How to carry out relevant market research in just 5 steps?

Doing your own market research for your future business?

It may seem daunting at first, but with a bit of rigour and patience, it's perfectly possible to carry out this exercise yourself, at least for the most part.

What's in it for you?

As well as the obvious economic benefits, it gives you a thorough understanding of your future market, and therefore provides you with all the keys you need to steer your business in the right direction.

But how do you carry out a business market study that makes sense, and what are the factors you need to take into account?

Steps, examples and advice... this article tells you how to gather and use the data you need to assess the feasibility of your project and make the right decisions.

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Definition of market research

But first, a quick reminder of what market research involves.

Are you an entrepreneur looking to set up a business based on a specific idea? Then you need to make sure that your future product or service will be well received by the market.

By gathering and analysing a range of data, market research enables you to :

• estimate the sales potential and success of your offer,
• guide your strategy to differentiate yourself from your competitors.

The different types of market research

There are two main types of market research.

Quantitative market research

Quantitative market research is essentially based on figures and statistics obtained from a large panel of individuals.

It is used to calculate :

• the size of the market (the number of potential future customers),
• the value of the market ( forecast sales).

Qualitative market research

Qualitative market research generally involves a smaller sample. However, thanks to a system of open-ended responses and the collection of verbatim comments from interviewees, it provides a more accurate picture of consumers' buying behaviour and aspirations.

☝️ Effective market research combines both methods.

The cost of market research

It may be tempting to call on external services to carry out your market research. There are several options available to you.

• Contact a specialist agency. It will carry out a complete, personalised market study. Estimated costs 👉 from €5,000 to €10, ⁰⁰⁰¹.
  
• Use the services of a company junior. Although the rates are lower, you will still benefit from less expertise. Estimated costs 👉 from €1,500 to ^€3,0001.
  
• Buy a ready-made market study online. Prices vary, but it will be more limited and not necessarily suited to your business start-up project, especially if you are launching an innovative product or service.

Whatever the case, doing the work yourself will prove to be cost-effective. That's why we've outlined the steps involved in carrying out your own market research.

¹ Estimated rates from webmarketing.com

The stages of market research

Step 1: Identify the data you want to obtain

As a general rule, market research is based on the analysis of data relating to :

• the sector
• demand
• competition
• the environment.

To do this, you need to obtain answers to a number of questions.

Ask yourself questions about the sector

Understanding your sector and market is built around an economic analysis, taking into account current data and future developments.

Examples of questions to ask yourself:

• How is the sector doing?
• What is the potential size of the market?
• What is the potential value of the market?
• What is the estimated repeat purchase rate for your products or services?
• What are the trends in this market?
• Is it a sector for the future?
• What innovations can you foresee in this market?
• How does this market appear to be developing?

Ask yourself about demand

This involves identifying and analysing the buying behaviour and desires of your future customers.

Examples of questions to ask yourself:

• Who are you targeting?
• What are their characteristics (catchment area, income, age, consumer habits, etc.)?
• What are their buying motivations?
• What are their needs or desires?
• What value do they place on the quality of a product or service?
• What psychological price would they be prepared to pay for your products?

☝️ Be careful, a high price can drive customers away. Conversely, a price that is too low is often associated with poor quality products and services.

💡 Have you heard of the empathy card? A collaborative tool, it is sometimes used by sales and marketing teams to understand the customer by identifying:

• what they want to do,
• what they see,
• what they say,
• what they do,
• what they hear,
• what it thinks,
• what they feel.

This technique can provide you with a framework to guide your questioning.

Example of an empathy card:

Ask yourself about the competition

It's vital to analyse what's already on the market, particularly to see how you can position yourself and stand out from the crowd.

☝️Notez There are two types of competitor:

• direct competitors: they offer the same product as you.
• indirect competitors: they offer a different product, but meet similar needs. Example: a supermarket and a local organic shop don't really have the same positioning. However, they meet the same need: food.

Examples of questions to ask yourself:

• Who are your direct and indirect competitors?
• How are they doing economically?
• What is their turnover?
• What is their current strategy?
• What is their positioning and brand image?
• What are their strengths and weaknesses?
• What plans do they have?
• What types of recruitment are they currently undertaking?

Ask yourself about the current environment

Finally, look at the wider factors that may have an influence on your business by studying the environment:

• political
• economic
• social
• technological
• environmental
• legal.

This is known as PESTEL analysis:

It is vital to take these various events into account in order to avoid certain pitfalls. After all, let's not forget that some companies suffered when the RGPD was introduced, calling into question, at least in part, the way they operated.

Step 2: Conduct a literature review

Once you've identified the objectives of your market research, it's time to put them into practice!

To begin with, carry out a literature review.

Also known as monitoring, this consists of drawing on existing resources, generally available online.

This type of research is particularly useful for gleaning information about :

• the market, using data available on websites such as :
  • official websites such as those of chambers of commerce or trade unions,
  • in reports and studies, such as those provided by INSEE,
  • in the press (print or online) relating to your sector of activity.
    
• your competitors, by using data available, for example :
  • on their official websites,
  • on company legal and financial information sites such as Societe.com,
  • on media dedicated to employment, such as Welcome to the Jungle.

☝️ Always check the relevance and quality of the information you obtain. And make sure it's recent enough to be usable.

And if you want to cut your research time by a factor of ten and be sure of the data collected, you can also use specialist software such as Smappen.

This geomarketing software enables you to find the best area in which to set up your business, with over 350 INSEE indicators directly accessible on their platform. You can also consult and analyse your competitors to avoid unpleasant surprises, thanks to access to data from the SIRENE database.

Step 3: Prepare your field study

Field research is carried out directly with your potential customers, but also through contact with experts in your field. It generally takes place after the documentary study.

How do you prepare your interviews and questionnaires?

Field research involves obtaining key information for your market study by means of :

• face-to-face or telephone interviews,
• questionnaires, usually posted on the internet.

In both cases, the ideal is to prepare both open and closed questions, with the aim of obtaining quantitative AND qualitative data.

☝️ There is a real difference in objectives between open questions (more appropriate for qualitative research) and closed questions (more appropriate for quantitative research). For example, if you're creating a perfume line, you might ask questions like:

• Do you buy more than two bottles of perfume a year? 👉 closed question for quantitative research.
• What qualities do you look for in a perfume? 👉 open question for a qualitative study.

Although it depends on your objectives, a questionnaire is generally structured as follows:

• questions about the respondent 's profile,
• questions about your future products or services
• questions relating to the business sector in general.

💡 The good news is that some software packages have been developed to help you create and distribute questionnaires and surveys. This is the case, for example, with Drag'n Survey. The tool offers a range of templates to personalise your document as much as possible, and also provides a bank of over 500 questions to inspire you. What's more, it makes it easy to distribute your questionnaires and analyse the results by displaying reports.

Example of a questionnaire on Drag'n Survey :

[Sample market research questionnaire]

To illustrate the above, here is an example of a market research questionnaire relating to the opening of a second-hand clothes sales outlet.

There are a number of open and closed questions, relating to the respondent's profile, future services and the market in general.

Step 4: Distribute your questionnaires and/or conduct interviews

Once you've created your questionnaires and surveys, it's time to distribute them or collect contacts so that you can talk to them directly.

There are several methods of doing this. Here are a few examples:

☑️ Call on your friends and family and their network. However, this technique should be used sparingly, to avoid emotional bias in the responses. The closer a person is to you, the more likely they are to subconsciously agree with you so as not to "offend" you.

☑️ Go to places where you can directly approach the people you want to interview. Passing places, such as shopping centre exits, are good opportunities for approaching potential customers. On the other hand, you'll find it easier to meet experts at professional events such as trade fairs or conferences.

☑️ Distribute questionnaires on the Internet. To do this, we advise you to target social networks (Facebook groups, for example), forums or blogs dealing with subjects likely to be of interest to your core target.

If you want to interview experts in your sector, consider using professional networks such as LinkedIn to get in touch with them.

Step 5: Analyse your results and draw up your report

Once you've gathered all your data through documentary and field research, transcribe it into a document: the market research report.

The aim is to use it as a strategic tool to guide your decision-making, but also to convince banks or potential investors.

It must therefore meet certain criteria:

• reveal the essential information needed to convince people of the relevance of your project,
• be very clear and concise,
• include visual elements such as graphs and tables.

Here is an example of how to present a market research report:

☝️ Important recommendation: take a step back from the results of your market research. The aim is not to convince yourself that your project, as you imagined it, is relevant. Always be objective, so that you can readjust your actions if necessary.

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Conquering your future market!

That's it, with patience, rigour and method, you've done your market research. But your work doesn't stop there!

Market research is a prerequisite for other actions that will consolidate your project and guarantee the success of your business start-up.

Of course, the first thing that comes to mind is the preparation of your business plan, including the identification of your business model, an essential tool for winning over your future commercial partners and investors.

But your marketing strategy and communications plan will also flow from your market study. After all, you now know what differentiates your business from the competition, and the type of customer you want to target.

So, are you ready to choose your weapons and set out to conquer your future market?