Marketing research is all about helping you create a profitable online home business.
Entreprenuer defines market research as “the process of gathering, analyzing and interpreting information about a market, about a product or service to be offered for sale in that market, and about the past, present and potential customers for the product or service; research into the characteristics, spending habits, location and needs of your business’s target market, the industry as a whole, and the particular competitors you face.”
This is a huge subject.
We can define it a little differently. We can define it as a niche market.
Niche is the situation in which a business’s products or services can succeed by being sold to a particular kind or group of people. (Merriam-Webster dictionary)
The objective is to find profitable corners (niches) in the marketplace to sell products and services. We will identify the niche and the consumers associated with the niche. Profitability is dependent upon the supply and demand for products and services.
How to identify your market
Identifying a viable market is based on determining supply and demand. Supply can be defined as what product or service is available to fulfill a consumer’s wants or needs (demand). In other words, what problem does the consumer have that needs a solution? For extra information, click here.
Supply and demand is much like the chicken and egg. Which came first?
We are going to start with demand. Even though there are innovative products introduced into the marketplace to fill a demand that consumers’ did not know they had. ZipCars is a classic example. Apples’ iPhone is an example of a product solving a consumer problem. Consumers did not like carrying a separate cell phone and music player. Apple solved this problem by combining the two into the iPhone.
There are two ways to evaluate the demand. First is pre-existing demand. Products and services are already being supplied by your competitors. To enter this market, you have to determine how to make your product better than everyone else’s or what makes your product stand out from the rest. This is your Unique Selling Proposition (USP). “Me too” products do not sell!
The other option is creating new demand. This is done through innovation. New demand is created by bringing a new, unique product to the marketplace. Amazon was first to bring electronic books to the marketplace. They have done okay. But being first in the marketplace is a high risk, high cost proposition.
To determine the demand for your product, it is important to define or determine who your potential customers are. This is done by determining who and why would they want (demand) your product.
The purpose of identifying your typical customer is so that you can connect with your customer. You will want to know the customer’s needs and pain points. With this information, you will be able to help solve the customer’s problems.
Tools for identifying your niche
Market research tools include tools to help you identify keywords related to your product or service.
Keyword is defined as a significant word or phrase that defines your product or service. A keyword is used by search engine users as search terms in their search for information or products on the internet. Through Google, for example, the search engine matches the searchers search terms with the related content on websites.
Google states that “Words or phrases describing your product or service that you choose to help determine when and where your ad can appear. The keywords you choose are used to show your ads to people. Select high-quality, relevant keywords for your ad campaign to help you reach only the most interested people, who are more likely to become your customers.”
Should you purchase Google advertising, when someone searches on Google, your ad could be eligible to appear based on the similarity of your keywords to the person’s search terms, as well as your keyword match types. Keywords are also used to match your ad to sites in the Google Network that are related to your keywords and ads.
To help identify your niche, DMOZ.org is the largest, most comprehensive human-edited directory of the Web. It is the Web, Organized. It is constructed and maintained by a passionate, global community of volunteer editors. It was historically known as the Open Directory Project (ODP). DMOZ lists over 5 million websites by category.
Google Keyword Planner is another tool to help identify your niche.
You can search by product/service phrase, website or category. It shows the average number of times people have searched for specific keywords based on the date range and targeting settings that you have selected. The following is a screenshot of the keywords related to my search term, “market research tools.”
Another keyword tool is Jaaxy.
Jaaxy is a powerful research tool that helps you identify the number of other websites that are competing for keywords. The following screenshot shows the search results for the keyword “market research tools.” The search results show the keywords related to the search term I used, “market research tools.”
Their Quoted Search Results (QSR) shows the number of websites ranked by Google for the search terms used. The SEO score reflects the the likelihood of being ranked on the first page of Google. Higher the number, higher the likelihood. The color-coded Keyword Quality Indicatior (KQI) shows whether the keyword is great, OK or poor.
Jaaxy offers free members 30 free searches to try out their service. Beyond that requires a paid subscription.
Keyword Finder is another useful tool.
Keyword Finder is an online application to find “long tail” keywords. “Long tail” refers to multiple words or phrases. Using multiple words narrowly focuses the search. Search engines will return fewer, but more accurate results. Kwfinder is a paid subscription service, but you can do two searches every 24 hours. The following screenshot shows kwfinder.
What’s hot and what’s not! All about trends.
When doing marketing research, it is always a good idea to evaluate what is currently trending. Promoting hot trends is a profitable niche in itself.
You never know whether there is a new innovative product launched that will make yours obsolete. So it pays to watch trends. Some trend following tools are:
- Google Trends – Google provides current information what is trending in the news and current events.
- thinkwithgoogle.com – “Google’s source for insights, trends and research in digital marketing. Get creative inspiration, industry intelligence and best practices for your business.”
- trendhunter.com – trend Hunter, a Canadian company, is the world’s #1, most popular trend community. Their collection of cutting edge ideas are the source of inspiration for industry professionals, aspiring entrepreneurs and the insatiably curious.
- trendwatching.com – Trend Watching does exactly that. They track and report on worldwide trends. Their services are used by over 1200 companies.
Finding your competition
Your profitability in your selected niche market can be impacted by your competition. To find your competitors and relevant information, there are some useful tools.
Alexa – Alexa provides competitive intelligence on websites including worldwide popularity ranking worldwide. One of the benefits of using Alexa is the ability to see what websites are related to the one searched. Alexa also provides top keywords from search engines as well as websites with similar names. The following screenshot shows partial results from a search for crazyegg.com.
This screenshot shows websites related to crazyegg.com as well as sites with similar names.
SpyFu – SpyFu is a great keyword research tool for analyzing your competitors. SpyFu provides a domain overview of their most profitable keywords. It shows where the competing website is in Google. It also shows the paid advertising keywords (like Google Adwords). The screenshot below shows the monthly domain overview of crazyegg.com. It shows that 95% of their inbound traffic from Google is organic (from searches). 5% of the traffic comes from paid ads.
SpyFu also shows crazyegg.com top organic competitors and top paid competitors as well as backlinks, Adword history and a bunch more metrics.
Doing all this market research is great. But what do I do with all this information?
Marketing research helps you to find out if your business is feasible. You identify the supply and demand for your products and services by collecting relevant information about similar products in the marketplace, potential customers and their needs as well as collect information about competitors.
Essential marketing research tools are used to identify categories and market niches suitable for your products and services.
Keywords help define your products and services as they apply to internet search engines like Google. Keywords are important in the ranking of search results. Once you have identified applicable keywords, they are used to create ideas for your website content. It all becomes part of business planning and marketing strategies to maximize the amount of visitors to your website as well as maximize profits.
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