Know you need to do market research but don’t know where to start? Help is at hand! Market research is an essential part of business planning. Done well, it lays the foundation for a successful business. Find the right techniques for you and your business idea, and you’ll be off and running in no time – saving time, money and tears as you go.
Why do market research?
Market research helps you to:
- discover the size of the market for your product
- understand the needs and feelings of your target market
- find out what, where and why they buy
- learn who else they might shop with
- identify what your competitors offer compared to you
All of this information helps you build a picture of the market you’re operating in and makes it easier to develop a successful marketing strategy. You’ll be armed with vital insights to maximise on opportunities and to get your product, pricing and promotion right from the start.
It also helps protect your business against threats. You’ll have a better understanding of what outside influences could reduce your chances of success, so that you can work out how to tackle them.
Types of market research explained
There are lots of terms you’ll come across that are associated with market research. The key is to understand what they offer so you can decide which are right for your specific idea.
This is research you conduct yourself. It includes things like talking to customers, conducting a survey or running a focus group. It gives you the chance to ask the exact questions you want the answer to.
This is research that someone else has already done, like existing surveys and reports, data in the public domain, or reputable sources you can find online. It can be very detailed and insightful but won’t be specific to your business.
This is research that can be measured in numbers, eg 25% of your market is over 45 years old or 14% of the UK population are vegetarian. Hard facts can provide insights into market size and makeup, as well as back up your business case.
This is research that can’t be measured in numbers. It is concerned with thoughts, feelings and emotions, eg when someone says your brand makes them feel happy or confused or hungry. It can help guide product development or marketing by letting you know what people think.
Popular market research tools for startups explained
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It helps you focus on what you’re good and bad at, as well as what external influences can impact your business. Check out our article on doing a SWOT analysis for your startup. You can also conduct a PEST analysis, which focuses in on external factors.
Your customer persona is a profile of your ideal customer. It helps you think about key characteristics - who they are, what motivates them, the problems they face – so you can reach out to them effectively. Find out more about creating a customer persona for your business.
This provides insights into the makeup of the population, their buying habits and their media preferences. It helps you understand the size of your market and how to reach them. The UK Government website has great demographic information online for free. Or you can buy data specifically designed for market research like Acorn.
Free online resources mean you don’t need to hire someone to stand on a street corner with a clipboard to conduct surveys anymore. Tools like SurveyMonkey, Google Forms and social media help you quickly canvas opinion.
This is when you gather a group of people together to talk about your business idea and wider market. It is useful to find out what they think about existing products and services, the potential of your proposed businesses, and problems you can solve. Read our guide to running a focus group for your startup.
If you’re already trading, you could be sitting on a wealth of insights. Look at customer feedback, complaints, online reviews, and info from people who’ve declined services. Find out what they love or hate about what you offer; what made them buy or shy away from your product.
Commercial sources of data
You can buy data from a wide range of sources, like the Acorn reports mentioned above. You might also find reports on your specific industry or sector. You’ll have to pay to access these but they can deliver valuable insights to help you segment and understand your audience.
This covers a lot of different techniques to build up a picture of businesses already serving your ideal client. Having this information helps you to know who you are up against, as well as providing insights into how they position and promote their products. Read our blog post on competitor analysis for more information.
Do I have to do market research myself?
Not at all. If you don’t have the time or inclination to do market research yourself, there are options to hire in help.
Market research agencies can speed up the process by providing access to a pool of participants for focus groups and surveys, and running them on your behalf.
Freelance market researchers are also a cost-effective option if you’re self-financing your startup and feeling cash conscious.
We've got lots of articles for all stages of your startup journey. Check out our advice section for insightful information from our business experts.