Chapter 2: Market Research
Knowing Your Market
A. General Economic Conditions
Be aware of the economic cycle we are in right now. In periods of economic downturns, as we have experienced for a few years now, people’s spending habits are different than when the economy is booming. Unnecessary purchases are cut back. That doesn’t mean you should rule out any particular market based on the economy, but you may have to work a lot harder to get the same sales you could if things were brighter. Marketing and positioning come into play here.
B. Specific Market Research
By now you should have some idea of potential market that you want to explore, based on your work history and other interests.
If you are not sure, you want to be in a market where people spend money. Makes sense, doesn’t it? Don’t get caught up in the trap of trying to “create” new markets; i.e. manufacture demand where people are willing to spend money where they were not before.
One easy test is to check a local magazine rack to see if there are one or more magazines on the topic. OR if you want to start a brick and mortar business…just look around and see if there are other people doing what you want to do.
Come up with at least 3-4 potential markets and get an understanding of who the market is and their demographics. How often do they buy, how much do they spend… and ultimately, what motivates them to buy in this market? This knowledge will help you later when crafting your sales messages and may also be a guide to joint venture projects to join and create.
If you get stuck in the research phase, there are numerous places online to do market research… eBay, Amazon, other book sellers, Google trends, and many other places that are in most cases free.
Once you narrow down your choice to a handful of markets, consider actually participating in that market as a consumer, if you have not already. Buy a product and take note of the sales process, and learn all you can.
Competition is another form of market research. You can learn a great deal from what other people are doing to serve the same market.
If there are no competitors, then you may want to consider that your marketing idea is not the best because there are very few untapped markets today. In other words, there may not be enough business in that market.
It is not a hard and fast rule, but especially if you are starting out, you should work where you know people are buying.
When you find competitors in your niche, you should study your competitors carefully and look at how they communicate, and observe the sales process… if they do upsells and down sells, and related services, coaching and extended programs. What they do and how they do it will teach you about what works, if they are successful.
Ideally, you will find a market with lots of demand and you then identify some segment that is underserved. For example, there are thousands of people every day that are looking for dog training information, and many sellers of that information. What you could do is serve a segment of that market and be the best at doing so. You might focus on a certain breed of dog or a certain type of training.