How to do Market Research to launch a profitable business 2022

Within the period of Covid-19 and July 2022, as a market researcher and business analyst investigating small business performance, I have interacted with more than 500 micro and small business owners operating a physical shop and selling either a product or offering services to customers within the Lokoja market in Nigeria. One fundamental question that resonate with existing small business owners is, why do I need a market research to run a small business successfully?

What is Market Research?

Market research is an activity-based business strategy which requires you to think first and then collect data for potential customers or existing customers and look at the entire business environment before you make your business decision:

If you run an established small business and operate within the informal sector, it is very easy to win the argument against market research relevance for small business. Why? This is because, most small business owners face a common misconception about market research and marketing research relevance.

In this blog post, you will learn what market research is and what it is not. You will gain practical step-by-step approach with example on how to conduct a brief market research which can help you understand your target audience, review your business model (how it works) and check (is business model feasible within your location/environment?) your profit cap on products or service offering to existing customers.

These three elements of market research will indeed help you decide whether you should launch a new business or need to change your existing marketing strategy to reach more customer and in turn increase your profit level based on the information you gain with data obtained from potential or existing customers you talk to during your market research activities.

8 Steps: How to do market Research in the informal Sector

Market research is an activity-based business strategy which requires you to think first and then:

• Itemize 2-3 reasons why your new or existing small business will fulfil a unique need for potential/existing customers within a specific environment or local community.
• Then, list 2-3 category of persons who has a need for the solution you intend to create. Example: you might have noticed in your area that some ladies or women don’t like to do the hurdle of physical shopping for food items within the local market run every 5-days. So, you create a solution plan to serve busy ladies (working class), pregnant women as target audience for a new business idea.
• Next, you visit these women to know why they sometimes dislike physical shopping for food items on regular basis in their area: use a pen & paper for this brief interview task.
• You gather phone numbers & shopping schedule (per weeks) for food items needs from 5-10 potential customers (e.g busy women) and design a shop-for-me service for a fee.
• Then, you monitor the weekly changes in price of food items to evaluate the budget available for spending plus the willingness of your target customers to pay for service fees.
• Find out if other competitors in or outside your area are already offering fresh food shop for me services to women. What is the service charge or competitors price offering?
• Check if your target customers are price sensitive. Will you focus on low-income, average or high-income customers segment? What unique value will you deliver to each segment?
• Based on customer segment, then, decide if you can charge differential service fee per customer income status or per customer location factor.

4 more Steps or activities to conclude your market research tasks

• Find out if your competitors target same audiences, if yes, then what marketing tactics will you use to create awareness for your product or service offering. Can you start awareness from your friends & family via word-of-mouth referral marketing tactic?
• Imagin you are the owner of this micro business “shop-for-me food ordering service”. What other unique marketing tactic aside referral do you intend to use to attract existing customers enjoying weekly fresh food shop-for-me service offered by your competitors?
• Bonus tips: if you have carried out these 10 activity steps to do market research for your new or existing business and then you observed no competitor currently exist in your chosen line of business; whoa, you are an innovator within your area.
• Next, be careful if your market research information shows you are an innovator, to innovate a new product or service is a Good news, unfortunately, products innovators have more marketing research activities and business model testing work to do. But don’t be afraid, Sherdzon online marketplace got you covered with free 30-minutes business advice support.

Now that you know about the 12 activities that entails how and what market research is, let’s review what is marketing research compared to market research that you know.

What is Marketing Research vs Market Research?

Marketing research is a continuous process required along the pathways of marketing management decision which are made either by the owners or managers of the business. Whereas, a market research looks at the entire market situation from a broad perspective (study the customer needs & behaviour and the external business environment).

By contrast, marketing research specifically takes a narrow view of the customer segment you have decided to focus on (niche market size or your addressable market segment) with a goal of either mixing affordable product pricing strategy with a direct selling strategy which point to selecting the right marketing mix (product-price-place-promotion model) to deliver better value to target customer and then beat your competitors within specific market segment.

Conclusion

In a nutshell, know that market research should be done first to provide the desire data inputs to develop unique business plan and crafting a successful marketing strategy which is a component of marketing research.

• If you ignore the conduct of market research to inform your marketing decisions, your business can fail gradually.
• Your product may lack acceptance by customers not because value is not created, but
• The signs of a business failure can begin with an unsuccessful marketing plan or strategy.
•  We recommend that you should use the external source data and insights obtained from market research as a toolbox to help you design your marketing research plan and marketing action plan (marketing mix strategy for wining new and delighting existing customers).

If you need to know more on market research for small business performance, you can send your inquiry to help@sherdzon.com or contact us to use Sherdzon market research services at affordable rate.