Sateesh’s Weblog

Market research is the process of systematic gathering, recording and analyzing of data about customers, competitors and the market. Most of the companies are already established in this field. Today, 16% of people are dedicated to market research out of 25,000 employed in the KPO industry in India. Industry players peg the current market research outsourcing industry at around $90-100 million, with the potential to touch $500 million in five years.

Key elements for market research:

• Find the size (current and future) of the market using present sales of the product and determining the future estimate.
• Forecast market growth rate using demographic information and sales growth in complementary products from historical data.
• Determine the profitability for a particular product to know the money earned using that particular product.
• Find the industry cost structure for formulating strategies to develop a competitive advantage and for value addition.
• Find existing distribution channels to find how direct they are to the customer and new channels which can offer the opportunity to develop a competitive advantage.
• Find the new opportunities and threats understanding the market trends.

Importance of market research for a new business:

• New businesses don’t come from ground; they come from new ideas of the people. A new idea doesn’t mean that you are ready to start your business without knowing the potential of that particular idea and know what people will pay for your idea. This is only possible by market research.
• Starting a business with your idea may lead to profit or the other way the idea may be crashed. So, researching on your business idea before your business starts is essential.