Market research step by step: are your plans feasible?

You have a new idea for your business or you want to know whether you are still on the right track with your current products or services. With market research, you check whether your plans are feasible and how customers view your business idea. You will examine who your ideal customer is, how you stand out from your competitors, and how you appeal to customers. Using the steps in this article, you can get started with your market research yourself.

Market research takes time, but that time will eventually give you good insight into the feasibility of your idea. That way, you will know whether you are spending your time and money wisely or whether you need to change your plans.

Step 1: Do industry research

An industry analysis gives you insight into developments in your industry. For example, use the KVK Company Counter to see how many companies are based in your sector and area. Use the KVK Regiodata tool (in Dutch) to see up-to-date economic data, such as the number of bankruptcies in your municipality or region. You can order financial statements and extracts from similar companies in the Business Register, to see what their turnover figures are. This gives you a picture of economic developments in your sector.

See how your competitors provide their products and services and how you can stand out from them.

Finally, also follow legal developments in your industry. That way, you will know if there are any upcoming legislative changes that will require you to adjust your ideas.

Step 2: Look at your strengths and weaknesses

A SWOT analysis, also called strength-weakness analysis, shows at a glance where opportunities lie for your company and what needs extra attention. You can use these findings to determine your strategy.

Step 3: Define your target audience

Look at who your customers are. This is called a target audience determination, or target group analysis. The KVK location scan (in Dutch) gives you a picture of the number of potential customers in your region and information about the population. Find out who you specifically want to reach, for whom are your products or services suitable? To determine your target audience, consider the characteristics of your customers.

For private customers, you look at the neighbourhood, municipality or region where they live, as well as their gender, age, education, and profession. For business customers, you look at the industry, location, number of employees, turnover, and job groups.

What keeps them busy

With the information above, you make an assessment towards what your target audience is concerned about. You do this by answering a number of questions:

  • What does your target audience deal with, and how can you respond to that with your offer?
  • What are the daily activities of your target audience?
  • What would be a barrier for your target audience to purchase your product or service?

After answering these questions, you have a picture of your target audience, you create a persona. A persona helps you reach your target group. If you have several target groups, you can answer the questions for each target group. This way, you create several personas. You approach each persona differently. For example: you have a shop with handicrafts. Your target group consists not only of children who want to do crafts, but also of elderly people who like to knit, and parents who help their child with a Sinterklaas surprise gift. These are 3 different personas that you each reach in a different way.

Step 4: Ask your customers

Ask your current customers what they think of your product or service. That way, you can improve your offer. You can ask a large group of people questions, or you can ask your customer some questions during a conversation. For instance, you can ask which social media your customers use, and adjust your marketing accordingly. Or you can present your idea and see how they react to it.

If you want to plot a larger research project, first formulate the purpose of your research in concrete terms. For example: I want to know why customers come back less often. Then you start setting measurable goals. Such as: I am going to send everyone who was a customer of mine in the last year an evaluation form about my services. In doing so, I am going to interview 5 clients this month. Within 2 months, I want the results of the evaluation to be clear. Then make a plan of approach: what is your budget, how do you approach your target group, are you going to do it yourself or outsource it, what is your main question, and what questions should you ask to answer your main question? Think about what customer information you already have or what information you can find in another way, so you do not have to ask those questions. Next, you implement your plan.

Step 5: Processing answers

With all the information you have gathered, you can make decisions. You can be sure to respond to developments in your industry, you know what you can improve, where your opportunities lie, you know what your customer wants and where to find your customer. By doing regular market research, you can compare data and notice changes.