Confused as to what you can learn from market research? Perhaps you feel it is a waste of your time, or that you already know your market quite well.

While I have written about how important it is to conduct market research, I haven’t explicitly discussed what specifically you can learn from it.

Below are 9 things you can learn about your market through market research. You may have the answers to some of these, but even leaving one unanswered is reason enough to conduct this valuable process.

1. If there is demand for your product

This is vital. If there is no demand for your product, you can’t make any sales. If you can’t make any sales, you cannot profit, period. Therefore, knowing if there is a demand for your product is something you should be certain about before even starting to market.

Saying to yourself: “This is a great idea, anyone would be stupid not to buy this”, or “I think people will love this product” is NOT sufficient in determining product demand.

Your own belief on what will and will not sell is not enough to consider this question answered. You aren’t an oracle and your opinion certainly isn’t objective. There is even a good chance you don’t belong to the demographic that you are marketing to. For something as important as this question, you need hard, tangible proof, not intuition. Your intuition is important to have in a lot of areas, but it is not a replacement for research; at least not in this process.

Yet I can’t tell you how many entrepreneurs determine the demand for their own product just by thinking that their product will catch on. I, too have done this. Don’t fall for the trap. Do your research and answer this question the appropriate way.

2. Who is demanding your product

This is another very important question to answer. You certainly don’t want to be targeting your product or service to the wrong demographic, do you? After all, targeting the wrong demographic could mean zero sales.

Knowing your target demographic is key and will aid you significantly in writing your marketing messages. However, it is often not enough just to know which demographics demand your product. You need to know which demographics are the most profitable ones.

You can usually answer this by determining what demographics your competition is and is not targeting. In fact, you can take this one step further and select narrower niches based on your competition’s targeted demographics. This way, your niches will feel more personally identified with your product, and may even be willing to pay a higher price.

3. If your product is profitable

Again, another extremely important point to determine. Knowing if your product is profitable is essential when determining your marketing strategy.

If your product is not profitable, that doesn’t necessarily mean it should be scrapped. If there is a lot of demand for it, and your competition is clearly selling a lot of this same product, this could mean that this is a front-end product, or a product that establishes a relationship with a customer.

The idea behind front-end and back-end marketing is that you use a cheap, attractive, highly demanded and often unprofitable product to bring customers to you and create a relationship with them. Then, once they have a relationship with you and a trust is established, they are marketed back-end products, carrying a higher premium and are much more profitable. Therefore, the margin that you lost on the front-end is recovered (and then some) in the back end.

Therefore, knowing if your product is a front or back-end product is essential to determining how and to whom you will be marketing your product to.

You don’t have to use front-end, back-end marketing, it is just a strategy you can use if you have an unprofitable, but highly demanded product.

4. The best ways to market your product

Knowing the different characteristics of your target market, as well as tactics that your competition is using can reveal this to you.

Understanding the best ways to market your product will add efficiency to your advertising: it will maximize the amount of sales per dollar spent on marketing, while eliminating wasted advertising costs: both time and money.

Having a good idea of the best ways to market your product in the early stages will make it easier for you to start selling your product faster and will eliminate a lot of market testing that you otherwise would have to do.

5. Any seasonality in product demand

Maybe your product is only demanded in certain seasons. Why is this important to know?

Firstly, if you are generating most of your revenues during one part of the year, but incur expenses the entire year, you may have to plan ahead and look into getting a line of credit for your business (good luck in this economy).

Secondly, you may want to sell a second product that has the opposite seasonality. So if you have one product that sells mostly in the spring and summer, sell another product that sells mainly during the fall and winter months.

Understanding your product’s seasonality (if any) is essential for planning ahead in case you can not perfectly match the timing of your revenues and expenses.

6. How much customers are willing to spend

You don’t want to overprice your product. That will drive away sales. But you also don’t want to underprice your product because that will eat away at profits.

Of course, both of these points depend heavily on your marketing strategy. You may want to charge premium pricing for a higher quality product, or price lower than the competition to sell more units.

Either way, it is important to know the going rate for your product. This way you can establish an acceptable range of prices. Premium pricing is one thing, but if your product is priced way out of the normal range, no one will buy.

Understanding this range of acceptable prices will help you determine what price you want to charge for your product, and if it will lie in the upper-bound or lower-bound of prices.

7. If customers will repeat buy

Knowing whether or not your customers will buy from you again will help you determine if you should utilize front-end and back-end marketing, or even assist you in deciding on product pricing.

If your customers do repeat buy, you may be able to afford a smaller margin since they will come back to you again. However if this product is generally a one time purchase, you may want to consider employing a higher margin.

It ultimately comes down to determining the lifetime value of your customer. Knowing this will help you determine acceptable margins for your product.

All of this can be determined by doing some basic market research and even observing the strategies that your competition employs.

8. Opportunities and threats for your marketing campaigns

Understanding any kind of opportunities that are presented to you for your advertising will aid in creating a more efficient and profitable marketing campaign.

Maybe there are additional niches to target or more products that your target will buy. These are all things to consider when researching your market.

Also consider threats for your marketing campaign. Are there any factors that may inhibit your ability to generate sales (ie: recession fears and therefore, limited consumer spending)?

Make sure to address this when conducting market research. Looking into what your competition is doing to address different problems can help. Consider trying to develop a contingency plan to turn these threats into opportunities.

9. Strengths and weaknesses of your product and your competition’s product

What features and benefits do your customers like and dislike? Are there any undesirable features that are present in your product? What about your competitions product?

Are you sure that all of the desirable features present in your competition’s product is present in yours as well?

These are all things you should know before marketing your product so you can address them in your sales message. Assuming a benefit you offer is desirable when it really isn’t means wasted time and money. Leaving out a desirable benefit in your product that your competitor has makes your competition that much more attractive.

Are there any other things that you believe you can learn from market research?

I never realized how important market research really was until I actually did it. Unfortunately for me, I conducted this research after I had already began marketing my product.

Luckily, in my case, it wasn’t the end of the world and I only had to work to tweak the positioning of my product. The same isn’t true in every case and not conducting sufficient market research can prove to cost business owners a lot of wasted money.

The reason market research is so important is because it gives business owners a better insight into what the customer is demanding and if the niche you are trying to market to is a profitable one.

Yet so many business owners fail to conduct enough market research because entrepreneurs believe they understand their product and their market’s needs more than they really do.

I know this because I was one of these business owners. I began marketing my product, believing that there were certain features and benefits that my market was looking for in this product and I decided to research later.

Upon finally conducting my research, I found that my product positioning was all wrong, I was emphasizing the wrong benefits and my customer’s needs were different from what I expected.

The good news about making this mistake is that it is correctable and it is a mistake you can learn from. The bad news is that this is potentially a very expensive mistake to make. The longer you wait to perform market research, the longer your marketing mix will be inefficient, costing you lost sales and wasted advertising expenses.

However, the amount of insight you get from well conducted market research and how easy it is to do today means there is no good excuse not to do it. By spending just a few hours online, you can learn what exactly your customers are looking for in the type of product you are selling, what they don’t like, how much they are willing to spend, what marketing causes them to buy, if the product is rising in popularity, how much your competition is spending on online advertising, how they are advertising, along with a plethora of other vital information that I haven’t mentioned.

As mentioned previously, AdWords for Dummies author, Howie Jacobson discusses the use of Google Trends, Google Keyword Tools, Google Sponsored Links, user groups and many others that give you access to all of this information for free!

Since this information is so revealing, easy to obtain and free, it is very important to start researching as soon as possible. In fact, this is one of the first things you should do when considering getting into a new business. You wouldn’t want to waste any of your valuable time working on a product that there is no market for.

Furthermore, you should be sure to conduct market research on a regular basis during your normal business operations to ensure that your marketing efforts remain efficient.

Has anyone had any past successes with well conducted market research? Any blunders? Does anyone have any other good online resources for market research?