Why You Must Do A Market Research Before Starting Your Business
Entrepreneurship is not about you, what you like, or what your employees think.
I tell people that Aliko Dangote, Africa’s richest man is not passionate about sugar, or cement. He has only been able to create a conglomerate out of opportunities in Africa.
Let’s take Mr. Dangote’s cement enterprise as a case study. He knows that Africa is very much underdeveloped, with the continent still in need of infrastructures.
Africa is still building bridges, houses, schools, and other infrastructures that will need the use of cement. Hence, there is a huge market across the continent for cement.
Globally, Africa erects over 15,000 structures annually, compared to America 4000 and Europe about 6000. Likewise, the West is seeing a decrease in the use of cement, toward containers and bricks. Dangote would have not made as much profit if he had invested in another continent.
What is Market Research?
It is the technique used to better understand a target market and get feedback from potential consumers about interests in a product.
Market research helps you make better business decisions. Knowing what the market wants, will determine what you should sell to them.
The market does not want your passion or the product that you created in your head.
Market research will map out your customer profile, determine market size, and what triggers customers to buy. You will get insights on age, income and other parameters needed to develop your product.
Market research helps you know the needs, wants, and pain points of the market.
You will be able to find out if there are existing competitions, and how much the market is willing to pay for your product.
Knowing your market will help strategize your branding, marketing, and pricing.
Amazon CEO, Jeff Bezos saw an opportunity in E-commerce because Americans wanted a new way to shop.
Suppose you are passionate about building young entrepreneurs, first Year students are not your market. Research says 85% of them are interested in sex, music, gadgets, and getting good grades.
You will build an enterprise selling their desires to them over your passion.
The process of market research itself is designed to reduce the risk and make the marketing cost-effective for your business.
When market research is properly done, enterprises will reach desired business goals.