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The marketing study in business plan template is one of the most important sections that will help you understand and gather the data and information that will be helpful and make your business to be able to sustain in the market. The market research for business plan template makes it possible for you to describe all details and provide you with complete information about how your business will be done. The market research process incorporates strategies as well as tools that will help you gather data as well as information related to the products, prices, competitors, customers, services, target audience and other factors that can have a positive or negative effect on your company.
For a successful market research and analysis business plan, you will need answers to many critical market research questions. What demographic is your product or service most likely to appeal to? What is the forecast for the industry you are in? How have other products or services similar to your own done over time? What are your competitors doing right or wrong and how can you capitalize on any market openings?
All these questions have to be addressed to have a strong Market Analysis section within the business plan. If not, when it comes time to deliver your business plan to a potential investor, they will quickly spot the lack of factual data to back up your business promises and they will most likely walk away. To get a strong Market Analysis section, make sure to do your homework and include relevant data, graphs, and charts to make your case.
How to do market research
Diving into conducting market research can seem daunting at first, but it doesn’t have to be as long as you know what you’re looking for. We’ll get into the types of market research you can leverage in just a bit, but for now start with this step-by-step process.
1. Start by identifying your target market
Imagine that someone walks into your business, or picks up the phone and calls you. It’s your perfect customer: someone who has the problem that you solve and is willing to spend money on your solution. Now imagine the details about this person. Who are they? Can you describe them?
Ideal customers and common traits
This “ideal customer” is your target market. Now, your business might have several target markets, but it will usually serve you best to keep your list of target markets to two or three.
Each of your target markets should share common traits. These might be demographic traits such as age group, gender groups, income levels, or locations. They might be what are called psychographic traits, which are groups of people that like the same things or have similar interests. Or, your target market might be a certain type of employee at another company, such as a CTO or head of marketing.
Most often, target markets are blends of demographic and psychographic groups. For example, you might be developing a new type of shoe targeted at female triathletes. Or you might be opening a hair salon targeting urban, hipster men.
Market segmentation
Creating multiple target markets for your company is doing what’s called “market segmentation.” This sounds complex, but all you’re doing is dividing your target markets up into different groups that you hope to sell to. Each market segment might have different characteristics and might buy your product or service for different reasons.
You might end up coming up with different marketing campaigns for different market segments or even customizing your product or service for each segment.
2. Talk to your potential customers
Once you have identified your target market, or at least made a good guess at who your target market is, you need to take the most important step in this entire market research process. You need to get up from your desk, get out from behind your computer, and go outside. That’s right, you need to go and actually talk to people in your potential target markets. This is called primary market research.
Yes, you can do online surveys and other research, but that’s no substitute for actually talking to potential customers. You’ll gain more insight into your customers just by seeing their work or home environments, and get a better understanding of how they make buying decisions by actually talking with them than any survey will ever tell you.
Do this one thing, and you’ll be miles ahead of your competition. Why? Because most people skip this step. It’s intimidating to talk to strangers. What if they don’t want to buy what you plan on making?
So, don’t be like most entrepreneurs (including me!) and skip this critical step. It can mean the difference between success and failure. Getting this step done early will help you refine your business model and make a clear impact on your future success.
3. Find out if your market is big enough
Once you have identified your target market and validated it by talking to them in person, you need to do research to figure out if your target market is big enough to sustain your business. If there aren’t enough potential customers to sustain your business and your competitors, then you need to consider changing your product or service offering.
For example, if your target market only has a few thousand potential customers, you either need to sell to them frequently or sell at a fairly high price to create a sustainable, profitable business.
To figure out if your market is big enough, you need to do some research. Use the attributes you defined in the target market step and then figure out how many people meet your demographic, psychographic, or location criteria. I’ve got some links to resources that will help you figure this out at the end of this article.
If you are targeting an existing market with established competitors, you do what’s called industry research. For example, perhaps you are building a new company in the market for sports drinks or the market for cell phones. In cases like this, understanding how much people buy of the currently existing offerings will give you the best sense of potential market size.
In this case, you want to look for industry reports and read trade publications for your industry. These publications often summarize the market size.
4. Document your findings
The final (and easiest) step in the market research process is to document your findings. How formal your documentation is will really depend on how you plan on using it.
If you only need to share your findings with your business partners and others in your business, then you can probably communicate fairly informally. However, if you’re looking for investors for your business, you may need to write a more formal market analysis and do a market forecast.
Presenting your market research
The single piece of documentation that every business should create is a buyer persona. A persona is a description of a person that hits on all of the key aspects of your target market. And, just like you might have several target markets for your business, you might have several different buyer personas.
Creating a buyer persona converts your target marketing information from dry research into a living, breathing person. For LivePlan, we’ve created a persona named Garrett who drives much of our product development. Garrett embodies the attributes of our ideal customer.
Conclusion:
Despite the fact that in a competitive business environment, a marketing plan is necessary to enable a firm to keep up with rivals in order to make significant position in the market. A marketing plan is a critical stage for any firm before it decides to launch products or services to get into the market place. At present, there are many business organizations which are already running its business according to the demand of the market so they know how to bring products which are not only needed by their customers but also can be sold easily.