While the importance of an idea and identifying a problem is pivotal, it is equally crucial for companies to spend time in studying the ecosystem, the competition, prevailing trends, et al. We are all aware of the fluctuating fortunes of few of the Unicorn startups and their evaluation and performance is very temperamental and can change anytime. It is however widely acknowledged that this can be avoided to a large extent if the companies can invest sufficient time in studying the ecosystem and factors influencing it beforehand. This will help them to tweak or restrategize; this may perhaps, not guarantee a success but the probability of getting failure will definitely get subsided.
Market research is one of the most favored tools by marketing professionals for centuries among the traditional brick and mortar businesses. With the advent of e-commerce/m-commerce, businesses have integrated technology to a great deal in their processes and so have the research companies. We are seeing a paradigm shift in the requirements from clients – they want to understand the patterns of consumer behavior very quickly, and very rightly so. Hence, we as a research company need to ensure that the quick turnaround is the common denominator to all our services. We are achieving this courtesy tech-driven methodologies.
One more very interesting observation is that start-ups see market research as a cost without tangible return vis-a-vis advertising, which gives them brand awareness, to start with. They align towards research once they have built customer base, while to some extent, this argument could be bought as start-ups can’t do brand tracking, c-sat, e-sat et al when you are laying your foundation; but we all should understand that MR has options for different stages of product life cycle.
Breaking it down further:
- Idea stage: An entrepreneur can use MR to study the market to arrive at an idea that is meaningful. The research will give him enough conviction to prove the idea.
- Product Development stage: MR can help founders during the product development stage as the market around is constantly in churn. If the product development takes about a year for completion, the markets around and competition are all bound to change. Here MR will help make you become market ready anytime to launch.
- Growth phase: This is one of the most crucial periods for market research to play a role in one’s business. By now the Founder would have realized his true strengths and potential. However one must take the help of MR to keep track of the transitioning customer, their likes and dislikes and their influencing factors. MR also becomes crucial as competition is always on their toes and one cannot afford to miss out on any subtle changes in the competitive landscape.
Conducting market research to study the ecosystem can actually provide the much-needed ammo in the arsenal of start-ups to build a scalable and successful business in today’s marketplace. The potential of Market Research and its applications are in fact very vast. For start-ups, it’s about addressing short-terms goals that could be done through the development of micro-surveys. They got to bring in incremental changes as & when required and put clients business needs at the very forefront.
Featured below are some of the key reasons why a startup needs to factor in market research in their marketing mix:
- Market research explores the target market and gives one control to understand a customer’s needs
- Research identifies the right opportunities to achieve success in a business
- It helps arm a business with information and data to help it explore uncharted territories
- It helps with decision making seamlessly
- Helps in brand positioning
- Studying competition through MR will take a startup to the next level in optimizing the price of their products/services properly
- Market research will help in risk analysis prior to launching any new product/service. There are typically two kinds of research that a startup will need: Primary Research, and Secondary Research.
Primary market research
The objective of the primary market research is to collect unique data which is not easily available, towards improving the overall functionality of the products/services. It can be conducted individually or as a business.
- Audits the sales effectiveness
- Finds out the competitors’ quality of products/services
- Figures out the communication channel of competitors
- Evaluates the level of competition in market
Secondary market research
Secondary Research is a common research method which involves using information that others have gathered through primary research. The data can be taken from existing surveys, reports, case studies, news.
- Helps to publish company report data
- Offers simple, easy and quick knowledge of the market
- Clarify the questions of fulfilling customer needs
- Helps largely to focus on primary research and to draw meaningful takeaways
It is therefore established that market research is an essential tool for any startup small or big. Here is a short list of items that market research can provide prior to launching a startup:
- Understand what is the total addressable market?
- What is your targets’ demographics?
- What is their psychographics?
- Why do they need or want to buy your product/service?
- Where do they spend their time and why?
Hence, market research is not only important but is, in fact, paramount for any startup. It helps startup founders to understand the seriousness of a product/service in the context of actual market needs.
Therefore any entrepreneur who has decided to take the startup plunge must utilize the benefits of market research in every step of the way. Market research will not only help in decision making but will give the right amount of conviction to the product and its inherent strengths.