How To Do Market Research For A Startup (Complete Guide)
Market research is essential to grow brands, meeting customer expectations, find opportunities, increasing profit margins, and generally staying competitive. Without data collected directly from consumers and markets, it’s difficult to be sure your product or service addresses your audience’s real pain points. This article is everything you need to know about how to do market research for startup is here.
What is start-up market research?
Market research is a business technique used in the early stages of business idea development to gain a thorough understanding of key demographics, their dynamics, potential consumer attitudes, focus group buying behavior, and other factors. The purpose of market research is to help potential customers better understand how well your products and services meet their needs and how they compare to what your competitors are offering. is.
Two types of research can be conducted: primary and secondary.
Primary research involves gathering data to learn more about a particular customer or target market segment. It helps you create buyer personas, segment your market, and improve your products to meet your customers’ needs.
Secondary research is performed using data that you did not collect yourself. Gain insight into your target market segments and industries using industry reports, public databases, and proprietary data from other companies.
How do market research for a startup product?
Market research is time-consuming. With limited funding and runways, smaller startups often don’t have the millions of dollars they can put into a comprehensive industry analysis. Investing in in-depth research is worthwhile, but high-level initial research as a starting point often yields relevant and applicable insights.
Below is a simple 7-step guide that explains the basics of market research for startups.
1. Set overall goals
Be sure to take the time to outline the rationale for your planned investigation. Think about the key information you are looking for and how you will apply the results.
What problem did you want to solve through your research? How are survey results handled? These questions will aid you in developing your overall goal. This overall research goal should guide the research process and act as a “polar star” that follows everyone as they develop and execute their research plan.
2. Choice of research approach
Primary and Secondary research methods are the two most popular ones.
Primary research is about gathering completely new information and providing solutions to unanswered questions. It is in the best interests of an organization to conduct primary research only when gaps in current secondary research have been identified, as primary research is frequently more time-consuming and expensive.
Primary research should only be conducted after thorough secondary research has been completed.
Primary research requires more resources to be deployed than secondary research. Research teams are responsible for all aspects of primary research, from determining the best way to reach your target audience to determine the metrics to evaluate.
It is a good idea to conduct secondary research beforehand to determine what information isn’t already available and to prevent squandering time and resources on pointless primary research.
Primary research can help close the knowledge gap and provide crucial answers to questions about particular products and clients once researchers have a clear understanding of what is and are not already available through secondary research.
In secondary research, answers to research questions are usually already available online through news sources, published books, magazines, and other places. The task is to sift through the available material to find data that correspond to a particular research topic.
At the beginning of the secondary research process, you may be overwhelmed by the amount of material available on a particular topic. The ideal sources of information for answering a particular research topic vary, and it is almost certain that a single project will require multiple sources.
3. Collect data about your audience
It’s time to focus on your target audience after deciding on your overarching research objective and your preferred method of data collection. You can plan the best strategy for both secondary and primary research by determining who your target audience is.
Plan your target audience’s location, the things they interact with, or the places you can find out more about them, as well as the channels you can use to reach them. read relevant market data and keep an eye on market trends with the help of industry experts to acquire the necessary knowledge of your target market.
4. Formulate your research questions
The right questions can assist in guiding your overall strategy, but the incorrect ones could sabotage your work and lessen the significance of your findings. Consider the following questions to ask your internal team:
- Who are your competitors?
- What are the market values of our direct and indirect competitors?
- What differentiates your service from your competitors?
- What is the range of services/products in your target market?
- What are your target market’s buying habits?
These basic questions will help you formulate a formal research question.
5. Choose the right tools for the job
Data analysis takes a long time. But gathering data is only the first step—evaluating it well is just as crucial. Both data collection and analysis are critical to research success, so having the right tools at hand is essential.
6. Analyze the data
After collecting primary and/or secondary data, mince the research to extract pertinent business insights. There are various data collection and analysis tools to assist you in collecting and analyzing data.
Data analysis is often a manual process that involves compiling and sifting collected data, annotating videos, taking notes, analyzing survey responses, and more. It’s important to be relevant to the overall goals of your research, and make sure you’re looking for the most helpful and accurate information.
7. Act on the data
After sifting through the data, produce a research paper or report containing both a summary of the findings and a detailed study including methodology, data, and key findings. This allows us to organize our findings concisely and clearly so that other team members can refer to and apply our findings to inform the overall business direction and specific strategic decisions.
What are the five 5 Common market research questions?
Below is a list of market research questions to gather valuable insights from your prospects and customers.
1. Who are our ideal customers?
Gender, education level, income level, occupation, or location are demographic and psychographic market research questions. Use them in really inventive ways. You might also consider conducting profile-only surveys about your customers’ shopping and dining preferences. It’s important to know as much as possible about your ideal customer. That way, you can make marketing decisions based on customer preferences.
2. What sets you apart from your rivals?
Competitive analysis and benchmarking are essential to increase product profitability and grow your brand. Customer satisfaction surveys are an efficient way to measure or identify differentiators and competitive advantages. Proper attribution is essential to answering these market research questions.
For example, either Apple or Samsung may conduct surveys to find out how satisfied customers are with their products and what other features consumers prefer from competing brands.
With such data, businesses can also integrate features based on demand and evaluate features that customers prefer. The Apple-Samsung survey question template helps you get the data you need to compare your product against the competition and strategize accordingly.
3. Why do people buy from you? What value or need does it meet?
Only perceived value motivates customers to purchase from you. This value is either what you present to potential customers or what regular customers know about the value of your product or service. Customers also make purchases based on their trust in products and services, brands, and sometimes specific individuals.
To make sure that the perceived and actual brand index is extremely high, it is crucial to comprehend the brand’s value and to uphold the morals and ethics of providing high quality. Another reason customers buy from you is whether your offering meets their needs.
4. What is the fair price?
Pricing laws can determine sales, brand recognition, profitability, and acceptance of products or services. Setting prices too late has negative implications and can lead to lower revenue. High prices give a feeling of being elite, and profitability and turnover depend on acceptance rates per unit rather than very high acceptance rates. The right price is a myth – what one person thinks is cheap, someone else might think is expensive.
If someone finds value for money in your product or service, others may find it outrageous. It’s crucial to get input from both current and potential customers on the ideal price. It is also important to conduct due diligence on your competitors to map your pricing relative to the features of the services and products they offer.
5. What’s the best way to communicate with the people you want to reach?
What plagues many brands is that even with the perfect product or service, they can’t reach their target audience. All your hard work goes to waste if you don’t know how to reach your target audience and potential customers.
For example, even if a new drug hits the market that could save someone’s life, almost 20 years of research and development will be wasted if medical professionals and doctors don’t know how to use it and its benefits.
To engage the target market for your product or service, you need to choose the right channels and distribution methods.
How to get free market research?
Free tools for market research are:
Google tendencies is one of the pleasant free-marketplace research equipment which lets you look for specific keywords, topics, and phrases which have been searched for over some time. This work is performed by analyzing a subset of Google searches and calculating the number of searches made for the phrase entered against the total number of simultaneous searches on Google.
Make My Persona
When collecting and analyzing customer-related information, create or adjust buyer personas. Personas are useful when conducting market research because they make it easier to understand and integrate collected data. Make My Persona is a simple, intriguing seven-step process that guides you through the key features of your target market: demographic information, company information, job titles, issues, etc.
Ubersuggest is an easy-to-use tool for researching keyword and content markets. Enter a phrase and you’ll see a long list of related keywords. You can log in to Ubersuggest’s dashboard for free and track his website’s ranking among competitors.
Google Analytics is a less comprehensive tool for providing market research, but it can provide feedback on customer behavior on your website. It shows which products are getting more views but fewer sales, and which social media platforms are getting more customer feedback. Google Analytics helps you get a complete picture of your visitors and their queries and analyze your website traffic.
Google Keyword Planner
For basic keyword research, Google KeywordTo use Google Keyword Planner, you can create a free Google Adwords account Planner is a great tool. The main function of this tool is to search for phrases and keywords related to your business. Google Keyword Planner helps you discover new keywords and get a deeper understanding of how your target audience is searching for information in your industry.
What are the disadvantages of market research?
Disadvantages of Market Research
High cost of research:
One of the main reasons companies are discouraged from conducting market research is the huge cost they must incur. For a start-up company, it can be very daunting to know how much effort goes into market research. Hiring a company to do research can require a lot of resources. Of course, you can also outsource this to existing employees. However, it is still expensive to conduct surveys, interviews, etc.
Time consuming :
Market research is a time-consuming and labor-intensive process. There are no shortcuts in market research. It usually takes at least 3-6 months to solve a marketing problem. Therefore, it cannot be used in urgent emergencies.
Unpredictable consumer behavior:
Consumer behaviour is the subject of marketing research. But consumer behaviour is unpredictable. It is constantly changing with the times and the mood of consumers. Social, religious, family, economic, and other factors all have an impact on it. These factors are very difficult to examine.
No reliable data available:
The quality of market research reports depends on the quality of the data collected. Market research reports are reliable if the data is complete, up-to-date, and reliable. However, it is very difficult to obtain complete, up-to-date and reliable data in India.
So, the lack of reliable data is also a limitation.
As market parameters are constantly changing, market research data may be relevant for a limited period. Data collected for a new product launch may be out of date by the time the product hits the market. You need to keep an eye on changing market conditions and update your data accordingly to keep your research relevant. If you don’t update your data, your survey may not reflect the reality of the field.
Frequently Asked Questions (FAQs)
What should a startup budget for market research?
Most businesses use the financial statements from the prior year to draught their budget. For a start-up, marketing research should account for 10% of your projected revenue.
How long does it take to do market research?
A market research project can range from 6-12 weeks.
What is the best form of market research for starting a new business?
Primary market research is the ideal type of market analysis for a new company. This means using online surveys and working with focus groups to gather information directly from people who want to use your product or service.
What is the main focus of market research for small startup businesses?
A primary focus of small start-up market research is validating business ideas. No matter how good your ideas and designs are, they are meaningless without a market.
Starting a startup is on your list, but we advise against proceeding without conducting reliable market research. With its help, you can learn a myriad of business essentials such as competitors, market trends, consumer buying behavior, and prospects. Knowing all these factors upfront can help startups make smart decisions and ensure startup success. Because of this, the task does not appear to be difficult. Don’t skip market research.
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