Market Research for New Affiliate Business: Are You Doing It Correctly?

Market research is one of the most critical steps to consider before starting an affiliate business. But yet many new affiliate marketers often got it wrong: they either are ignorant about the market research process or got it mixed up with keyword research. Some of them even got the order wrong during the research phase. Keyword research will come only after market research because you must first ensure there is a market for the affiliate product you are going to offer before finding how your customer search online. In addition, market research saves you from guessing games; it helps you to uncover market opportunity and provides critical information to reduce financial risks.

Some examples of critical information such as which market segment to target; who are the right customers and what are their common characteristics? What are the customers’ true wants, needs and demand (problems to solve)? Can they afford to buy your offer? Who are the competitors in the market? Only after you have acquired such information will you be able to offer your customers of what they want precisely. This will also help in customizing your marketing mix and future competitive positioning.

To illustrate how to do the market research right, we will use the idea that has been brainstormed from the previous post – “How to Brainstorm Your First Affiliate Business Ideas”. We have identified “Healthy Organic Nutrition” is the product that you are interested in offering so the next step is to proceed with the market research.

#1: Identify the Market
The first step is to identify is there a market for “Healthy Organic Nutrition” product? Go to the pharmacy or stores and look at the nutrition products that are on sale. Observe who are the people who are buying these products? Are they happy with the product or are they looking for alternative? Doing so will help you to get first hand information about their problems and at the same time may offer insights you might not know.

Another effective way is to ask for samples from the affiliate merchants and distribute to your family and friends especially those who are taking other type of nutrition products. (Note: If the affiliate merchants do not offer free sample then buy from them so that you know the pros and cons of the product before selling to your customers). Ask them to try them out and see how they react. Do a survey or questionnaire after that and collect their feedback. The result collected will be used for developing action plan for future marketing decision and promotion.

#2: Segment the Market
From the first step, you know that your market is those who are health conscious and want extra boost for their health. However, there are many types of health conscious consumers and they can categorized into few segments, see chart as below.

Affiliate market research pie chart

The usual practice to segment market is according to the consumers’ common characteristics such as age, gender, income, health condition and lifestyle. The reason is it helps to pick the best market segment that will bring you the most profit. You may have a fantastic affiliate product but if you are targeting the wrong market segment, you may not make as much as you hope to. For example, the “Patients” market segment may also need extra nutrition due to their health condition but might not be able to afford premium products like “Healthy Organic Nutrition” when most of them are bogged down by heavy medical bills. However, if you are targeting the “Health Conscious” market segment which includes busy working adults, these groups of people have more spending power than the “Patients” segment.

#3: Target the Market
The technology nowadays allows you to segment your market very specifically. If you have picked the “Health Conscious” market segment, this will be your target market. Your target market can further segment them into working professionals, athletes and people who want to look good and young. And from the “working professionals”, you can segment it into male and female market segments. To stand out from the crowd, many affiliate marketers prefer to pick a narrower market segment which is also known as the niche market. The niche market is a market with unique needs and wants but often overlooked by other competitors such as a “Healthy Organic Nutrition product for Busy Executives”.

The niche market is one way you can use to target your market but to target the best market segment; you must also look at its size, profitability, growth and competition.

#4: Competitive Analysis
Competition will affect the survival of your business so do check out who are your competitors first? Besides your direct competitors, you must not ignore those potential competitors. Remember the classic examples when Kodak and Fuji were contended with their traditional cameras and film but never expected they were overthrown by Sony’s digital camera. So keep a close eye on the industrial trends, who knows that one day, the competition for healthy organic nutrition product is not from the nutrition industry but from beverages industry? The healthy organic nutrition can come in the form of healthy drink instead of capsules or tablets.

#5: Positioning
The last step is to determine how you are going to position your product to your target market. Are you going to be a premium product for an upscale market or affordable products for everybody? Find out how your competitors position themselves and see what benefits that you could offer but they lack of. According to American academics Aaker and Shansby, there are many variables that can create positioning such as product attribute, price, quality, usage or application, product class, competitors and users. Each of these variables can be used to your advantage in positioning but you must first understand your competitors and your products thoroughly.


Market research can be a time consuming and expensive process but once you have done the market research, you will be more knowledgeable and confident about your market, customers and your competitors.

Hopefully at this stage, you should also know the difference between market research and keyword research. As mentioned earlier in the post, keyword research is used to determine the keyword phrases, volume and frequency that your customers search every month. The information collected from market research is, however, to help you in developing a more concrete marketing plan. You will be in a better position to develop focused strategy and targeted promotion campaign to market your affiliate products so it is critical to do it right and well at the start of your affiliate business.

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