Chapter 2 - Find the Target Market

So you've decided on setting up a business for yourself and now you want to seriously begin the legwork into making it a success. In this post you are going to be introduced to the concept of market research and the importance it will play in identifying opportunities. Additionally, the benefits of conducting thorough research will be highlighted before you dive into your new venture.

Understanding Market Research for your Target market

We've all heard about it, but what does market research actually involve? Basically, it is the systematic gathering, analysis, and interpretation of information about a market. In this case the market that you are entering into. You will need to cover research about the following:-

• the target audience, perhaps even the demographics of a particular area for non-online businesses

• competitors in the same market

• the overall industry landscape,

  • what are major competitors doing, and

  • how are they doing it.

The goal is to understand customer needs and market trends, this should enable you to make informed decisions about your business. Market research is a critical component of a marketing strategy for any new business. There are two types of research, Primary and Secondary Research.

Primary Research

Primary research is new research you conduct yourself and data is collected right from the source, which is often consumers.

There are a number of different ways to conduct this research. for example Surveys, Questionnaires, Focus Groups or Observations.

You could design a brief questionnaire and conduct a survey. Whilst the survey would be relatively easy, depending on how many responses you get, the analysis could be quite cumbersome and tricky. If this sounds daunting to you, you could use market research services or tools to gather insights on your behalf. You will have seen market researchers in the High Street with a clipboard asking passers-by questions.

Advantages of conducting primary research are that it is specific to your business and so it is relevant and up to date. Disadvantages are that is can be time consuming, expensive and difficult to collect.

Secondary Research

For secondary market research you use insights conducted by others, like governments. For instance, demographics would be available from a secondary source.

Sitting down at your computer and conducting internet research includes data taken from competitors’ websites, newspaper articles and social media. This provides a business with an overview of information relating to its industry and the types of products and services other businesses offer.

Look for market reports which are industry specific. They may give specific information about an industry as a whole. An example of information that could be found in a market report would be ‘40 per cent of households have a dog or cat and visit a pet shop at least once a week’. This could help a business assess the size of the market in pet-related goods.

Government reports are also a very good source and consists of more general information that is not usually industry specific but can still be useful for a business. For example, ‘25 per cent of the population is now aged 60 or above, are retired from their previous occupation and would consider working part time to keep active and occupy their time'. A business may use this information to decide what flexibility to offer potential employees, who its target market will be or what kinds of products to develop.

Advantages of using secondary research include the fact that it is relatively easy to collect and analyse. Sometimes it can be industry specific but generally is not specific to your business, one of the disadvantages, additionally, it could be out of date.

Reducing risk

Market research is a great way of informing decisions about what to invest your hard-earned money in. By setting up a business, you are facing risking your own money. You will be able to reduce this risk considerably by using market research.

Informed Decision-Making

Market research will enable you to find out information, such as:

• what customers want

• what needs aren’t currently being met

• how much competition there will be

• what target market the business should aim at

• how much the business should charge for its product or service

Many businesses fail within the first year because they have neglected this information, either by not collecting it and analysing it, or by ignoring it.

Your market research will help you make better business decisions. Don't assume you know everything you need to know, collect the information to back up your understanding of customer needs, but remain unbiased, its very easy to get caught up with your enthusiasm.

For instance, you may be undecided whether to run your business online or from a premises. Before you decide you should find out whether customers will respond positively to either option. By doing this, you will know which option is likely to be a success.

Making informed decisions gives a business a higher chance of being successful. This is a theme throughout these guides.

the Lead Coach can support you throughout this process.

Chapter 1 - A Business Idea - Lets Make it Happen

Chapter 2 - Target Your Market

Chapter 3   - Land Your Brand

Chapter 4   - The Price is Right

Chapter 5   - Lets Get Down to Business

Chapter 6   - Its All in the Name

Chapter 7   - Location Location Location

Chapter 8   - Financing your New Business

Chapter 9 - Recruitment

Chapter 10 - Law and Taxes: Play it Smart, Stay Sharp

Chapter 11 - Kick off Your Business with a Bang

Chapter 12 - Financial Review for your Small Business

And there's more to follow

Look out for further chapters to get your business up and running.

the Lead Coach is always available to help you just get in touch via the contact form on the website www.theleadcoach.biz