How to Do Market Research for A New Business or New Product?

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In our previous post we delved into the importance of market research in business success and continuity. While discussing the research sources that are predominately used to collect market and consumers insights, we covered briefly the process of market research for a new business or new product. In this post we will dive deeper in the process and key questions to ask.

why market research is important - Rawlift Digital
Source: Undraw.co

How to Do Market Research for A New Business or New Product?

 

Market research for a new business will usually consist of five main steps: 

  • Understanding and categorising your consumers 
  • Identifying consumer categories and engaging in market research 
  • Present the consumers with market research-based questions 
  • Distinguish who your relevant competitors are 
  • Recap, summarise and apply your research 

1- Understanding and categorising your consumers:

 

Optimise your marketing efforts by reaching the targeted consumers effectively.

To identify which category each consumer falls into during the grouping process of participants, research about the consumers’ age, gender, geography, and occupation should be identified.

Although these categories are useful, you are not limited to them, so feel free to group your consumers as specifically as you see fit for your market research. 

 

2- Identifying consumer categories and engaging in market research:

 

You should aim for a minimum of 10 active consumers per category. These active consumers should be a mix of people who have made purchases from your business (or made similar purchase from a competitor), and people who are considering buying, but not yet have decided to purchase. 

 

The idea of pestering people for feedback may seem irritable, however, there are now many convenient ways to gather consumer feedback through multiple platforms, such as using social media for a call-out post to gather participants.

 

The use of incentives is proven to be successful for many businesses, as people’s time is precious, therefore, you must think outside the box of what you can offer these participants in return for their time. Your incentive can be anything depending on type of business you are in and what you’re willing to offer, for example, a fragrance business may offer their participants a free perfume sample for completing their feedback. 

 

3- Present the consumers with market research-based questions:

 

Once you’ve gathered participants, you should have a prepared set of market research-based questions. These questions should be a combination of closed and open-ended, as using  ‘yes’ and ‘no’ questions at all times,  might be limiting your research based on your assumptions rather than allowing your participants to express their feedback freely without any limitations.  

 

4- Know who your relevant competitors are:

 

A common mistake many new businesses make is assuming that an entire company is their competitor, rather than identifying the division within the company that could be considered as a competitor. So, avoid generalising multiple divisions of a company and try to focus on a division that is considered as a primary competitor.

 

When you find your real competitors, you then analyse the differences between your business and theirs, and examine why their product/service performs better. Once you’ve gathered adequate research on those competitors, the next step will be to look at integrating their success factors  into your business. 

 

5- Recap, summarise and apply your research:

The final step is to make sure your research doesn’t go to waste. Recap everything you’ve explored and searched and created a clear summary of your findings.  

 

Think about sorting your research out into categories as it brings clarity when trying to identify and view what has been gathered. When you feel that you’ve summarised and understood the market research you’ve undertaken that is when you should apply that newly uncovered knowledge of the current targeted market into your business.  

 

A carefully conduced market research for a new product can determine the likelihood of a successful market entry and penetration.

Your research should be able to identify whether any competitors have the same product on the market, and if so, what are their tactics and approaches when it comes to selling? and how would your business stand out?

 

To recap, questions you should think about before your business releases a new product on the market are: 

 

  • What are your competitors doing that is attracting consumers? 
  • How can your product be just as successful if not more successful than what’s already out there? 
  • What will take your product to the top of the market? 
  • How can you use the marketing techniques and tactics to successfully launch your product? 

Until next time.

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