Market research is a key phase in the creation of your business. It allows you to identify the market in which you are going to enter and to convince your potential funders. This article will provide you with a method as well as an overview of how to do this.
For a market study to be effective, you must follow an orderly and structured approach and respond to four major topics: the market, supply, demand and the environment of your project.
1 – First step: define your market
Your objective here is to take a general photograph of the market.
Its identification and its evolutions
You will need to answer several questions:
In which market (s) will your business evolve?
Who will be your customers or users (the customer, the one who pays, is not necessarily the user)?
What is the geographic dimension of the market (s) you want to target?
What are the changes in the market in terms of value and volume?
Directly or indirectly competitive products or services
Secondly, you will have to find out which products will be your direct competitors, but also indirect ones, that is to say which can replace your product.
Competitors, customers, users, specifiers… identifying and defining the main players is important for in-depth knowledge of your market.
2 -Second step: analyze the demand
The first step allowed you to sketch the broad outlines of the demand, but now you need to get more information in order to be able to make decisions later.
Global evolution of demand
Ask yourself about the trends in demand:
What is the size of the market and what are the quantities sold?
What is the number of customers in the market? How is this figure changing?
Client and user behavior
Get an accurate picture of your customers and / or users, then try to determine their behavior:
On what occasion does he (the customer) or use (the user) the product and / or the service that you offer? How? ‘Or’ What ? Or ? Why ?
Are they satisfied?
What are their motivations? What are their brakes?
What is their perception of the product and / or service?
What are the characteristics of the product and / or service that could favor the act of purchase or use?
Your goal is to select from among all of your identified customers (and / or users) which ones to target in the first place to market your product or service. Depending on the nature of your market, the criteria may be very varied. For individuals, you can use distinctive criteria such as: gender, socio-demographic criteria, consumption patterns and styles, etc. For companies: workforce, activity, turnover, location, etc.
3 – Third step: analysis of the offer
As with the analysis of demand, a detailed analysis of the offer will allow you to establish your strategy more precisely.
Global evolution of the offer
Present the different products (and / or services) and companies present on the market as well as the leaders.
Characteristic of the offer and competing companies
Once you have presented them, analyze in detail your direct and indirect competitors. Ask yourself the following questions:
• Who are they ? Where are they ?
• What do they offer? At what price?
• How do they sell? What are their financial results? Who are they selling to?
• How do they communicate? What are their competitive advantages?
• What is their market share?
• Are customers / users satisfied?
4 – Fourth step: analyze the project environment
Finally, it is about identifying the factors that may or may not have a favorable influence on your market and on your activity.
The challenge is to determine whether the size of your market could decrease or increase. This work involves the analysis of the following 6 dimensions:
What is political stability? Are there particular tensions? What is the regime in place? What is the policy on taxation, trade, etc. ?
What are the current economic conditions? What is the unemployment rate? What is the disposable income? What is its evolution?
What is the culture? What are the values and standards? What is the level of education? How is demography changing? What are the consumption habits?
What are the technological developments to come? Are they frequent? Which sectors are they affected?
What is the sensitivity to the challenges of sustainable development? What measures have been taken in favor of the environment? What treatment is reserved for waste?
What is the legislation governing your activity? How can it evolve? What is the role of the public authorities? What is the role of influence groups and professional organizations? Etc.