Market research can give a business line of sight into what new products and services may bring new, profitable opportunities, and what market segments may be underserved and ripe for the picking.
Market research can also provide insights into whether a business is effectively meeting its current customers’ needs and expectations.
By researching the answers to specific questions, business owners can learn whether they need to change their package design or pricing, and even whether they might want to consider offering additional products or services.
Table of contents:
- The biggest promises of market research
- How do you do market research on a shoestring budget?
- Analyzing data
Successful businesses undertake market research on a regular basis to:
- identify potential new customers
- learn more about existing customers
- inform their decisions regarding existing and new products or services
- better understand their competitors
- test new markets
- identify performance, pricing or promotion opportunities
- research competition
|“Failure to do market research before you begin a business venture or during its operation is like driving a car from Texas to New York without a map or street signs” says William Bill of Wealth Design Group LLC in Houston. “You have to know which direction to travel and how fast to go. A good market research plan indicates where and who your customers are. It will also tell you when they are most likely and willing to purchase your goods or use your services.”|
Biggest promises of Market Research:
Promise 1. Better strategic decisions
Many companies don’t know exactly who they are in the market.
Do you know?
Many don’t, and yet they think they understand the market, and know what the buyer wants. How would they know if they don’t even know their own position?
Let’s see if you can answer them:·
- Who is in front of you and behind you in the market place?
- How much is your competitor’s profit?
- How big is the market?
- Do you have to use an attack or defensive strategy?
- What is your main message? What is your competitor’s? Does the market understand how you are different from the competitor?
If you can’t answer the questions above, this means you have no information to make the right decision. If you have useful information, then you will save time time, plan ahead, and make better decisions.
It’s a fundamental thing.
You need to know if there’s a market for your product or service, how much demand is out there, who your potential customers are, what are they prepared to pay, and how often are they prepared to pay?
When you make marketing research, the results can assist you in developing a new business and marketing plan, or to evaluate the success of your current efforts. That’s why it’s important to ask the right questions, in the right way, and of the right people. Poorly researched information can send a business in the wrong direction.
There is a variety of data sources to assist you in researching your:
Market research involves two types of data:
Primary information. This is research you can complete yourself or hire someone to gather for you.
Ask open-ended questions, which helps you define a specific problem, and usually involves detailed, lengthy answers.
Secondary information. This type of research is already compiled and organized for you. Examples of secondary information include reports and studies by government agencies, trade associations or other businesses within your industry. Most of the research you gather will most likely be secondary.
How do you do market research on a shoestring budget?
Market research doesn’t have to be expensive. There are a lot of techniques that allow you to collect very valuable data at minimal or even no cost. Below are some examples of inexpensive ways to gather information that will help you better understand your clients, their needs, and what motivates them.
- Use Government Resources and Research Tools
Local, state, and federal agencies collect helpful information. These no-cost resources, often available online or at libraries, U.S. Census Bureau reports and other federal publications, trade reports. The SBA offers a free online tool called SizeUp, which caters to small enterprises conducting market research.
Without spending a penny, you can uncover a great deal of information about potential customers, your competition, and the business environment in any geographical region nationwide. This data can include patterns of income and spending, ages and household demographics, and many other relevant characteristics.
Do some research yourself
The objective of the competitor research is to learn as much as possible about the marketplace you will be entering, in terms of the products or services that exist, to who are they targeted, and how each of them is performing.
Google it. It’s not like the old days where you had to dig around for information about your competitors on the internet, it’s usually there within seconds. You can do a lot of very quick, effective research just by spending an hour on the internet, looking at who your potential competitors are. This includes Googling the brand names of the competitors, and examining the websites of each of them. It also involves looking up products on sites like Ebay, Amazon, etc. for both product and price comparisons.
Nothing is more valuable than a conversation with a customer – and the price is: free!
Don’t ask friends and family about your idea, as you will not get the truth. People who know you well be likely to “like” your idea, as they have difficulty being objective due to their relationship with you.
To make a good interview do the following:
- Have a script and memorize it-don’t read it
- Avoid pauses because respondent interest can quickly drop
- Ask if a follow-up call or email is possible in case you require additional information
How to set it up?
- Ask your current customers
- Get on social media
- Invite clients and potential clients to participate in a survey
Whether it’s a newsletter or an invoice, you can include a call-to-action to provide feedback through a short survey. Offer a small gift certificate, savings coupon, or similar reward for participation.
Run user testing on your website
Making a research what’s working and what’s not can help you raise the productivity of your site. You can get a lot of information about your site performance from Google Analytics about which pages are the most popular, or converting the most lead.
In addition to basic analytics though, there are some free and low-cost tools out there to help you run user testing on your website.
How to set it up?
Set up an autoresponder that collects email addresses and after they give you their info, send out the survey questions.
- What is the first thing you look at on this page?
- Where would you go first if you wanted to take the next step?
- Is this page trustworthy?
- How likely would you be to explore this site (rating scale)?
Online surveys can be quite cheap and easy to do. You can make a survey on Facebook or LinkedIn.
Or you could go out and hand out questionnaires, people still do that. That happens in the food trade. If someone’s trying something new they’ll put up a form asking for feedback. Nowadays people are more confident with giving their opinions about things. People are used to telling people what they think, they don’t hold back and that’s a good thing for research.
You can conduct formal surveys online (using a tool like SurveyMonkey). When budgeting, you’ll want to factor in any long-distance phone charges and time spent recording verbal answers; the prices of return postage or post cards; and any fees associated with the size of your online survey.
- Questionnaires (by Direct Mail)
Sending out an emailed or printed questionnaire to your targeted customers is an easy way to gather information. You can even ask customers to complete one while they are at your store. If you offer them a small reward and keep it from being too time-consuming, most people will happily do it.
- Questions have to be short and to the point
- A questionnaire has to be no more than two pages
- Attach a professionally-prepared cover letter that adequately explains why you’re doing this questionnaire
- A postage-paid, self-addressed envelope to return the questionnaire in. Postage-paid envelopes are available from the post office
- Give them an incentive, such as a coupon in your shop or a downloadable gift to complete the questionnaire
Convene a Focus Group
Gathering a group of likely prospects for an hour or two gives you a chance to ask in-depth questions.
Compared with other types of market research, focus groups are somewhat complicated to organize and run. They also can cost more than other forms of market research, too. But they can give quality information.
7. Competitor research
The following metrics are interesting:
- Audience growth
- Content distribution
- Content engagement
Here is a list of marketing channels you could use in a competitive analysis:
After identifying the source and type of information you need, you can start to collect it.
The aim of data analysis in research is to discover useful information from a set of data, and conclusions that can be used to form insights. Large quantities of data must be summarized and presented in a way that clearly communicates the most important features and conclusions.
It is important not to allow your opinions or preferences to affect your research. Having a preconceived idea of the results will bias your research and provide false information. Remain open minded and be prepared for unanticipated results.
When processing data make sure you:
- keep your market research objectives in mind
- categorize data according to what is most relevant for your business, don’t become side-tracked by information that is just interesting
- collate your data using tables or lists to make it easier to identify certain trends and themes.
You may need to collect additional information if your results are inconclusive.
Analyzing the data should allow you to draw some conclusions regarding your initial objectives.
Update your business and marketing plans with the information collected from your market research.