Embarking on a new business venture can be scary. With limitless variables affecting any one outcome, success is never guaranteed. However, an investment in the right type of insurance can significantly increase the likelihood that a company’s idea, as well as its policies, will reap profitable reward. Start-up companies that use their time and resources to fund quality market research projects before they introduce their first product gain valuable intelligence that can then be used to recognize need, strengthen relationships and anticipate change, all things that boost their chances of becoming eventual market leaders.
Market research is basically the gathering of information about a market and the people in it. Businesses can use pre-existing industry information or they can conduct their own studies directly. Take a look at five reasons why market research is vital for startups:
It Helps Determine Market Need
First and foremost, a product must satisfy a need. If consumers don’t need it, they won’t buy it. Collecting facts and figures that detail the current market landscape, including its size and the trends and other influences (like political and social policies and consumer preference) affecting it, helps new companies fine tune their offering(s) for maximum ROI.
It Helps Determine Business Location
A company in the right location attracts the most customers. Have you ever noticed that a lot of similar businesses are frequently located near one another? Quite often, a central location appears as more and more businesses set up shop in the areas most often visited by their target customers. They follow the customers and the customers follow the businesses, further concentrating both to a particular area. Market research literally pinpoints existing businesses with subsequent analysis determining whether or not it would be profitable for a company to set down roots there, as well.
It Helps Reveal the Competition
In addition to noting the physical position of competitors, market research can lay bare the market position of competitors. The level of market saturation affects everything from product design and distribution to marketing and pricing. Uncovering what everyone else is offering and doing can bring to light any gaps between supply and demand so that new companies are better able to exploit them and (hopefully) gain market share.
It Helps Reveal Customer Need
There’s a slight but poignant difference between market need and consumer need. While the first is general, the second is specific. Companies must know if a need exists, and then they must target the right people. Market research is vital for startups because it details who might buy a company’s product, as well as when and how often and from where they will get it. It helps businesses identify their ideal customer personas (including their age, gender, education and income levels) so that products and services are properly and appropriately tailored from the start.
It Helps Inform Marketing Practices
Companies invest a lot of time and money into their advertising and marketing practices. Market research is vital for startups because it helps them determine the type of marketing campaign that will reach and resonate with the most people in their target audience. They can then allocate their budget in a way that supports those preferences.
Need More Information?
Market research isn’t something that only well-established and well-funded businesses can afford to undertake. On the contrary, market research is vital for startups, too, and can be made affordable when done correctly. Contact our team at Communications for Research (CFR) if you need help deciding how and when to start a project so that you can be well prepared from the outset.
Feel free to also download our complimentary eBook, 6 Keys to Accelerate Growth with the Right Data Collection Partner, for tips on maximizing the benefits of quality market research.