Researching your market
There was a man in the garment industry whose marketing strategy was to drive to a fairly large city, pick up a phone directory, then go to his hotel room and go through the yellow pages calling people and making appointments to see the ones he thought might be interested in his products. You could call this “on-the-spot” market research. This didn’t work too well because the man is no longer in business.
To be successful, a business must know its market. This requires marketing research, which is simply learning about people — the people who do or might buy your product or service. Stated another way, marketing research is an organized way of answering the basic questions every owner must ask:
- Who are my customers and potential customers?
- What are their demographics?
- Where are they located?
- Am I offering them the goods and services they want, at the best price, at the right place and in the quantity they want?
- What do they think of my business, and how do I compare, with my competitors?
The marketplace is a dynamic, constantly changing system, which makes it imperative that business owners engage in ongoing marketing research. It is an objective way to find out how things are — not how you think they are or would like them to be. Also, it helps you learn what people want to buy, not just what you want to sell them.
Marketing research focuses and organizes marketing information. It ensures that you have timely and accurate information to help reduce business risks. It will also help you spot problems and potential problems as well as potential profit and sales opportunities. By getting the basic facts about your market, you will be able to make better decisions and establish a plan of action.
One of the first steps in marketing research is to define the problem or opportunity. It is easy to confuse the symptom of a problem with the cause. For example, a decline in your customer base is a symptom of a larger problem, and you must try to discover the cause. Begin by brainstorming. Write down all the possible reasons you can think of for a decline in customers. Next, gather data about the things that are measurable. For example, check Census data to see if population is increasing or decreasing, and check consumption patterns for use of your products or services. These and other facts will help you see more clearly the root cause of your problem.
Now that you have defined the problem, you will need to gather and assess additional information. For instance, you might interview customers, suppliers and employees; search other sources of secondary data; review your own records and files; and finally, collect primary data if you can’t find the desired information from another source.
Next, organize and interpret the data so that you can make an informed decision. Now make your decision, and track the results to see the impact on the problem.
One of the dangers associated with marketing research is to think you need more information than you really do to make the best-informed decision. This may cause you to spend too much valuable time waiting for information you may not need. Our customers’ wants and desires are changing constantly. We will never have all the knowledge we need about a particular problem. So move quickly to gather what you do need and to ensure you do not miss any key opportunities.
Further support is available from your local Small Business & Technology Development Center to help you with market research and other business management issues.
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