The two conducted market research, delving into what users didn’t like and what competitors, such as Facebook, didn’t deliver. They found that people liked to use Facebook to share photos and to stay in the loop with their friends but didn’t particularly appreciate how news or information was delivered. This information convinced Williams and Stone to transform Odeo into Twitter – a platform that offered users a better news and an opinions feed where they could share a “status”.

Why Market Research is Important

Conducting research on a continual basis is ideal for maintaining a competitive advantage. The information gathered can confirm or dispel the notions a business owner or marketing team has. The findings can then help to make calculated decisions moving forward. The reasons for conducting research can vary, yet the kind of data that can be attained include:

• Customer characteristics – In getting to know customers, data about their gender, marital status, job descriptions, family composition, level of education, salary range, and address are gathered. Moreover, their preferences in relation to the product or service offered, the conditions in which they would switch to your product or service, their shopping behaviour, their sources of information and so forth are also looked into.
• Blind spots in the business model – Through market research, the business owner will get to see the product through the eyes of customers. Information such as what they like about the product or service, what they don’t like, what other features they wish the product had and so forth.
• Business Opportunities – Market research is also a good way to check if trends are shifting (if so, why and how) and the level of saturation of the market. It may also lead to the discovery of a market that is not serviced, or is under-serviced, in which the business owner can penetrate.

These can then help a business owner set realistic targets and develop effective strategies.

Research Methods

There are two methods used for market research: primary and secondary. The two can be done concurrently.

Primary research – This type of research is done by the business owner and/or his staff or by an outside agency. The material is designed to the needs of the business. There are different ways of conducting primary research: surveys, focus groups, interviews or observation.

Secondary research – Instead of a more hands-on approach to sourcing data, secondary research entails using accessible data or information that has been collected by another person or agency. Sources of such information include; journals, white papers, and marketing reports. These can usually be found online or in libraries.

Categories of Data

When conducting research, there are two core categories of data that can be attained: qualitative data and quantitative data. The type of data chosen will depend on the research goals of the business. They can also be unstructured or structured.

• Qualitative research – Through this method, the fundamental reasons, opinions, and motivations towards a product or service are investigated. Focus groups, interviews, and observations are some of the ways by which this type of data can be gathered. Usually, a small group of respondents is chosen based on specific criteria to share their thoughts with others.
• Quantitative research – This involves measuring the situation through numerical data. The numbers are used to represent the opinions, attitudes, perceptions, and behaviours of the respondents, who are generally made up of a larger sample size. Patterns are uncovered in this type of research. Quantitative data is usually collected through surveys, interviews, and observations.

Market Research is an important tool as a great way to understand elements of the business and discover potential opportunities for the business moving forward. The crucial element is aligning the findings with your strategy.

The post In the know: Simple Market Research appeared first on Reload Consulting.

In reality, if you build something, the chances are that someone else may have already built it or ‘they’ (being your market) may not, in fact, come knocking as they can’t immediately see the value of what you’ve built. This consideration, while unpopular for many visionary entrepreneurial types, is incredibly important to address early before significant resources have been invested.

So how do you ascertain the feasibility of your business idea and determine the existence of a market for it? The simple answer: Research. It takes time, but the more you know, the better placed you’ll be when making decisions about your idea’s future. Taking action on a business idea without knowing if it is feasible is a sure fire way to increase your risk and subsequently the risk seen by potential investors. Research will help you get a clearer picture of the internal and external factors that will impact on your business’ chances of success and a provide a rough idea of the potential market share available to you.

Makes sense right? However, a surprising number of businesses fail to take this crucial step before diving into a venture headfirst. We feel this largely comes down to the ambiguity of what’s involved in feasibility research and the fact that very few know where to start. For specific research requirements, many will engage a market research expert to carry out primary research. Whereas for broader research requirements or those on a tighter budget, some may take the option of conducting secondary research themselves by looking online or accessing research reports.  If the latter rings true for you, we’ve compiled this article to outline the key research areas to get you started and to highly some tough questions you (as the idea owner) need to ask yourself (and others) to help determine whether your business idea has legs.

Industry Performance and Outlook

Understanding what industry your business idea falls within and having a clear picture of the performance and outlook of that industry, aids in highlighting whether there are opportunities and/or red flags early on. Some questions to ask when researching industry performance and outlook online are:

• Which industry does your business idea fall within?
• What is being said about the current state of this industry?
• Is the industry performing well in terms of revenue and growth?
• How is it projected to perform in the years to come?

Key External Drivers and Trends

It is important to take a look at the people, knowledge, political, social and environmental conditions and trends surrounding your business idea. This is carried out to discover how these factors can potentially impact the way your business will operate. Being aware of these will allow you to better prepare for any changes brought about by external drivers and trends. The questions below provide a starting point for assessing these considerations:

• What are the political, social and environmental conditions in the market you’re entering? What are the implications of these for your idea?
• What is the present state of the economy in which you are entering?
• Will your business idea be greatly impacted by a change in Government or upcoming legislative change?
• What are the industry trends and how can these trends potentially affect your business performance?

Threats and Opportunities

Knowing the threats that your business can possibly face will allow you to devise a strategy to either combat these threats or avoid them. Meanwhile, identifying and understanding the opportunities that are available can help you prioritise and map out exactly how opportunities will be taken advantage of in future. A Strengths, Weakness, Opportunities, and Threats (SWOT) Analysis (or even better, a TOWS analysis) is a useful model used to list out and plan around the key internal and external factors influencing your business idea. The SWOT Analysis starts as a table of the four areas to visually list out your internal strengths and weaknesses and your external threats and opportunities. From there you must assess the next steps to build on your strengths, minimise weaknesses, take advantage of opportunities and mitigate against threats. A TOWS analysis allows this extension of a SWOT, whereby the identified opportunities and threats are attached to the points you’ve identified for strengths and weaknesses in order to create a plan for maximising the potential of strengths and minimising the impacts of weaknesses. Applying these models to your business idea early will help you get a picture of where it stands and can aid in understanding the primary influencing factors for its success or failure.

Competitors

Investigating who you will be competing against is an essential part of predicting the feasibility of your idea. To get started, the answers to the questions below will allow you to start evaluating whether or not your business idea can compete with these businesses.

• Who are your competitors?
• How established are they?
• What are their strengths and weaknesses?
• Are they likely to respond to your market entry?
• How are you different?

Consumers

The next critical element is detailing exactly who your business idea will be providing value for. Before this point you’ve probably got an idea of generally who your market will be, but to obtain realistic details of the market size/potential, your research needs to dig a bit deeper and start looking at the overarching market, the segments within that market and sometimes even down a level further to segments within segments!  Profiling your target market properly (geographic location, demographics, behavioral characteristics, decision influencers, path to purchase etc.) will allow you to determine exactly who will be the most viable group of consumers to target, how much of a market is available to you and also helps in getting to know your potential customers and what will entice them to buy – All of which forms the basis when developing your tailored marketing strategy.

Market Testing

If the above secondary research doesn’t answer enough of your questions, conducting primary research on a sample of your target market/segment will help you to obtain feedback on your product/service and the likelihood of uptake within that group. Through market testing and research, you will be able to see how a portion of your target market responds to your product/service idea. The results will enable you to gather information towards improving your product and/or define if there is no appeal at all. The answers to the questions below will aid in providing a basis for this information.

• What did the sample like about the product/service?
• What did customers dislike about the product/service?
• How can the product be improved?
• How did the customers respond to the price of the product?

To summarise; little good can come from putting the cart before the horse. The well-conducted research will help you to get an idea of the viability of your business idea and aid in determining if it, in fact, serves an attractive market. If from the above exercise you find that your business idea has potential and that an attractive market exists for it, then the next step is to craft a business plan. A well-crafted business plan will define the actions that need to be undertaken to ensure the commercialisation of your business idea is well considered and has the greatest chance of success.

The post Is There a Market for Your Business Idea? appeared first on Reload Consulting.