When building a product, it is important to know the type of market your product is entering into, and this is not just a strategy; it’s the whole playbook.
Good market research will help you identify important problems or challenges.
What is market research?
Market research is the collection, analysis, and interpretation of market data, which includes information about the target audience, competitors, and the whole market environment. Market research is important because it gives you information about customer demands, preferences, market trends, and market size.
Primary vs Secondary research
There are two types of market research that you can perform to gather insightful information about the market: primary research and secondary research
Primary research
Primary research is the process of collecting new data that isn’t already available. This can be through numerous methods, including surveys, interviews, and focus groups. This type of research is often tailored towards the company’s specific needs and provides direct insights from the target audience. However, it can be time-consuming and costly.
Secondary research
Secondary Research, on the other hand, involves using existing resources like market reports, articles, and industry trends. It’s usually the first step in the research process and helps identify what is already known and what new data are needed. It’s often quicker and less expensive than primary research but may not be as specific or tailored to your needs.
Purpose of a market research plan
Below are the purposes of a market research plan in your product development:
1. It ensures strategic alignment
A market research plan helps ensure that your business decisions align with your strategic goals. It provides valuable insights into your market, your customers, and your competition, guiding your strategy and decision-making process.
2. Minimizes Risks
By providing a deeper understanding of the market and customer needs, market research can help minimize risks. It allows you to make informed decisions and avoid costly mistakes.
3. It drives innovation
Market research can reveal gaps in the market, customer pain points, and emerging trends, all of which can drive innovation. It can inspire new ideas for products, services, or improvements that will meet customer needs and set your business apart.
4. It facilitates market entry and expansion
If you’re considering entering a new market or expanding your presence, market research is crucial. It can help you understand the competitive landscape, identify opportunities, and develop an effective entry or expansion strategy.
5. Maximize ROI on Research Activities
A well-planned market research process can help maximize the return on investment (ROI) of your research activities. It ensures that your research efforts are focused, efficient, and aligned with your business goals.
Components of a market research plan
1. Conduct a situation analysis
Making a strengths, weaknesses, opportunities, and threats (SWOT) study of your competitors is one of the first things you should do when creating a market research plan. This is done to identify your competitors, learn about their business practices, and assess their advantages and disadvantages.
Strength
Competitive advantages should be one of your plan’s strengths. These advantages may be your ability, skill, and knowledge, as well as that of your team- Everything that can strengthen your product position in the market.
Weakness
Weaknesses are things like outdated production equipment, unreliable delivery, and a lack of planning that makes it difficult for your product to accomplish its goals on its own.
Opportunities
Opportunities are areas where your product can experience growth and become more profitable.
Threats
Threats are things like labor shortages or political developments that will stop you from entering a primary market.
2 Clear marketing objectives
Give a clear and realistic attainable description of the intended result you want for your marketing plan and make sure these objectives align with the vision you have for your product using marketing objectives is the most popular method for addressing this. These objectives can include total customers and retention rate, average purchase volume, total market share, and percentage of potential consumers that make purchases.
3. Research design
Research design means you’re choosing between qualitative and quantitative methods or a mix of both, based on the research objectives. It focuses on understanding the ‘why’ and ‘how’ behind consumer behavior, providing insights into attitudes, experiences, and motivations through methods like interviews and focus groups.
The selection depends on the research question, for example, qualitative methods are good for exploratory research like understanding user experience, while quantitative methods are suited for validating hypotheses about market sizes, customer demographics, and many more.
4. Target market identification
Knowing your target audience is important for adjusting products, services, and product messages to the needs and tastes of a certain set of people.
Method for Segmenting the user journey:
- Based on Demographic: age, gender, income, education, etc.
- Based on Psychographic: lifestyle, values, attitudes.
- Based on Behavior: Purchasing behavior, brand interactions, and product usage patterns.
5. Data Collection Tools and Techniques
You can collect data primarily through surveys, interviews, focus groups, observation, and digital analytics technologies.
Tips:
- Select tools that align with your research goals; for example, surveys for quantitative insights and interviews for qualitative insights.
- Make sure the chosen method reaches your target audience (e.g., online surveys for a tech-savvy audience).
6. Competitive analysis
It helps you understand their market position, identify strengths and weaknesses, and discover opportunities and dangers provided by competitors.
You can review your competitor websites and marketing materials, analyze customer reviews and feedback on competitors, or even study industry reports and market analyses for broader competitor analysis.
7. Data Analysis and Interpretation
After gathering data, you can move to analyze it to derive actionable findings. The volumes of data that researchers gather require the use of statistical and analytical methods for it to be interpreted and to help them find patterns, correlations, and insights that guide decision-making.
8. Timeline
After creating the detailed plan, you must calculate how long your market research procedure will require. Project management charts are useful for this because they assign tasks and staff over a predetermined time. If a process that should take one week turns into two, having a two-week cushion toward the end of the process will help you finish on time.
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