How to study the market and why is it needed?
In the section “How to conduct your business” on Entrepreneur-Pro there is an article “How to research and segment the market?”. They said from a practical point of view how to study the market, what needs to be learned and how to determine your target audience. In this article we will talk more about the importance of market research and about the answers to which questions you should receive.
First, let’s figure out what a market is. I say again, I write about my concepts, which do not have to correspond to textbooks. Therefore, the market for me is customers, but competitors. And that’s all. Roughly speaking, of course, but the essence is as follows. Accordingly, to study the market is to study customers and explore competitors. Just huh? 🙂
How to study the market
How to study the market and why do you need it?
Learn more about what it means to “explore the market.”
I’ll start the paragraph as I finished the previous one – excuse me. Explore the market – this is to study customers and explore competitors. In fact, you have two areas for market research.
1. To study customers is to study the market in terms of demand (that is, the total number of potential consumers for your business), customer behavior (for what reasons they buy, how much they are willing to pay, how often they use a service or product, etc.) and their demographic and other characteristics (gender, age, solvency, etc.).
In other words, everything that you do in order to study the demand for your products is a demand study (it is also part of market research). Whether you are looking for information on the Internet, in subject magazines, statistical institutes or in conversations with people – your choice. The easiest way, of course, is here: wordstat.yandex.ru :-). And not only simple, there you will know for sure whether there is demand or not. Different methods, of course, can be different in effectiveness. But in any case, you have taken activity to study the market, and this is important.
Almost a similar situation with the study of customer behavior. Truth, on wordstat it cannot be checked :-). You can observe, ask people or search for ready-made studies – the main thing for you is to understand why certain groups of clients behave this way and others differently. When they decide to buy, how much and when they are ready to pay for the goods, what kind of objections they usually have, what they expect from the goods, etc. This is not easy, of course, but if you succeed, you get a very strong business tool in your hands.
The third point is to distribute potential buyers into groups based on certain indicators (demographic, geographical, social, etc.). For example, women 25-40 years old with an average monthly salary of 30-50,000 rubles buy these goods most of all. This is all averaged, but understanding will give.
In principle, this is all that applies to the “client side” of market research. You understand how many people are looking for a product and / or service, who they are and for what reasons they buy it. Of course, you will not have final figures like “in the month of 195342 people, 123987, of which women buy green napkins for about 30 years because they are green.” The bottom line is that you make sure that the product or service is, in principle, in demand (this is the most important thing !!), and that you can offer what people need (i.e. your offer will meet their expectations).
2. To study competitors – this means to study the market in order to understand who your competitors are, what they sell, how they sell, at what price, what their strengths and weaknesses are, what you can be better than them. This is a very important point – if you are not better at anything, then how are you going to lure buyers to yourself?
In principle, this may not be all; you can learn more about your competitors. All that succeeds – find out. Who are their suppliers, what distribution channels, what kind of advertising do they use, how many offices do they have, who is the CEO, etc. Of course, you should not use extra effort to find out, for example, who their accountant outsourcer is, but if possible, why not? Definitely not harmful :-). The main thing is to understand who you have to deal with. In more detail about the analysis of the main competitors.
Studied the market, so what?
Here is a list of direct and indirect advantages of those who have studied the market over those who are not going to explore the market:
The information that you received during market research will play a decisive role in choosing a marketing strategy in your business. Initially, it will be easier for you to understand what can work and what doesn’t, what is worth trying, and what is also worth it, but last but not least :-). Otherwise, you will do everything on your own assumptions, which is not so reasonable in business.
You already understand where threats and dangers can come from, and, accordingly, prepare your defense in advance. It turned out as if we were talking about boxing, but no, we are still about business :-). The market always carries with it various threats; nobody can get away from it.