What exactly is Market Research?

 

 

Many people mistakenly think that marketing is simply selling or persuading people to buy; with a little bit of advertising thrown in, however, marketing is far more than that. The following is a brief overview of the first component of marketing - market research and how this fits in as a vital part of the Marketing process. So often it is overlooked or avoided, yet it should be an ongoing process if you are interested in developing and maintaining a strong business focus. Market Research is where you find the answers to all your questions.  

Market Research: Secondary research.

Here is a Market Research check list to assist you to recognize, assess, define and segment your market and calculate the number of customers you will need per month, how much they will be required to spend on your product or service and prioritize the number of products and/or service you are able to deliver. If you want to start a new business, expand an existing business or plan for future growth, use this check list to provide you with the relevant information to assist you in developing your business.

Economic trends:

What will affect the purse strings of your target customers i.e. Bank Interest increases, wage rises? Any of these things could effectively influence future spending.

Geographic area:

Do your customers live in the country or metropolitan and what is the suburb rating and income status? How will this effect your delivery costs if any, traveling times, prices, products availability?

Demographic trends

Are your customers female or male, a specific age group, with or without children? Do they own their own homes, how many cars do they have, are they employed? All information is relevant to the spending power they may have.

Social and cultural needs

How will their ethnical or indigenous backgrounds effect what they purchase?  Do they have special needs? What influences their spending? The fast food industry may want to look at alternative menu offerings as the push towards losing weight gains momentum.

Technology trends

Do your customers understand today’s technology? Do they embrace or reject technology? Mobile phones and computers are fine for the ‘X’ generation and even to some degree the ‘Baby Boomers’ however, selling computers to retirement villages requires more than a little sales skills and intense basic computer training and follow up service

Political environment

GST increases, new taxes on fuels, elections. Have you looked at what other issues would influence a customer’s decision to purchase your products? Local tourism will be hit hard by fuel prices and this will lead to increase in tour prices. The question must then be asked as to when tour buses will no longer be a viable ongoing business.

Legal issues

Changes related to existing small business laws, licenses, new restrictions and classifications are just a few of the areas to investigate as these are constantly monitored and updated.

Regulatory Changes

smoking, drinking in public, deregulation of Telecommunications Industry. How will regulatory changes by local government affect you and your working from home business?

Seasonal factors

Are seasons a major factor determining sales.  (Particularly valid in the clothing industry)

Market Research – Primary research

The tendency is to suggest that everyone is a potential customer and this is not necessarily the case. People buy for many reasons and from many different providers and this is why effective market research is so important. The key to identifying your customer comes from the primary market research. What they want to buy, why they buy and how much they want to pay. All these things will come to light as well as the reality of whether there is a business for you. You may have the greatest product ever made, you may be able to sell it very cheaply, you may even really like it yourself, but if nobody wants it, you haven’t got a market, and if you don’t have a market, you haven’t got a business.

First you need to find out just who wants what you have.

Questionnaires

Ask questions that start with Who, What, Where, Why, When and How (open-ended questions) . Avoid ‘yes/no’ (closed) questions. Take care that you don’t manipulate the questions to reflect the answers you want rather than the answers you need.

Customer Buying Patterns

Find out how often people buy a similar product or service, usage rate. It may be necessary to value add to your product to encourage more regular purchases.

Compile a Customer Profile

Location, age, gender, income, education level, occupation, marital status, family size, buying influences, benefits sought, lifestyle, who makes the buying decisions etc.

Summarize your findings

Summarise your findings for an overview of who your ideal customer is or will be.

Your Product/Service Features

This is the tangible, measurable aspects of your products or service, i.e. engine size, processing speed, fabric, colour etc.

Your Product /Service Benefits

This is about how your product helps solve a problem, fills a need, satisfies a goal

Your USP (Unique Selling Point)

That special something that makes your product or service stands apart from the rest. Try to stay away from better price, quality and service unless it is truly outstanding.  Focus on what it’s uniqueness really is, this is what will sell it for you.

Competitor Research

 A competitor is anyone that is competing for the same dollar you are vying for. This may not necessarily be for the same product.

Indirect Competitors

List all your indirect competitors, the products and service they offer, their price range, delivery service, after hours service, refund policy, in store service etc and compare them with what you have on offer.

Direct Competitors

From the list select three competitors that you consider to be your major threats.

Competitor Analysis

Work through and compare every aspect of your competitors business with yours. Determine the areas you can improve on and excel in to win potential customers

Competitive advantage

Compare and describe competing and substitute products or services and your distinctive advantage.

SWOT Analysis

Carry out a SWOT analysis for both you and your competitor. (SWOT is an acronym for Strengths,Weaknesses, Opportunities, andThreats) Strengths and Weakness come from within your business and Opportunities and Threats come from outside of your business. Ideally you will want to further develop your strengths and opportunities and determine strategies to overcome any of your weaknesses and threats.

This is the first step in effective Marketing. This exercise will assist you to determine what you have on offer and if that is what people want, whether you can turn a dream into a viable business or expand further with your business idea.  It is an essential but extremely neglected aspect of Marketing yet all future marketing will rely heavily on the research conducted in this the most important first step in Marketing.               

Comments   

 
0 #2 anna82 2015-03-03 04:16
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0 #1 anna82 2015-02-26 03:53
I can recommend African Mango, it helped me a lot.
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