Lesson

Why is it important to analyse the market?

• Exploration – understanding the market
• Guidance – identify market niches, position product/service
• Help in decision making – product development, packaging development, etc.
• Feedback – shows how effective our sales activities are

In terms of the above, market research is an excellent tool for selecting the most appropriate marketing activities, identifying and eliminating any problems that may arise, and informing short and long term strategic decisions.

What is market research?

• The purpose of market research is to assess the needs of existing and potential future consumers, and to identify sales opportunities that contribute to successful operations and increased revenues.
• Testing products, identifying the customer base, purchasing opportunities and assessing competitors is primarily part of marketing research, but are also covered in this lesson.

There are two main types of market research:

• Primary research: data obtained from a primary source, the information is gathered by the researcher. This may include analysing our own sales data, reviewing our website statistics, organising interviews, focus group surveys, where we gather information directly from our target audience on a specific issue (e.g. how satisfied they are with our product, its appearance, what improvement directions they suggest, etc.).
• Secondary research: we use data from secondary sources, previous research results. In this case we may use collected statistics, industry analysis, surveys published by others on the subject.

The market research process

The first and most important step is to formulate the question you want to answer, e.g:

• Is our target group satisfied with the product?
• What improvements would they be open to? What are their needs?
• Is the size of our target group large enough to generate the amount of revenue we expect?
• Is the pricing of our products appropriate?
• How well are we known in the market? How dominant is the competition?

Secondary research opportunities:

The advantage of secondary research is that there is a wealth of data available for free on the internet that can be easily used in your research. However, it is important to make sure that this information is up-to-date, that it comes from a reliable source and that we select the right data sets that are truly relevant to us.

Where to look for data?

• Online and offline journals and magazines,
• Online and offline textbooks and studies
• National level statistics,
• Statistical publications,
• Results of public market research carried out by other research institutions.

In addition to the information published by national statistical offices and service providers, the Eurostat database, which provides data on EU countries, is useful. It can be used to examine the consumption habits of each age group, their presence on the Internet, consumption trends and the popularity of products. The availability of the database can be found among the useful resources.

To process and visualise the data collected, it is useful to create a simple MS Excel database, where the information can be summarised and coloured with charts and graphs.

Primary research opportunities:

Competitiveness analysis:

It is worthwhile to formulate what is the added value that we can convey to our customers, how we differ from our competitors. This is where a competitor survey and analysis can help. If you cannot find competitors in the market, your idea may be completely unique, but it is also possible that there is no demand for it.

The internet can help us to easily identify our competitors, it is worth looking at their websites, the products/services they offer, their social media platforms and their business model.

Interview/focus group survey

You can also gather information directly from your own customers through one-on-one interviews or focus group interviews (interviewing 3-5 people at a time). We can get many useful ideas from these interviews in response to a question we ask. For the sake of simplicity, we can also ask customers entering the shop, or people visiting our stand at a trade fair, or we can ask for feedback along a specific question in the case of online sales.

Online questionnaire

Thanks to the active use of social media, it is easy to contact potential customers and find out what they think by means of an online questionnaire. It’s important not to ask too many questions at once, but rather to focus on only 1 or 2 problems. A shorter set of questions will be more likely to be filled in. The online questionnaire can also be a simple way to find out about the current awareness of your product/service. The easiest way is to use Google’s questionnaire, but there are many other platforms for creating such content for free.

Market research for product development

If you have several ideas for product development, it’s worth listing them and even using an online poll to target your audience through your social media platform.

Pre – order promotion

You can organise a pre-order campaign to test a new product /service. We present the product/service and pre-order it at a significantly discounted price. If there are few inquiries, it is worth rethinking the specifications and justification of the product/service.

Facebook groups, online forums

By accessing groups that are relevant to us on social media platforms and registering on online forums, we can easily reach our target audience and access a wealth of relevant information. As an active member, we can also ask questions and find out the opinions of our potential customers about our product/service.

If you want to increase the number of people taking part in our surveys, you should hold a prize draw to win one of our products or services, or even a discount.

A questionnaire can be easily prepared and delivered to the target group.

How to build a good questionnaire?

1. Formulate your questions! What do we want to know?
2. Choose questions that are really relevant so that your questionnaire is not too long!
3. Always be precise in your wording so that the question is not misunderstood!
4. Test the questionnaire after editing! Ask an acquaintance or friend who you do not work with directly to help you check it. When using an online questionnaire, it is also worth testing the functionality. If necessary, modify the original questions.

When preparing the questionnaire, it is important to capture the interest of the respondent, so be sure to include an introduction explaining what the purpose is and why it is important to us, so that they can identify with it more easily. You can also vary the way you answer the question, not all of them should be explanatory, you can choose from a list, tick more than one answer, answer yes or no, etc.

Make sure that a good questionnaire, in addition to the above, is not overly complicated or time-consuming to process. In any case, it should contain feedback that can be used for comparison, even for statistical purposes. In addition to anonymity, it is important to ask respondents for basic demographic information (gender, age, even by age group, type of residence – settlement, etc.).

Analysis and evaluation of collected data

There are three steps we need to take when analysing the results:

• Organizing and grouping the collected data,
• Selection of redundant data – we first review the secondary and then the primary research and remove the irrelevant information from the sample,

Processing: we can perform a content analysis on the qualitative data, after reviewing the answers must be compared objectively. Quantitative data can be analysed using a computer to create diagrams.