Do market research in 5 steps

Conducting market research is often considered an essential step in starting a business. However, many budding entrepreneurs skip this phase, perhaps deeming it too abstract and time-consuming, opting instead to dive straight into their business activities.

It’s highly likely that these same entrepreneurs will reconsider their decision when they realize the necessity of reassessing their positioning, pricing strategy, and overall approach. In reality, conducting market research saves a significant amount of time for a business. It enables the entrepreneur to avoid making serious mistakes from the outset and acts as a guarantee for the success and sustainability of the business.

To yield effective results, market research cannot be improvised. It can mitigate uncertainties by helping to define your niche, target customers, competitors, and your product.

While it’s possible to commission market research from professionals, if you have a limited budget, there are ways to conduct it on your own.

What is market research?

Conducting a market study involves analyzing the economic landscape in which a business operates, as well as its key players, including competitors and primarily targeted customers.

In essence, a market study aims to address the following questions:

What is the nature of the market for my business? (B2B, B2C, sector, or niche?)
What is the size and economic significance of this market? Is it growing?
Who are the consumers within this market? What are their profiles, needs, and behaviors?
Who are the competitors? How numerous are they?
What offerings do they have, and at what prices?
What are the opportunities, threats, or constraints within this market?

Understanding this market allows for strategic decision-making to establish the foundations of your business and guide it in the right direction. It helps in financial forecasting, devising business strategies, determining pricing policies, distribution channels, and communication strategies.

There are two types of market studies: primary and secondary. Let’s delve into them further.

Conducting a Primary Market Study: A primary market study involves a direct examination of the niche through various initiatives such as focus groups, customer surveys, analyzing your own sales data, and more. To conduct a primary market study, one needs to examine the market firsthand.

Conducting a Secondary Market Study: A secondary market study involves examining the considered niche using third-party data. You do not conduct the research yourself but rely on data collected by third parties to make well-informed decisions regarding your products and customers.

Secondary market studies rely on the analysis of reports, market trends, and case studies.

How to Conduct a Market Study? 5 Key Steps:

Define Your Market:

Assess the size, economic significance, and location of the market.
Predict market trends.
Identify market opportunities, threats, and specific regulations.

Evaluate Demand:

Assess the demand and its evolution: market size, quantity to sell, and number of customers.
Identify your target customers and use marketing personas, aiding in understanding customer profiles, needs, and behaviors.

Evaluate Competitive Offerings:

Identify direct, indirect, and potential future competitors.
Analyze their offerings, competitive advantages, strategic positioning, market share, marketing, and communication strategies.

Analyze Collected Data:

Once data is collected, it’s crucial to analyze it relative to your business to draw conclusions for defining your action strategy, asserting your positioning, or setting your pricing policy.

Document Your Market Study:

This formalization stage articulates the conclusions of your market study. It serves as a crucial element for decision-making or convincing investors and partners.

The Importance of Market Studies:

Market studies are essential to validate your business idea, product, or service. They provide critical insights to enhance product appeal and optimize marketing, pricing strategy, and brand positioning.

Without quantitative or qualitative studies, you lack essential data to identify your target customers, their buying behavior, preferences, and how best to sell your products.

Through market research, you’ll understand where and how to find customers, determining the best way to present your product and brand. Studying your competition during your research will also enable you to develop a unique selling proposition to differentiate your e-commerce site and attract more customers.

When to Conduct a Market Study?

Now that you understand what a market study is and how crucial it is for the proper development of your business, it’s time to address the question: when should you conduct a market study?

For your market study to be useful, it should be performed before deciding to launch your business. This will help you ascertain its long-term viability or identify any necessary adjustments needed for your product or service.

However, market studies can also be beneficial throughout the lifespan of a business, especially when planning to introduce a completely new product. Furthermore, given that markets are constantly evolving, it’s healthy for a business to reassess itself over the years based on trends, and a market study serves as a perfect tool for that purpose.

Recommended Reading: 4 strategies to double your traffic without any marketing

How to Conduct a Market Study

There are two ways to conduct an online sales market study: doing it yourself or hiring someone to do it for you.

It’s generally easier to conduct a secondary market study when working independently. In this case, you’ll need to search for reports, case studies, and reputable publications within your niche.

For a primary market study, a different approach is needed to gather data. There are various ways to collect information:

Customer surveys: Conducted via email, on your website through sophisticated forms or comment sections, or using questionnaires.
In-depth customer interviews: Phone or video conference interviews with customers.
Customer reviews: Analyze feedback on your brand, products, competitors, and similar products.
Focus groups: Engage an agency to conduct extensive research by organizing focus groups.
Sales records: Review existing customer information and sales data.
Employee insights: Seek opinions from employees regarding frequently asked customer questions or feedback on customer behavior.

For both types of market studies, consider the following elements:

Industry-related data:

Statistics and trends related to commercial regulations within your industry.

Consumer behavior-related data:

General consumer behavior statistics and trends within your industry, especially in retail.
Demographic data to segment your audience into targeted groups for more effective sales.

Company positioning:

Existing demand for your products. Areas where your customers excel and potential pain points.

Common Mistakes in Market Studies

If you’ve chosen to conduct your market study independently, it’s crucial to be aware of commonly made mistakes to avoid them:

Avoid seeking only convenient responses and opinions.

While having confidence in your business idea is excellent, accept that a product that seems good initially may not necessarily attract enough customers. Avoid solely focusing on elements that validate your business and conducting a biased study. Embrace all results and adapt accordingly.

Remember to survey only genuine prospects.

Avoid solely questioning friends or individuals whose opinions might be biased and might validate your idea just to show their support. Focus on individuals genuinely part of your target audience.

Tools and Resources for Market Research

There are numerous tools and resources you can use to study your niche.

Here are some:

AFE (Agence France Entrepreneur) Spotlight Dossiers: An online library providing downloadable dossiers containing essential data on various industries—key figures, statistics, market studies, information on trade shows, regulations, advice, and ways to start a business, among others.

FNPS (Fédération nationale de la presse d’information spécialisée): Access over 1592 publications covering specialized themes across multiple industries, many of which are available online.

Statista: A comprehensive site that condenses statistics in various economic domains.

Press Guide: A platform that categorizes all publications, magazines, newspapers, periodicals, and professional press titles online by theme.

FCGA (Fédération de Centres de Gestion Agrées): Access statistics and data collected from French small businesses—gross income, financial results, ratios, etc.

INSEE: National Institute of Statistics and Economic Studies.

Event Eyes: Monitor trade shows and professional events organized in France across various cities and industries.

Facebook Audience Insights: If you manage a business Facebook page, use Audience Insights to better understand your fans. It provides data on their age, income, lifestyle categories (according to Facebook), consumption habits, particularly useful geographic information for physical store owners.

Survey Tools: Several free tools like Google Forms and SurveyMonkey are available for customer surveys. These tools are beneficial if you already have an engaged audience (such as a qualified email list or engaged social media followers). For larger-scale surveys, use a paid service like Google Surveys, which allows you to configure targeting parameters for more relevant and detailed data.

SEO Tools: Free and paid SEO tools can help merchants evaluate their potential niche. Google Keyword Planner is a free tool to check keyword search volumes and discover related search terms, useful for assessing online niche potential.

Semrush: An analytical competitive tool that provides critical data on competitor e-commerce sites in the evaluated niche. It offers insights into site traffic, traffic generated by popular keywords, paid ads by competitors, traffic evolution over time, and other analysis reports.

Google Trends: Helps determine popular topics and track changes in interest for a given niche or product.

Market Study: An Ongoing Endeavor

Understanding that the research process never stops is crucial to successfully conducting online sales market studies. Trends regularly change and evolve, and to ensure the long-term success of your business, it’s essential not to rest on your laurels and continuously study your niche. As markets change, ongoing monitoring is necessary to stay ahead.

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