All businesses exists 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 and 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 analyze the buying behaviors of individual people while business-to-business market research analyze the buying behaviors of the other businesses. Entrepreneurs must to 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 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.
But what is market research? First, market research is any activities that have purpose to understanding the behavior of customers in a particular market where business operate. Second, market research is the processes that gaining information’s from the market and after that extracts specific data from current and future customer’s behavior for the purpose of 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 market research is analyzing of effectiveness of small business marketing campaigns.
Market research need 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 dimension of the market that is obtained from competitors?
- What is the price of the specific product or services of the competitors?
- What impression we make with our marketing campaign?
Thus marketing research is the process of objective identification, collection, analysis, and distribution of information for the purpose of assisting entrepreneurs and managers in decision making associated to the identification and solution of problems and opportunities in market. The task of market research is to provide entrepreneurs and managers with important, accurate, reliable, valid, and current information in real time.
The benefits from market research
Market research has 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 will may to identify opportunities for your business and in the same time to prevent threads that may to come from the market.
- You will always know and constantly learn about your customers, your competitors and your marketing efforts.
- You will may to decrease risks about new products or services that you plan to introduce on specific market because this products and services will be arranged especially for the real market demand for that type of products or services.
- Market research will give you basic marketing benchmarks that you must to complete. In this way you may to 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 6 different phases:
- Identification of the market research purposes;
- Collecting information from the market;
- Evaluation of the collected information;
- Analysis of the collected information;
- Interpretation of the analyzed information;
- Dissemination of the final product from market 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 market research relies on quality of market information collected. Information about the markets can be obtained from different sources. Here are some sources where you can collect market information for the purpose of market research:
- Your current customers. Collecting of this information depend on your creativity. You may to collect this information with asking for feedback of customers. You may to collect this information from your sale team. This is valuable information and offer good basis for market research. Your current customers can also tell you what your strengths are and more importantly what is your weakness.
- Business magazines. Business magazines are an valuable source of business information that may to be useful in purpose of market research. There you may to find already finished analysis that may to be valuable for you business. There you may to 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 may to use customer surveys, random interviews, feedback sheets, telephone market research 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. Internet is unlimited source for information. Google is good starting point to see what internet users search for. Here is also Google trends that may to give you valuable information about trends in search engine. On the internet you may to find various already finished analyses that you may to use in the purpose of market research.
You may to see that information are everywhere around us. The key point is to start to note that information and use for your decision making process.
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