1. What Is Market Research
Market research is the process of collecting and analyzing information about a target market, competitors, and customers. It helps businesses understand demand, pricing, and opportunities before launching a product or service.
2. Example Market Research Scenario
Business Idea: Opening a new coffee shop in a busy UK town centre.
Step 1 – Define the Objective:
Understand demand for coffee shops in the area and find out what customers want (e.g., speciality drinks, Wi-Fi, seating).
Step 2 – Collect Primary Data:
- Surveys: Ask 200 local residents about coffee preferences, spending habits, and ideal price points.
- Focus Groups: Invite a small group to discuss their expectations for a local coffee shop experience.
- Observation: Visit competitors, observe customer flow, and note popular menu items.
Step 3 – Collect Secondary Data:
- Use government data on population and foot traffic.
- Review industry reports on coffee trends and average UK coffee shop prices.
Step 4 – Analyze Findings:
- 65% of respondents buy coffee at least three times per week.
- Most are willing to pay £3–£4 for a premium coffee.
- Competitor analysis shows a gap for a café offering plant-based milk options and quiet workspace.
Step 5 – Make Business Decisions:
- Offer vegan-friendly menu options.
- Create a cozy seating area with charging stations to attract remote workers.
- Set prices slightly below the premium competitor to attract budget-conscious customers.
3. Benefits of Market Research
- Reduces risk by validating demand before investment
- Helps set competitive prices
- Identifies unique selling points (USP)
- Provides data for business plans and investor pitches
Frequently Asked Questions
Do I need to hire a professional for market research?
Not always — small businesses can use free tools like online surveys, social media polls, and competitor visits.
How long does market research take?
It depends on depth — basic research can take a few days, while detailed studies can take weeks.
Can market research guarantee success?
No, but it significantly increases your chances of making informed decisions.
Conclusion
This example market research shows how data from surveys, competitor analysis, and industry reports can guide business strategy. By collecting and analyzing insights, businesses can reduce risk, attract customers, and position themselves competitively.