Research: The First Step to Business Success

Knowledge is power.

This common phrase is more than just fuel for motivational posters and movie writers. It’s great advice across all industries, and your industry is no exception. The more you’re able to truly learn about your specific market, the better you’ll be able to able to find your place in it.

That’s why research is the first step to business success.

This isn’t just for new business-owners or those changing industries either. No matter how old a brand is or the level of past success in their given niche, every business needs to continually research what’s going on in their market landscape and keep an eye on trends.

Established brands need to update their knowledge about competitors on a regular basis. New brands need to find how best to position themselves when entering a new market. Brands looking to pivot to another niche need to check if there’s a demand for that service or product. No matter what your brand does, or what your current goals are, you need to know as much as you can about the market you’re in.

Enter: The Market Analysis.

Market analyses look at any given industry to gauge the difficulties and opportunities in the competitive landscape. Whether or not you decide to enter or continue in the market you’re researching should depend on this analysis, so the information you gather in this process is vital. Market analyses will tell you exactly how competitive your industry is, as well as identify which niche is underserved so you can hone in.

Defining Your Competitive Landscape

The first step in any market analysis research is identifying the major players in that market: your prospective competitors. How many brands are in the market? Who’s successful, and why? Is there enough demand to support another brand in the mix?

Knowing who you’ll be competing against is important because without that knowledge, you might be set up for failure before you even launch. For example, if you spent all your capital developing and making a new $100 shoe, but didn’t take the time to research competitors, you might not even realize there’s a direct competitor selling the same thing for $75. 

Understanding Your Ideal Customer

The next section in your market analysis concerns the customers you hope to serve.

First, how may customers are in your target market? If the market is already saturated with too many brands for a limited customer pool, you won’t want to throw your hat in the ring. Think about it: Is the 8th donut shop in a town of 5,000 likely to draw a large consumer pool?

Next, you’ll need to know what type of customer you’re likely to see. Customer profiles and personas are slightly more subjective than other aspects of the market analysis, but learning who you’ll typically be serving is a great way to position yourself for success.

What are your customers looking for exactly? How much money do they have to spend? What age-group, gender makeup, tax bracket, etc. are you targeting? Don’t position yourself to serve too narrow a group, but knowing your general customer profile gives you a lot of great information to target your promotional efforts.

Planning for External Market Forces

So, now that you know your competitors and your customers, take a look at the market itself. Some important things to look out for are any external forces that affect the market. These can include government regulations, taxes, geography, and many more.

A great example of the importance of external market forces is the oil and gas industry. The demand for fossil fuels is falling, but not at a slope that would bar one from trying to enter the market, nor is the price falling fast enough to lose money on. But there are still plenty of reasons not to build your new fleet of oil wells.

New government regulations go into place every year that incentivize sustainable energy sources and limit how much oil can be drilled. On top of that, the tax rate continues to rise for fossil fuel companies to disincentivize new businesses from entering the market. While you might be looking at entering the retail market rather than the fracking industry, these external forces are still vital to be aware of.

Putting Your Research to Use

With all of this new information under your belt, you’re ready to put it to work developing your target niche. Niche targeting helps determine exactly what your brand does and who it’s designed for. The more information you have on the competitive landscape the better you’ll be able to identify a gap in the market - an underserved section of the landscape to key in on.

Let’s look at our $100 shoe example from above. If you found out during your research that while your competitor is selling her shoes for $75, nobody is selling shoes designed for wide feet, you can readjust your product & marketing to highlight that you’re the only place in town for customers longing for stylish shoes that actually fit them. You’ve found a niche where people will patronize your business even though your price is $25 higher than a competitor.

Within each of the above categories, there are many nuances and specific brand questions to be answered. The more information you can gather, the better equipped you’ll be to adapt to your market as your business grows. The gist? To become successful brand, the first step is undoubtably research. Finding out as much as you can, as often as you can, will always put you a step closer to achieving your business goals. If you want to start your market research process to put your marketing dollars to better use, but aren’t sure how to go about it, please contact me!