Market Research

In today’s rapidly changing business environment, market research is a crucial method for helping companies understand market demand, competitive landscape, customer expectations, and product potential. Through effective market research, businesses can make more informed decisions, optimize products and services, and develop effective market strategies.

Step One: Define Research Goal

Assess the market demand for new products

If we are dealing with products that already exist in the market, the research becomes relatively easier because the transaction data is relatively reliable. For example, in a previous project, we conducted a global market comparison of fitness equipment categories, channels, and regions. Each piece of data collected has a clear significance.

Using the chart below as an example, we need to understand the sales of both the targeted categories and complementary categories to determine the overall trend. For instance, while treadmills have the largest base stock, their growth rate is not as high as that of elliptical machines, which doubled the growth rate of treadmills from 2022 to 2023. Based on this observation, it is possible that elliptical machines could surpass treadmills in total transaction volume within five years. Therefore, why not focus more on developing elliptical machines, which have faster growth and less competition? Could this single decision potentially increase the company’s sales by 20%?

Of course, specific decisions require considering more elements. For example, region comparison: In which country do products within the xx-xx price range sell the most (specific product positioning)? Do our national policies favor exporting to that country? Should we focus on a few countries, and through what methods? These are determined by different data and the company’s situation to create a detailed strategy. Additionally, it is crucial to conduct cross-data analysis and understand the impact of major events on the market, such as national policies, local leading companies, and the cultural environment. It is essential to learn to understand the meaning behind the numbers.

Understanding Target Customers’ Purchasing Behavior

When conducting objective data analysis, it is equally important to consider subjective factors. This approach allows us to gather more comprehensive data. For instance, in the context of fitness equipment, we must consider complementary products, potential competitors, and customer preferences. If we focus solely on treadmills, wouldn’t manufacturers of ellipticals and other cardio equipment become our competitors? The answer is, of course, yes. Ellipticals cause less knee damage and are more beginner-friendly; stationary bikes are more fun; rowing machines provide better full-body workouts. These factors influence customers’ purchasing behavior. If you are a leading manufacturer, you might even change public perception of a product, but most companies do not have this capability. Fully understanding customer behavior is a crucial step before conducting detailed data analysis.

Analyzing Competitors’ Market Performance

Analyzing competitors, especially industry-leading brands, is one of the most efficient ways to understand an industry. We examine competitors’ detailed financial reports (typically available for public companies), study their research, production, supply, and sales ratios, and observe their website traffic, channels, social media presence, news, and both online and offline reviews. This comprehensive observation provides insights into competitors’ business models and user profiles. Most leading players have methods that are worth emulating and can be directly applied. Additionally, we must ensure that our products/services have enough unique selling points to attract customers over the industry leaders we are analyzing.

Exploring Potential Market Opportunities and Risks

After completing both macro and micro analyses, we conduct a detailed SWOT analysis. No company is omnipotent, and every product/service has its strengths and weaknesses, opportunities and threats. Otherwise, the product/service wouldn’t have a place in the market. Our task is to see deeply and far enough to ensure the continuation of our strengths and opportunities while implementing sufficient measures to mitigate and prevent weaknesses and threats.

Step Two: Data Collection

Collect Global Macro Data for Products/Services: This includes total transaction volume, growth rates, and growth rate forecasts from various institutions over the past 5-10 years. Additionally, we need detailed data segmented by brand, region, price, channel, and other relevant factors.

Understand User Behavior: This section focuses on analyzing the root causes that our product can address and extracting key behavior patterns from objective data. This is also a critical thought process for the SWOT analysis. If our product is unique and unprecedented in the market, this section becomes even more crucial.

Gather Detailed Data on Industry Leaders: These data points are relatively scattered but aim to analyze the business models of leading players and compare them with our own business model.

Collect SWOT and PEST Models for the Industry: Analyze the market prospects, opportunities, and threats from an industry-wide perspective. Based on the industry models, analyze the SWOT and PEST models for our own company.

Step Three: Data Analysis

Data Cleaning: Remove invalid, incorrect, or incomplete data to ensure the quality of the foundational data for analysis. Although we collect data to obtain objective results, the reality is that even the most authoritative data can be falsified. Therefore, we collect data from multiple sources and investigate the background and stance of the data providers to anticipate possible data fluctuations.

Data Analysis: Choose appropriate data analysis methods based on the research objectives. Quantitative data can be analyzed using statistical tests, while qualitative data can be analyzed using content analysis methods. At this stage, we primarily provide objective results, which are numbers. We use visualization tools to present these numbers in the most effective way.

Extract Insights: Extract key information and insights from the data and convert them into actionable strategic guidance. This is what we previously referred to as the meaning behind the numbers. We ensure that the models and information we provide offer practical and strategic guidance for your business.

Step Four: Reporting and Presentation

Compile Research Report: Organize the analysis results and write a research report that includes key findings, market insights, and recommended strategies. We will tailor the final report to meet your specific objectives, whether it’s for strategic planning or fundraising.

Prepare Presentation Materials: Create PowerPoint presentations or other materials to clearly present the research findings to stakeholders. We will ensure that every participant, regardless of their level, understands the key data, insights, and analysis of the overall research. Typically, reporting sessions are lengthy, so we provide follow-up support to address any questions.

Feedback and Discussion: Share the research findings with the team and stakeholders, engage in discussions, and gather feedback to optimize the final results. While the overall strategic guidance at the strategic level is usually sound, the focus often shifts to the detailed execution phases and goal-setting after the strategy is established. If needed, we can also participate fully in the execution phase.

In The End

Market research is a systematic project that requires careful design and execution. By following the detailed steps and considerations outlined above, our market research will be more precise and effective, providing strong support for your business decisions. Clear Shadows is dedicated to partnering with you to unlock market potential and build a pre – Fortune 500 company.