Step-by-Step Guide to Conducting Market Research
Why is Market Research necessary?
Market research is essential in product development, project organization, and services. Being aware of your target market helps develop the product to reach potential customers and achieve a higher position than competitors. You should know that if you have a product, your competitors also have a similar one, and they have specific strategies for customer acquisition, lifetime value, sales strategy, advantages and disadvantages of the product, etc. If you want to take a high position in the market, you should develop your product based on solving customers' pain points in the easiest way.
How to Conduct Market Research
Starting market research involves the following steps:
- Identify your market size
- Understand your product’s weaknesses and strengths to determine the company's position
- Choose 10 direct competitors to analyze
- Identify segments and gather customer feedback
1) Identify Your Market Size
Understanding market size can create a future image of your product and help define an effective market positioning strategy. You can learn the number of potential customers, the approximate amount of profit you can get, and the market share of other companies in this research. If your product is the same as companies that have millions of dollars in cash flow and take large parts of the market, improving your product will be very challenging. In these situations, you can understand the product's future and shift to more niche services and targeted customers in the market.
For example, in the current situation, “Wolt” dominates the food delivery service in the country. It has a wide restaurant network, many couriers, millions of customers, fast customer service, a highly qualified application, and, most importantly, strong brand representation. To be successful in this market, you can target more niche audiences, such as people who want to eat healthily. For this, you can create meal subscription packages and delivery services that offer personalized meal plans to help people stay fit and healthy.
2) Understand Your Product’s Weaknesses and Strengths to Identify the Company’s Position
To identify your product’s strengths and weaknesses, competitive benchmarking and SWOT analysis are the most effective methods. This method explains the product's strengths, weaknesses, opportunities, and threats.The success of a product depends on how to find solutions customer pain points and leverages unique value propositions. The strengths section covers proven methods that satisfy customers and create a more positive impact than competitors. The weaknesses section highlights areas for improvement. Opportunities refer to underutilized actions and fields that can significantly improve the product in the market. Threats include economic changes, technological innovations, new legal regulations, etc., that can impact your product’s success. SWOT analysis can be applied to different fields such as competitors, collaborations, and the company.
“Identifying your strengths allows you to leverage competitive advantages, while recognizing weaknesses helps you mitigate risks and improve product positioning.” — Harvard Business Review, Strategic Positioning Research
3) Choose 10 Direct Competitors to Analyze
This analysis explains your direct and indirect competitors' sales methods, digital presence, PR activities, pricing strategy, etc. Creating a competitor analysis map is a beneficial and time-saving way to conduct this process. This map covers necessary metrics, outlines action steps from beginning to end, and saves time during the process. A competitor analysis map can include different metrics:
- Competitors’ Revenue Model
- Digital Strategy
- Content Analysis
- Advertising Strategy
- Website Analysis
- Digital Audit
- Pricing Strategy
- Social Media Engagement
- Perceptual Map
- Collaborations
- Innovations
- Customer Satisfaction
- Market Positioning.
It is important to remember that competitor analysis must always be ethical and protect each company's brand representation.
4) Identify Segments and Gather Customer Feedback
Customer segmentation and feedback collection are crucial for understanding user personas and solving customer pain points effectively. Customer segmentation defines the product's budgeting strategy and development direction. Customer segmentation allows businesses to personalize their marketing efforts by focusing on consumer behavior, demographics, and buying habits. Customers can be divided into different segments based on age, needs, fields, interests, etc. In this process, choosing one main segment is necessary.
For example, Product X refers to all age categories, from young to old people. Creating age segmentation is beneficial because different age groups have varying interests, needs, and requests. Identifying age segments and creating personalized product offers for each segment will increase conversions.
“The more specific your customer personas are, the better you can personalize marketing and sales efforts, which leads to higher engagement and ROI.” — HubSpot, Buyer Persona Report
Nowadays, collecting customer feedback is easier because of the internet. You can access feedback from review platforms such as Trustpilot, Reddit, Indeed, as well as their Google Play Store and Apple Store applications. These reviews help answer the question, “How?”—how to improve the product and create a marketing strategy. This means you will understand how to solve customer pain points and meet their needs. Most big companies now use agile methodology to respond to customer feedback quickly and receive positive responses.
Additionally, conducting market surveys can be advantageous in this process. The benefit of surveys is that they provide a clear image of the areas you need to improve because you design the survey questions. There are several tools that help create easy-to-fill surveys, such as Google Forms, Typeform, and SurveyMonkey.
Conclusion
Conducting market research is essential for positioning your product effectively and staying ahead of competitors. By identifying your market size, analyzing strengths and weaknesses, understanding competitors' strategies, and gathering customer insights, you can develop a well-researched strategy. This not only helps in understanding customer pain points but also enables you to create solutions that meet their needs. With the right approach, market research becomes a powerful tool for innovation, differentiation, and long-term success.
Search 
