More often than not, the most stupid thing a business owner will do is not research their market. Nevertheless, market research should never be forgotten about, particularly for those about to start their own business. Industry developments and trends constantly change and the only way to keep on top of them is to do your research.
You wouldn’t buy a house or a car without researching your choices first, would you? Setting up and running a business is no different, don’t commit to something unless you’re prepared first.
Market research creates a solid foundation for a business to thrive and succeed. Pinpointing who your key rivals are, your target audience and uncovering gaps in the consumer market will give your business, especially your digital marketing a significant edge over your competitors to help keep you at the forefront of the industry.
Still thinking of skipping market research? Here are 3 potential things that could happen to you and your business if you do:
- You could be developing a good or service that is becoming obsolete.
This isn’t necessarily a bad thing, provided you have ideas and ways to revamp the product to re-interest past customers. However, it can be notoriously hard to rejuvenate a dying market which is why successful companies have turned their attention to other areas, for example, IBM adapting itself away from its dying hardware offering into new and current software offerings such as AI and cloud.
Therefore, it’s a good idea to research your market to avoid finding yourself in this position where you only have a matter of time before your product becomes irrelevant and are struggling to make ends meet.
- You find yourself in a crowded or mature market with several strong competitors.
A little friendly competition can be good for any business, however, landing in an over-populated market can make it very difficult for you to find success.
From the get-go, you may find yourself several metres behind the pack, as your competitors will have already established themselves with their customers (brand awareness). Other issues such as economies of scale or high barriers to entry can make it hard for small businesses to succeed in this type of market, particularly if it is a monopolistic/oligopolistic market (a market heavily dominated by one or a few companies).
Therefore, it’s worth redefining your USP (unique selling proposition) to help you stand out from the market should you choose to remain in the market. On the other hand, if there are too many players in the market and not enough gains (return on investment) then it may be time to rethink your business venture.
- You could be creating a product where there is no product/market fit.
Most people will say that this is the dreaded nightmare of any entrepreneur. A ‘product or market fit’ means being in a good market with a product that can satisfy that market. Without a product/market fit there will be a lack of sales opportunities for your product to really grow and become successful.
If you find yourself in this position, it's important to continuously test product/market fit theories with MVPs (minimum viable products) to avoid wasting money on a product with little or no short life expectancy. Our tip is to use tools such as Google Trends or SEM rush to stay on top of new, emerging customer trends.
Hopefully, we have convinced you of the importance of market research and steered you away from the potential business pitfalls helping your business to be one step ahead of your competition.