Once you have a good idea for a business, you need to research the market to ensure that your new company is likely to be a success. It is easy, if you are very excited by a new idea, to gloss over the practicalities of what your new company will involve. However, the more market research you undertake and the better you understand your marketplace, the better prepared you will be once your new company begins to trade.
How To Do Market Research
As a starting point, undertake your own market research by contacting industry associations, reading periodicals, speaking to government agencies like Business Link or your local Enterprise organisation, as well as conducting searches on the internet. You might also consider going to the library if you need to find and read specialist publications. At this stage what you are trying to do is to gain a general perception of the type of person who would want to buy your particular product or service, and to draw up a research plan to identify how you propose to do this.
Failure to Conduct Market Research
If you do not conduct sufficient research for your company, you are much more likely to come up against unforeseen obstacles which you may have otherwise been able to avoid. Firstly, it is very important to be objective. Although it may be difficult not to get excited about something that you are very passionate about, you should always conduct research before spending any money on development.
Analyse Your Business
There are in essence four different perspectives that you should consider when undertaking market research for your new company. These are as follows:
To begin with, look at your company’s products and/or services, how they will benefit customers. Then consider this in light of your brand, and how you want to be perceived by your competitors, by your customers and by the public as a whole. What are your key objectives? What are your core values?
Then think about your target market, or the types of customers you are seeking to attract. These break down into three broad categories: the decision-makers who purchase your products or services, the people who influence the decision makers, and the actual end users (the ones who will be interacting with the product and/or service supplied by your company.
One of the most vital pieces of market research you can conduct in relation to your new company formation relates to what your competitors are doing, and how much threat they pose to the success or otherwise of your business.
Finally, consider the help and assistance that you may be able to leverage from people who have an interest in your new company but who aren’t otherwise likely to engage directly with your product or service. These are trade associations, the media, and other organisations.
Pricing
Where you price yourself in the marketplace is also something that requires substantial amounts of market research. Are you a high-cost, high-end brand, a mid-priced necessity, or a bargain basement, high-volume driven business? Pricing is also a factor that determines how others perceive your company, and the size of your profit margins, so it is worth getting it right first time. You must be sure that the price you set delivers enough value to command the cost to the customer. If you can, test different pricing structures to gage which of them is the most profitable for you over time.
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