What is market research? Application in e-commerce

The process of understanding what market research is plays an important role in building a business's long-term development strategy. Understanding the market and customers will help businesses determine the right goals and maintain their position in a fiercely competitive environment.

1. What is market research?

What is market research? This is the process of collecting, recording, analyzing and evaluating data from the target market about consumer needs, behavior or preferences for products and services. The collected data will serve the business plans and strategies of the enterprise.

Market research is an essential activity in business, allowing entrepreneurs to accurately and fully perceive the market and draw useful insights for business plans and strategies. When developing business on e-commerce platforms, market research will help businesses identify two important issues:

• Does the market you want to penetrate have potential?

• If there is potential, how should the product model be sold or how should it be improved?

Learn more: What is a potential product? 5 steps to identify potential products

2. What is the role of market research?

From understanding what market research is, the data collected and analyzed will become a useful source of information about the market and customers for businesses. Help businesses:

• Understand the market and customers

• Build an effective business plan

• Improve competitiveness

• Make future forecasts

Understand the market and customers

Market and target customers are two important factors that determine the future development of a business. Specifically:

For the market: Research results bring back data about the size, characteristics, potential, trends,... of the target market. From there, it creates an in-depth perspective on the current and future market and supports the formation of clear business strategies and goals.

For customers: Research is meaningful in providing information about the needs, tastes, characteristics, etc. of target customers. From there, accumulate detailed knowledge about customers, especially consumer behavior, and build quality product plans and effective marketing plans.

Build a business plan in the right direction and effectively

A clear understanding of the market and business objects creates the premise to form effective strategies, achieving worthy business results. It is also a guideline that guides the company to properly implement its vision and mission in the long term.

Understanding what market research is helps sellers solve sales problems

Read more: Instructions for building the latest business plan for 2024

Enhance competitiveness

Discovering what market research is will help businesses clearly portray their competitors:

• Who are the business's competitors?

• What is their strategy?

• What are their development goals?

• What are your competitors' strengths and weaknesses?

• How do our opponents tend to react to the strategy we will use?

The above core issues help the unit understand what advantages and disadvantages it has compared to its competitors. From there, come up with effective attack and defense strategies.

Understanding what market research is also helps managers avoid mistakes and limitations that competitors make in business. At a higher level, business owners can predict their competitors' next strategies to respond and respond promptly.

Make future forecasts

When studying the macro environment, the unit has the ability to forecast future trends, fluctuations, etc. of the market. From there, plan early to prepare and adapt: ​​take advantage of opportunities, deal with challenges,... Predicting the future will support business organizations to develop sustainably in the long term.

3. Research the e-commerce market for businesses

5-step process of specific and effective e-commerce market research, helping businesses succeed. Immediately refer to the 5 steps of market research in the following section.

3.1. Identify products with sustainable growth trends

The solution to finding emerging products with long-term growth potential is to look at their strong historical growth trends over the most recent months/years. You need to carefully consider products that are currently popular or growing the fastest in the past week,... because there is a high possibility that they have peaked and will soon weaken.

3.2. Identify growing markets

A product's chances of success increase significantly if it is part of a growing market trend rather than one that has stagnated or is in decline. To answer the question: “Is this a good product niche to pursue?”, one should carefully consider many aspects to determine the market growth trajectory:

• Market size

• Growth forecast

• Compound annual growth rate

• Target market spending data

• Demographic data

• Market psychology,...etc.

The steps of “what is market research” are what researchers wonder about when first starting this work

3.3. Measure profits and consumer demand

The next step in the process is to analyze specific metrics about the profitability of the products. To determine average monthly gross profit, an entity needs to know the average retail price per unit, average monthly sales, and manufacturing and wholesale costs.

This task will help people identify products and high profits. At the same time, it helps narrow down the list of potential products that were listed in the first step.

3.4. Analyze competition in the market

Competitor analysis is an indispensable task when researching the market, especially the leading brands in the field. Determining traffic growth, search traffic, brand query trends, etc. are important indicators to see if your competitors are performing well on the online business platform.

Read more: Understand what competitors are in e-commerce

3.5. Identify customer pain points

Pain points are factors that prevent customers from "spending money" on the product. Therefore, if you can find and solve these customer problems, your brand will increase its chances of success. Customer reviews and feedback about competitor products will help you handle the above problems:

• What specific problems are customers using the product to solve?

• What do people like about the product?

• Things people don't like about the product

• Target customer portrait?

4. What are market research support tools?

Understanding what market research is, business people will realize that this is a long and not easy process. Here are some tools to help sellers complete this job faster and with better quality:

4.1. Google Trends

This tool is very familiar to business people or marketers. Google Trends is a keyword research tool that allows researchers to learn and gain deeper insight into trends and consumer search behavior.

Search results of e-commerce sites in Vietnam in 12 months

All research data is exported by Google Trends in chart form to help users easily understand the main functions:

• Search for specific keywords

• Compare interest between different related keywords in the same chart

• View keyword search trends as graphs in real time (hour, day, month,...)

• Analyze keyword interest by geographic region

• Allows identification of market trends and areas of interest to customers

• Displays news related to researched keywords

• Propose predictions about keyword search trends in the near future

4.2. Jungle Scout

Jungle Scout is a powerful tool to support sellers on the Amazon e-commerce platform. This is an extremely effective tool to help sellers increase profits, discover growth opportunities and surpass competitors. It possesses many typical features:

• Product research

• Keyword analysis

• Track rankings

• Detailed analysis of competitors

4.3. Metric

Metric is an e-commerce metrics platform for businesses, brands and sellers. It provides market data analysis tools, helping users build business strategies and make decisions faster. Outstanding features:

• Research market reports

• Price control

• Control market data

5. What is market research? Conclude

Understanding clearly what market research is, businessmen will realize its importance and effectiveness. Smartly using the above methods and support tools, researchers will bring in useful and quality market insights. Thereby improving business performance and maintaining sustainable development.

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