Market research techniques

Networking and Events

Attending events is a great way to meet people in the same position as you, while also an opportunity to undertake some free market research by talking to potential consumers, competitors and industry leaders.

Building networks with other businesses in the same industry or with complimentary businesses can help make sure you are up to date with new techniques or regulatory changes to your sector.

Speaking to friends, colleagues or peers

Seek honest views and constructive criticism of your business idea and how your business can do better. It's important to note that friends and family can offer biased opinions.

Secondary research or desk research

While carrying out your own research that is specifically related to your business is a must, there is also plenty of research already in existence. Take a look online, at libraries or in government data for consumer data on your specific sector.

Focus Groups

A focus group is about organising discussions with potential customers to get detailed opinions about your business idea, product or service.

The groups are usually made up of 310 people and ideally should be led by an independent moderator. Bear in mind you may need pay attendees or offer an incentive.

A structured set of objectives is important to getting the most out of a focus group session.

How do I know who my competitors are?

Research doesn't end with looking at your customers, it is important to see where you business falls among its competitors. You need to establish how competitive you are, who the market leader is and whether your product or service differs to similar companies. Depending on your business finding out who your competitors are may be as simple as searching the local area for potential rivals, or searching online for similar products or services - remember in an increasingly global consumer world you may be competing with business from across the world.

When looking into competition, you can break down your competitors into two sections, direct competitors and indirect competitors.

What is direct competition?

Any business offering a similar service or product to you. For example, if your business is a coffee shop, direct competitors are other coffee shops. Think about how your business matches up in terms of price and customer experience.

What is indirect competition?

Any business selling substitute or alternative products that are aimed at the same client base. For example, if your business is a coffee shop, indirect competitors are other business places supplying food or drink such as pubs.

What do I look for in relation to competitors?

When evaluating your research in relation to your competitors, there are three essential areas you need to consider.

Price - Is there another business offering the same product at lower prices?

Quality - What can competitors offer their customers for the same price as your product or service? How similar or different is this to what you offer?

Location - Where are other competitors based? Do they have the same customer footfall as you? With the rise of online shopping and international exportation, you can't afford to only research similar products and services offered in your local area - location doesn't always rule them out as a competitor.

What is a SWOT analysis?

If you've never heard of a SWOT analysis there's no need to worry. It's business jargon for a simple way to identify your business' strengths and weaknesses, as well as the opportunities your business could face.

Strengths and weaknesses are internal capabilities. Look at where you are succeeding and doing well, against where you can improve. This should be an ongoing process whereby you evaluate your positives and negatives in order to move your business forward.

Opportunities and threats are external factors that may arise. In order to maximise opportunity you must evaluate the threats associated. SWOT analysis helps to compare and contrast both opportunities and threats in conjunction.

If after completing your market research you decide that your business needs funding, why not begin your Start Up Loan application today.