Any enterprise, large or small, should never neglect market research. Conducting thorough and effective market research is one of the most important things you can do while starting a business to get off on the right foot. Most of the time, entrepreneurs run their business ideas by their closest friends and family, evaluate their reactions, and gather what they believe to be useful information. While it can generate new ideas and objections that haven’t been considered before, it can also be biased! And by not performing adequate market research before entering a competitive market many startups are doomed to fail.
Why Startups should do Market Research?
Uncertainty:
Since there is uncertainty about the product, the supply chain, the target customer market, the business model, and almost every other aspect of the business, extreme uncertainty is one of the defining features of startups. Despite this uncertainty, startup businesses overlook the value of market research for their business (lack of understanding of the ROI) and assume that it is only for big players in the market.
Inability to be self-critical:
Founders and team members generally believe that they have come up with a fantastic idea or a perfect product that could change the world, yay! But the product fails to register with the target market and receives an underwhelming response because the target audience did not share your vision of this revolutionary and fantastic product, proper market research can save you from this.
Competition and Customers:
If the startup does not have a thorough understanding of its customers’ needs, it may not be addressing a real problem in the desired manner. If the company does not invest in having a conversation with customers about their product, they will miss out on the opportunity to refine the product to their needs and improve the product’s chances of market success. The company cannot size the market opportunity and potential growth in the market unless it conducts a thorough analysis of the market competition. Developing pricing, marketing, and sales strategies must be based on a comprehensive understanding of the target customers (by asking the right questions to the right audience) and an analysis of the competition that the business will face in the market.
Why Startups often don’t invest in proper marketing research?
No tangible ROI:
A common mistake that startups make is viewing market research as an expense that provides no tangible return on investment, as opposed to advertising, which provides the company with a return in the form of brand awareness. Such start-ups intend to align with research once they have established a customer base, which does not always happen because market research was not done properly and the target customer’s point of view was not taken into account.
Too Costly:
Market research for a business helps to quantify the risks associated with implementing various decision-based actions. Following a comprehensive investigation, your company is likely to be more certain about whether or not to act on those decisions. You must proceed if your market research shows significant evidence of success. However, you should not take the risk if your market research does not provide enough data or confidence.
If a particular activity necessitates a significant investment, market research will assist you in determining whether the risk is worthwhile for the organization.
Novel Idea/Product:
Another reason why some startups do not prioritize market research is that they frequently release completely novel products, with no benchmark or existing market research for such products. Startups with such products can still find the closest product in the market and solicit customer feedback via surveys, etc. Talking to customers will allow the company to add/remove features from the product, as well as understand how much people are willing to pay for such a product, or if the idea needs to be scrapped because it is perceived as useless by the target audience.
Advantages of marketing research
Lowers risk factor
Market research for a business helps to quantify the risks associated with implementing various decision-based actions. Following a comprehensive investigation, your company is likely to be more certain about whether or not to act on those decisions. You must proceed if your market research shows significant evidence of success. However, you should not take the risk if your market research does not provide enough data or confidence.
If a particular activity necessitates a significant investment, market research will assist you in determining whether the risk is worthwhile for the organization.
Increases sales
Market research for a business helps to quantify the risks associated with implementing various decision-based actions. Following a comprehensive investigation, your company is likely to be more certain about whether or not to act on those decisions. You must proceed if your market research shows significant evidence of success. However, you should not take the risk if your market research does not provide enough data or confidence.
If a particular activity necessitates a significant investment, market research will assist you in determining whether the risk is worthwhile for the organization.
Improve customer relations & management
Market research entails gaining a better understanding of your target audience and then providing them with products and services that are in line with their wants and needs. Asking business-specific questions to your audience will help you get valuable and honest feedback from your customers. Inquire as to how they recognise your brand. What do they like best about your brand?
These customer-centric questions will reveal how your customers perceive your brand. Market research has the greatest impact on customer relations. Twitter polls are an example of this! Asking business-specific questions always helps businesses learn a lot more about their customers.
Business growth
Rigorous market research allows you to investigate more and different challenging opportunities that will aid in the growth of your business.
To raise the stakes for your company, you must deliver more than what was promised. This will make your customers very happy, paving the way for your company to grow. Proper market research for your business also gives you a reason to measure its success.
Measure brand reputation
How does a company know whether or not its consumers like the brand? Market research assists businesses in measuring their brand’s reputation in the market among their target audience over time. It’s a great way to track the company’s progress and compare it to your competitors to see what’s missing or exceptional.
To summarise, it is more crucial than ever for startups to conduct real market research, and talking to a small number of individuals who are similar to you will not provide you with enough insights to develop a successful business strategy. Market research cannot be an afterthought for companies to be successful startups.
Another reason why some startups do not prioritize market research is that they frequently release completely novel products, with no benchmark or existing market research for such products. Startups with such products can still find the closest product in the market and solicit customer feedback via surveys, etc. Talking to customers will allow the company to add/remove features from the product, as well as understand how much people are willing to pay for such a product, or if the idea needs to be scrapped because it is perceived as useless by the target audience