Depending on where you plan to set up shop, you could be facing some steep competition. In new and old markets alike, cannabis retailers are popping up on every street corner, with cannabis delivery services filling in the gaps. To get an edge, you'll need to employ market research before spending any money marketing and advertising in cannabis.
Market research encompasses a broad set of tools and techniques to give you a better understanding of customers, competition, and market trends. It can mean anything from consumer surveys, to competitive analysis, to demographic and geo-spatial data.
The intel gathering from this process helps you understand your place in the market, hone in on brand differentiation, and better segment your target audience. Data is power, especially when it comes to standing out amongst the ever-growing landscape of cannabis.
The Basics of Market Research
There are both informal and formal techniques driving market research. Informally, it may be as simple as taste-testing new edible flavors among friends.
At the more formal end of the spectrum, it can mean partnering with a market research firm, hiring a programmatic ad specialist, and getting a branding expert on board. There are, of course, many options in between.
Market research typically encompasses public, commercial, and internal sources of information. These include local demographics, industry insights from private marketing firms, and your internal numbers from sales.
The end goal of all this information gathering is to increase your sales by identifying opportunities within your market. Who isn't being served by current retailers? Where is there space? And how can you do it better?
Cannabis Market Research Starts with Compliance
A less glamorous but nevertheless critical aspect of cannabis market research is the compliance component. Legalization may be spreading…but it’s not the same across the board. In every state, county, and sometimes municipality, your new cannabis business could face entirely new sets of regulations.
Before you sign on the dotted line on a lease agreement or apply for a license, researching with the aid of a compliance or legal expert is going to help you drill down on location and business plan.
Detailed Competitive Analysis
How well do you know your competitors? For example, how many dispensaries or delivery companies are already in operation in the area where you plan to open? How do shoppers feel about these companies? What's their market share?
A market research company can help crunch the hard numbers behind your local competition. But you can also do your own research into your biggest competitors.
Do online and in-person visits. Get a feel for their branding. Ask yourself questions about who they are marketing to (ex: stoner culture, elevated shoppers, females, wellness consumers). What are their price points like? Their products?
Critically evaluate the pros and cons of these companies, everything from the online shopping experience to what kinds of products they carry. Then, use this data to help inform your own branding and, subsequently, your marketing and advertising in cannabis.
Designing Your Target Audience, aka the Buyer Persona
Do you know who you are advertising to? Because you are likely trying to differentiate yourself within an already crowded marketplace, you'll want to drill down to a specific demographic.
Your compliance research and competitive analysis will inform broader demographic details. For example, maybe you discovered that all your competitors appeal to an old-school stoner culture vibe, with nobody catering to female and wellness-focused consumers. This is a glaring hole in the market and could build out a novel buyer persona.
Alongside your marketing team, break down the specifics of your consumer profile, including gender, age, location, habits, salary, education, and hobbies. Even better if you can back up this information with statistics, online surveys, focus groups, and numbers.
How this All Plays into Marketing and Advertising in Cannabis
All this intel plays into your overall branding, marketing, and advertising strategy. It informs your email marketing campaign, programmatic advertising, and content marketing plan.
Instead of a "Spray and Pray" approach, market research means you can target specific audiences, in specific locations, with specific content.
Market research especially plays into programmatic marketing, which uses detailed and specific data on consumer behavior, demographics, location, and interests to pull them into your sales funnel. Interested? Check out one of our Programmatic case studies.
Therefore, the more you know from market research, the more effective your advertising — and eventually you’ll see this reflected in your bottom line.
Make Market Research an Ongoing Aspect of Your Business
Once you've launched, this doesn't mean your market research is over. Remember, the more data you have about your current competitors and target audience, the more informed your daily operations.
The cannabis market is evolving all the time, which means your business needs to adapt constantly. Be sure to build systematic market research into your annual strategy, and most importantly, adapt when needed.
Interested In Learning More?
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