3 Stages of Market Research: How to Complete Them Right
We often say that before starting working on an application, it is extremely important to conduct a market research and to discover everything about the target audience, competitors, etc. Finally, it is time to share our experience and to tell you all the details on how to perform this research in the right way and, therefore, lead your product to success.
How We Conduct The Market Research
Every product market research should cover the following areas: target audience, competitors, and willingness to pay for the product. Let’s take a closer look at them.
1. Identifying the Target Audience
Knowing your target audience is crucial, as this information will let you develop the most efficient monetization strategy, base the app’s design and functionality on the users’ needs, and plan the most suitable marketing campaign. A lot of people think that at this stage it is essential to discover everything about your potential users: their age, gender, income, location, hobbies, marital status, employment status, and so on.
But that’s not really true. The thing is that you need to know only that information which is relevant to your product. For instance, your product is a parking app for Spain — in this case, location matters! But what if you are working on a cool mobile reader app? Then the location is not that important, as your product will be available to users from all over the world. However, in this case, you will probably want to make sure that your audience uses GoodReads or liked any writers on Facebook.
So, how to define your target audience? Here is a guide:
- General understanding and the secondary research General understanding is the first step to take — describe the audience with one line! For example, in the case of the parking app, the target audience will be people living in Spain.
Then, it is time to move to the secondary research and to analyze potential customers more thoroughly. Taking the same example, it will be essential to find out the number of Spanish residents who own or regularly rent a car. Tourists who visit the country can also be taken into account, however, the primary market will still be occupied by residents. The thing is that residents may need such an app every day, while tourists — only when they come to Spain.
Anyway, the age will also matter — people aged over 60-65 are not likely to download and install a parking app. Then, it would be great to discover how often these car owners actually use their vehicles, and how much money they are ready to spend on parking.
Collecting data Statista, Quora, Reddit, and other websites like this can be helpful in collecting data about the target audience. Statista is a pretty reliable aggregator of statistics — for instance, we found there the number of new passenger cars registered in Spain, which can be useful for our example. In turn, Quora and Reddit can be used to discover more personal things and preferences. Another useful tool is Google Trends — it can help to find out what people are searching for on the Internet and how often.
Conducting surveys Apart from this, don’t forget about market surveys — they can help to understand the needs of your users. To target the audience better, we usually divide it into several groups which differ by age, gender, income, and other factors defined specifically for new products. Afterwards, we create a simple landing page to make sure that the product we conceptualized will meet and address the needs of the targeted audiences.
Apart from this, we sometimes develop an interactive app prototype and create a survey to find out what people like and don’t like about the app, what features they want to be added, what they don’t understand, and so on.
Remember that a good market survey is a combination of multiple choice and open-ended questions. If it has only multiple choice options, people won’t be able to share all their own thoughts regarding the product. And in case there are only open-ended questions, potential users may simply get bored of answering them. Besides, having only open-ended questions can complicate the follow-up analysis.
2. Analyzing the Competitors
If your product is absolutely special and there are no competitors yet, you can simply skip this stage. But creating a unique app is a very complicated thing to do — there are over 3 million apps available at Play Market, so coming up with one and only idea is a true challenge.
So, let’s imagine that a product has some competitors. How to analyze them? The first thing to do is to define the competitors. A lot of guides on this topic recommend analyzing as many competitors as possible. Yet when you have a limited amount of time, it is better to match your product to top 3 rivals and a couple of creative alternatives that you feel have chances to reach the top soon.
When the list of competing apps is ready, it is time to download them and check the following things:
- The app’s features. Do the competing applications have any great features which you can adopt? Are there any features missing (in your opinion)?
- Performance. Do the apps work without any problems or freeze from time to time?
- Design. Do you like it? Are there any patterns and ideas you can use as a source of inspiration? Device compatibility. What kind of devices do these apps support? Is it essential to make your product compatible with a wider range of gadgets?
- Promotion. How are these apps promoted? How can you create a more attractive and catchy brand?
- Audience. Do these apps target the same audience? And if not, why?
Apart from this, it is crucial to discover the opinion of these apps’ users — read the reviews at the stores, and pay special attention to the negative ones. In this way, you will discover the weaknesses of your competitors and start working on avoiding them even before your own product will be released. Positive reviews should also be checked — they will allow you to understand what features users like the most.
3. Defining the Willingness to Pay
Finally, it is important to define if your potential users would like to pay for your product. And if yes, how much? You can use the competitors’ prices as one of the factors, but it is still essential to consider the opinion of your audience (keep in mind though that intentions not necessarily always align with actions). Several open-ended questions included in the market research survey should be enough. Here are the examples:
- What price would be perfect to you?
- What price would be too high for you?
- What price would make you doubt the app’s quality?
In case your product is really unique, and your potential users have no experience of trying anything like this, come at the question of price from a different angle. If there are no apps like yours, it may be difficult for users to answer the above-mentioned questions. So ask them something like this:
- Would you buy a product for (insert a price here)?
You can also provide users with several response options: “100% likely”, “80% likely”, etc. This trick will help them to orient and simplify the process of analysis.
This is how we perform the research. We divide the whole process into three stages, and at the end get a clear picture of the market. You can use our recommendations and do the research on your own — there are more than enough tools which allow conducting surveys and analyzing the collected data.
However, if you still have any questions or simply want you own research to be done professionally and quickly, contact us via the form below. We would be pleased to apply our experience in practice and perform a research for your product!