Why Should Entrepreneurs do Market Research?

You should not underestimate the power of market analysis, especially when starting a business. It will build a sturdy foundation for your start-up because it will prepare it for possible weaknesses or threats that may arise later.

Market insight offers information on potential competitors, target audience and market tendencies. It is the most effective way to keep up with the trends of the market and to maintain your business competitive. You can carry it at any stage, but a pre-launch one is vital if you want to have a great start. If you have a detailed understanding of the marketplace before launching the business, you will be able to create a successful strategy and to stand out in the industry.

But first, you should define the objectives of the market analysis

Your objectives will influence the scope of the market research and determine the tools needed during the process. Market research can cover multiple aspects:

  • Identify the competition within the industry
  • Find the channels of communication your competitors use
  • Verify the quality of services and products your competitors offer
  • Monitor if your sales are effective (it’s required after you start the business)
  • Check government data
  • Identify existing studies and surveys that can influence the manufacturing process

Market research has the aim to provide unique data that can improve the products and services your company will offer.

When performing marketing analysis there are some main steps involved: the team should check if previous research has been carried out, analyze the existing data, and decide how the information will be used.

Now, why is market research important?

It will identify your competitors

It does not matter the type of business you decide to start, it’s vital to identify the companies that can be considered your competitors. If you know how a direct or indirect competitor can threaten your business’ success, you can decide how to create products and design services to attract audiences.

Market analysis identifies the possible threats other businesses can pose to your company. If you know your competition, you can adapt your strategies to retain clients and to create a unique image for your brand. If you don’t have this piece of information you will feel like a small fish in a pond, your efforts will probably have no result.

You’ll understand what type of client is interested in your business

All new businesses encounter three types of clients when they enter the market. Market analysis will reveal the type of clients interested in the products and services you offer and even show the means by which you can convince them to buy from you.

  1. The savvy buyer, that purchaser who doesn’t care about the quality of the services or products you offer, they only want to get the best possible value for it. They have the wide knowledge of the prices offered by multiple companies within the same niche and you can attract them if you understand if they consider your prices competitive enough to buy from you.
  2. The industry influencer is the one who has extensive knowledge about the market and who can influence audiences. They are not interested in the price you ask for your products but on the quality and value, you provide. You can send them products as gifts to offer their feedback and review.
  3. The end-user is the client who uses the services and products you offer. The market analysis will reveal their limitations and frustrations and will offer insight on how to design and develop your products.

You’ll find out how to sell your products

Do not be discouraged to find out that only half of the new businesses started every year make it past their five-year mark. In order to be part of the ones that succeed you need to know how to sell your products.

The way people buy is in a continuous change, and market research will prove useful if you run a B2B it provides useful insights on the latest trends of the market. If the analysis determines that your prospective clients do not read the newspaper there is no reason to place your ads there, if they are using social media focus your promotional efforts to create internet compatible content. It will identify what the best promotional platforms are in the domain you are operating and it will help you know how your audiences shop.

Why should entrepreneurs do market research 1

It identifies your audience if you have one

Before making some big steps in starting your company, you need to know if there are people interested in buying from you. If there are no clients, there will be no sales, and you will have no company to run. Market insight offers you information about your potential audience, and where you can find them. If the research shows that no one is interested in the type of services or products you want to sell then starting this type of business is not the best idea.

For a young entrepreneur, as you are, it’s quite difficult to understand the ins and outs of sales and marketing. You have an idea and you want to transform it into a business, but many steps and tactics still remain unclear to you. How can you reach and convince audiences to buy your products instead of choosing your competitors? How can you effectively communicate your message to your audiences and convince them that you are promoting a reliable brand? Where should you begin?

You can get answers to all these questions if you hire experts to handle market analysis and a marketing agency to help you work on your strategy tactics. From identifying the audience to creating content for social media, and delivering products all these steps can influence your business’ success to a greater extent than you imagine.  In-depth knowledge of the industry and effective marketing will help you promote your company and reach success. And more important they will help you cross over the first five years of existence. Starting a business may seem scary but having access to information is all you need to succeed.

Dragan Sutevski

Posted by Dragan Sutevski

Dragan Sutevski is a founder and CEO of Sutevski Consulting, creating business excellence through innovative thinking. Get more from Dragan on Twitter. Contact Dragan