Successful startups have vast knowledge of their market, consumers and competitors. Market research is a process of gathering information that will help you better understand how to sell and whom to sell your product or service. You will gather information on your competitors, on the market you operate and on your potential customers. A market analysis will help you to make better decisions and will serve as a solid foundation for your business plan.
The initial market research can include
- Focus groups to receive direct feedback on the product
- Some important questions to include in the questionnaire:
- What is important to you when purchasing this product or service?
- What do you like or dislike about today’s existing products or services?
- What areas would you suggest for improvement?
- What is the right price for a product or service?
Secondary market research:
The purpose of the secondary market research is to analyze published data. With secondary market research, you can identify competitors, set benchmarks, and identify target segments in the target market. Your segments are the people who are your targeted demographic – people who live a certain lifestyle, show certain behavior patterns or fall into a predetermined age group.
- Product – Based on the findings, our team will be able to recommend necessary changes to the product that best suit your consumers
- Why do products fail? The most common cause of a startup (product) failure is product / market mismatch (42%). You may have an excellent team and an innovative product – but it doesn’t matter if there is no market for your product.
- In about 30% of the cases, when developers start developing an MVP before examining the market in depth, during market research & competitor analysis, we find that there are very similar and even identical solutions to the product developed by the team. In most cases, the market may be large and may have room for another player, but when it comes to startups, you need to present an innovation on an existing solution; otherwise the chance of raising money is relatively low.
- When the Targo team conducts market research, it allows the enterprise team to define the MVP It is therefore important to ask the right questions. Research done poorly can lead the startup in the wrong direction.
- Price –We will set an optimal price for your product or service that takes into account margins, competitors’ pricing and how much the consumer is willing to pay
n cases of physical products, two main factors must be understood:
- What is the Cost of Product Manufacturing – In pre-development stages, it is difficult to estimate the COGS, but you can look at launching products on Alibaba to get estimates
- How much the consumer is willing to pay for the product?
Sometimes the entrepreneur develops an innovative product, but the COGS are high and require high product pricing, well above what the consumer is willing to pay. The result is that there is an innovative product, but no one is willing to pay a high price. Market research and early planning would have enabled the product to be designed more efficiently & cost effective, or the idea would be abandoned all together in favor of a more practical idea
- Location – Depending on the research, we determine where and how to distribute the product.
The research will help the company decide how and where to distribute the service or product. The research can affect the business model of the start-up and even cause the transition from a B2C model to a B2B model and vice versa. Market research allows you to identify opportunities for strategic collaborations and streamline the market penetration process.
- Promotion – Defining the most effective marketing channels to reach your audience.
Targo helps start-ups build an effective go-to-market strategy. We believe that an effective market penetration plan is a link between team decisions about where to compete and how to define the customer experience. This approach to the market penetration process enables start-ups to identify an attractive target audience, acquire seed users, deliver a tailored value proposition and maximize ROI on its initial investment. Companies in the early phases face budgetary constraints; therefore if the go-to-market plan is not based on in-depth market research, it can lead to a high cost of user acquisition and impair the ability of the venture to raise additional funding in the next round.
Examples for Market Research Summaries
Autonomous Vehicles and ADAS Market Analysis Summary
- The ADAS (Advanced Driving Assistance System) market size
- Expected number of autonomous cars on the road and expected market value
Cancer Treatment Market Analysis Summary
- CAR-T Cell therapy market
- The cancer biological therapy market
- Epidemics of cancer worldwide and most common types of cancer
Anti-Terror Market Analysis Summary
- Terrorism in western countries
- Common types of terrorist attacks
- Online trends regarding terrorism
Online Private E-teaching Market Analysis Summary
- E-Learning market size in Israel and the US
- How much families spend on private tutoring every month
- Geographical analysis to identify the market with the highest potential
Social Networks Market Analysis Summary
- Where social networking is headed
- How much money advertisers spend on social media ads
- How much, on average, each user is worth (in $) for a social network
Car Washing Market Analysis Summary
- Total number of car wash services
- Types of car washing services (automatic, manual)
- Behavioural analysis of potential clients
- Countries with the highest potential for a car washing service