Studies have shown that one of the main reasons entrepreneurs fail in their new ventures is because they did not do their market research. Market research can help you with well-made decisions for your business, contribute to your sales growth and give your brand a better chance of success. You might have an excellent idea for business but it is not enough unless you check if there really is a market for your products or services.
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Market research is a cost-effective way to check out if your idea is going to work or not. It tells you what your customers want and then you can match your products and services with your customers desires. It will give you an advantage over your competitors and you can improve your chances of success. Overall, it can help you make better decisions through information and data gathered.
While you can always hire market research professionals to do this for you, it can be very expensive. You can do your own market research by employing lots of low cost and straightforward techniques that you can use to get the information you need.
Company Records
If you are already in business, companies’ own records can be one of the best sources to gather marketing data. Company records can provide a large amount of data to help with strategic and tactical marketing decisions. For example, invoice records can give information on who the buyers are and how much they purchase. Purchase records can reveal information about customer loyalty patterns, identify gaps in customer’s purchasing and reveal the most valuable customers. However, it matters how the data is collected.
Ideally, routine data should be collected and kept in such detail to help with marketing decision making. For instance, sales records should be kept by customer, customer type, product, product line, sales territory and detailed period. This data type can help identify the valuable customers, product lines and trends in the marketplace. The best customers are usually the existing customers.
Off the Peg Research
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This type of research is based on the already available data outside the company. Information on market sizes and growth rates, social and economic trends, and about competitive companies are usually available. Off the peg research is generally classified into three types.
The first is desk or secondary research using published data. This is when the researcher is the secondary user of the already researched material. This method can be relatively cheap, quick, as well as reliable and accurate. However, it does have its limitations. It can also be outdated and it can give you limited information like being able to give you the number of customers and competitors but would lack information on why, and that might be something you need to know especially if you have just started a business.
The next is research using data available from regular market service of syndicated research. This is usually done by larger marketing agencies and they sell the results to interested buyers. It happens when a group of research buyers share the cost and findings of the research. The advantage of this type of research is that methods are tried and tested. Research is usually done on a more extensive scale and results are more reliable. The disadvantage, however, is that the data is limited to monitor the change in trends over time and it is not company specific.
Lastly for off the peg research, the third type is research in which data collection methods are shared but not the data itself. They are done using a predetermined sampling frame – Individual clients add their own questions, questions of all the clients are combined, then the collection of responses of all the questions from the same group of respondents. At the end, each client is given all the information and data received from the sampling. This type of survey always saves money.
Tailor-made Research
This is a type of research which exactly matches the needs of a company. Depending on those needs, the research can be quantitative or qualitative.
Quantitative market research involves a large amount of data collection through surveys, questionnaires and polling methods. It used to be a face-to-face technique but now it has evolved into online surveys.
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Qualitative market research is all about finding out customer behaviors and motivations by observing them through one or several methods. Typically, it is done in small groups or face-to-face settings. If the quantitative research is mainly about the what of the customer behaviour, qualitative research answers the why. This approach can be useful to identify why customers like or dislike a product, why they like certain marketing messages and dislike others, and what motivates actual customer behavior.
Qualitative market research methods include focus groups. The advantage of this is that you get to see the customer’s verbal and non-verbal reaction to your product or advertising, and it can also allow members of the focus group to bounce off each other’s thoughts and ideas. This type of method can also include online focus groups which is more cost efficient and allows you to reach more people. You can use social media to your advantage by creating communities of people who are interested in your topic and then start a conversation. You can even use online forums like Reddit or newsgroup discussions over Usenet to start a dialogue about your desired subject from your product or service type, your specific product, competition and the market environment itself. You can get a lot of interesting insights from Usenet newsgroups and online forums because they are very niche when it comes to their threads or newsgroups. You can also do individual or group interviews in person or via online channels as a form of qualitative research to get deeper information on what motivates customers to purchase.
On the other hand, quantitative research methods include experimental research that is conducted with a scientific approach using constants and variables. For example, a chocolate company making two different packaging styles and delivering each one to limited test market stores where their individual sales can be measured. Whichever performs better would be the preferred packaging for the chocolate company.
In a Nutshell
You do not always get new information from your market research. Sometimes, it only confirms what you already know. But it gives you confidence that it is not just your own opinion or that of your family or friends. It gives you valuable insight to define or adapt what you’re offering or make changes to your products, services and pricing. You can even get some hints and tips on how to do your marketing efforts better.
While market research is very important during the early stages of developing your business, it is equally vital that you know about your market and your competitors once you are already established. It is important that businesses regularly research their market since customers’ tastes and trends change all the time and it is easy to get left behind.
