Skip to 0 minutes and 17 secondsHi. I'm Linda Robinson. I'm a lecturer at RMIT University, and I'm here today to talk about the importance of doing market research. Why is research important for starting a new online business? It's important for a number of reasons. Firstly, we want to find out more about our market. What is the market size? Who are the competitors that are currently selling in that market? And what are they offering, and therefore, what potential do we have to offer a new product to the customers? Then we want to find out who are customers are. What is their demographic profile? Where do they shop? How do they behave? What are their attitudes? And finally, where shall we sell our product?
Skip to 0 minutes and 55 secondsIf we find out where our customers shop, we also need to know why they shop, when they shop, and how they prefer to shop. It is really important to conduct market research, because no matter how great your business idea is, if you don't have a good understanding of the market and your customer, you could be missing out on lots of opportunities.
What is research?
Have you ever filled out a survey? Given feedback on service received or been asked to taste test at a supermarket? If you have, then you’ve participated in market research.
Market research is the process of gathering and analysing information to get to know your customers or consumers (and competitors) better.
Market research is the activity that links the customer or consumer to you by:
- Providing information about and understanding of their buying motivations and attitudes, and
- Generating insights (ideas around those deep reasons why people do what they do).
When to use market research
You can use market research when you're starting a new business, or looking for opportunities for your existing business, or even when you’re trying to understand why something is happening in your business.
There are many things you might want to find out using market research. Here are just a few:
- Ideas: Look for new ideas and opportunities. Find out what people are currently doing to solve a problem or need, and then determine how creating something new might improve their experience in solving that problem or addressing that need. You can also consider what new problems or needs they foresee that they may need assistance with in the future.
- Competition: Keep an eye on your competition and compare what they are doing versus what you are doing. For example, what products do they offer? What do their customers think about how well their products perform? Are they open to purchasing other products or services to solve their current problem or need? Sales: If you are already trading, you may want to understand what is driving your sales. If you’ve recently experienced lower than usual sales, you may want to try to understand what has been the cause of the lower sales.
- Customers: You may want to find out what the customers or consumers really want. For example, the customer or consumer might be satisfied with what they currently purchase, but may be delighted if you can provide them with a different size, faster delivery or more colour choices.
The better you know your customer or consumer, the better you’ll be able to solve their problem, match their needs and increase the likelihood they’ll buy from your business.
See Also below for a quick article on how market research can assist a business to grow.
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