How to Create a Market Research Plan

What should a market research plan include?

A market research plan should provide a thorough examination of how your product or service will fare in a defined area. Here are four key things to include in your plan.

1. Marketplace analysis

To know where you fit in the market, it’s important to have a broad understanding of your industry — covering everything from its annual revenue to the industry standards to the total number of businesses operating within it. Start your marketing analysis by gathering statistical data from sources like the U.S. Bureau of Labor Statistics and BMI Research. Then, consider the industry’s market size, potential customer base and how external factors, such as laws, technology, world events and socioeconomic changes, impact it.

2. Competitor analysis 

By analyzing your competitors, you can discover strategies to fill market gaps. This involves identifying well-known competitors and noting trends they employ successfully, scrutinizing customer feedback about businesses in your sector and understanding competitors’ product or service offerings. This knowledge can then guide the refinement of your own products or services to differentiate them from others in the market.

3. Target customer data

Identify which segment of potential customers in your industry you can effectively target, considering their demographics — such as age, ethnicity, income and location and psychographics, including beliefs, values and lifestyle. Learn about the challenges your customers face in their daily lives and determine how the features and benefits of your offerings address their needs.

4. Your marketing goals

You want to create goals that are realistic and attainable that also make a meaningful impact on your business’s growth. Consider myriad factors, including your target and expected number of sold products or services, target market behavior, pricing for each item and the cost of production and advertising. Your plan should also provide a clear road map for achieving those goals, focusing on approaches to distinguish your brand from competitors. 

How to create your market research plan

Many entrepreneurs mistakenly believe there is a big demand for their service or product but, in reality, there may not be. Your prices may be too high or low, or you may be going into a business with so many restrictions that it’s almost impossible to be successful.

To ensure your business makes smart, data-driven decisions right from the start, you’ll need to create a market research plan. Below is a step-by-step guide to help you get started. 

Step 1. Conduct a comprehensive situation analysis.

One of the first steps in constructing your marketing plan is to create a strengths, weaknesses, opportunities and threats (SWOT) analysis, which is used to identify your competition, to know how they operate and then to understand their strengths and weaknesses.

“The goal is to collect the right data, process it effectively and use the insights to advance your company’s objectives and overall growth,” explained Ksenia Kolyeva, senior marketing manager at Ecosense Inc.

Step 2: Develop clear marketing objectives.

In this section, describe the desired outcome for your marketing plan with realistic and attainable objectives, the targets, and a clear and concise time frame. The most common way to approach this is with marketing objectives, which may include the total number of customers and the retention rate, the average volume of purchases, total market share and the proportion of your potential market that makes purchases.

“Market research empowers small businesses to make informed decisions by identifying gaps, trends and opportunities,” Kolyeva said. “Whether targeting B2C, B2B or multiple markets … understanding the landscape allows businesses to tailor their strategies effectively.”

Step 3: Make a financial plan.

A financial plan is essential for creating a solid marketing plan. The plan maps out multiple critical components in your business, such as how much you intend to sell, what you will charge, delivery costs for your services, basic operating expenses and more. In your business plan, be sure to describe who you are, what your business will be about, your business goals and what your inspiration was to buy, begin or grow your business.

Step 4: Determine your target audience.

Once you know what makes you stand out from your competitors and how you’ll market yourself, you should decide who to target with all this information. That’s why your market research plan should delineate your target audience. What are their demographics and how will these qualities affect your plan? How do your company’s current products and services affect which consumers you can realistically make customers? Will that change in the future? All of these questions should be answered in your plan.

“Know your goals. Are you diving into a new market, figuring out your ideal audience or scoping out competitors?” explained Brown. “From there, break your audience into groups using demographics and preferences to build solid customer profiles. Pick your research methods based on your needs.”

Step 5: List your research methods.

Rarely does one research avenue make for a comprehensive market research plan. Instead, your plan should indicate several methods that will be used to determine the market share you can realistically obtain. This way, you get as much information as possible from as many sources as possible. The result is a more robust path toward establishing the exact footprint you desire for your company.

Once you’ve established your methods, make sure to conduct market research regularly. Otherwise, you could miss shifts in your customers’ needs and preferences. “Market research is not a one-time fix; it’s an ongoing process,” said Kolyeva. “Engage with your customers through surveys or in-person events, understand your top customer personas and establish clear success metrics to ensure you’re heading in the right direction.”

Step 6: Establish a timeline.

With your plan in place, you’ll need to figure out how long your market research process will take. Project management charts are often helpful as they divide tasks and personnel over a time frame you set. No matter which type of project management chart you use, try to build some flexibility into your time frame. A two-week buffer toward the home stretch comes in handy when a process scheduled for one week takes two — that buffer will keep you on deadline.

Step 7: Acknowledge ethical concerns.

Market research always presents opportunities for ethical missteps. After all, you’ll need to obtain competitor information and sensitive financial data that may not always be readily available. Your market research plan should thus encourage your team not to take any dicey steps to obtain this information. It may be better to state, “We could not obtain this competitor information,” than to spy on the competitor or pressure their current employees for knowledge. Plus, there’s nothing wrong with simply feeling better about the final state of your plan and how you got it there.

Using a market research firm

If the thought of trying to create your own market research plan seems daunting or too time-consuming, there are plenty of other people willing to do the work for you.

Pros of using a market research firm

If creating a market research plan seems overwhelming or out of your league, consider enlisting help. Outsourcing this task to a market research firm comes with several benefits, including:

• Professional guidance and perspective. As an objective third party, a market research firm can provide businesses with impartial perspective and guidance, helping them shape impactful brand strategies and marketing campaigns. 
• Tailored results. Market research firms, which can help businesses with everything from their marketing campaigns to brand launches, deliver precise results. They can draw on their expertise and experience to provide in-depth insights and solutions tailored specifically to your company’s needs. 
• Increased brand awareness and credibility. Working with a market research firm can elevate a brand above the competition. They provide credible and unique research that is highly valued by the media, enhancing your brand’s reputation and potentially increasing website traffic, social media shares and online visibility.

Cons of using a market research firm

Although hiring a firm can provide businesses with tremendous results, certain downsides can lead a business toward the do-it-yourself route, including: 

• High costs. Market research firms can be a costly expense that some businesses can’t afford. However, companies that can allocate the funds will likely see a positive return on investment, as they are paying for the expertise and proficiency of seasoned professionals in the field.
• Extended timelines for results. Finding the right market research firm for your business’s needs can take some time. And even longer — ranging from weeks to months — for a market research firm to complete a plan. This lack of immediate results can be detrimental for businesses that don’t have the time to wait. 

How to reduce costs when using a market research firm

Market research firms can charge into the thousands of dollars for a market research plan, but there are ways to lessen your costs:

• Outline your plans carefully and spell out objectives. “A well-structured market research plan is essential for small businesses, as it lays the groundwork for success and sustainability in competitive markets,” Kolyeva said.
• Examine as many sources as possible. “Tools like Google Analytics, SurveyMonkey and SEMrush can make the process easier,” Brown advised. “They give you the data you need to make more informed, faster decisions.”
• Before paying for any information, check with librarians, small business development centers or market research professors to see if they can help you access market research data for free.
• You may think you’ll need to spend a hefty sum to create a market research plan, but plenty of free and low-cost sources are available. Consider looking through university business schools, that will guide you through the process. [Read related article: Best Business Certifications]

Miranda Fraraccio contributed to this article.