaviours, companies can develop customizd products and services that truly resonate with their target audience. Not only does this research uncover valuable insights into market trends, competitors, and potential opportunities, but it also empowers businesses to make well-informed decisions.
