Business model research is an essential process for entrepreneurs, founders, CEOs, and leadership teams. One of the most important steps in business modelling is researching target markets and competitors. When businesses understand their target market and competitors, they can make informed decisions about the direction of their software product development. Market research makes it possible to model a product that meets customers’ needs and stands out from competitors and the industry landscape.
Why and where do target market and competitor research fit in the software development process?
In the discovery stage of the software development process, target market and competitor research are typically carried out. The purpose of the discovery phase, first and foremost in software development, is to foresee and eliminate risks such as a lack of market demand. This iterative and ongoing process helps businesses understand the problem they are trying to solve and identify potential solutions.
During target market research, it is important to identify the demographic, psychographic, geographic, and behavioural characteristics of your potential target customers. These characteristics help you highlight factors such as location, income, and lifestyle when defining your target market. Which enables you to tailor your product or service to meet those needs.
In this phase, businesses gather information about the needs and pain points of their potential customers and identify existing market opportunities.
Competitive research is also conducted to understand the market landscape and identify the value proposition of similar solutions in the market. Look at their pricing, marketing strategies, and product offerings to understand how they address their target market. This information can be used to identify market gaps and opportunities for differentiation.
It is important to note that research doesn’t stop after the initial research phase; it’s an ongoing process. The market and competition are constantly changing, so it is important to stay updated on any new developments.
How does competitor and target market research contribute to product-market fit?
Target market and competitor research can help a business achieve product-market fit by providing insights into the needs, preferences, and pain points of its potential customers, as well as understanding the competitive landscape of its industry.
By better understanding the target and competitor markets, businesses can better identify the features, functions, and values that are most important to their niche market and design a product(s) with unique selling propositions to stand out from the competition.
Competitor research is key to identifying gaps in the market and opportunities for differentiation by understanding the strengths and weaknesses of their competitors.
Target market research assists in achieving product-market fit by offering insights into the needs of the target market and identifying opportunities for differentiation.
In summary, market and competitor research is an essential step in business modelling. It enables you to understand your potential customers and the competition, which will ultimately help you make decisions about the positioning and strategy of your product.