Market Research - What is it, Benefits, Process & Information Sources

Market Research

All businesses exist on some type of market. That market is composed with current or potential customers. You need to understand why persons are buying specific product and services. There are many different reasons about this. Some customers buy for one reason, another for another reason. Market research is an essential part of any business that wants to offer products or services on a particular market or market niche.

When I say customers I think about customers as a business and customers as persons. Consumer market research analyzes the buying behaviors of individual people while business-to-business market research analyzes the buying behaviors of the other businesses. Entrepreneurs must know everything about their customers, what they want, in what they believe, what is their needs, how they can meet those needs and how the business can assist them to meet those needs. Market research allows entrepreneurs and managers to learn more about past, current and potential customers and with that understanding to make a better decision. Marketing research does not only occur in large businesses with many employees and a large budget. Market research is also needed to small businesses but the only difference is in dimension and quantity of the markets. Large companies have markets with larger dimension and quantity from small businesses.

However, what is a market research? First, it is any activities that have a purpose to understand the behavior of customers in a particular market where business operates. Second, it is the processes that gaining information’s from the market and after that extracts specific data from current and future customer’s behavior for effective marketing strategy.

Besides customers, market research as a process also analyzes competitors on a certain market. One more important thing that is obtained with research is analyzing of effectiveness of small business marketing campaigns.

Market research needs to answer on the following basic questions:

What are the target customers?
How often those customers will purchase specific product or services?
How much they are willing to pay for it?
What is a dimension of the market that is obtained from competitors?
What is the price of the specific product or services of the competitors?
What is the impression that we make with our marketing campaign?

Thus marketing research is the process of objective identification, collection, analysis, and distribution of informations that will assist entrepreneurs and managers in decision making associated to the identification and solution of problems and opportunities in the market. The task of market research is to provide entrepreneurs and managers with important, accurate, reliable, valid, and current informations in real time.

The Benefits From Market Research

There are many benefits for entrepreneurs and small business. Here are some of them:

Good market research and quality decision making on the facts from marketing research ensure surviving of the businesses on the market.
With quality market research, you can identify opportunities for your business and in the same time to prevent threads that will come from the market.
You will always know and constantly learn about your customers, your competitors and your marketing efforts.
You can decrease risks about new products or services that you plan to introduce on a specific market because these products and services will be arranged especially for the real market demand for that type of products or services.
It will give you basic marketing benchmarks that you must to complete. In such a way, you can evaluate your marketing efforts and constantly improve overall marketing strategy of your business.

Market Research Process

The basic process of market research is obtained from six different phases::

Identification of the research purposes;
Collecting the data from the market;
Evaluation of the collected data;
Analysis of the collected data;
Interpretation of the analyzed data;
Dissemination of the final product from research to the decision makers.

Sources of Information for Market Research

In the process of six different levels for market research the second level is most important and also most hard to complete. The quality of the research relies on quality of market information collected. Informations about the markets can be obtained from different sources. Here are some sources where you can collect market informations for the research purposes:

Current customers. Collecting of this information depend on your creativity. You can collect this information with asking for feedback of customers. You can collect this informations from your sales team. This is valuable information and offer a good basis for research. Your current customers can also tell you what your strengths are and more importantly, your weakness.
Business magazines. Business magazines are a valuable source of business information that can be useful in purpose of research. There you can find already finished analysis that can be valuable for your business. There you can find information about your customers, your competitor or different marketing campaigns in the industry.
Survey. Surveys also collect information about persons and their opinions about products and services on the market. This is very valuable information for every business. You can use customer surveys, random interviews, feedback sheets, phone surveys, web-form survey, e-mail based survey…
Government agencies. Government agencies collect statistical information about markets, and also give some forecast about markets. Contact these type agencies and ask for information about your target market.
Internet. The internet is an unlimited source of information. Google is a good starting point to see what internet user search for. Here are also Google’strends that can give you valuable information about trends in search engine. On the internet, you can find various already finished analysis that you can use in the purpose of research. Read more about How to Use Google Search Data to Improve Your Business Offer.

You can see that informations are everywhere around us. The key point is to start to note that information and use for your decision making process.