Market Entry Research: How important is Market Research for Startups?
Conducting primary market entry research is among the most crucial components of starting a business in another country. You’ll never know what your potential clients want without proper market research. You may also not know what they’re willing to pay for and how to attract new customers. If you have no clue where to start, keep reading about different market research techniques and marketing strategies.
We will discuss the most popular research methods used in international market research. It is possible to conduct market research online and in person. Customers are often asked a small number of questions during this process. The type of survey research will depend on what information you want to gather from them. But they usually include things like:
- Their demographic information includes age, marital status, gender, educational qualifications, profession, etc.)
- How satisfied they are with your product/service.
- The likelihood of them recommending it to others etc.
You may also use customer surveys to find out more about your existing customers and customer segments.
What are the benefits of market research?
The marketing plan is incomplete without market research. It enables them to better grasp the potential markets, foreign markets, and price point appeal. It also helps in competitive analysis, understanding the market potential, behavioral data, market conditions, and the prospective desire for their product. Marketing research is essential in the marketing process. The data helps us determine whether our products, services, and campaigns are working or not.
What is the most effective reason to perform market research?
Every business should conduct market research as its first step. If you’re not aware of the term, it relates to the procedure of learning about your target audience. It can be their preferences and buying habits and/or market trends to help you decide what products or services to develop. Surveys, focus groups, interviews, online polls, etc., can be used to collect this information.
This blog will go over how to perform market research for your startup or foreign company. It can help you discover what people are looking for and understand the competitive landscape and where they might be going wrong.
How can you run market research quickly and effortlessly?
“How can they conduct market research quickly and cheaply?” This is one of the most common queries we receive from small businesses and startups. There are numerous market research strategies to choose from.
Some are cheaper than others, but each has its own than others. The effectiveness of some is better than that of others. But no one method is perfect for gathering market research.
Many entrepreneurs are having trouble finding the correct product-market fit. They’re trying out new products and services. However, they don’t know if their customers will love them or hate them. Suppose you have an idea that could be useful to your target audience. However, establishing whether or not there is a need for what you are performing may be challenging. Market research can assist you in figuring out who your target clients are.
It also helps you know how much value they place on what you offer and what makes them tick. This data can then be utilized to create goods depending on consumer preferences. The market research process is often referred to as ‘marketing,’ but more than marketing. It entails acquiring information about individuals and businesses to optimize your marketing initiatives optimally.
Attracting investors to the Emerging Markets
Potential markets and emerging markets are attracting the attention of international investors. These fastest-growing markets and nations have the sales potential to produce enormous profits. This can even outperform traditional markets. Investors would like to discover if the greatest and fastest-growing countries are worth investing in. This is where the latest market intelligence, operational tools, different segments, and qualitative research would come to aid them.
An excellent place to start with primary market research is by talking to your current customers or other direct contacts. Inquire about their opinions regarding your goods or services. Inquire about your support services, any additional expenses, and whatever they like and dislike about that.
Also, inquire about any additional items or services they would be willing to buy. Should the organization provide access to any pdf documents? Do they need external links to learn more about their product? This type of client feedback is priceless. It gives you an idea of what your buyers appreciate. It also tells you what problems they are having and what features you can add to improve your product.
You may also consider surveying people who aren’t your customers yet. For example, you are selling software. You could send emails to people who use similar software and ask them what they like and dislike. Or, you are selling insurance. You can contact people looking for health insurance and ask them what they are thinking about.
Cost-Effective Market Research Methods
You have a wide range of market research methodologies at your disposal. A few are more successful than others, while others cost less. So, which methods are most cost-effective? Let’s take a look.
Customer surveys are one of the most effective ways to get insight into what your customers think about your company’s products and services. This covers data from both quantitative as well as qualitative research. Quantitative data provides numeric answers to a set of questions. And qualitative research data gives you rich insights into why someone chose to buy something or not.
Surveys are perhaps the most valuable method of gathering market data. They’re simple and straightforward to set up. Moreover, they usually require minimal effort on your part. However, surveys are not very reliable. People tend to give answers they think are expected rather than giving honest responses. This can result in incorrect trade statistics and results.
In addition, surveys don’t always provide you with enough information about your target customers or capita income. You might be able to learn what types of products customers prefer. However, you won’t know why they like them or how they feel about them.
Surveys are also ineffective for learning about events that have previously occurred. For example, if someone has already used your commercial service or purchased something from you, it is unlikely that they will answer questions about their experience.
Interviews are another great way to gain insight into your customers. It involves asking your target audience a series of questions. These questions should help you learn more about your audience’s attitudes and opinions about your commercial service or products. These are usually conducted face-to-face, although phone interviews are becoming increasingly popular. The interviewer uses open-ended inquiries to get information from individuals. For example, you might ask:
- What was your biggest challenge when buying our commercial service or product?
- What prompted you to purchase our service or product?
- Who else uses our product?
When organizing focus groups, interviews are commonly used. They are much costlier than interviews, but they are more beneficial.
Another technique to get feedback from your clients is to hold focus groups. It lets you converse with numerous people at the same time. This makes getting a diversity of viewpoints on an issue easy. And since people tend to agree more with other people who share their views, this helps you get a better idea of what your audience thinks.
Focus groups are indeed useful since they enable you to test ideas before putting them into action. For example, an idea seems popular among participants. To put it to the test in real life, you don’t need to invest a lot of time or money. Focus groups, on the other hand, necessitate a significant amount of effort.
You must plan ahead to ensure that everybody gets along. You must determine whether to conduct a group discussion or individual interviews early on. Then, you need to prepare all the materials needed to run the session. Finally, you must record the sessions so that you may subsequently examine them.
You can ask these people things such as:
- Would you mind sharing any likes or dislikes you had about our product?
- How would you rate our customer support?
- Why didn’t you purchase our product?
The last type of market research technique we will discuss here is observation. Observation is probably the least common form of primary market research. However, it is still valuable. In fact, it is sometimes the most effective method of conducting market research.
When you observe your customers, you gain insight into their behavior and valuable strategic behavioral data. This data can be utilized to improve your service or product. For example, you might notice that people tend to buy specific items after watching ads for those items. This means that you can create an ad campaign or marketing campaign specifically designed to encourage purchases. Or, you might see that people only purchase particular brands of soaps. This tells you that you should offer discounts on these brands.
Qualitative research observations can also be used to identify what things or solutions your clients prefer. For example, from different segments, you notice that most of your customers are women over 30 years old. Then you can design your marketing strategy around catering to this demographic or as per the trade statistics. You can even use observations to find out which parts of your website visitors spend the most time looking at. This will allow you to optimize the layout of your site.
Using observations does, however, have significant disadvantages. For starters, you can’t ask plenty of questions carried out using different ways. Next, you can’t do any follow-up studies. But, these disadvantages don’t mean that observations are useless. They just mean that you shouldn’t rely on them exclusively. Instead, combine them with other types of market research and market segmentation.
Market and qualitative research can both benefit from online surveys. It can be used to conduct client surveys or get opinions on new products or services. The anonymity of online questionnaires is a benefit. As a result, they outperform traditional face-to-face talks. However, they also have disadvantages like low response rates. This is because people do not want to share personal details on various internet sites.
Online surveys are divided into two main categories. Open-ended and closed-ended surveys. Respondents can enter their personal responses into open-ended polls. Closed-ended questions require them to select from a list of pre-defined options or choose from a drop-down menu.
Open-ended surveys are more qualitative than closed-ended surveys. They encourage free-flowing conversations between you and your audience. They also give you more flexibility when analyzing data. This is because there is no set number of possible answers for respondents to pick from.
Closed-ended surveys can provide more accurate estimates of the number and distribution of species in a given area. The results of closed-ended surveys are less likely to be biased by changes in land use than open-ended ones. This is because they measure the actual presence or absence of species at a particular location. However, closed-ended surveys may not detect rare species that infrequently occur within their study sites.
Semi-Closed Ended Surveys
In addition to these two types of survey methods, there is also an intermediate type known as semi-closed-ended surveys. Semi-closed-ended surveys are a hybrid between closed and open-ended surveys. There are some characteristics of both closed and open-ended surveys. They are not, however, fully closed or open-ended. For research purposes, the semi-closed-ended survey approach has been utilized in the past.
However, it is now mainly used by marketing companies. It can be used to find out what people think about your product/service without having them tell you directly. For example, you wanted to know how well a new toy was sold. You may ask people on the street or in shops and see how many they have sold.
Startup Market Research – Help to Test Your Ideas
Startup market research will help you test your ideas and get feedback from the right people. The startup world is full of brilliant, innovative entrepreneurs. They have built successful companies changing their industries. However, determining whether or not those concepts will work in practice is difficult.
Here comes the role of market research. Market research helps startups understand what customers want and how they behave. It also gives them a chance to see if there’s demand for their products or services. Finally, it provides ideas on which markets are ripe for growth.
But the process of conducting market research can be expensive and time-consuming. As a result, startups are frequently forced to make hard choices. For, e.g., Would it make sense to invest in market research at all? Market research is really a good idea, even when it seems like you don’t need to.
How does market segmentation work?
Segmentation is the process of dividing your market into small areas that may be targeted. The process of dividing a market into different divisions is known as market segmentation. It might focus on demographics, goals, targets, common interests, and other psychographic or behavioral qualities that assist the target audience in embracing you.
Market Segmentation Advantages
You may use this targeting in products, promotions, and business strategies if you know your target markets. Market segmentation might help you speed up product development by directing how you build product offers for different groups. For, e.g., male vs. female or high vs. low income.
Companies that divide their markets correctly get enormous benefits. As per a Bain & Company survey, 81 percent of executives believe segmentation is crucial for revenue growth. Over a five-year period, Bain discovered that firms with excellent market segmentation strategies profited 10% more than those with less efficient segmentation.
Other advantages include
Stronger Marketing Messages: You don’t have to be general or ambiguous anymore. You can talk directly to a specific set of individuals in ways that they understand. It is because you know their qualities, goals, and requirements. Follow the effective content marketing strategy and the best content marketing tools for guidance.
Digital advertising with a specific audience: Market segmentation allows organizations to discover and describe their target audience’s attributes. It enables you to target specific demographics such as age, location, purchasing habits, and hobbies with your marketing efforts.
Creating an efficient marketing strategy entails the following steps: Knowing who your target audience is will offer you an advantage. It helps in determining which strategies, tactics, and solutions they will respond to the most.
Better response rates and reduced acquisition costs: This will leverage your segmentation to create your marketing communications in ad messages and sophisticated targeting on social networking platforms such as Facebook and Google.
Getting the proper customers to come in: People who want to buy from you respond to focused, clear, and direct marketing.
Increase brand loyalty: Clients are more likely to continue with their brand if they feel appreciated, well-served, and trusted.
Make your brand stand out from the crowd: Your brand will stand out if you use more particular, personal messages.
Identifying niche markets: Segmentation may reveal not just untapped areas. It may reveal new methods to service current consumers. Also, the possibilities for your brand to develop.
Staying on message: Segmentation is so straightforward. Hence, it’s simple to keep on point with your marketing strategy and avoid getting sidetracked.
Boosting growth: Customers might be enticed to buy from you again or upgrade from a lower-cost service or product.
Profits are up: Consumers’ spending power varies. Thus pricing can be established based on how much money they are interested in spending. Knowing this will help you avoid overselling (or underselling) yourself.
Product Development: You may be able to design it with your customers’ desires in mind. It helps to create multiple items that appeal to different parts of your client base.
Organizations such as American Express, Mercedes Benz, and Best Buy have employed segmentation tactics to boost sales, develop better goods, and communicate more effectively with their prospects and consumers.
Market segmentation types
When it comes to segmentation and targeting, you want to know how your market would react in a specific circumstance, such as buying your items. A prediction model can be used in research in a variety of situations. You may now divide people into groups based on their responses to survey questions.
Segmentation by demographics
Demographic segmentation takes into account criteria such as age, educational qualification, earnings, family size, ethnicity, gender, profession, and country. Because demographic characteristics influence the services/products we acquire, how we use them, as well as how much we are ready to spend. One of the most important and widely used types of segmentation is demographic segmentation.
Segmentation by location
Geographic segmentation is a component of demographic segmentation. It may, however, stand-alone as a type of segmentation. It divides customers into separate target groups based on their location. Identifying the temperature and geographic regions of a customer base may assist in identifying where to sell and promote, as well as where to develop your business. Because potential customers’ demands, preferences, and interests fluctuate depending on where they live.
Segmentation by Firmographics
Firmographic segmentation is comparable to demographic segmentation, with the exception that demographics focus on individuals whereas firmographics focus on businesses. Firmographic segmentation will consider the effects of things like the size of the company and the number of employees. It would then demonstrate how communicating with a small business varies from communicating with a major enterprise.
Segmentation based on behavior
In behavioral segmentation, people are classified according to their actions. Markets are segmented based on consumer behavior and choice patterns, including purchasing, utilization, style of living, and use. Younger clients, for example, may appreciate packaged body wash. However, elderly people, on the other hand, favor soap bars.
Marketers may establish a more focused strategy by segmenting audiences based on purchasing behaviors since they can concentrate on what they know people want and are more likely to acquire.
Segmentation by psychographics
Psychographic segmentation considers the psychological components of consumer behavior by segmenting markets based on consumer lifestyles, personality traits, beliefs, views, and interests. Psychographic segmentation is used by major markets, such as the fitness sector, to categorize their clientele into the sort of individuals who are concerned about healthy lifestyles and training.
Strategy for market segmentation
Why is market segmentation seen as a strategy? A strategy is a well-thought-out method that gets you from point A to B in the most effective manner possible. Market segmentation is identical in that you will need to evaluate your market segments from period to period. For example:
In times of fast change: The Covid19 pandemic, for example, pushed many firms to reconsider how they market to clients. Restaurant owners contemplated collecting, while companies with physical locations investigated online ordering. If your consumers change, so must your market segmentation so that you know precisely what your prospective clients require and desire from you.
On an annual basis: Market segments can shift from year to year as consumers’ conduct and actions are driven by various influences.
What do market segments entail?
The market segment is a collection of people who have at least one thing in common. Organizations and marketing departments build target audiences for their brands and products using a variety of factors.
Successful export Planning
Good market entry research is essential for successful export planning. Whether you are a major corporation or a small business planning to enter key markets or fastest-growing markets, effective export planning is critical. Many factors must be examined before entering foreign markets, along with legal forms that business organizations may assume in foreign nations. The method of developing plans for acquiring access to overseas markets is known as export planning. Having a customized export plan will help your sales and distribution channels too.
How can Market Research Analysts help you?
Many international market research entrance tactics aim to gain a footing in the largest markets or target market and then control as much of it as feasible. Market research analysts are an excellent resource for organizations wanting to break into new foreign markets or potential markets or enhance their position in existing ones.
Market research analysts are known for their expertise in the latest market intelligence, primary market research, secondary market research, data analysis of market conditions, and legitimate reasons. Also, the more data you possess, the greater knowledge of your consumers you’ll get, which implies you will be able to make good judgments when creating marketing campaigns, advertising methods, and product offers.
Market research analysts can assist you in developing a creative new strategy or improving one that already exists. Many areas of the planning process are within their control, including performing research (survey formulation and analysis), product design and implementation, and marketing strategy preparation.
It is critical to undertake considerable research prior to entering the market. To perform market research for the company, you’ll need both money and time. As a matter of fact, it’s vital to make sure the information you’ve obtained can be put to good use in your business. It is difficult to enter the business realm without first learning a lot about your company’s specialization and the industry you are entering. And that is where research comes in helpful since if you don’t do it, you will set yourself up for failure.
Market analysis for startup companies must always be backed up by solid, reliable data that truly reflects the actual world rather than somebody’s fantasy. Any potential investor will surely want to know where the data came from.
Like any scenario, it’s all about your business and your goals. The variety and quality of market research you perform have a direct impact on your success. Eighty-five percent of venture-backed firms fail due to a lack of market research, either in quantity or quality. You can get insight through studying other people’s blunders.
If you undertake detailed market research before starting your company, you may save time and expenses, avoid typical traps, and make better marketing decisions. In reality, huge firms like Facebook and Google perform frequent market research when attempting to enter new geographic regions or hitting a new target demographic, so it is not just clever startups who realize the value of market research.
There may be unforeseen surprises on the path to starting a business. Great analysis, on the other hand, can aid you in anticipating and mitigating any obstacles that may hinder you from progressing to the next level.
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