Market research in any business is one of the most important parts of the business plan.
It helps you understand precisely, what you’re getting into.
Have you read my previous post on ‘How To Make A Great Business Plan’ ? If you missed it, you might want to read that first before going ahead with this one. Link HERE.
Market research is just one factor, of all the other factors your business plan should contain.
What exactly is market research?
Market research is the process of collecting information regarding a particular market for business development and decision making.
It includes your market size (target market), market growth, demand and lots more. Market research helps you check for the potential profitability of your business.
Trends keep changing in different industries, you want to make sure to keep tabs on the demands and interests of your clients, customers and community.
Questions you should be able to answer after conducting your market research
- Who are your products or services for?
- What are the values it will add or what problems will it solve for the customers?
- What are the market needs?
- Are the products or services suitable for the market.
Steps to take in market research
1• Describe the industry you want to go into
What is the foreseeable growth rate in the industry? Size of the industry? Key players in the industry? Industry trends?
2• Define the target customers
What are the demographics (age, gender, income, education level) what are their interests? Lifestyle? Values? Opinions? Where do they stay? Will you be reaching them offline or online? Do they have influencers they are loyal to?
3• Classify your target customers into segments
This applies if you have products for different market segments. This step is necessary because each segment may require a different approach.
For example, separating male and female wears, because there are two segments of target customers.
4• Determine possible price
At this stage, you already understand your target customers and what they can afford. One of the key factors to success is to price products according to the buying capacities of your target customers.
If you read my post on ‘How To Make A Great Business Plan’ you would have seen where I discussed several methods of billing/pricing.
It would go a long way to help you make good pricing decisions. Link HERE.
5• Determine the distribution channels
Through what channels will your customers receive your products/services? Will you deliver directly? Will you need a middleman? How will your potential customers see your products? What advertisement or promotional strategies will you adopt?
6• Know the market regulations and costs
Know the rules and regulations governing production of such goods, or rendering of such services in your country. What licenses or permits are you required to get? What is the tax payment system like?
This may seem like a joke,but it works.
I once sent several topics to friends on my contact list to get from them topics they would like to see more of on my blog, and that has greatly influenced my posts in a good way.
Don’t be afraid to ask a client (old or new), customer, community member, friends or family, questions that will help influence your business journey for good.
You can also get instant feedbacks from Instagram polls.
If your community connects with you on Instagram, it will be a good opportunity for you to give polls and see what they really want from your brand. Make your polls fun and engaging!
8• Competitor analysis
This is my favourite part of market analysis. Here, you get to determine and understand the success factor of your competitors.
What are they doing differently? What do people not like about their products or services? What can you do,that they can’t?
With these questions answered, you can determine your competitive advantage, it could be pricing, better customer service, better packaging, better quality, more creative promotions and adverts.
I will be discussing competitor analysis in full next Thursday, make sure to stay updated.
Why is market research important?
- It helps you foresee the future of the market.
- It helps you understand changes in the needs and interests of your target customers.
- It helps you identify entry barriers, possible challenges and success factors.
- It helps you realize when and how to exit a particular market if need be.
- It helps you identify problems quickly and how to solve them.
Guys, as I mentioned in one of my previous posts on the business series, I am nearly done with my business plan on the fashion ideas I want to venture into. I had finished up profit making but had to revisit market research.
I am really excited to take you guys on this journey with me. Let’s see what really works, what does not, mistakes, successes and industry experiences.
I’m super charged!
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