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What is market research and why is it useful?

Market research businesswoman, smiling

 

We asked market research expert, Diana Montador, what is market research, and why it it useful? As it turns out, market research is for every entrepreneur, and can be the building blocks of a successful business!

So, Diana, can you give us a bit of background into your career?

I knew I wanted to have a commercial focus, and wanted to work with tech businesses. After I graduated, I got in my car and drove to Silicon Valley, where I started my career in market research. I’ve worked with some great companies including Yahoo! and eBay, helping them understand the markets that they’re in, and their customers. After moving to the UK and continuing to work with big tech firms, I eventually moved to Scotland. Eventually, I started up my own business and now do consulting. Being a business owner has been a fabulous challenge in a very different way.

What is market research and why is it useful?

Market research is the study of customers and markets. It involves looking at actual or potential customers, competitors, market dynamics, and the regulatory environment, to understand how your business could fit into that picture. By understanding your market, you can figure out where you could slot in.

Often, market research means connecting with customers directly. Examples of market research include discussions or focus groups or surveys. It’s about trying to get feedback from people on their interests and attitudes towards things that are relevant to your business.

“People are fascinating. How they make decisions is fascinating. That’s what’s so fantastic about market research. You can understand how people decide what they do, and how you can give them information and education to influence those decisions”

Let’s say I’m wanting to start my own business selling pens and I want to use some market research. Where do I start?

Start by understanding who’s already in the market; understand what competitors are doing and where the gaps might be. Google is a great place to start when you don’t know anything.

Next, you need to understand what your differentiator is. If you can understand your unique selling point, you can then go to potential customers and work out if there is a meaningful difference that would make them want to buy.

Being an entrepreneur is busy work! If time and money are tight, what market research is possible?

You don’t need to spend a lot of time or money. At early stages, there’s lots you can do on your own. Make sure you know your market before you enter it and do your research up front.

Google or SurveyMonkey are great places to start. Or, put a survey on LinkedIn or Twitter. You can reach large groups of people and get feedback, for free. In short, the more information you can gather, the better.

Who should we be asking for feedback?

Friends and family are not going to tell you that they don’t love your idea. They should be encouraging you, as your loved ones. For non-biased feedback, try to reach people that you don’t know with your market research. Identify the people who have the potential to be your customers – are they from the right age range? Are their shopping behaviours relevant to your business?

How do we reach people that we don’t know when researching?

The Market Research Society has given guidance that you should only be doing face-to-face market research when there is definitely no other alternative. However, there are so many other great ways to reach people online.

Social media is a fantastic, free way to access large groups of people. Keep in mind that if you put up a survey on a private social media account, it is more likely to go to your social circle. Get your network to share your market research more widely, and then you’ll reach people that you don’t know. Similarly, enterprise communities like the Women’s Business Centre is another great way to reach out to like-minded people for help.

If I have a new, innovative business idea, should I be worried that someone might copy it when I ask questions in my market research?

You can ask questions that don’t necessarily give your idea away, such as asking what their current shopping behaviours are, what interests them, what price range works, etc.

If you’re speaking to businesses about your proposition, you can sign non-disclosure agreements. Speak to a lawyer early on if protecting your intellectual property is a concern for your business.

Diana, it’s been fantastic to hear advice from a market research expert and a woman entrepreneur yourself! What top tip do you have for women business owners?

“My top tip would be to get to know your customers. No matter what stage of the business journey you’re at, make sure to continue learning about your customers as your business base grows. You’ll learn new things every day if you ask the right questions.”

 

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