I have been hearing a lot about market research and why it is really important but I don’t really understand it. Is it the same as advertising? Can anyone give me some advice?
It’s a bit of a maze, isn’t it. I found this definition quite helpful:
'Market research is the process of collecting and analysing data related to the marketplace. Many companies use market research to collect and assess data about a target market or consumer to better understand their ideal audience. For example, if a company wants to target primarily females in their 20s who make more than £50,000 a year, they would compile as much data as possible from this particular market and use this data to influence their marketing decision.
Market research has several purposes that include identifying a potential new market to break into or determining whether launching a new product will be successful with a company’s target audience. Performing market research allows businesses to make informed decisions and use their resources in a way that is most beneficial.’
I’ve done things like gathering some mates to get feedback on what my plans are, I’ve got people to test products and give feedback, and I’ve looked at pricing structures and what the market can handle.
Don’t know if that helps?
Stevie has helpfully provided a very detailed explanation (thanks Stevie!) but I think the detail can confuse people a bit, it certainly did when I was learning about it, so I thought I’d try and break it down a little.
At its basic level market research is just looking at what already exists in the market you want to work in. For example if you’re looking to open a cafe you might look at Starbucks and Costa and whatever independent cafes exist in your local area. That could include looking at their accounts (which many companies publish online) or hanging around outside them and counting how many people come in at a given hour, things like that.
By doing market research you can estimate things like expected foot traffic/web traffic or even what your profit margins and revenue might be based on what other people are getting.
It all depends on how in depth you want to be, and if you’re looking to receive funding from an organisation or grant body they would typically expect a basic level of market research.
When it comes to market research the thing a lot of people want to see is that you’ve considered what the market needs, what niche you want to fill, and what your unique selling point is that fills that niche. If you can answer those questions you’re well on the way to a successful pitch.
There is some great advice on there already. What i might also add is that a lot of people confuse marketing with advertising. Marketing is about understanding the market, understanding your customers, understanding your competitors and developing a strategy to reach your market target.
So let’s say you wanted to set up a community cafe. You would want to understand what the demand is for a cafe in the area you want to set it up in and who are the existing competitors? You then need to work out how you will compete against them - perhaps by offering different types of food, perhaps by offering healthier food, perhaps by offering cheaper food or perhaps by offering a different experience (like a cat cafe or library space). This is what I would think of as market research. You can do almost all of this yourself but it might take a bit of leg work going round other cafes and some time in the library or on the internet.
Thanks so much everyone for your advice. Do you think this is the kind of thing I can do myself or do I need to pay someone to do this? Do you know how much that might cost?
Hi Sally, I think you can do it yourself and there are some good resources out there. As with many things, a professional would be probably be able to do it better but it will likely cost. I would suggest it would definitely cost a few hundred pounds and maybe a few thousand pounds.
These might help though:
Like Dave says, I think that this is something that you can do yourself. Have you had a look on the Udemy site? They have some great free or very cheap courses on marketing and market research. From a quick search, this looks like a good one: https://www.udemy.com/course/testmyidea/