Market Research for Startups
Objective of the service
Market research is like a test of a market to see if it is conducive for a chosen business idea or business project. Good market research is also about carving out meaningful information and insights for improvising business decisions. Market research is as important for startups as it is for any global multinational company. It is a full-blown profession involving specialized knowledge and expertise. For startups, gaining the necessary skills and expertise in carrying out market research in a short span is extremely difficult. Whether it is about tracing competition, adopting the right competitive stance, forecasting demand, determining the pricing ranges, understanding customer behaviour, identifying the right brand positioning or any other vital area of marketing decision-making, the ability to derive meaningful and actionable insights from market research is critical. So, a big question arises for an entrepreneur is how to do market research for a startup that could cover its market-related assessments? Business startup market research is an overwhelming activity for entrepreneurs; before going to bed, they must question every assumption.
In this service program, DFX shall carry out the market research for startup business enterprises with expertise and diligence while maintaining the best standards of the field.
Why market research for startups?
It was not a long time ago that almost every young, qualified man and woman preferred private sector employment, campus placements with decent salary packages, or secured jobs in the public sector going through a series of competitive examinations. But that phenomenon started to lose its effulgence in the last 20-25 years and more rapidly in the last 4-5 years. People from the younger generation, especially Gen Y and the late Gen X, got past the stereotyped perception and beliefs associated with ‘becoming an entrepreneur/business person’ and were willing to pilot and sail off on their own boats. The current youth (Gen Z) now looks up to people like Mark Zuckerberg, Elon Musk, Jeff Bezos, Larry Page, Sergey Brin, Arianna Huffington, Reed Hastings, Cher Wang, and many others as their role models. Globalization, demographic factors, improving higher education, and the information age ushered by the internet and digital technologies have played a big role in bringing about this age of entrepreneurship and startups.
Market research is as important for startups as it is for any global multinational company. Market research is a basic requirement in the process of starting a new business or before going for any business growth and expansion project. It could be about starting a new business or launching a new product or expanding to a different/foreign market. Market research could substantiate whether the business idea or project will be sustainable in the chosen market or not. To be able to correctly comprehend the market and its characteristics is crucial for all businesses to derive effective marketing strategies and for informed decision-making. The failure to carry out an objective and meaningful market research means that businesses will remain incognizant of the market realities and factors affecting their business.
Market research is the characterization of a market on certain specific parameters. It is like a test of a market to see if it is conducive for a chosen business idea/project. But a good market research is also about carving out meaningful information and insights for improvising business decisions. Thus, a good market research not only presents the status quo but also serves as a gateway to formulate better marketing strategies for better business. Some of the key parameters on which a market is studied are:
- Need for the product, product utility
- Target market, market size, segment-wise performance
- Customer behaviour and trends
- Competitors, competing products
- Supply chain network, distribution channels
- Pricing factors, payment options
- Other factors affecting the market, industry, business, etc.
In seeking to answer how to conduct market research for a startup or how to do market research for a startup idea, it would be worthwhile to remain cognizant of its challenges first.
Challenges for startups in market research
- Lack of expertise
Market research is a full-blown profession. It is a specialized branch in itself. And there are market research experts and professionals with years of experience who know the process and technicalities of studying a market to draw expert insights. To gain market research skills and expertise like the professionals in the field in a short span is extremely difficult for startups and their small teams. If the market is not studied correctly and objectively, it could lead to misinformed decision-making on brand positioning, competitive stance, pricing, promotion, inventory management and purchase planning, CRM, and so on. This is where availing the services of market research companies providing exclusively startup market analysis services could save time and efforts for new businesses.
- Tracing competition
For any business, including startups, mapping competition is a challenging task if it is not known already. We can see the presence of competition in the brick and mortar format. But with eCommerce, things get complicated. ECommerce had already earned the reputation of being a big source of disruption to countless brick and mortar businesses. It is quite likely that certain competitors may have no office or factory in a city and are still delivering products directly to customers and clients from another state or country via their distribution network. Another emerging and elusive challenge in tracing competition is the dark store format.
- Comprehending pricing strategies
Startups may acquire knowledge and information on the prevailing price tags. But they must also be able to comprehend the pricing strategies adopted by other players in the market. Businesses often use pricing as a powerful tool of marketing. Tinkering with their price tags and margins helps them to attract and retain customers and dampen the promotional efforts of the new players. Being experienced in the market gives them the privilege of having a better understanding of customers’ probable response to changes in the pricing strategies.
- Demand forecasting
A big challenge with demand forecasting is knowing where to look for information making it an open-ended adventure. There will be no market authority that could vouch for the numbers or where these are leading to. Some may provide macro estimates but it has to be reasonably validated through supporting statistics. Existing businesses get the nerve of demand and trends in the market. But new players have to do their homework. They have to read the performances of similar businesses, product categories, market segments, supply chain, and distribution channels.
- Insights for brand positioning and competitive stance
Market research should enable businesses, including startups, to gain relevant information and insights for informed decision-making in adopting the right brand positioning strategy and the right competitive stance. For startups, positioning its brand for the first time in the market involves uncertainties. They cannot be sure how the customers and clients are going to perceive it. It is like a theory until it meets the market response. The same is true for the competitive stance they adopt. Apples should not be fighting with oranges; its biggest competitor is apple juice.
- Staying up-to-date
Market research should never be assumed as a one-time activity in terms of its essence of keeping a continued tab on the market realities. The initial 4-5 years are critical for a new business as that is the period when most of the startups wither into oblivion. It takes years and decades of market understanding and dynamics to keep business fine-tuned for growth and survival. So, it is even more important for startups to keep their market research activities going on for a few years till they get a hang of the market and the industry followed by periodical efforts to keep themselves future-relevant.
Why DFX for market research?
With experience in conducting market research across a multitude of verticals, DFX (Digital Finance Experts) seeks to ensure that its startup clients roll their business planning with the best foot forward with a clear and comprehensive understanding of the target market. Our team of expert market research consultants follow a planned and systematic process in conducting market research. The team will work closely with your representatives to define the market research questions for startups i.e. your business. We ensure that all the necessary assessments are made towards weighing the prospects of a business idea/project. Our analyses cover market overview, segmentation, competition, demand and supply, pricing and margins, distribution channel, SWOT, and emerging trends. Our ultimate goal remains to help clients provide meaningful insights and information that could help them make the bigger decisions. That is why we provide conclusive CTAs (Call To Action) and expert recommendations.
Objective is to understand product viability in terms the following factors:
- Product Demand Study
- Buying pattern and preference of our TG
- Product/ Services Categories Demand Analysis
- Keyword Analysis i.e. Online Search Analysis of our products: No. of searches per day/ week/ month in our target location
Objective is to decode competitor strategies and decode what's working for them? What strategies we can adopt and mistakes which we need to avoid.
- Identify and benchmark the key players in a competitive set
- Analyse the online best-sellers of your competitors
- Competitors Policies adopted for online/ e-commerce sales
Objective is to understand the price range at which players are selling today. Which are the products where we can match the market expectations and where there is a gap?
- Market Price Analysis (includes key competitors and market players)
- Suitable Price Bracket (Min-Max range): as per your brand positioning
Objective is to decode the Digital Marketing strategies of your competitors. Understand what's working for them? What strategies we can adopt and mistakes which we need to avoid.
- Evaluate the channels which is driving traffic to your competitors
- Determine industry trends and strategies adopted by top market players
- Evaluate the effectiveness of how competitors are acquiring customers
- Traffic Channels: Direct/ Referring sites/ Social Media/ email/ Paid Ads/ Organic traffic
- identify marketing channels that drive the highest conversion rates
- Top Referring Sites & Top visiting pages
- Social Media Leaderboard
- Influencers Profiling
- Trending Online Searches related to your Industry, products & services.
Objective is to understand the overall market opportunities and threats. Also identify our TG (i.e. target group/ customer)
- TG Demographics (Total Market size in terms of: Age/ Gender/ Cities/ etc)
- TG Profiling - 5W Analysis: Who, Where, What, When, Why
- Market SWOT Analysis
- Risk & Mitigation Factors
Objective is to understand the operations strategy adopted by competitors i.e. their overall team structure, head-office/ warehouse/ business locations, IT strategy, etc.
- Infrastructure Strategy
- Human Resource Strategy
- Information Technology Strategy
Post Analysis and research, DFX team shall set recommendations for action plan which needs to be followed to achieve the desired objective.
30 - 45 days.
Step 01 - Request for Quote
Step 02 - Service Quote Finalization along with SLA (Service Level Agreement)
Step 03 - DFX Experts start working on your business
Always humans, never bots.