What is market research?
Market research involves making a prediction about your business and its relevant market before confirming whether this idea is true. To actually do the research you can choose between primary and secondary sources. Primary sources will be turning to the consumers themselves and asking them questions firsthand. This can be done either in person or virtually, but we’ll get more into the specific methods later on. Secondary sources are based on the interpretation of research done by others, such as industry reports that are published online for public or paid access. There are many other secondary sources which are typically what you find when you do a quick Google search about a particular question.
Why is market research important for you and your business?
Typically, market research is used to learn more about your consumers, competitors and the industry in general. The practice will help you to make better decisions based on data and research rather than relying solely upon your gut feeling. As the modern proverb goes, “failing to plan is planning to fail.” Without market research, you cannot adequately assess and develop your business plans. By engaging in this research process you are likely to uncover information that was previously unknown, as well as gain a clearer picture of the situation you are dealing with. Essentially, market research helps you to validate your ideas and also recognize when you should pivot from the current direction.
What is the process of conducting market research?
Define the problem. You need to know what it is that you will be trying to solve in the first place, otherwise your efforts will be aimless. Without a destination, you won’t be able to decide what direction to head in. In these cases, time, money and effort are often wasted by asking questions that are irrelevant to the problem at hand. And after all, there’s no time to spare as a busy businessperson.
Think about what you need to know in order to solve the problem. You won’t need to be extremely specific here, but rather just aim to get a general idea of the areas of information you will need access to. This will act as a starting point to help you decide who you can turn to for such information, which brings us to the next point.
Decide how you will go about collecting this information. Once you’ve decided what information you need, it’s time to find out how to access such information. Of course, some individuals or resources will be more beneficial for certain types of information compared to others. You will also need to decide on some sort of process for gathering this information. For secondary sources, it will likely be along the lines of consulting a particular resource. As for primary methods, you will need to decide between tools like surveys, focus groups, one-on-one interviews and more. There are many options out there so be sure to choose the one that best fits your needs.
Gather the information and analyze it. Now you will need to take all the information you have gathered and sort it in a way that can be easily viewed. This could include creating transcripts of interviews or aggregating all of your survey results. As you do this, you will start to see patterns as to whether the data supports your initial hypothesis.
Conclude, present your findings and decide on your next action. This is where the magic happens and you learn whether your initial prediction warrants further action, or whether a pivot is required. Sometimes what you learn will support your idea, and other times it will not. In the cases where the information is contradictory, then you can pivot the direction of your current plan and repeat the process with your next prediction.
And with that, we have covered the entire market research process from start to finish. Utilizing this process to test any hunches you may have is entirely to your advantage. It would be a shame to pursue a certain route of action, just to learn later on that there was a better alternative that could be uncovered through some simple market research. So be proactive and get started with your market research today! Be sure to learn about all the ways Rich Dad Education can help you reach your goals.
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