For every entrepreneur, understanding the environment in which their business idea is framed is one of the keys to success. Before diving headfirst into the entrepreneurial world, it's important to understand how viable your project can be. This is where the market study emerges as a key tool.
At La Lonja de la Innovación, we have a team of mentors who are experts in various areas, helping startups with crucial processes like this one, ensuring they continue on the right path. So that you can also learn a bit more about market studies, in this post, we provide some key insights.
What is a market study?
A market study is a comprehensive process that involves collecting and analyzing data and information about a specific market to determine if a business idea is viable. In summary, it is an evaluation of the feasibility of our project.
This study encompasses three fundamental pillars: supply, demand and the environment. All of them must be analyzed in detail to know if your idea really has a future. It is too risky to enter a market with a new project without any information about it or the existing competition. Therefore, through the market study, you can thoroughly understand your environment and make well-informed decisions.
You need to consider a key aspect: it is not the same as market research. Each is conducted at a different stage; the study is done before the product or service is launched, while market research comes afterward. The former is a process carried out to understand the viability of your idea and determine whether to launch it in the market or not. During this process, data such as the following is observed:
- Characteristics of supply and demand
- Public segmentation
- Analysis of existing prices.
- Channels of distribution and marketing.
- Entry barriers to the market or difficulties and challenges.
- Special regulations in each country.
How to do a market study
One of the most commonly used tools for conducting a market study is the survey. Surveys help easily collect the information you need from different aspects to draw conclusions about the feasibility of your project. But what steps should be followed to carry out a comprehensive study?
- Define objectives. Before getting started, establish what you want to achieve with your market study, what questions you want to answer to determine if your project can succeed.
- Define surveys. Once you have clear objectives, carefully define the questions you will include. To do this, focus on a topic you are interested in studying, conduct research on it before drafting the questions, and finally, write clear and concise questions. Nowadays, there are various online tools for creating surveys such as "Easy Survey," "Google Forms," or "SurveyMonkey." Alternatively, you may consider conducting focus groups instead of surveys.
- Analyze the results. Once you have gathered all the necessary responses, it's time to analyze them. Before getting started, remember that not all survey responses are valid; you need to analyze and differentiate between fraudulent or incorrectly answered ones. Analyze the responses and discover the answers to the questions you have posed.
- Audience segmentation. Through surveys and collected information, you can build your target audience and define your buyer persona.
- Research the competition. To assess the viability of your project, it's also necessary to understand the competition in detail, learn from their successes and failures, observe their strengths and weaknesses, how they operate, etc.
- Understand market regulations. You need to be aware of regulations and restrictions that may affect your market positioning.
- Create a final report. Once you have obtained all the aforementioned information, it's time to create a final report with all the data, including conclusions about the feasibility of your project.
As we have seen, conducting a market study is a step that should not be overlooked. It can prevent you from wasting resources and time on a project that may not work. Therefore, before launching into the market, carry out a solid market study that makes a difference.