Market research allows us to validate solutions, determine if products need to be improved to meet market demand, or conclude whether a business model can succeed as is or if it needs reworking.
Accurate and comprehensive information is the foundation of all successful businesses, providing a wealth of data on existing and potential customers, competitors, and the general industry. It allows entrepreneurs to determine the viability of a business, validating and testing their hypotheses before committing significant resources to a company.
These are the five essential steps to conduct successful market research:
1. Define the Objective
The first step in market research is defining the objective. It’s important to ask, “What is the problem?” This question allows us to engage in preliminary discussions with collaborators and gauge their opinions.
Having a clearly defined objective acts as a sturdy foundation to make the most of the data that will be gathered.
2. Create a Hypothesis with the Objective in Mind
The second step in conducting market research is validation. This can be achieved through a single question, “What should we test?” Defining an effective hypothesis allows researchers to actively test and make conclusions that guide the direction of the market research.
The ideas being tested should be based on interests within the industry and the market planned to enter.
An effective hypothesis should follow the standards of the SMART matrix: Specific, Measurable, Achievable, Relevant, and within a Time limit.
3. Formulate the Plan to gather Data
The third step in conducting effective market research is to ask, “How do we carry this out?” That is to say, how do we carry out all the necessary actions, activities, and roles that each team member must perform to gather data that tests the hypothesis.
What format to use? What questions to ask? How many people will be surveyed? Clarity in each step of execution is key to gathering information that is relevant to the hypothesis and to the objectives of the research.
4. Analyzing the Data
The fourth step in market research is to ask “What are our findings?” It is important to recompile the data, interpret it, and draw useful conclusions.
Despite being one of the most important steps, this step tends to be taken lightly and leads to important data being excluded when decision making. It is advisable to have a dedicated team member analyzing, interpreting, and drawing conclusions from the results to generate several plans of action.
5. Utilizing the Conclusions
Now, “How do we use the resulting conclusions?” It is useless to have a lot of data and statistics if there are no decisions made to act. Information is only powerful when it can be acted on.
It is at this point that the data gathered allows us to evaluate if it makes sense to move from the idea stage into execution.
Now ask yourself, do you apply these steps when conducting market research?
This article is a translation of “5 pasos para hacer un estudio de mercado” by Endeavor Mentor and Entrepreneur Diego Noriega for Endeavor Argentina. Translation by Endeavor Staff member Eric Marroquin with additional support from Laura Ginebra.