Every day hundreds or even thousands of businesses and entrepreneurial projects are launched with the hope of achieving success And customers like it, but unlike what we see every day, where many startups fail and get out of business market in a short time.
This is due to many reasons, the most important of which is negligence Market study where indicated US Census Bureau It indicates that one out of every five startups fails within the first year of its founding, while three out of five companies fail within five years of incorporation.
In this article we will discuss:
- The importance of market study
- What are the stages of a market study?
- Methods of conducting a market study
- The difference between market analysis and market study
The importance of market study:
Most companies, especially in our Arab world, deal with the market study or market research as an unnecessary process that drains a lot of time, effort and money, and this is certainly a misconception that costs companies a huge loss that may reach millions of dollars. Market Companies can make clear decisions about expansion, product development, pricing and market trends.
Here are some of the main benefits of market research:
1. Understanding Consumer Behavior:
A company's understanding of how users interact with its products and services will help it make improvements and changes that make its offerings and messages more attractive.
This necessarily leads to happier and more loyal customers to the company, and paying attention to user behavior inspires companies to innovate products and services that meet the new and changing needs of their customers and ensures that they stay ahead of competitors.
2. Discovering opportunities in the market:
Gathering data about the target market and consumers helps companies identify gaps, problems, and untapped demand.
This enables them to create better products, more targeted marketing campaigns, and improves customer experience, which leads to growth and success.
3. Identify challenges in the target market:
Markets face unique challenges that affect the growth and success of companies in them, such as political and economic instability, weak purchasing power, complex government procedures, cultural differences, and so on.
Companies must be aware of these challenges and devise strategies to overcome them, such as adapting their products to the popular culture in this market, and building relationships with local partners.
4. Risk Reduction:
Market research helps companies mitigate risks, identify potential challenges and obstacles, and anticipate changes in the market, such as the emergence of new competitors or shifts in consumer behavior.
5. Develop effective marketing strategies:
- Determine the appropriate channels, messages and language to communicate with the target audience.
- Understanding the market and customer weaknesses.
- Design messages that speak directly to the target audience in their language and address their pain points.
6. Increase customer satisfaction:
Companies can tailor their products and services to meet the unique needs of customers in a particular market.
For example: offering products that are free of lard in Islamic countries or foods that are free of dairy and meat derivatives during periods of Christian fasting.
By meeting these needs, companies can win customers and create a positive brand image.
What are the stages of a market study:
1. Determine the objective of the market study:
The first step in a market study is defining the objective of the study. This objective could be identifying a gap in the market, exploring new segments, or analyzing the competitive landscape to identify growth opportunities.
After clearly defining the objective, the company can develop a detailed study that includes defining the research methodology and data collection and analysis methods.
2. Conducting a preliminary analysis before the market study:
Gather as much information as possible about your target market and industry with the aim of providing a broad view of that market.
Primary analysis includes reviewing government or union data, analyzing news articles and statistics, in addition to analyzing the competitive landscape such as: competitors' pricing strategies, marketing methods, and profit margins.
3. Define a methodology Market study:
Determine the methods and tools that will be used to collect data and information, and this depends on several factors, including the objectives of the study, the geographical scope, and the available resources.
The Company may choose to collect data through face-to-face interviews, focus groups, or through observation, and may choose to collect data through digital surveys, statistical analysis, or direct experiments.
4. Market study data collection and analysis:
Once data is collected, whether in a traditional or digital way, it must be analyzed in order to understand it and to identify patterns and trends for this data.
It is necessary to ensure that the data collected is reliable and correct, and that the analysis is comprehensive and accurate. The results of the analysis can be presented in the form of graphs or tables.
5. Drawing conclusions and making recommendations Market study:
After all this work, it is necessary to interpret the data and determine how it contributed to achieving the research objectives. This includes defining the main ideas of the study and what it found in terms of identifying market trends or customer behavior and others.
Then make recommendations regarding product development, marketing strategy, sales strategy, customer service, or pricing.
It is important to note that recommendations must be data-driven and must be realistic and actionable.
These are some of the common stages involved in a market study, each stage requires careful planning and execution to ensure that the study is comprehensive, effective and provides actionable insights.
Methods of conducting a market study:
Some companies seek the help of specialized research institutions in order to study the target market accurately, but the cost of these institutions is usually very high and only large or medium companies can bear their costs. As for small and emerging companies, they use multiple low-cost methods to obtain information about their target market, including:
It is one of the most popular and least expensive data collection methods and provides accurate and wide information about customers and markets.
They are managed through social media or through email, and are targeted at wide audiences or limited to a small group of customers.
2. Personal interviews:
Personal interviews provide valuable insights into customers' opinions and preferences, but they require a lot of time and effort. Personal interviews are usually used to study customer behavior.
3. Focus groups:
It is group discussions that are subject to direct supervision by the organizers of the study with the aim of collecting qualitative data such as: customer opinions about the product or service and discussing the solutions it provides and how the product or service can be developed to help them more.
4. Direct observation:
It is directly observing customer behavior in a natural environment to understand how they deal with the product or service and what difficulties they face. Direct observation provides a deep understanding of customer behavior, but it requires a lot of time and is not sufficient to gather research information alone.
5. External sources of information:
Such as industry reports, government statistics, and customer reviews, external sources can help in initial market analysis, but they are Most of the time alone is not sufficient.
The choice of data collection method depends on the objective of the research or study, the nature of the target audience, and the available resources.
The difference between market analysis and market study:
The term market analysis refers to studying the value and size of the target market and identifying segments potential clients.
In addition to studying competitors and their strengths and weaknesses, opportunities and threats in this Market, which is known as (SWOT) analysis.
Some questions that market analysis must answer:
- What is the size of the market and what is its growth rate?
- Who are the main competitors in the market and what are their strengths and weaknesses?
- What are the main obstacles to entering the market?
- What are the opportunities and threats in this market?
While the term market study or market research refers to providing specific information about customers, their behavior, preferences, and the way they make decisions.
Some questions that the market study must answer:
- Who are the target customers, what are their demographics, and what are their preferences?
- What factors influence their decision to buy? Like price or quality.
- What are the channels through which the company can communicate with them?
- What is the mental image of customers about the product or service?
- How satisfied are customers with the product or service?
- What are the improvements that customers require or that facilitate their use of the product or service?
Market analysis and market research are both important activities that provide valuable insights to businesses, and both are important for understanding the market and making informed decisions.
Although it appears that the market study is costly and requires time and effort, it is not necessary It is indispensable to understand the target market and discover growth opportunities, challenges and risks before entering the market or before Launching a product or service.
The market study also helps direct the company's resources of time, money and human resources in the right direction, which ultimately leads to reducing production and promotion costs, increasing sales and achieving profit.
If you do not have the time or experience to conduct a detailed study of your target market, we are happy to hire a team Octhubs To help you study and analyze your target market, our team has extensive experience in the Arab markets and in many fields, do not hesitate and ask Free consultation immediately .