It is important that you develop the discipline of researching your market, to avoid being a part of the statistics of small businesses failing in their first 5 years. Market research is the process where you validate the demand for your idea or product, visualize your competitive landscape, and establish strategies for your business that will be the foundation of your decisions. Market research methods range from studies such as focus groups and interviews, to customer surveys and analysis of secondary data.
This article will give you a short guide to accessible tools that you can use to understand the demand, behavior and catalysts of your potential or existing market. Dare to stop for a moment and take a few minutes to give your business idea a foundation. If not, there’s a likelihood you’ll be operating without any strategic sense.
Validate an Idea or Product: It is important because it will help you to have an idea of the market or the absence of a market for your business before spending time and money. Likewise, you can study the existence and opportunities that are in niches within your potential market. Here are some accessible tools that Google offers to use as part of your market analysis.
1. Google Trends. In this web page you can search key words to see the popular trends by geographical area during a period of time. You can compare different words related to your business idea to study the popularity of their search on Google. The following example compares the behavior of the popularity of tea and coffee from the year 2006 to 2017 in Puerto Rico. Within the results, you will find that it shows the popularity according to the town/city and the most searched terms:
Note: This tool can also be used to study the popularity of a product in other countries to which you wish to expand. Also remember to validate the context of popularity to ensure that the data is relevant to your business idea. For example, you can see the word ‘tea’ in the term ‘boston tea party’.
2. Google Correlate. This tool is an extension of Google Trends and seeks to show which search terms have a dependent relationship to your word of interest. In this example I use the term ‘coffee’ in the country of Colombia. The list that appears are the terms that turned out to have a dependent relationship to the search for ‘coffee’ in Google. Coffee is related to the search for the term ‘newspaper’ and ‘eggs’, among others. This tool can give you a look at interests related to your main product and ideas that you can add to your offer.
3. Google Adword – This tool allows you to make some test ads with a reasonable budget. You can make several different product advertisements with different styles to the same audience in order to see how the demand reacts and/or what your customers are looking for.
4. Google Forms & Google Survey – A tool that offers users the capability to capture a large audience to complete surveys. This option is very useful for studying a considerable group of people within a particular market.
Competitive Panorama: Once you validate the existence of demand for your business idea, you can continue to study the competition. Continuing with the product of the tea in Puerto Rico, you can evaluate in your search those places with greater rating, read customer reviews to find areas of opportunity and understand their expectations.
1. Google Search – You can search on Google to examine the first places in the results of your search.
2. Social Networks – Analyze the number of followers and your competitor’s strategies that appear successful in social media.
Formulation of Strategies: Once you have the right picture of your market and your competition, you can begin to establish strategies to penetrate your offer:
- Develop new uses or innovate the product / service
- Offer incentives / differentiation for choosing your product / service
- Attract customers from your competitors
- Attract non-users (create demand) for your offer
Continue to strengthen your life project through organization and planning. Researching your market in combination with other aspects such as managing your costs, determining an appropriate price and strategic planning, will help you establish a foundation to build your business.
Kerenny has worked in Puerto Rico’s Finance Industry during the past 5 years. She holds a BBA in Finance and a Master’s Degree in International Business from the Graduate School of Business at University of Puerto Rico. In addition, Kerenny holds a Registered Paraplanner (RP®) designation from the College of Financial Planning (CFFP).