How to conduct relevant market research in just 5 steps?
Doing your own market research for your future business?
It may seem daunting at first, but with a bit of rigor and patience, it's perfectly possible to do most of it yourself.
What's in it for you?
Over and above the obvious economic benefits, it gives you a perfect grasp of your future market, providing you with all the keys you need to steer your business in the right direction.
But how do you create a business market study that makes sense, and what components do you need to take into account?
Steps, examples and advice... this article will show you how to gather and use the data you need to assess the feasibility of your project and guide your decision-making.
Definition of market research
But first, a quick reminder of what a market study entails.
Are you an entrepreneur looking to set up a business based on a specific idea? Then you need to make sure that your future product or service will be well received by the market.
By gathering and analyzing a range of data, market research enables you to :
- estimate the sales and success potential of your offering,
- guide your strategy to differentiate yourself from your competitors.
The different types of market research
There are two main types of market research.
Quantitative market research
Quantitative market research is essentially based on figures and statistics, obtained from a large panel of individuals.
In particular, it enables us to calculate :
- market size (number of potential future customers),
- market value ( forecast sales).
Qualitative market research
Qualitative market research generally involves a smaller sample. However, thanks to a system of open-ended responses and the collection of verbatim comments from interviewees, it provides a more precise picture of consumer purchasing behavior and aspirations.
☝️ Effective market research combines both methods.
The cost of market research
It can be tempting to call on external services to carry out your market research. You have several options.
- Contact a specialized agency. It will carry out a complete and personalized market study. Estimated costs 👉 from €5,000 to €10, 0001.
- Call in a junior entrepreneur. While the rates are more advantageous, you'll benefit from less expertise. Estimated costs 👉 from €1,500 to €3,0001.
- Buy a ready-made market study online. Prices vary, but it will be more limited and not necessarily suited to your business start-up project, especially if you're launching an innovative product or service.
Whatever the case, doing the work yourself will prove to be cost-effective. That's why we've outlined the steps involved in carrying out your own market research.
1 Estimated rates from webmarketing.com
Steps in market research
Step 1: Identify the data you need
As a general rule, market research is based on the analysis of data relating to :
- the sector,
- demand
- competition,
- environment.
To do this, you need answers to a number of questions.
Ask yourself questions about the sector
Understanding your sector and market is built around an economic analysis, taking into account current data and future developments.
Examples of questions to ask yourself:
- How is the industry doing?
- What is the potential market size?
- What is the market's potential value?
- What is the estimated repeat purchase rate for your products or services?
- What are the trends in this market?
- Is it a sector of the future?
- What innovations can you foresee in this market?
- How does this market appear to be evolving?
Ask yourself about demand
This involves identifying and analyzing the buying behavior and desires of your future customers.
Examples of questions to ask yourself:
- Who are you targeting?
- What are their characteristics (catchment area, income, age, buying habits, etc.)?
- What are their buying motivations?
- What are their needs or desires?
- What value do they place on the quality of a product or service?
- What psychological price would they be willing to pay for your products?
☝️ Beware: a high price can drive customers away. Conversely, a price that's too low is often associated with poor product and service quality.
💡 Have you heard of the empathy card? A collaborative tool, it is sometimes used by sales and marketing teams to understand the customer by identifying:
- what they want to do,
- what they see,
- what they say,
- what they do,
- what they hear,
- what he thinks,
- what he feels.
This technique can provide you with a framework to guide your questioning.
Example of an empathy card :
Find out about the competition
It's vital to analyze what's already on the market, not least to consider how you're going to position yourself and differentiate yourself.
☝️Notez There are two types of competitor:
- direct competitors: they offer the same product as you.
- indirect competitors: they offer a different product, but meet similar needs. For example, a supermarket and a local organic store don't really have the same positioning. They do, however, meet the same need: food.
Examples of questions to ask yourself:
- Who are your direct and indirect competitors?
- How are they doing economically?
- What are their sales figures?
- What is their current strategy?
- What is their positioning and brand image?
- What are their strengths and weaknesses?
- What are their projects?
- What types of recruitment are they currently undertaking?
Ask yourself about the current environment
Finally, look at the broader factors that may influence your business by studying the environment:
- political
- economic
- social
- technological
- environmental,
- legal.
This is known as PESTEL analysis:
Taking these various events into account is essential, in order to avoid certain pitfalls. After all, let's remember that some companies suffered from the implementation of the RGPD, which called into question, at least in part, their operations.
Step 2: conduct a literature review
Once you've identified your market research objectives, it's time to put them into practice!
To begin with, carry out a literature review.
Also known as market intelligence, this involves drawing on existing resources, usually available online.
This type of research is particularly useful for gleaning information about :
- the market, by exploiting data available, for example :
- official websites such as those of chambers of commerce or trade unions,
- reports and studies, such as those provided by INSEE,
- in the press (print or online) relating to your sector of activity.
- your competitors, by exploiting data available, for example :
- their official websites,
- corporate legal and financial information sites such as Societe.com,
- employment media such as Welcome to the Jungle.
☝️ Always check the relevance and quality of the information you obtain. Make sure it's recent enough to be usable.
And if you want to cut your research time by a factor of ten and be sure of the data you've collected, you can also use specialized software such as Smappen.
This geomarketing software enables you to find the best area in which to set up your business, with over 350 INSEE indicators directly accessible on their platform. You can also consult and analyze your competitors to avoid unpleasant surprises, thanks to access to SIRENE database data.
Step 3: prepare your field survey
The field study is carried out directly with your potential customers, but also through contact with experts in your field. It generally takes place after the documentary study.
How do you prepare your interviews and questionnaires?
Field research involves obtaining key information for your market study by means of :
- face-to-face or telephone interviews,
- questionnaires, usually distributed via the Internet.
In both cases, it's ideal to prepare both open and closed questions, with the aim of obtaining quantitative AND qualitative data.
☝️ There is a real difference between the objectives of open-ended questions (more suited to qualitative research) and closed-ended questions (more suited to quantitative research). For example, if you're creating a line of perfumes, you might ask questions like:
- Do you buy more than two bottles of perfume a year? 👉 closed question for quantitative research.
- What qualities do you look for in a perfume? 👉 open-ended question for qualitative research.
Although it depends on your objectives, a questionnaire is generally structured as follows:
- questions about the respondent 's profile,
- questions about your future products or services,
- questions relating to the business sector in general.
💡 The good news is that some software programs have been developed to help you create and distribute questionnaires and surveys. This is the case, for example, with Drag'n Survey. The tool offers various templates to personalize your document as much as possible, and also provides you with a bank of over 500 questions to inspire you. What's more, it facilitates the distribution of your questionnaires, as well as the analysis of results through the visualization of reports.
Example of a Drag'n Survey questionnaire:
[Sample market research questionnaire]
To illustrate the points made above, here's an example of a market research questionnaire relating to the opening of a second-hand clothing depot.
It contains both open and closed questions, relating to the respondent's profile, future services and the market in general.
Step 4: Distribute your questionnaires and/or conduct interviews
Once you've created your questionnaires and surveys, it's time to distribute them or collect contacts to talk to them directly.
There are several methods you can use. Here are a few examples:
☑️ Call on your friends and family and their networks. However, this technique should be used sparingly, to avoid emotional bias in responses. The closer a person is to you, the more likely they are to unconsciously agree with you, so as not to "offend" you.
☑️ Go to places where you can approach interviewees directly. Passing places, such as shopping mall exits, are good opportunities for approaching potential customers. On the other hand, you'll find it easier to meet experts at professional events such as trade fairs or conferences.
☑️ Distribute questionnaires on the Internet. To do this, we recommend targeting social networks (Facebook groups, for example), forums or blogs dealing with subjects likely to be of interest to your core target audience.
If you want to interview experts in your sector, consider professional networks such as LinkedIn to get in touch with them.
Step 5: Analyze your results and prepare your report
Once you've gathered all your data from your documentary and field studies, transcribe them into a document: the market research report.
The aim is to use it as a strategic tool to guide your decision-making, but also to convince banks or potential investors.
It must therefore meet certain criteria:
- reveal the essential information needed to convince your clients of the relevance of your project,
- be both clear and concise,
- include visual elements such as graphs and tables.
Here's an example of how to present a market research report:
☝️ Important recommendation: take a step back from the results of your market research. The aim is not to convince yourself that your project, as you imagined it, is relevant. Always be objective, so that you can readjust your actions if necessary.
Conquering your future market!
That's it, with patience, rigor and method, you've done your market research. But your work doesn't stop there!
In fact, market research is a prerequisite for other actions that will consolidate your project and guarantee the success of your business creation.
Of course, we're thinking first and foremost of your business plan, including the identification of your business model- an indispensable tool for attracting both your future business partners and investors.
But your market study will also determine your marketing strategy and communication plan. After all, you now know what differentiates your business from the competition, as well as the type of clientele you wish to target.
So, are you ready to choose your weapons and set out to conquer your future market?
Article translated from French