Market research and collecting the necessary data will be key elements in decision making for your company or business. A market study will allow the successful development of your organization. A good initial idea is not enough to create a profitable business, however, a good business plan will give you everything you need to know to achieve a certain commercial profitability.
A market research is based on the collection of necessary information and data about a specific market. These inquiries yield information about the target audience, potential consumers, business opportunities, ideal customer and demographic characteristics of the population, which will define what the new products will be.
What is the purpose of a market analysis?
The market study provides the necessary knowledge of the environment of your future business and allows you to make the right strategic decisions. The instruments used for data collection (surveys) validate the commercial viability of your project, which allows you to strengthen your commercial strategies before you start.
A market study allows you to define or adjust your commercial strategy and thus detect which tactics will effectively differentiate you from your competitors. If you are going to make an important business decision or implement a strategic plan, you need to have the right tools to do it successfully.
Do you want to increase your market share and lead your industry? A market analysis is the ideal method to achieve this, as it incorporates qualitative and quantitative information from data collection tools, allowing you to identify current trends and areas for further growth.
A company that takes the time to analyze its market is able to make the best investment decisions, development and manufacturing of new products, expansion and diversification of its organization.
Steps to perform a market analysis
To begin your market analysis, define the objective of your study. The first step is to know the purpose of your market. To do this you need to be able to answer the following questions:
What is the nature of the market and what are its trends?
Who is your target audience? What are the categories of your potential customers?
Who are your competitors and what is their positioning in relation to these companies?
Also design the research questions to ensure the effectiveness of the data collected through surveys or other collection methods, you must ensure that it has the following:
✅ Nature and market trends
To do this, identify the type of market in which you are positioned, what are its trends? It will then be a question of whether this market is emerging, in strong growth or in decline.
Define the size of the market, its geographical dimension (local, national market) but also the volume in terms of sales and turnover What market share are you targeting?
Important: specify if there is an evolution of technology in your market in the last few years, are there any barriers to entry? You should also indicate if the market is regulated and if such specific conditions require any kind of access such as licenses, etc.
Having a good knowledge of the market is essential for you to react and adapt to any changes. Your firm should convince investors that it has that ability.
Who is the target market? Define your target customers: Defining the target market is a fundamental part of the project. These are the people who will actually buy your products or services.
Therefore, it is important to determine their needs, their desires, their sensitivity to price, quality, quantity, etc. All this type of information can be obtained through data collection through surveys or focus groups.
Also describe their consumption pattern, buying habits and behavior. Where do your customers come from? Where do they mainly live? This will allow you to prioritize your communication and sales efforts.
💦 Competition: It is essential when creating a business or writing a business plan to keep in mind that there are a multitude of other players in the marketplace. You should always recognize which companies market the same products and services as you and can replace you.
To perform a solid competitive analysis in your market research, you need to: Identify current competitors, but also potential competitors and new entrants. They are likely to gain market share and change your strategy, if you know this in advance it allows you to generate new attractions.
Understanding your brand image, your specificities, your strategies, determines whether your products or services sell well or not well enough.
Identify your competitive advantage, that is, all the strengths and weaknesses of your company, with this you will distinguish the competition and reach the target customer.
💦 Collect the data: The next step in our guide on how to conduct market research, is for you to do a data collection process and the most effective way to achieve this is through online surveys. Always keep in mind that you must have a representative sample.
This is the solution that more and more organizations are choosing, because it allows them to obtain real-time data very quickly and covers a large number of participants, regardless of the geographical area. Therefore, it also facilitates the purchasing process.
By conducting an online study, you can conduct anonymous surveys, which reduces the bias of traditional studies. In fact, unlike face-to-face questionnaires, people are more critical and give their opinion more easily.
If you have the right software, you can conduct a survey easily, efficiently and quickly.
💦 Analyze your results: After collecting the necessary information, the next step is to perform an analysis of the data collected.
Data analysis is a determining factor for your project, since it allows you to obtain a real observation of the industry. The use of the personal interview will provide you with useful qualitative data to know the degree of satisfaction.
Write a report of the results: The main objective of this document is to present the results of your research and recommendations in order to build a business plan with greater strengths.
Mistakes to avoid when doing market analysis
Before you start your market research, you have to identify exactly the needs of the customers who belong to your target audience, know the main players in your market sector and analyze the future prospects, all according to the characteristics of your company.
Antes de iniciar su estudio de mercado, tiene que identificar exactamente las necesidades de los clientes que pertenecen a su público objetivo, conocer a los principales actores de su sector de mercado y analizar las perspectivas de futuro, todo ello en función de las características de su empresa.
If your market study has a national scope, ultimately, the company only offers the products or services in the locality, this would reduce the risk of failure. For the behavior of a population located in location A will not be the same as that of a population located in location B.
Your analysis should not only focus on consumers, key players, the degree of satisfaction, or the products and services, but should also pay attention to the competition. It is essential that you know your future competitors, the prices charged, the goods and services they offer, their qualities, their commercial policy, their distribution networks.
Tools for market analysis
Some of these tools will be very useful for market analysis: Google Analytics, Google Trends, Social Mention, SurveyMonkey, Semrush, SimilarWeb, Octoparse, among others. The purpose of these tools is to facilitate your work and help you obtain the necessary information.