There has been a rise in small businesses due to the pandemic. It has unleashed innovation and forced us to get creative to make a living. On the other hand, existing businesses also had to get creative and resourceful to survive the pandemic. This revelation got me thinking about the process it takes in starting a new business and decided to put my findings together. There were two words that kept popping up in my searches when I looked into starting a new venture and that was ‘market research’. Many sources indicated it is an essential tool for starting a new business but what exactly is it? I did my own research to explore what this means a little further.
What is Market Research?
In short, market research is a process that gathers information to test the viability of a product for a business. This research is conducted in order to better understand your target audience.
Why Do Market Research?
I mentioned above that market research involves getting information about a product from customers. I wanted to examine the concept with regard to starting a new business but at some points throughout this article there will be references to it in terms of an already existing product. I found that market research was much more than just gathering data from people. It is an extensive study that is carried out so that the results that were collected can be analyzed and used to aid in the creation process of the product.
It is important to note that a product can include a good or a service and as we start a business, especially one that features a new product, we want a better perspective from the buyers we intend to market this product to. Our intention is to get into the minds of the customers by getting an insight into their preferences and influences, gathering their opinions and gaining their feedback on their consumer behaviors. After we have all the data and information, we can ascertain what the customers are looking for in the product and decide the direction we need to take to develop a successful product.
Primary and Secondary Research
There are two ways to do market research namely; primary research and secondary research.
Primary research is the data that you collect firsthand rather than relying on the studies that have already been done. It often takes longer and is more expensive because you are your own researcher but you get your own personal findings and conclusive results. The information you collect also gives you complete ownership which is not only remarkable but it is also valuable in fast-paced markets. Secondary research refers to the information that is already out there. It is basically research that has already been done where you gather the information from sources like the internet, journals or books and archives. Because your focus is on existing data, there is less time spent on the research and it is inexpensive, however it is can be hard to establish the validity of that data if you should come across something uncertain or debatable.
The scope of market research is not only limited to the research on the product as it also covers several other areas in the research. It includes information gathered on the sales methods and policies which is concerned with sales activities and existing selling methods, studies on advertising which speaks to the promotion of the product during various stages of its development, evaluating the pricing of the product which includes setting the price, the pricing objectives and the effects of discounts or sales during certain seasons. All of these can be covered using either primary or secondary research.
Methods of Market Research
There are four common methods that are widely used to conduct market research. These methods are surveys, focus groups, interviews or observations. Each method can be used independently or you may choose to mix the methods depending on the goal of your research.
1. Surveys
Surveys are the most common methods that are used to conduct market research. They are usually in the form of questionnaires with open-ended questions so that makes them inexpensive and the results are easy to analyze. Conveniently, they can also be done online.
2. Focus Groups
Focus groups assemble a group of individuals with a moderator to guide the session. However, this method can sometimes be dangerous as one participant can forcefully influence the opinions of the other participants. Normally, if you are conducting market research for the first time, it is recommended not to use this method to avoid skewed results.
3. Interviews
Interviews allow you to delve deeper into the customers’ experiences because these one-on one scenarios provoke emotions that you are not able to get from doing surveys or focus groups.
4. Observations
Observations are a great way to get an unbiased view from customers interacting with your product. It is also an inexpensive method; however, it limits your results to just the interactions and does not allow you to get into the customer’s mind and thoughts.
How Does Market Research Help Your Business?
Market Research takes the guesswork out of starting your business. Building a business based on inadequate information will not yield effective and true results. We do not want to assume what a customer needs when we can just ask them.
Let’s say you are starting a new sandal business and you intend to target teenagers and young adults for your sales. Your objective for the market research could be to determine what type of sandals this particular age group prefers, why they prefer these sandals (if any at all), the occasion for this type of wear etc. After gathering all of this information, you can then learn from your market their preferences and behavior in order to proceed with the product. Sure, you could have assumed all the answers to the questions that you will face as you start the business, but with the research you get insight from real people with real experiences.
For existing products, we want to go in-depth to understand what determines buyers’ decisions which can in turn aid in product innovation. We want to review their critiques which helps with product improvement. We want to also test the demand for new products which assists in product promotion and competitiveness in the market.
Let’s take the sandal business again but this time it has been created and already successful. At this stage, you may no longer be the one conducting the market research as you can now hire a team to do so. You feel the need to do more and that is where the innovation comes in. The team can include individuals who are not necessarily buying the product but it is still important to understand your audience. You may conduct research to find out if the sandals would do well in a different color or adding a new design to an existing one. Along the way, you may very well then encounter recommendations on how to improve the product.
How Much Does It Cost To Do Market Research?
Now let’s get down to the numbers. All that has been outlined above may seem costly, but any entrepreneur should know that it may be even more costly AND risky to start a business with a lack of sufficient data. I had mentioned before about using questionnaires as a method to gather your information which is relatively inexpensive especially in the internet age. You can create questionnaires and email OR mail them to your audience. Formplus offers a great service for creating surveys online for free. Additionally, if your audience is active online, you can join forums and conduct your research there.
I decided to do delve even more on just how much it may cost to conduct a market research. I found that there were a lot marketing specialists, consultants and advertising firms who offer the service at a fee to small businesses. Fees that can range anywhere from $100-$1,000. Some marketing consultants charge between $30-$150 hourly.
Then I also came across Fiverr.
Fiverr is a talent hub. It is a freelance website that offers a range of professional services and it is very popular among entrepreneurs.
I searched for market research and sorted the results by using their bestselling option and decided to cross-reference five of their vendors that offer market research services by their costs, response time, and turnaround time, WITHOUT even making a purchase and here is what I came up with:
| Vendor | Services Offered | Cost | Reviews (out of 5 stars) | Fiverr Rating (out of 5 stars) | Turnaround Time | Response Time |
| loaloariad | 1. Market Trends 2. SWOT Analysis 3.Competitive Analysis 4. Customer Analysis | Starting at $395 | Seller communication level ★★★★★ Recommend to a friend  Service as described | Fiverr’s Choice* | 3 Days | 1 Hour |
| johndreck | 1. Comprehensive Market Research 2. Competitor Reports 3. Industry Trends, Growth Statistic, Demographics 4. Product Research | Starting at $60 | Seller communication level ★★★★★ Recommend to a friend ★★★★★ Service as described ★★★★★ | ★★★★★ | 2 Days | 1.5 hours |
| rustom_pro | 1.Comprehensive Market Research 2. Market Analysis 3. Industry Analysis 4. Competitor Analysis 5. Market Size | Starting at $60 | Seller communication level ★★★★★ Recommend to a friend ★★★★★ Service as described ★★★★★ | ★★★★★ | 3 Days | 1 Hour |
| fahadahmed921 | 1. Web Research 2. SEO Keyword research 3. Market Research 4. Competitors Research | Starting at $50 | Seller communication level ★★★★★ Recommend to a friend ★★★★★ Service as described ★★★★★ | ★★★★★ | 5 Days | 1 Hour |
| amelia_jessica | 1. Market Trends 2. Competitive Analysis 3. Customer Analysis 4. Executive Summary 5. SWOT Analysis | Starting at $50 | Seller communication level  Recommend to a friend ★★★★★ Service as described ★★★★★ | ★★★★★ | 2 Days | 2 Hours |
* – Fivver recommends this vendor based on people’s feedback about their work and delivery
My findings above are not just limited to the criteria I used as Fiverr gives other options that you can use to narrow your search. You can search based on your budget, the goal of your research, level of expertise and so much more. I say all this to say, Fiverr is a key resource to keep in mind for future endeavors while working on a new business.
Will Market Research Help You?
There is a reason why there are phrases such as “the customer is always right” or “anyone who gets close to the customer wins”. They are not just important but customers, consumers, buyers or users – whatever you wish to call them – are the most powerful aspects of your business. This is because customers are integral to the growth and success of a business. Customers can read reviews from other customers and just decide whether or not to buy your product – just like that. They can make or break your business. The product is created for the customers so ultimately, we want to create appeal and provide satisfaction to them so it does not hurt to gather a little information on them.
What it boils down to is that, market research is the first step to starting your business. It allows you to determine whether there is a need for the product to be created or developed before investing the time and money. Once that is decided, the next step is to determine whether they will buy into your idea once it is created.
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