Anybody who owns a business understands the importance of a market research. Market research can practically help you predict the success of your products or services. It is a great indicator of who you are targeting and what your potential market will be like. An understanding of the existing competition, targeted audience, profitability and feasibility of the business becomes clear as a crystal if you carry out an extensive and unbiased market research. Also it is important to do so as you may never get to know the market you are missing. A good market research will answer a lot of questions like: What is the best marketing strategy to be used? What age group is the targeted audience? What and how much is needed? Etc.
First of all, we need to be clear about the types of research that can be done. There are primarily two kinds of research:-
Primary research
This is the type of research that you do either yourself or hire someone to do it for you. It means collection of data about the product or the market directly. This is the first form of data and can be collected through various forms like questionnaires and telephonic interviews etc. There are mainly 3 ways of conducting primary research :-
- Direct Mail: In this method, you can send out a letter to people carrying a survey and ask them to mail it back. Although not very effective, there are many businesses which still use this form of researching. Make sure it is addressed to a specific individual and give them a free coupon or an offer to make it look worthwhile. Do not forget to send out a follow-up mail after a couple of weeks to remind them.
- Telephonic Surveys: This is one of the most widely used ways of collecting first hand data. It is a cost effective method and is a cheap method of getting raw data. You can call up the person and ask for his views and opinions or ask for a plain “yes” or “no”. It is now being used by many companies out there.
- Personal Interviews: With this method you can have a group called the focus group to brainstorm ideas related to what you want to know or just plainly have a set of pre-selected questions and ask them in a personal interview.
Secondary research
Secondary research provides you with the data that someone else has gathered. It is generally provided by government agencies and research companies. It is also an easier and cheaper way of getting information you want. It could be anything from statistics or a list of things from government agencies, labor unions, chambers of commerce etc. Like primary research, this form of research also has 3 sources:-
- Public: This includes things like public libraries, government agencies etc. where the information is available generally for free. It is a great source of information.
- Commercial: These include research and trade associations or even financial institutions. These are also a great source of information and need to be paid a small amount to get the information out.
- Educational: Unfortunately, many businesses lose out on this source. In fact, high school libraries, universities and college business sections provide a whole lot of information that you may require.
Conducting a market research is not an easy task. It is laborious and back breaking. This is the reason why most of the businesses outsource this work to companies which specialize in the same area. This can take off the load off their minds and can save them a lot of time. Some of the results you will immediately be able to see could be as follows:-
- Better communication: First hand interaction can be helpful in bettering your communication. You will be able to learn more about your client’s needs and wants.
- Identification of opportunities: How headstrong is your product as compared to its competitors? Do your clients need anything that nobody else is giving?
- Minimizing Risk: Keep low and do not expect too much. This ways you will loose less and win more.
- Measurement of Progress: It will help you measure your strengths, weaknesses and results from the very beginning. If you set your standards high from the very beginning, you will be in a better position for sustained growth.
Hopefully, this format of research will be helpful for you and your business in the future.
Very Good Advice. I think people who understand business understand the importance of market research. Where I find it most lacking is in start-ups. Too many people start a business without any kind of market research. They assume because they like a product or serivce, everyone else will as well. They assume because a product is in great demand in California, it will also be in great demand in Iowa. Market research may not guarantee success, but it certainly helps to put the odds in your favor.
Ron Meledandri – Sentra Business Solutionss last blog post..2009 – Will Your Business Be Better or Worse?