Market Research For Online Business
As you already know, starting a business requires making lots of critical decisions and research. Market research is first and most important tool and activity you'll ever use through your business life.
Let's first clafity Market Research versus Marketing Research, which often get confused and which have different approaches when it comes to its activites.
Market research is the next step after the expoloratory research that'll lead to discovering the market potential of a business idea. It's main purpose is to collect information about the market you want to target.
This process will allow you to plan, collect, and analyze information that'll help you make key decisions.
It also provides you with the specific information you need to breakup or segment markets, decide on which areas to target, and to help identify the best way to position your business relative to your competitors.
Marketing research on the other hand, is research done throughout the life time of your business that will lead to explore new business or growth opportunities, as competitive strategy, or to solve issues that will definitely arise while in business. In addition, it's used to analyze processes already in place to determine their effectiveness.
It helps in the development of solutions to business problems, prepare biz strategies, planning for business growth, and identifying new opportunities on the market.
So, after clearing that out. We have now a clear picture of the distinction between these two types of research. Now, we can better focus on the one we'll use to start exploring a business opportunity online.
By using Market Research we want to collect the following information:
Note: Although our focus is online business opportunities and potential, this could also apply to off-line businesses and viceversa.
Identifying Potential Markets = Market Research
Is there a market for your offering? Which are the markets most suited to your product? Develop a market profile including customer characteristics, such as age, socioeconomic background, lifestyle choices and personal values.
Identifying Potential Customers.
This area focuses on consumer behavior. What and who influences their buying decisions? Why do they buy this or that? Where do they buy? What's involved in the decision-making process? How does it start? Getting a good understanding of how consumers think, what their buying habits are and what factors influence these habits is essential for you to make the most of your marketing opportunities.
Understand Identified Potential Consumers.
Understanding online customers is more vital due to the wider geographic and cultural spread, as well as diverse characteristics and attitudes to both obtaining information and buying online. They now have more information and many product and price options than ever. They are less tolerant of poor products and services, and with the rise of latest technologies like social media, they can communicate instantly and raise their voices through blogs and forums about their interests and concerns.
Is there a demand for my product or service? what sales can I expect? who buys my products (e.g. age, gender, income, occupation, lifestyle)? what is the best price for my products or services? How should my products look, feel, taste, etc.? are other businesses offering similar products or services?
Keyword Research (For Online Businesses).
Keyword research is a practice used to find and research actual search terms people enter into the search engines when conducting a search. This method is used to research keywords in order to achieve better rankings in the search engines. Source: Wikipedia.org
It is important to analyse your competitors’ online presence before starting up. Your online competitors can be identified as those websites that offer the same or similar products or services to the same target customers at similar prices. Online competitor analysis is essential for the success of your e-marketing campaign as it not only will help you to identify your competitors and their online activities but also allows you to get a better understanding of their strengths and weaknesses.
It is very important to consider the external environment that your business operates in before beginning the marketing process and to continue monitoring for any changes that may influence your marketing activities. To do this you can develop a PEST (Political, Economic, Social & Technological) model to help you identify and understand the various environmental factors that can impact your business and its marketing activities.
Identify Market Trends.
Identifying and understanding trends in the market assists you to forecast future sales and anticipate events and changes that can impact your business. Trends in the market can be identified by understanding the pattern of growth or decline in sales resulting from changes in environmental factors such as; seasonality, population, social, technology, economic cycles and political climate.
Once you have identified your customers, competitors and the trends in the market, the next step would be to have an understanding of where your product has been recently, where it is now, where it is headed in terms of your plans and the external factors and trends affecting it. The final goal of the SWOT would be to identify the critical factors affecting your organisation and then build on your strengths to reduce your weaknesses, exploit opportunities and avoid the potential threats.
Market Positioning Strategy-Differentiation.
Points of difference are usually in line with the unique selling proposition and are critical in defining the competitive advantage of your products. In order to gain a competitive advantage from points of difference, they must be benefits that your consumers strongly, uniquely and positively associate with your product, rather than any competing product.
Prepare Strategies To Reach The Identified Markets.
Customers decide quickly, move often, change their mind and shift their loyalty easily. Smart businesses make ongoing efforts to forge relationships with customers who match their ideal lead profile and convert those leads to prospects.
Adapted from © State of New South Wales through NSW Trade & Investment.
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