Market research assists your business in acquiring customers. Competitor research enables you to make your brand distinctive. Combining both will provide your small business with a competitive edge.
The more you spend in an industry, the more you realize that the more you know, the better you perform. Certainly, knowledge yields and wields power. For businesses, this typically involves determining to whom and how they can satisfy demand, as well as the competition they may face. This summarizes market research and competitor research.
What then is market research?
Market research is the collection of information about consumers, including their wants and needs. This approach frequently involves both primary and secondary sources of information. The prices associated with each of these data kinds vary substantially based on several variables, including a business’ size, resources, products, and total client base (among others). Despite this, it has been unanimously agreed upon that businesses that follow current market actions and trends (regardless of their budget) consistently beat those that don’t.
Consequently, whether you utilize syndicated industry reports, official statistics and trade publications, or run your own focus groups and distribute your own surveys, market research gives you an advantage in your market niche.
There are numerous ways to perform market research and acquire customer information. However, you are not limited to a single research strategy. Surveys, interviews, focus groups, and customer observation are four prevalent types of market research approaches. Let’s have an overview of each.
Four types of market research
I. Surveys: Surveys are a type of qualitative study that consists of a short sequence of open-ended or closed-ended questions delivered to respondents via an on-screen questionnaire or by email.
Why are online surveys so prevalent? They are simple and affordable to conduct, and they allow for rapid data collection. In addition, the data is rather simple to evaluate, especially when analyzing answers to open-ended questions that may initially appear tough to categorize.
II. Interviews: Conversations with people in your target market are interviews. If you get it right, nothing beats a face-to-face interview for delving deep (and reading non-verbal clues), but if that’s not possible, video conferencing is a good alternative.
No matter how you conduct it, any form of an in-depth interview will yield substantial insights into your target clients.
Why are interviews so enlightening?
By chatting directly with an ideal client, you will obtain a deeper understanding of their experience and be able to follow illuminating threads that can lead to numerous “I see!” moments.
III. Focus groups: Focus groups put together a carefully selected group of individuals who are representative of a business’ target market. A skilled moderator facilitates a discussion regarding the product, user experience, and/or marketing message in order to acquire a greater understanding.
What is dangerous about focus groups?
If you are new to market research, you may want to proceed with caution while using this strategy. Because the moderator you choose can make or break the entire study procedure. Two of the various ways your focus group data could be distorted are dominance bias (when a dominant participant influences the group) and moderator style bias (when various moderator personalities produce different results in the same study).
IV. Observation: During a customer observation session, a business representative observes an ideal user interacting with their product while taking notes (or a similar product from a competitor).
What makes observation so intelligent and effective?
Observation is an excellent substitute for focus groups. Not only is it less expensive, but it also allows you to observe people interacting with your product in a natural environment without affecting one another. However, observation is not a substitute for customer surveys and interviews because it is impossible to know what is going on inside their minds.
Locate customers with market research
Consumer behavior and economic trends are used in market research to confirm and enhance your business concept.
Understanding your consumer base from the outset is vital. Market research allows you to lessen risks even when your firm is simply an idea.
Collect demographic data to better comprehend client acquisition prospects and restrictions. This could contain demographic information regarding age, money, family, and interests, as well as anything else pertinent to your business.
Then, respond to the following questions to gain an understanding of your market:
- Demand: Does your product or service meet a need?
- Market size: How many individuals would be interested in your product or service?
- Economic Indicators: What are your customers’ income range and employment rate?
- Location: Where do your clients reside and how far can your business reach?
- Market saturation: How many similar offerings do consumers already have?
- Price: What do prospective buyers pay for these alternatives?
You should also be aware of the most recent trends in your market niche. It is essential to understand the exact market share that will influence your profitability.
You can conduct market research utilizing existing sources (secondary research), or you can conduct your own study directly with customers (primary research).
Secondary sources can save you a great deal of time and effort, but the material may not be as relevant to your target audience as you would like. You can use them to answer general and measurable inquiries, such as industry trends, demographics, and household incomes.
Alternatively, you can gain a nuanced insight into your specific target population by directly questioning consumers. Nonetheless, it can be time-consuming and costly. Use it to answer questions about your particular business or clients, such as reactions to your logo, the effects of your advertising campaigns on your brand, how you may improve the buying experience, and where they would go instead of your firm.
What is competitor research?
Market research and competitor research are not that dissimilar. In actuality, the latter (competitive research) is merely a subset of the former (market research).
As previously stated, comprehensive market research includes discovering what consumers want and who already offers it to them. This is because when you understand what people want and the value they are getting, you are in a better position to identify your own unique position to leverage. This distinguishes you from everyone else.
A good survey will help you identify opportunities and dangers to your present and new products, as well as provide historical data that can be utilized to predict prospects, offerings, and competing threats. Thus, by utilizing market research to illuminate your existing and potential competitors, you uncover what consumers like and dislike about them, allowing you to carve out your own specialized market niche.
Taking the above reasoning into account, it answers the question, “Is competitor research part of market research?” The answer is affirmative.
Employ competitor research to identify a market advantage
Competitor research enables you to gain insights from organizations vying for your prospective clients. This is essential for defining a competitive advantage that generates recurring revenue.
Your competitive study should identify your competitors by product or service line and market segment. Assess the following competitive landscape characteristics:
- Market share.
- Strengths and weaknesses.
- Your market entry window of opportunity.
- The significance of your target market to your rivals.
- Any obstacles that may impede your market entry.
- Indirect or secondary rivals who may affect your success.
Multiple industries may serve your market. It’s, therefore, crucial to consider competition level, the threat of new rivals or services, and suppliers’ and customers’ price impacts.
What makes this a competitive advantage?
When utilized to estimate future demand, market research — and competitor research in particular — can assist a company to shape its influence and position in the market. Consider: if market research reveals that customers respond positively to a competitor’s pricing but frequently criticize its customer service, you have the chance to adjust your pricing and service standards accordingly. And if your competitors do not follow suit, you are in a position to challenge and possibly surpass your present market share.
Want to learn more about market and competitor research in Africa?
The combination of market and competitor research gives businesses a competitive advantage. If you own a business in Africa and need help getting customer data, contact our team at Survey54. We do competitor analysis to boost your ROI and keep you ahead in the African market.