Entrepreneur’s Guide To Conduct An Extensive Startup Market Research
Ask any entrepreneur and they will tell you how times have changed with regards to startup market research.
Just over a decade ago, India had many entrepreneurs running pillar to post to find out few basic things which they can now access via few strokes on a keypad.
The simple act of searching for information has become so easy that one can look at the internet anytime and without making much effort, find out what they want.
But one needs to remember that internet these days yields an excess amount of data, and unfortunately, a majority of this data can give you information but can’t provide you “knowledge”.
When you talk about “startup market research”, you need to remember that simply having information is not enough and you need to know exactly how to use that information.
While I had my professors to help me out while I was learning about market research, here are few cheat tips from my end which will make sure you don’t end up utterly confused by all this “excess information”.
Know it’s startup market research and not marketing research
One of the first mistake people make is that they confuse market research as being the same as marketing research.
Please note there is a huge difference between both.
While market research will make you more aware of how the people you hope to sell to will react to your product, marketing research is the marketing process which links the producers, customers, and the end users.
Know when to conduct market research
As a new startup, market research is a critical element of any entrepreneur’s business plan.
It is crucial with regards to determining sales, and the potential that your products holds or might hold in the future.
The timing of market research also helps you understand customers and how to make them into repeat customers.
All the above information will help you understand your product’s potential and thus provide you with valuable information with regards to making a business plan.
Thus, conduct startup market research before making any key decision with regards to the business plan. This will help you know exactly how your product will fare and at that time.
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Finally, how to conduct startup market research
There are basically two ways to conduct startup market research – Primary market research and Secondary market research.
(a) Primary market research
One conducts primary market research when they compile market information themselves or hire someone to gather it for them.
Under this, you find out who are your customers are and how to reach them, which product do the buyers want and what factors affect their buying decisions.
It also helps understand what price you should set for your product and who are your competitors with regards to that particular product.
To understand all these you can either use the quantitative research method or use the qualitative research method.
Under quantitative market research, you collect numerical data which will help understand data trends and thus you would be able to compare the data to know the difference.
For this, you can create a standardised questionnaire and conduct structured market research based on the answers given by the respondents.
You can involve a larger number of respondents to participate via mail (old snail mails still gets you huge results), face-to-face, telephone conversation, email or via web or online survey.
Under qualitative market research, you get to understand the reasoning behind the consumer actions and thus helps you understand why he or she went for the product.
For this, you make sure appropriate questions are asked in the questioner and get results from asking these questions, not to the masses but the appropriate focused groups.
Under this, you conduct in-depth interviews and observe your potential customers so as to know the results.
While the qualitative aspect helps you understand the reasoning, it is equally important to conduct quantitative research for new business as it will give you actual figures that highlight target market interest and thus help you secure investors.
(b) Secondary market research
While in primary market research you conduct collect your own data, in secondary research you use data that is already compiled and organized for you.
Thus most of these data would act as secondary information for you and only give you something you can compare against.
In startup market research, primary research as it gives you more information, but it is equally important to conduct secondary research as it can give you valuable information and answer some questions that are not practical to ask through primary research.
You can collect secondary research data via information collected by government agencies, industry and trade associations, etcetera.
While public sources of information are usually free, you can also buy certain data compiled by commercial sources such as trade associations, banks, and publicly traded corporations.
As a startup thus it is important to plan wisely and figure out what works best for your startup and also for your customers.
It is also important to know that just gathering market research data will not ensure your companies success.
You will also need to figure out how to use the data to your advantage and know what fits your budget and at what time.
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