Entrepreneurship is the art and science of bringing a business idea to life to make a profit and meet a need. Business ideas often do not come fully formed when conceived, and it may be challenging to validate their potential of becoming a viable venture. For these reasons, entrepreneurs need a way to acquire valuable information that will guide their decisions and business choices.
That is where market research comes in. Market research provides entrepreneurs with the knowledge they can apply to structure essential aspects of the business, like business strategy, product development, pricing, and marketing campaigns. This article will help you to see why market research is vital for building successful enterprises.
Understanding Your Target Market
Before establishing a business, there’s a need to know who your solution is meant for, and market research can help you do that. For example, without market research, an entrepreneur interested in the gaming industry may think that Gen Zs spends the most time gaming and goes ahead to design his products for Gen Zs. However, Express VPN’s research into gaming behaviors across generations found that Millennials spend more time gaming than Gen Zs. Millennials are the largest group of gamers, likely due to their exposure and familiarity with the gaming industry’s evolution and having more disposable income to spend on gaming.
On the other hand, Gen Z, who grew up with ubiquitous mobile devices and internet access, may view gaming as just one of many forms of entertainment available to them. This information will help the entrepreneur avoid mistakes significantly when expanding into new markets and finding the right target audience. They can connect with customers better and tailor their products and services to meet the specific needs of their target audience.
Carrying out proper market research will also help them to acquire critical information about the business landscape of their industry and potential market. Understanding your target market can also help you discover how your target customers and prospective clients feel about your brand, product, and business niche.
You may also learn about consumer behavior, demographics, preferences, and needs. Setting up a business without proper market research is dangerous because you may target the wrong people, affecting your bottom line and business.
Identifying Opportunities and Trends
Market research can help business people identify emerging trends and opportunities in their industry. These opportunities could be factions of the industry that the competition needs to pay attention to, a new way that the product or services can be developed to meet the target market’s changing needs, or a marketing strategy that the competition needs to utilize.
For example, we can see how this played out when the Apple iPad was launched in 2010. With this product, Apple could target a new demographic of users, resulting in a whopping $67.7 billion in sales. Entrepreneurs guided by proper market research have a greater tendency to find trends and exploit opportunities in their industry that can unlock new sources of revenue and help them outpace the competition.
Testing Product and Pricing Strategies
Making informed decisions is crucial for the survival of any business establishment. Market research can offer entrepreneurs updated information and data about important variables within their industry that can guide their business strategies. For one, market research helps entrepreneurs test their products and pricing strategies before they can double down on them.
Most successful startups are beneficiaries of this advantage of market research. During market research, entrepreneurs can conduct surveys, beta testing, research, and focus groups that can help them gather feedback from potential customers about their products and pricing. That allows entrepreneurs to avoid making costly mistakes, refine their products and pricing strategies and improve their chances of success. An excellent example is how Starbucks uses market research and customer feedback to inform its business and marketing strategies and change its products or offerings.
Market research informs entrepreneurs about their target market, industry trends, competition, and consumer preferences. Entrepreneurs who invest in market research can gain a competitive advantage and increase their chances of market success. Market research is essential for entrepreneurs who want to validate their ideas and established businesses who wish to gain a competitive advantage in their industry.
