It takes a lot to bring a business idea to life, and one of them is conducting adequate and thorough market research beforehand. We may not realise it, but launching a service or product without first determining the target market is akin to digging your own grave. So, before we dream of taking our business to new heights, we must first understand the art and science of market research and its significance. With the same intent, in this article, we explain why market research is an essential tonic for startups and what can be the right way for accessing market research on a budget.
Why market research is an absolute essential for startups?
Why should startups conduct market research before launching a new venture? The answer is that market research helps define the purpose of the business, analysing competitors and potential markets, and most importantly, learn about potential customers and the needs of the target audience. Market research for startups includes studying potential & emerging markets, learning about competitors with similar products or services, investigating the prices and marketing methods of others, and gathering information about prospects.
And it’s not enough to conduct one-time market research, in a brutal competitive world with new entrants posing a threat everywhere, the heat of fierce competition is constant. To survive this competitive environment that includes both traditional and online businesses, startups must keep a consistent eye on the markets, competition, and prospects and hence the need for a continuous stream of relevant and credible market research.
Mostly startups follow one of 2 ways of sourcing market research. Either they conduct research in-house which requires solid investment in terms of budget, time and resources including setting up a team, purchasing the necessary tools and conducting the research. On the other hand outsourcing market research to 3rd party market research providers and subscribing to market research subscriptions like MarketNgage can be very cost effective and efficient with desired results, providing needed data quickly, and can be conducted on a large scale.
However, in either of these 2 processes, there could be certain hiccups and it’s important to maneuver their way through it.
Challenges that startups could face – Financing market research
One of the most difficult challenges that startups face today is financial management. It is true that small businesses rely heavily on financial backing from investors. In such a situation where the organization should be extremely lean, the best way to source cost effective market research is to subscribe to a market research platform which provides credible starting intelligence on their chosen markets, competition, pricing strategy, prospects, consumer behaviour.
Hiring Qualified Candidates
Most global enterprises struggle with finding the right candidates to build an in-house research team, for startups this is a significant challenge. A key reason for this talent crunch is the fact that people who want to pursue market research as their passion and profession will join the top market research & consulting companies. It is highly recommended that start-ups outsource market research to 3rd party market research firms with in-house marketing teams managing the process. Most enterprises follow 2 models here – project based and managed services. The project based model is where 3rd party firms are hired for a particular research project, whereas the managed services model is where there is a partnership between an enterprise and 3rd party research firms to provide a continuous stream of research and consulting services. For a startup, a project based model is best to begin with, though, a managed services model is more cost effective long term.
Committing consistent time and effort
For startups, organizational processes can be adhoc which means even though you have hired your own market research team, they may be pulled in different directions when business priorities change. This will result in an inconsistent focus on market research which can prove to be unfavourable for a startup business.
How flexible market research subscriptions can empower startups
How does a start-up become valuable – it is through recurring sales and revenues and that does not come in a day. It requires extreme focus, continued efforts with no room for avoidable mistakes. It requires constant innovation of your products, your business model and the way you connect with your consumers. But first and foremost it’s important to understand the ‘Why’, the ‘How’ and the ‘What’. And that comes from in-depth study of your markets, your competition and your potential buyers. Most of the startups typically turn to market research for the following, which enables them charter a start, structure & scale model!
Determining new business opportunities
Determine nascent product profitability
Find extensive and up-to-date competitive, market, and customer intelligence
Price points of competitor products & services
Key differentiators of competitors to help benchmark themselves
Validate market trends
Gain insights about customers and their needs
Through the right market research subscription model, which is just a one-time investment, a startup can get answers and real time intelligence to the above points with an extensive access to the entire research library of reports across all geographies, countries, niche and leading product segments. Additionally, some subscription services also offer multi-format research which means you don’t have to purchase the full report, but you have the flexibility of purchasing downloadable, presentation-ready infographics, charts, graphs, dashboards, databooks as per your business needs.
Through market research subscriptions, startups can access research on-demand which means paying only for the relevant insights they need through flexi pricing models. Many market research subscriptions such as MarketNgage also offers renting as a pricing model, which saves up to 60% on research costs as opposed to when you buy a report.
Startups make wise decisions with market research
To conclude, market research is a business strategy used at the outset of business idea conceptualization that entails thorough understanding the target market, its dynamics, potential customers' attitudes, buying behaviour of focus groups, and other factors. Market research findings are used to make extremely critical business-focused decisions and to plan launch accordingly. Market research has the potential to boost a startup's success if done and implemented with care.