Market research is a fundamental aspect of ensuring any new business start-up hits the ground running; connecting with its target market and providing a worthwhile alternative to competitors or even filling a much-needed gap in the market.
However, the type of data you require and the budget you’re willing to dedicate to business research will determine which research methods you use to get an accurate picture of the market landscape.
Within this article we discuss four basic business research methods that start-ups can quickly utilise to make key decisions about whether or not to set up a particular business or to refine a business idea.
How many consumers out there will buy my product or service? Who are my potential consumers? What competitor are they currently using? How much would they be willing to pay? Am I entering an already saturated market?
These are all the types of questions you’re likely to need answers to in order to determine the level of opportunity for business growth.
Regarded as one of the more common business research methods, a survey allows you to gather vast amounts of data in a very short space of time and at a comparatively low cost. A quantitative survey should always be used over a qualitative survey when you need to identify a numerical output that helps to answer your research question.
For example, if you are looking to determine the size of your potential market, you may look to quickly survey 1,000 consumers or professionals in your field. If you know there are 50,000 consumers or professionals that would potentially be interested in your product(s) or service(s) you can simply multiply the amount of positive survey responses by 50 to identify the size of your market.
Put simply, it’s a very powerful business research method when you need a specific figure to support your analysis.
A more refined approach to business research, focus groups usually consist of small clusters of people that fit the profile of your target market. Within these focus groups, you can facilitate a discussion around your product or service, taking full advantage of the depth that interviews afford.
Focus group insights can prove invaluable; it humanises your business proposition, to enable you to understand how people feel about your product and identify potential trends and opportunities through discussion alone.
Qualitative research interviews
One-to-one interviews are similar to focus groups as they include open-ended, unstructured questions that give the interviewee the freedom to express themselves. It’s a great opportunity to get a deeper understanding of a user’s point of view regarding a product, service or company.
An interview allows you to ask follow-up questions to delve deeper, but this brings with it its own hazards too. A careless interviewer can potentially bias interviewee answers by asking leading questions that don’t subsequently provide a true reflection of a user’s opinion.
Qualitative case studies
Case studies provide fledgling start-ups with an even more comprehensive understanding of how an individual interacts with a product or service. It gives you a more complete picture of their satisfaction, usage and attitudes towards a specific product, service or industry in appropriate context.
It’s an insightful means of refining your business proposition, using target customers to create something that’s meaningful and adds value to your product or service, setting you apart from competitors.
For instance, you might choose to give your product or service idea to a prominent individual or professional within your industry and allow them to test it over a period of time. It’s this type of insight which can be priceless in solving teething problems with your concept; it might also uncover the potential for meeting needs that consumers are desperately looking for within your industry.
But which business research methods work best?
In truth, there are pros and cons to both qualitative and quantitative analysis. There’s no doubting that quantitative surveys and research can deliver statistics and a numerical point of view in a short space of time, but it’s also difficult to understand the bigger picture of your target marketplace.
For instance, quantitative analysis can demonstrate the size and scope of a target market but it does not inform you of how to position your brand in the market to give you the best possible chance of growth.
Qualitative business research methods such as focus groups and individual case studies give you the colour to mould your marketing collateral, define your overall idea and position in the market i.e. price points and target demographic.
In an ideal world you would combine the two in order to get a multi-faceted view of your industry, giving you the best possible chance to take your business idea in the right direction.