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Market research
Market research exists to guide your business decisions by giving you insight into your market, your competitors, your products, your marketing and your customers. By enabling you to make informed choices, market research will help you to develop a successful marketing strategy.
Market research helps you to reduce risks by getting product, price and promotion right from the outset. It also helps you focus your resources where they will be most effective.
Market and marketing research
There are two main types of market research - quantitative research and qualitative research. Quantitative research focuses on coming up with numbers: for example, what percentage of the population buys a particular product. It is gathered using surveys and questionnaires. You can do simple quantitative research yourself by talking to your customers. More in-depth quantitative research can be used to identify markets and understand customer profiles - vital if you're launching a new product.
Qualitative research gets behind the facts and figures to find out how people feel about products and what prompts them to spend. Researchers use questionnaires and focus groups to gather this intelligence, while interpreting the results is a skilled job.
You can also do desk research with existing surveys and business reports. Much information is available online and from industry organisations, and some of it is free. This information provides data on market size, sales trends, customer profiles and competitor activity. Your customer records also provide a wealth of information, such as purchasing trends.
For forecasting, it can help you assess key trends to anticipate how the market may change. This is a vital step towards identifying new market segments, developing new products and choosing your target market.
Market research needs to be a regular planned part of your marketing. Even if you are an established business, you need to stay in touch with your customers' needs as well as market trends and your competitors. It measures the effectiveness of your own marketing, giving you information about attitudes to everything from packaging and advertising to brand name awareness.
Planning your market research
Effective market research starts with knowing what you are trying to achieve and what information you need - whether you do your own research or brief a professional.
On a tight budget, you can take a do-it-yourself approach to market research. For example, if you are considering taking on a shop, you can check the levels of passing traffic at different times. Taking time to talk to your customers or potential customers is invaluable, too - this free market research can be very revealing.
However, to get the intelligence to make sound commercial decisions, you'll need a more sophisticated approach. For instance, if you carry out a market research survey, you'll need to plan the best way to conduct it and how to interpret the results. What customers tell you to your face may not be what they do, while your ability to interpret results is likely to be compromised by your own feelings.
For a truly balanced approach, you should work with a professional market researcher, such as an agency or a freelance consultant. If you are looking for detailed quantitative work, you will probably need to work with a company. However, a freelance market researcher can be cost-effective for a survey or focus group. Professional market researchers are skilled in asking the right questions and interpreting the results, producing objective results that you can act on with confidence.
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Comments
I agree with the article. Undertaking a quantitative market research is not a really hard thing to do in itself. However, find the right panel to administrate your survey could take you some time.
A freelance market researcher would be maybe cheap but I don't think that he is the best person when it comes to finding your target respondents. I would rather use an agency which provides Online Quantitative Market Research.
Online market research has grown rapidly in recent years as a key form of data collection for primary research activities. Online market research offers both large and small research focussed organisations the chance to eliminate the costs involved with face-to-face, postal and telephone data collection. Organisations have begun to realise also the speed and data reliability offered by the internet.
If you want more info about it...
Good points. I think it's important to remember the impact that personal research can have on your supplier/customer relationship. Asking their opinion makes your customer feel valued and can generate new ideas ("Yes, your new product sounds good, but I would buy more if you made it bigger/smaller/out of plastic etc...").
It can also generate interest in new products or services, because it gives you a specific reason to discuss your latest ideas. Personally speaking to your customers, lets you assess their initial business potential.
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