Market Research is very important for the success of any startup and every startup that starts its operations without prior market research isn’t able to gain much traction from consumers. Market research is gathering information about a market, its trends, and consumer interests. Startups can either use pre-existing information and work on that or they can conduct their research (which is the preferred option).
Startups that take out time and consume resources to conduct market research before launching any product or service can gain valuable knowledge about the market & its trends and they can use this knowledge to create a business plan that will help them succeed in the market.
While conducting market research, one thing should be duly considered that irrelevant data is of no use. Only unbiased and useful information obtained from the market research without any biasness can allow an entrepreneur to launch a successful startup company. With that being said, we will be discussing some of the reasons and highlight the importance of market research for startups:
Helps In Finding The Market Needs
Entrepreneurs can come up with unique product and business ideas but to take those ideas to the next stage, it is important to find out whether that idea is needed by the target market or not. If there is no need for a product in the market, the customers won’t bother buying it, whereas if there is a need for a product in the market and that product is solving a crucial problem that hasn’t been yet targeted by anyone, the product will be in-demand.
Looking at the needs of the market is very important because market needs are crucial for the success of any startup. It helps to find out whether your product is needed by the target market or not and also helps in launching the product into the market.
Reveals Customer Needs
The market research also helps to reveal customer needs. There is a small difference between customer needs and market needs. While the market needs is a general term, customer needs is a specific term. By performing market research, entrepreneurs can find out about both the general need of the market and the specific needs of their potential customers. Customer needs help startups to find and target the right people, people who would be actually interested in buying their product.
For startups, the revelation of customer needs becomes vital as it allows companies to find out about the target audience, their demographics including age, gender, education, and also when and how often they need the product. This information becomes very vital in targeting the right people and launching the product at the right time.
Leif K-Brooks, the owner of the popular website Omegle was well-aware of both the market needs and customer needs. Market research helped him to launch a product that was needed by the market and was able to target the right group of people, people who were interested in his product.
Reveals The Competition
Market research not only helps in determining and pinpointing the most ideal business location but also reveals potential competitors. Market research tells you whether the market is saturated or not, whether the market holds enough potential for a new product or not, and also the supply & demand gap. It also tells you about top names that can give you competition in the market, their strategies, their position in the market, their share in the market, and how they market their product. All of this is very useful information that can be used to give your competition a tough time.
OmeTv, although an alternative to Omegle, was able to succeed in the online market because of the market research that helped its founders to find out the strategies used, the position, and the share of Omegle in the market.
Helps To Determine The Ideal Business Location
Market research helps in determining the ideal business location too. There is no doubt that if a company opens its office in the right place then it can attract a lot of customers and through market research, entrepreneurs can find the most feasible and ideal location for their business, which would be in the approach of the target audience. You might have seen that similar businesses are found in close vicinity to each and most of them are huge brands that already have a good customer base but for a startup that is starting from scratch, opening an office or store in a congested area with similar businesses nearby won’t be beneficial at all.
Market research helps in determining the ideal business location, where the customers can easily approach the business and the business is not in close vicinity to similar businesses.