Marketing research allows you to see what kind of new products or services are more likely to be profitable. If you have already launched your products, marketing research will tell you if you are meeting the expectations of your customers. This allows small businesses to change their marketing model, delivery methods, or package design. By simply tweaking their designs or promotional methods, they will be able to reach a larger market. That is the benefit of researching the market.
Launching a product without doing market research is a bit like driving without a road map. There is no guarantee that you will reach your destination. A well-planned marketing research plan will show you where your customers are and what they expect from you. It will also show you when they are more likely to buy your products.
But before you launch a product based on that idea, you need to ensure that there is a market for it. Even if you are on a tight budget, you must not overlook the importance of marketing research.
HOW TO CONDUCT MARKET RESEARCH
Many businesses neglect this important first step because they are not interested in hearing any negative feedback. They are passionate about the idea they have stumbled upon and don’t want anyone to tell them that there is no market for that. So they just go ahead and launch the product. Unfortunately, many times, such products fail in the market.
Some entrepreneurs neglect marketing research because they are on a very tight budget. They don’t have money to spend on research. They don’t feel the need either because they are confident that their product is going to be a winner.
MARKET RESEARCH METHODS
When conducting market research, you will collect two kinds of information: primary and secondary data. Primary data comes directly from existing and potential customers. It is possible to hire someone to collect this information via surveys or other methods, or you can collect it yourself.
Secondary research involves collecting statistics, studies, reports and other information from government agencies and trade associations etc. Big corporations spend millions of dollars to research the market. Small entrepreneurs who don’t have a big budget also have access to plenty of free information. How to obtain this information? The internet and your local library are great places to begin your research.
Librarians at university and public libraries will be able to show you the right direction. ThomasNet and Harris InfoSource All-Industries and Manufacturing Directories are two important resources to look for. They will help you to target businesses in particular industries.
The Statistical Abstract of the United States will help you find valuable information about consumer markets. Reference librarians may also be able to suggest other resources.
Your trade association may be able to offer valuable information like list of members, market statistics, reference materials and books. Talking to other members of your association is an informal way to collect valuable information. Most trade associations offer free information.
Read magazines and journals published by your trade association. Publications aimed at your customers may also help you find current and future buying patterns and trends. Don’t ignore new magazines. They provide information about new businesses and products on the market.
Government agencies also provide useful information for free. Nearly all countries publish population density figures. These figures show the number of people living in particular areas. You should ideally target localities where the population is increasing.
The U.S. Census Bureau publishes plenty of free business information. You can find most of this information on the internet.
When products hit the market without proper research, they are more likely to fail. Even big brands like Colgate and Heinz have tasted failure by launching products without conducting market research.
Working with a marketing research company can be both time consuming and expensive. Here are some more affordable ways to collect more information.
INTERVIEW CUSTOMERS AND PROSPECTS
This may cost nothing. Ask potential customers what they think about your products. This will throw up many surprising details. Most customers are willing to be interviewed. Ask them. They will offer priceless insight into what they like and what they don’t like about your products. It is impossible to interview all customers, but when you select random people and ask them what they want or expect from a company like yours, you will definitely get a better sense of direction.
HOW TO FIND PEOPLE THAT YOU CAN TALK TO
There are several ways to do this. If you run a software company, you can ask your beta testers to be your interview subjects. You can also ask your followers on social media to join you in a conversation.