How to conduct Market Research

Step 1: Identify Your Competitors

Objective: Determine who your direct, indirect, and potential competitors are to get a complete picture of your competitive landscape.

Types of Competitors:

• Direct Competitors: Companies that offer similar products or services targeting the same customers.

• Indirect Competitors: Companies with alternative solutions addressing the same customer needs.

• Future Competitors: Companies that could potentially enter your market as it grows.

How to Identify Competitors:

• Google Search: Search keywords relevant to your product and see which companies come up.

• Customer Feedback: Ask potential customers which products or services they currently use to solve the same problem.

• Industry Reports: Look at market reports from sources like Statista, IBISWorld, and CB Insights, which often list key competitors.

• Social Media: Check industry-specific social media groups or platforms where competitors and customers interact.

Example: For a productivity app, you might identify direct competitors like Asana and Trello, indirect competitors like Google Sheets or email, and potential competitors in project management software.

Step 2: Analyze Their Product or Service

Objective: Understand the core features, benefits, and limitations of competitors’ products to see where your product stands.

Key Areas to Analyze:

• Features and Functionality: List out their main features, noting any unique features that set them apart.

• User Experience (UX): Evaluate the usability and design. Are there notable UX strengths or weaknesses?

• Technology: Look into the technology stack they use, if available, and how it impacts performance, scalability, or functionality.

• Product Updates: Track recent updates or upcoming features to see where they’re focusing their development efforts.

Example: Compare your app’s key features to those of competitors, noting areas like task automation, integrations, and mobile accessibility. Identify if competitors’ features solve customer pain points differently or more effectively.

Step 3: Evaluate Their Market Positioning and Brand

Objective: Understand how competitors position themselves and communicate their brand, to find areas where you can differentiate.

What to Look For:

• Value Proposition: Identify their key value propositions and the main benefit they promote (e.g., “the easiest way to manage projects”).

• Target Audience: Analyze who they’re targeting (small businesses, enterprises, freelancers) and any specific customer personas they serve.

• Messaging and Tone: Note the language, tone, and messaging they use. Are they formal, friendly, authoritative?

• Unique Selling Proposition (USP): See how they differentiate themselves in the market. Look for statements on their website or product pages that highlight their USP.

Example: If your competitors position themselves as comprehensive solutions for enterprises, consider if positioning as a simple, user-friendly tool for SMBs could differentiate you.

Step 4: Research Their Pricing Strategy

Objective: Understand competitors’ pricing models to determine if your pricing is competitive and sustainable.

What to Look For:

• Pricing Tiers: Check if they have tiered pricing based on features or user numbers (e.g., free, basic, pro, enterprise).

• Pricing Model: Look at whether they use a subscription, one-time fee, or freemium model.

• Additional Fees: Identify any hidden fees or extra costs for add-ons or premium features.

• Discounts and Trials: Check if they offer free trials, discounts, or annual billing discounts, which may influence customers’ buying decisions.

Example: Compare your pricing model to your competitors’. If they offer a freemium model, evaluate whether a low-cost introductory tier might help you attract budget-conscious customers.

Step 5: Study Their Go-to-Market Strategy

Objective: Identify how competitors attract and convert customers to inform your own marketing and sales strategy.

Key Areas to Analyze:

• Marketing Channels: Observe their online presence (social media, content marketing, email) to see which channels they focus on.

• Sales Process: If they have a sales team, evaluate whether they rely on outbound (cold calls, emails) or inbound (content, ads) strategies.

• Partnerships: Note any collaborations or partnerships they have that help expand their reach or credibility.

• Customer Acquisition and Retention Tactics: Look at promotions, loyalty programs, or referral incentives they use to attract and retain customers.

Example: If a competitor is heavily focused on content marketing with blogs and eBooks, consider adding similar tactics to your strategy, especially if it helps build thought leadership in your niche.

Step 6: Examine Customer Feedback and Reviews

Objective: Get insights into what customers like and dislike about competitors’ products to identify strengths to match and weaknesses to avoid.

Where to Find Reviews:

• Review Sites: Look at platforms like G2, Trustpilot, and Capterra for customer feedback.

• Social Media and Forums: Check Twitter, Reddit, and Quora for user discussions about competitors.

• App Stores: For mobile apps, read reviews on the Apple App Store or Google Play.

Key Points to Analyze:

• Common Complaints: Identify frequent issues or dissatisfaction points that customers mention.

• Feature Requests: Note any requested features or improvements that aren’t being addressed.

• Strengths Praised: Pay attention to the features or attributes that customers love and rely on.

Example: If customers complain about complicated onboarding with a competitor, emphasize simplicity in your onboarding and marketing to differentiate yourself.

Step 7: Analyze Their Financials and Growth (If Available)

Objective: If possible, understand competitors’ financial health and growth to see if they are gaining or losing ground in the market.

Sources for Financial Data:

• Public Companies: Check quarterly earnings reports, investor presentations, and SEC filings.

• Private Companies: Use Crunchbase, PitchBook, or CB Insights for funding history, revenue estimates, and growth metrics.

• Press Releases: Companies may release growth metrics in press releases or interviews.

Metrics to Look For:

• Funding Rounds: Note how much they’ve raised and from whom, as well as their valuation.

• Revenue and Growth Rates: Look for any estimates on revenue, customer growth, or other key metrics.

• Profitability: See if they are profitable or heavily reliant on investor funding to sustain growth.

Example: If a competitor recently raised a significant funding round, it may indicate they’re planning aggressive expansion, which could impact your competitive landscape.

Step 8: Identify Competitors’ Strengths and Weaknesses

Objective: Summarize the main strengths and weaknesses of each competitor to highlight areas where you can compete effectively.

How to Summarize:

• Strengths: List their primary advantages, such as market share, brand reputation, unique technology, or superior customer service.

• Weaknesses: Identify limitations like high prices, poor user experience, lack of features, or slow customer support.

• Opportunities: Note gaps in the market that they’re not addressing, which could be opportunities for your product.

Example: Competitor A may have an extensive feature set but lacks strong customer support, presenting an opportunity for you to focus on customer service excellence.

Step 9: Create a Competitive Matrix

Objective: A competitive matrix visually summarizes how your company compares to competitors on key criteria, helping you identify unique advantages.

How to Build a Competitive Matrix:

• List Competitors and Criteria: In the rows, list your competitors and your company. In the columns, include criteria like features, pricing, customer support, and brand reputation.

• Score Each Competitor: Use a simple scale (e.g., 1-5) or checks to indicate where competitors excel, match, or fall short.

Example Matrix Criteria:

Competitor	Core Features	Pricing	Customer Support	UX Design	Market Share
Competitor A	High	High	Low	Medium	High
Competitor B	Medium	Medium	High	High	Medium
Your Company	High	Low	High	High	Growing

Step 10: Use Insights to Develop Your Strategy

Objective: Leverage your findings to make informed decisions about your product development, pricing, marketing, and positioning.

Key Areas for Strategy Development:

• Product Development: Use gaps identified in competitor products to prioritize features and improvements.

• Pricing Strategy: Adjust pricing to be competitive, considering the value you offer relative to others.

• Positioning and Messaging: Emphasize the unique benefits your product provides over competitors, especially if they align with customer pain points.

• Marketing and Sales: Focus on channels and tactics that differentiate you from competitors or leverage competitor weaknesses.

Example: If competitors have strong enterprise features but complex UX, position yourself as a user-friendly alternative with similar capabilities.