What is market research?
Market research is the activity and or process of hunting and gathering information on your market, what industry your market resides in and the environment it’s impacted by.
Market research acts in a similar fashion to science, it enables you to take your ideas and their assumptions and validate them with the closest thing you can find to facts.
Market research can help you be the detective to identify the gaps between the current state and desired state (the solution). Market research will help elevate your planning by giving you a solid perspective to ground your plans on and it will also support if you ever decide to pitch your business ideas, and or products and services to governments, organisations or investors for things like tenders, grants or funding.
Why Market Research?
Taking the time to do market research can support you in having a much clearer understanding of the market you plan to work in and also assist you in;
- defining the nature and scope of a problem you are trying to solve with your products and or services
- identify the current strategies and activities that are already in place in the market, to overcome the problem – ideally, this will save you re-creating the wheel if you don’t have to
- understand the opinions and experiences of stakeholders within the market and its industry
- give a comprehensive view of the current situation of the business if you’re already existing and how you compare to the market and industry benchmarks
One of the key benefits of market research is the potential directions it will guide you towards having validated your assumptions. You can move forward with your ideas with greater confidence. Or if you find the opposite of what you thought is true, if your assumptions prove wrong, you can circle back and re-work your idea until you get it right. Saving on money, time and resources!
Learn more by watching one of our experts: https://vimeo.com/288858548/19108cf5f7
Where can we research?
Market research is about collecting data and using this to either validate your assumptions or re-work them.There are a variety of data sources you can access to assist you in researching your market, its industry and environment.
There are two forms of market research, primary research and secondary research.
Primary research refers to information gathered from original sources such as:
- face-to-face interviews
- focus groups
- customer feedback
Secondary research is information and data that has already been collected and analysed by other sources such as:
- Australian Bureau of Statistics
- industry and trade publications
- social media and websites
- marketing and consumer lists
- newspapers and media
- Market research agencies i.e. IBISWorld
- Social Media Metrics
- Bank data
- Industry associations
- Government sites
Industry bodies can also be known as a trade association, industry trade group, business association or sector association. Basically, it’s an organisation founded and funded by businesses that operate in a specific industry to help support that industry.
Example: Jimmy’s business falls into the bread and cake retail industry. Retailers in the industry sell a range of bakery items including bread, cakes, pastries and biscuits. Industry players may operate independently or as part of a franchise network. Products are often made off-premises, purchased from wholesalers or supplied by franchise suppliers. The industry is stable pies and cakes in Australia are a staple item that customers love to consume.
What should we research?
When conducting market research the key areas you are aiming to hunt down data on are;
- The Market
- The industry the market sits within
- The Environment that impacts the market
A market is an interchangeable term that describes a group of people interested in a particular industry and or its products or services. In other words, a market is a group of customers.
Markets can be defined based on demographics, customer needs, customer preference or even customer locations or distribution channels. Consider the overall market you plan to provide a solution to;
- What are the overall customer needs?
- What cultural and or ethical needs are there that impact your problem?
- What social needs are there?
The industry represents a large number of companies that manufacture a particular product or provide a specific service. Also known as a sector in the economy.
Identifying what industry your business falls into and what is happening within your industry is vitally important. A single industry is often named after its principal product or service; for example, the auto industry or the bread and cake industry. In everyday consumer goods like clothing and homewares, we call it the retail industry.
Having a clear understanding of what industry your product and service ideas fall into will help support you in building your business knowledge.
- Consider what’s trending, what needs are arising out of the current or new trends?
- What are the competitors currently missing that could address the problem? (What are the market gaps?)
- Consider the other stakeholders in the industry: what are their needs?
- What are the bottlenecks that are creating needs? For example, as a result of Covid, the supply chain has been significantly impacted in a lot of industries with difficulty importing – this could cause a need for more Australian Manufacturing.
- What technological needs are there that could be overcome with a solution to your business problem?
- What legal and regulatory needs are there?
- What economic needs are there?
This week we want you to work on the Needs tool we have shared with you in this lesson. But don’t do it just behind the scenes or the desk, get out there, design surveys, chat to your potential market, the current competitors and source as much useful information as you can find.
- Complete the Needs Analysis (in Miro)
- Reflect on this process in your needs Journal
Between now and our next session we want you to go and get to know the market and use some of the tools we have shared to work out exactly what your market, industry and environment needs are that feed into your business problem. The more information you can gather the easier it will be for you to effectively design a solution to meet the needs of your market and fix the problem.