BUSINESS 2

MARKET RESEARCH


Learning Objectives

  • Develop a consumer research plan
  • Ask the right questions for competitor analysis
  • Create a market research report for your app

LEARN

When you have an idea and want to turn it into a business, it’s important for you to do some homework. You’ll want to understand how all the different kinds of things might impact your business and to see if there is a want or demand for your product, which is known as market research. Market research can be broken down into two parts: consumer research and competitor analysis.

Consumer research will help you understand the wants, needs, and beliefs of your target customer. By strict definitions, a customer is a person who consumes or uses something, while a customer is a person who has purchased something. In this case, we are going to use customer and consumer interchangeably. Your target customer is the person you are trying to sell to, or in other words the person who will be buying your products. It’s important to understand their perspective so you can create a mobile app that caters to them, so they will want to buy it. 

  • By definition, a customer is a person who consumes or uses something, while a customer is a person who has purchased something. In this case, we are going to use customer and consumer interchangeably.

Competitor analysis will help you get to know your competitors’ strengths and weaknesses and how your company is similar and different from them, so you can start setting yourself apart from them. Competitors are companies making things similar to your app and are trying to sell them to the same target customers as you.

Here are a few questions to consider:

Competitor Analysis

  • Is your solution the only solution to the problem?
  • What are some features your competitors offer? How can you stand out from them?
  • How much are your competitors selling their product for?

Consumer Research

  • Does your target consumer experience the problem your product solves?
  • Are consumers aware that they have this problem?
  • Would your target consumer pay for a solution like yours? How much would they pay?

Thought Exercise

Think of some of your favorite apps or products. Who is their target customer? Who are their competitors?


Consumer Research

There are many different ways to get information about your potential consumer. Here are a few tools that you can use for your consumer research:

Interviews are a great tool to give you insight on the thought process of your potential user and help validate your idea. To perform an interview, ask a potential customer a series of questions either in-person, or over the phone. You can also ask them over email, but it helps to hear their voice and their reaction to your questions.

There are different types of interviews that you can use. Problem interviews are typically used to gather more information about the problem you are trying to solve, so you can design a better solution (in this case, your app). Solution interviews help you understand how a consumer or user might use the app you develop-- you’ll need to have something that you can demo or show when you interview. For more information on interviews, click here.

Here are a few examples of questions you might use for each type of interview:

 

Solution Interview Questions:

  • Which features are most important for your app to have?
  • How much would people pay for your app?
  • Is your app a good match for the consumer?

    Problem Interview Questions:

    • If your app existed, would people use it? How often?
    • What solutions does your consumer currently use?
    • Where is there a need for your app's features or your solution?
     

    Surveys

    Surveys can help you gather more data quickly, however you will get less specific data than when you conduct interviews. They are typically a set of questions that are designed to gather specific information from a group of people.

    You’ll need to think about how you want to design the survey: the type of questions you want to ask, the people you want to ask, and how you want to deliver the survey. If you are interested in learning more about survey science for market research, click here.

    If you’re ready to get started on surveys or interviews, here’s an outline of all the things you’ll want to consider from start to finish. Also, take a look at the examples below. 


    Product: Shazam

    Survey Questions:

    1. Do you enjoy listening to music?
      • Yes or No
    2. How often do you hear music you like but not know its name or who performed it?
      • 1-10 scale where 1= Not Very Often, 10- Very Often
    3. May we contact you to talk more about a new music identification app?
      • Yes or No

    Results (data gathered)

    1. 45 of 50 said "Yes", they enjoy listening to music.
    2. 22/50 reported a satisfaction of less than 5.
    3. 40/50 said "Yes" and left contact information.

    Conclusions:

    • There is a good market size for the app.
    • Many people hear music they like but don't know the name of the song or who performs it.
    • People are interested in talking with us about a new music identification app.

    Product: Angry Birds

    Survey Questions:

    1. Do you enjoy Puzzle games?
      • Yes or No
    2. How satisfied are you with current options for mobile phone games?
      • 1-10 scale where 1= Not Satisfied, 10- Very Satisfied
    3. Can we contact you to talk more about this?
      • Yes or No

    Results (data gathered)

    1. 30 of 50 said "Yes", they enjoy puzzle games.
    2. 12/50 reported a satisfaction of less than 5.
    3. 40/50 said "Yes" and left contact information.

    Conclusions:

    • There is a good market size for the app.
    • Most people are fairly satisfied with their mobile game options.
    • People are interested in talking with us about a new game app.

    Trend Research

    Trend research will help you understand where the market has been and will give insight on where the market might go. There is already a lot of data that you can use to your advantage to get a sense of the market. There are many companies that are hired to do this kind of analysis! For example you can look at Gartner’s website, which is a leading information technology research and advisory company that forecasts the top 10 trends in technology. An alternate company is KPCB, which creates Mary Meeker’s report on internet trends. Here is a more digestible review of her very in-depth report.

    Google Trends is a great resource for understanding interest in a specific topic. For example, you can see that Bangladesh has the most interest in mobile apps as an industry. Here is a helpful tutorial on how to use this powerful tool.


    Competitor Analysis

    Competitor analysis will help you recognize what makes your app more successful than others. You’ll have to take a look at other companies who are developing similar products (apps) as you to get an idea of their strengths and weaknesses, as well as compare and contrast their product(s) to your product. In the end, you’ll want to have a strong argument for why your app solves the problem better than your competitors. When doing your research, here are a few points that you should be looking for:

    • Branding & Public Image
      • How well known is the competitor?
      • Do they spend a lot of money on marketing?
      • What is their reputation for quality product & customer service? (Look at their reviews on Google Play)
    • Market, Pricing, and Revenue
      • How do they make money?
      • Where is their funding coming from?
      • How big is their user base?
      • How much does the app cost?
    • Technology
      • What kind of features does the app have?
      • What kind of features is it missing?
      • Do the features meet the customers' demands?
      • What concerns do users have from using their app?

    It can be difficult to find this information, but here are a few places to look:

    • Look for relevant apps on the Google Play and iOS App Store
    • Use Google searches to find competitor apps & startups
    • Use Wikipedia articles about the startup/app to get stats on revenue, years in operation, size of team etc. (Whatsapp for example)
    • Use Google Trends to understand interest in a specific topic
    • Study competitors’ websites, social media, blogs, articles, sales material, white papers, and advertising to get a full picture of their success and strategy.

    Create a Market Research Plan

    Start building your market research plan! Outline your plan with all the necessary things you’ll need to create a strong market research report. With this report, you’ll be able to construct a strong argument in your business plan to show that your app is better than the rest! Here’s a worksheet to help you with building your plan.

    Resources:


    Apply

    Start researching using the market research plan you developed. Utilize the resources that we have provided and look for a few of your own. Gather your information so you can make a strong argument on how your app is more innovative than the others that are out there!

    Create your market research report, which will be added later your business plan. The report should be short, concise, and provide facts and figures that show your app will do well according to your research. Here are a few:


    Reflect

    Once you’ve conducted your market research, take a step back and think about what you’ve accomplished! You were able to perform consumer research & competitor analysis, and are develop a market research report. Now look back and ask yourself:

    • Do you feel well prepared and understand the market you are entering?
    • Are you going to make any changes to how you develop your app?
    • What are your strengths and weaknesses compared to your competitors?
    • What will be your selling points against your competitors? What sets you apart?

    Additional resources