Surviving in a competitive market involves taking effective measures to ensure that you stay ahead of your competition.
Doing a thorough research of the market can help you come up with better products and services, decide the pricing plan, and come up with marketing strategies that can help boost your revenue.
Before we take a look at the various market research techniques, let us understand what is market research and what are its benefits in brief.
What is Market Research?
Market research is the process of understanding the market by collecting and analyzing the data regarding your consumers, their consumption patterns, your competitors, and the trends in your industry which can help you come up with better marketing strategies. It forms the building block of business growth.
Benefits of Market Research
Market research helps a business direct their resources and efforts in the right direction. It also helps identify the ideas or strategies that have the maximum potential.
Market research techniques can help businesses determine if a product is feasible or not, identify potential areas of development, check the demand for new products or services, create innovative strategies, and decide if their product placement is optimal or not.
It forms the essence of survival and improvement for any business and hence it is recommended that you carry out adequate market research before launching your products in the market.
Below is a list of techniques that you can use for carrying out market research.
Market Research Techniques
Focus Groups
It involves organizing a session with a small group of people that have certain common characteristics. For example, 18-year-old kids with personal smartphones. These characteristics can be anything ranging from their age, gender to consumption pattern and so on.
This technique is expensive but can help you get the right feedback when you’re considering bigger scale upgrades or looking to add new features to your products.
Customer Profile
It is a technique which helps you make better decisions regarding the design of your products. All your customers are segregated into small groups based on their preferences, and each group is assigned a particular name and description.
Suppose you have a customer named John who likes playing mobile games and spends most of his time surfing the internet.
He can be grouped in with the casual gamers. So while deciding what product John might like, you can consider the entire group to which he belongs.
This gives you the customer profile that you can use further.
Competitor Analysis
You can create competitor profile to study your competitors by collecting data regarding their services, prices, and customers, categorizing them into groups, and analyzing the same to identify the key competitive differences.
You can also use a mind map to collect and organize data regarding your competitors. It is a visual representation of the information you need to collect which looks similar to your brain.
The main entity is placed in the centre and the related information is placed on branches stemming out from the entity like the neurons in your brain. Additional branches can be drawn on each branch forming an entire map.
Alternatively, you can use the following techniques to conduct market research:
- BCG Matrix: You can create a marketing strategy after dividing them into target groups, and placing them in the BCG matrix. The matrix has four areas depending upon the market share and growth rate: Dogs, Cash Cows, Stars, and Question Marks. It helps you identify the opportunities that have the maximum potential, and also neglect the ones with opportunities that might consume maximum resources and yet does not yield significant results.
- Perceptual Map: A perceptual map can help you understand how your customers feel about your products and services and thus get an overview of their competitive placement. A perceptual map is simply a two-dimensional graph that has two axes: X and Y. Opposite attributes are placed on these axes and scaled from high to low. Thus there are four areas created in the graph which help you understand the factors that are influencing buyer decisions.
- SWOT Analysis: SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. You can classify the information obtained from the market in one of these categories which can help you make an informed decision regarding your marketing strategies.
- Porter’s Five Forces: This is particularly useful in a competitive market as the key factors influencing the market are classified as five forces. These are Industry Rivalry, Threat of Entry, Threat of Substitutes, Bargaining Power of Buyers, and Bargaining Power of Suppliers. These forces help you determine the structure of an industry and the level of competition and take measures for overcoming threats and barriers.
Online Surveys
Online surveys are one of the easiest methods of collecting data as most users are now connected via the Internet and social media platforms. You can simply create a form using online tools like Google Forms and share the link amongst the users.
These tools also help arrange this data in the form of bar graphs, pie charts, etc. which makes it easier to analyze their responses.
However, the only problem with online surveys is the lack of credibility when it comes to responses. There aren’t enough methods which can help you verify the identity of your users which can result in duplication of data, fake responses, etc.
Interviews
You can conduct interviews with your existing and potential clients to identify what exactly they are looking for, and what are the ways in which you can improve your products or services. The results obtained are quite accurate, however, the process is quite time consuming as a whole especially if you have a large consumer base.
Online Data Research
Thanks to the power of the Internet and search engines, you can comfortably conduct market research from the comfort of your desk. Most data that is relevant to the market are available on the websites of your competitors. You can also use third-party services which contain information about various companies and consumption patterns.
You can also use popular social media websites to stay updated with the latest trends and events that can influence buyer decisions.
Amanda Athuraliya
Communication specialist/content writer at Cinergix
Amanda Athuraliya is the communication specialist/content writer at Cinergix, the team behind the development of Creately. She is an avid reader, an experienced writer and a passionate researcher who loves to write about all kinds of topics.