Why Conduct Market Research?
The goal of doing market research is to equip yourself with the information you need to make informed business decisions about start-up, innovation, growth, and the 4 P's:
Product — Improve your product or service based on findings about what your customers really want and need. Focus on things like function, appearance and customer service or warranties.
Price — Set a price based on popular profit margins, competitors' prices, financing options or the price a customer is willing to pay.
Placement — Decide where to set up and how to distribute a product. Compare the characteristics of various locations and the value of points of sale (retail, wholesale, online).
Promotion — Figure out how to best reach particular market segments (teens, families, students, professionals, etc.) in areas of advertising and publicity, social media, and branding.
Basic questions to answer with market research:
Who are your customers? Describe them in terms of age, occupation, income, lifestyle, educational attainment.
What do they buy now? Describe their buying habits relating to your product or service, including how much they buy, their favored suppliers, the most popular features, and the predominant price points.
Why do they buy? Depends on the product and its uses.
What will make them buy from you? Use detailed information about markets, sales figures, and consumer buying motivations.
Types of Market Research
The goal of primary research is to gather data from analyzing current sales and the effectiveness of current practices. Primary research also takes competitor’s plans into account, giving you information about your competition.
How can you collect primary research?
Interviews (either by phone or face-to-face)
Surveys (online or by mail)
Questionnaires (online or by mail)
Focus groups gathering a sampling of potential clients or customers and getting their direct feedback
Some important questions might include:
What factors do you consider when purchasing this product or service?
What do you like or dislike about current products or services currently on the market?
What areas would you suggest for improvement?
What is the appropriate price for a product or service?
The goal of secondary research is to analyze data that has already been published. With secondary data, you can identify competitors, establish benchmarks and identify target segments. Your segments are the people who fall into your targeted demographic--people who live a certain lifestyle, exhibit behavioral patterns, or fall into a predetermined age group.
No small business can succeed without understanding its customers, its products and services, and the market in general. Competition is often fierce and operating without conducting research may give your competitors an advantage over you.
Types of Research
Experimental Research – involves manipulating condition and studying effects
Correlation Research – involves studying the relationships among variables within a particular group, and frequently suggests the possibility of cause and effect
Survey Research – involves describing the characteristics of a group by means of such instruments as interview schedules, questionnaires, and tests.
Two categories of data collection: quantitative and qualitative.
Quantitative (Experimental, Single-subject, correlation, causal-comparative, survey)
Qualitative (Ethnographic, historical)