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Starting a Business

Conducting Your Market Research

 

Successful business owners have identified their core target markets – in other words, the people who are most likely to buy their products or services. They have also examined segments of people who might be persuaded to try their products or services. They know all about their competitors and the economic conditions that affect their businesses. Market research is an essential part of completing a solid business plan. Not only does market research identify sales opportunities and help you devise a plan of attack, but it also reduces your business risks by helping you better assess the present to gaze into the future.  

 

Types of Market Research:

  • Primary research involves going directly to a source for market information. You can hold in-person focus group meetings with members of your target market. You can interview people via phone, email, or in person. You can conduct social media surveys. You can shop at your competitors’ stores or observe how people behave in your competitors’ stores.
  • Secondary research involves analysis of data that has already been collected. You can read trade journal or industry website articles. You can conduct internet searches, visit reference libraries, and speak with someone from a local trade organization or industry association.
  • Quantitative research may change your assumptions about the industry through numbers.
  • Qualitative research sheds light on the industry through in-depth interviews to identify behavioral trends.

 

Questions To Examine:

  • Is the industry in its inception phase, mature, or declining?
  • What are the current industry projections?
  • What challenges face this industry?
  • Where are the opportunities for the industry?
  • What is the average profit margin?
  • Who are the major competitors?
  • How big is the competition?
  • Where are your competitors located?
  • What are their business models?
  • What sales channels do they use to make their profit?
  • How much do your competitors’ charge?
  • Are people willing to drive from neighboring areas for your products or services?
  • What is the age, sex, race, marital status, education level, income of your target market?
  • How many people fit this criteria in your city or town?
  • How much does your target market spend on products or services like yours?
  • Does your target market buy through retail shops, consultations, online, or on mobile devices?

 

How To Find Affordable Market Research

While there are many little details you can collect on your own, most of the treasure trove of market information is available – but for a price. If you’re particularly busy, you may not have time to pour into all the surveying – or perhaps data was never really your thing. Many budding entrepreneurs outsource this unpleasant task to full-service market research firms. A more affordable route would be to hire an independent consultant who works from home or a data collection firm. A database of all types of market researchers can be found at www.mra-net.org (the Marketing Research Association) or www.ama.org (the American Marketing Association). Sometimes you can find assistants at local business colleges to help with market research as a sort of internship or “experience building” project.  

 

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Related Articles:
All Business: Understanding the Basics of Small Business Market Research
Small Business Administration: Conducting Market Research


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