The reason many top businesses are so successful is that they are able to stay in tune with their target audiences and their competitors.
By using market research, you can not only decide who your target audience is but also what they are looking for in your product. These can be simple methods that your business can take on without help, or you can outsource to a market research firm for more complex tactics.
Why Should You Do Market Research?
Believe it or not, you do market research every time you ask someone about your business or research your competitors. This is market research at its most simplest form: finding out what’s working with your business and what isn’t.
By formalizing this approach, you can figure out the best ways to get information relating to product, price, place, and promotion. These subjects are also known as the four "Ps" of marketing.
Other benefits of market research include:
- Avoiding any (unpleasant) surprises: Market research can help strengthen your company’s intuition when it comes to buyer habits.
- Identifying and planning for industry changes: No matter what industry your business is in, consumers change their attitudes toward certain concepts and products. Engaging in research on a consistent basis can alert your business to these shifting mentalities.
- Monitoring your competition: What makes one competitor thrive while another experiences declining sales? What are your competitors doing differently from your business? Are these difference hurting or helping your business?
- Knowing your audience: While this may seem obvious, being able to understand your audience can allow you to change campaigns and find the best places to do business.
When Should You Do Market Research?
You should start doing market research as early as the planning stage of your entire business. Knowing information about consumers and the market itself can help determine the sales potential of your product. Of course, this doesn’t mean that established businesses should forego market research entirely.
If your business is in the process of creating a new advertising campaign or expanding its location, it would be helpful to research the benefits and disadvantages of these decisions as they relate to your audience.
How Can You Do Market Research?
There is no one correct method of conducting market research. One business’s research goals may be wildly different than your business’s ultimate goals. That being said, how you go about obtaining your research can be divided into two categories: primary and secondary research.
Any information that you gather on your own (or with the help of a market research company) is considered primary research. This data has never been collected before and is used to answer a certain question or set of questions. Some ways to collect data through primary research include:
- Focus groups
Secondary research involves using already existing information to draw conclusions. While the use of this kind of research will not yield the same targeted results as primary research, it can help to answer more technical questions pertaining to your industry.
Such questions could include the climate of local, state, and national economies as well as the pricing history of products similar to yours. Examples of places to find secondary research include:
- Business records
- Former research studies
- Official statistics
The trick to effective market research is to use a healthy balance of both primary and secondary sources. You cannot market a product based on personal surveys, nor can you market a product by looking at previous data alone.