Perform a Franchise Local Market Study in 3 Easy Steps

Before you launch your franchise business in the UK, you need to understand the local market. By performing a detailed local market study, you’ll easily identify your target audience. You’ll see what their needs are and who your competitors are.

Here are three easy steps to doing a local market study for your UK franchise:

1. Segment your audience
2. Understand their needs
3. Study the competition

Step 1: Segment your audience

You need to know who you are selling to and what they need to make effective sales. This audience becomes your core target. You can easily segment the local market with the following criteria:

• Socio-Demographic: Gender, profession, age, family status, income
• Psychographic: Personal traits, lifestyle, attitude
• Behavioural: Purchase frequency, average spend, service usage

This segmentation creates what we call “personas.” It creates groups of similar people with traits that they share. By establishing these personas, you can develop tailored strategies and communications for each one.

Step 2: Understanding customer needs

In this step of performing a local market study, you map out the audience environment. In essence, you’ll get a better understanding of:

• Influencers
• Purchase motivations
• Purchase barriers
• Purchasing behaviours

The best way to do so is to create an empathy map. It helps you model the audience's perspective. You simply ask a few questions: What do they see? What do they hear? What do they think? What do they do? Why do they do it?

In this way, you put yourself in the shoes of the individual personas.

Once you have a few theories, it’s time to validate them. Conduct a few interviews or surveys to see how close your hypotheses were. From here, you can adapt your ideas to what your audience needs.

Step 3: Study the Competition

The local market becomes more dynamic as the number of competitors rises. This factor is appealing to financial partners. However, you need to grasp your competitors' strengths, weaknesses, and offerings.

Therefore, it’s best to start by creating a list of competitors in the area you want to establish your franchise. Start with a radius of 10 to 20 kilometers. From here, do a SWOT analysis on them. Determine their strengths, weaknesses, opportunities and threats to the local market.

Bear in mind that you also have indirect competitors. For example, chocolate makers are in indirect competition with florists. When deciding what to buy for your loved one, you may hesitate between flowers and chocolate.

Franchising directly depends on the concept and brand. The franchisor develops the pricing policy, communication or distribution channels. These factors are usually recorded in an operating manual. Obtaining these details goes a long way in studying the competition in your local market study.

Setting the Stage for Franchise Success

Performing a local market study is essential for the initial success of your franchise. You can make informed decisions by completing each of the above steps. Also, you can align your business goals for each persona. With these steps, you can easily navigate the complex nature of franchising in the UK.