Market research helps you to understand if and why consumers would take an interest in a particular product or service. Market research pertains largely to consumer behaviour, which is influenced by a number of cultural, societal and personal factors. Market research is vital to a successful business plan, especially if you’re just starting out, and so you’ll want to get the best possible value from your research. What do we need to know about market research, and how can we be sure that we’re conducting it effectively?
The two types of market research
Firstly, it is important to understand is that there are two types of market research: primary and secondary. Primary market research occurs where an organisation directly studies consumers. This can be through telephone interviews, online surveys, focus groups, or even research into the company’s own sales. Secondary market research, on the other hand, is the study of information gathered by another organisation. This can include research into online reports, industry blogs and so forth. An organisation may choose to use either type of marketing research, or perhaps a combination of both.
What am I researching?
Generally speaking, there are a few basic questions that you want your market research to answer.
- Who are your customers? This can include their age, sex, occupation, income, location, lifestyle, etc.
- What do they buy now? You’ll want to know a bit about your customers’ buying habits in relation to your product or service. This can include how much they buy, their favourite brands/suppliers, how much they are willing to spend and any popular features.
- Why do they buy? This is where things get more complicated, as we begin to delve into the psychology behind consumer behaviour. You’ll want to look into just what motivates your customers to buy a particular product or service. Let’s imagine, for example, that you are a company selling cookware and you want to know what encourages your customers to make a purchase. Perhaps they will purchase the cheapest pan, the pan that comes in the widest range of colours, or the pan with the most effective non-stick surface.
- What will make them buy from you? Once you have delved into this thought process, you will be able to identify how you can better tailor your offerings to maximise sales. Where is your place in the market? This is the question that will help you to decide whether or not the venture is ultimately worth pursuing.
Whilst these questions are a good starting point, you ultimately want to be finding out as much as you can about the market and its consumers. Providing answers to as many questions as you can will lead to a more watertight business plan and increase your odds of success.
What are the obstacles?
The biggest obstacle for a firm looking to conduct market research is often that it isn’t cheap. Market research requires a great deal of manpower, expertise, resources and technology. Large companies will regularly spend vast amounts of money on market research which they later decide they have no interest in, but small firms, on the other hand, cannot afford to be doing this all too often.
Which is better – primary or secondary market research?
For companies of all sizes, the best market research is that which you conduct yourself. There are a variety of ways to conduct primary market research and don’t be afraid to get creative. Use social media to quiz your customers, run polls and gather intelligence on your rivals. The web is a goldmine when it comes to primary market research; you can access a wealth of customer information through platforms such as Google Analytics and Facebook Insights. Make sure to use tools such as these to their full potential.
Am I just researching my customers?
Whilst consumer research is vital, it’s also important to research the wider market, including your current and potential rivals. When identifying competitors, try to look at:
- Companies of relative size
- Companies that serve the same geographic area (unless you operate exclusively online)
- Companies with a similar ownership structure
What can I do to keep market research costs to a minimum?
As we mentioned earlier, market research is expensive and so you’ll want to avoid spending money on information that isn’t useful and make sure you get the best possible value from what you do collect. Here a few steps to making sure you’re getting the most out of the investment:
- Determine exactly what you need to know about the market. More focused research will ultimately prove to be more valuable, and it will prevent you from spending money on information you don’t need.
- Prioritise. You can’t research everything, so prioritise the information that will be most valuable, or provide you with the best (or quickest) payback.
- Review cheaper alternatives. You could develop and distribute your own surveys or see what secondary research your trade association can grant you access to. As we said, be creative.
- Estimate the costs of conducting the research yourself. Sure, you could spend hours trawling through Google Analytics, but could a professional do this much more efficiently and leave you to focus on more important aspects of running the business? Assess what research you can perform yourself, and what you could consider outsourcing.
Professional Advice from Fabulous Marketing
If you are looking to identify your target market or find out more about it, Fabulous Marketing can help. Our team of experts has a wealth of experience in all aspects of marketing strategy, from research right through to implementation and analysis. For a free, no-obligation chat about how we could help you, call us today on 0800 112 0880, or email firstname.lastname@example.org.