Researching Your Market
Many small business owners are frightened by the term market research. Market research is seen as something that a large company does, not a small business. yet nothing is further from the truth.
Successful small business operators are constantly analysing the market, the competition and the needs of their customers. They probably don’t call it market research though. They call it “sharp business practice” or “being one step ahead”. The effect is the same; they understand the market they operate in.
Market research is also seen as being too expensive. But you should view it as an investment not as a cost. It is possible for you to do your own research.
Whether you wish to research the market to start a new business or develop a strategy for your existing business, you do not need a marketing degree to gather the basic information. What you do need is time, energy and a determination to develop a winning marketing strategy from the information you collect.
What then is market research? Put simply, market research is the means by which you find out about the size, characteristics and nature of a market. A market is any identified group of people who could use your product or service. Valid market research may be as simple as talking to potential customers and finding out what they want.
There are many things that market research can tell you. For example, you can:
- see if a market exists for your product or service
- define the size of that market
- determine customer profiles and target markets
- analyse market trends
- keep up with changes in the competition
- investigate customer needs
- ensure your price and product/service mix is realistic
- make sure your promotion is appropriate
- evaluate new product opportunities
- determine better ways of getting your product to the customer.
Market research helps you avoid one of the most common mistakes made in small business – producing a product or service and then trying to find customers for it. By using market research, you can be sure you will be selling what customers want rather than just what you want to product/sell.
Be careful. It is a trap to make assumptions about consumer needs based on your own values and behaviour, or those of your family and friends. Your market research should extend further than family and friends which will soon verify or discount such assumptions.
Market research will give you the information necessary to create effective marketing strategies. However, it is frequently difficult to sift through all the information you collect to come out with a clear picture of where you are now and where you want to be. There are a number of techniques to help you interpret your research, the three most helpful to small business being:
- segmenting the market
- analysing the product life cycle
- conducting a SWOT analysis.
In the coming weeks we will look deeper into these techniques and examine in details the best approach for small business. In the meantime, have a think about your own business “intelligence gathering” practices: are you listening to your customers regularly, are you surveying your customers, do you keep a look out for emerging trends and are you aware of changes in industry and governance issues that will effect your business.
Until next time.
Virtual Business Advisor