Introduction to market research and competitor analysis
Tools & Resources
Key learnings
- Market research can help you figure out your customers’ wants and needs.
- Identifying past, present and future competitors helps you understand if there is room in the market for your product/service.
- You can do your own market research or use an external market research company.
Understanding the market that your business operates in and identifying any potential competitors will help you figure out how viable it is. Market research can also help businesses collect and document the opinions of their customers and make more informed decisions. Here, we explore the main ways to gather market research and competitor analysis.
Market research is defined as the process of gauging the viability of a new product or service, through research conducted directly with potential consumers.
Market research can be conducted directly by your organisation, or you can look at outsourcing to agencies with expertise in this process.
Click each of the headings below for an overview and useful starting points to get you going. For a structured learning programme with the option of one-to-one support tailored to your business, check out our Consumer Insight Programme.
1
Main types of market research
There are four ways of gathering market research:
1. Surveys - a form of qualitative research that ask respondents a short series of open or closed questions, which can be delivered as an on-screen questionnaire or via email.
2. Interviews - one-on-one conversations with members of your target market.
3. Focus groups - a carefully selected group of people who fit a company’s target market. A trained moderator leads a conversation surrounding the product, user experience, and/or marketing message to gain deeper insights.
4. Observations - someone observes and takes notes while watching an ideal user engage with their product.
2
How to do market research
You can conduct market research yourself or alternatively, you can pay an external company to do market research on your behalf.
Investing in research will help you strengthen your position, prevent any investment risk and identify trends and your overall market position.
3
Competitor analysis
Competitor analysis assesses the strengths and weaknesses of existing and potential competitors.
You can then compare your competitors' strengths and weaknesses to your own.
A competitor analysis will ultimately improve your overall business strategy as it will allow you to:
- Identify gaps in your market
- Help develop new products and services
- Find out about market trends
- Market and sell more effectively
4
Types of competitors
There are four types of competitors to think about when doing competitor analysis:
Direct competitors sell the same type of product or service as you.
Indirect competitors sell a similar product or service but it couldn’t be considered a substitute for yours.
Replacement competitors sell a product or service that’s different to yours but which your customers could choose to spend their money on instead.
Future competitors are new businesses that could enter the market at any time.
5
How to do a competitor analysis
To do a competitor analysis, you should follow these steps:
- Determine who your competitors are.
- Find out what products or services your competitors offer.
- Research your competitors’ sales tactics.
- Look at your competitors' pricing, as well as any offers they promote.
- Ensure you're meeting competitive postage costs (if applicable).
- Consider how your competitors market their products or services.
- Learn what technology your competitors use.
- Observe how they promote marketing content.
- Look at their social media presence and what engagement they have.
- Perform a SWOT Analysis to review strengths, weaknesses, opportunities, and threats.
Following these steps thoroughly will put you in a great position to start marketing and selling your products or services to the public.
For further reading, check out Myk Pono’s guide on how to conduct a comprehensive competitor analysis.
Next steps...
- Decide which type of market research will give the best insight into your product or service.
- If you are conducting the marketing research yourself, look at Hubspot’s market research kit with competitor analysis template.
- Look at UMi’s SWOT analysis advice and template.
- If outsourcing your market research, look at different agencies and what they can offer, such as Launchpad, which can deliver online polls, surveys and concept and product testing.
- To go deeper on this topic and access one-to-one support, check out our Consumer Insight Programme and get the first module free.