You need to understand why customers are buying specific products and services from you or your competitors. There are many different reasons and some of them buy for one reason, another for another reason and so on. You will learn more about them if you use market research.
Market research is an essential part of any business that wants to offer products or services on a specific market or market niche.
When I say customers I think about customers as companies and customers as individuals. Consumer market research will analyze the buying behaviors of individual people while business-to-business market research will analyze buying behaviors of the other companies.
As an entrepreneur, you must know everything about your customers, what they want, what they believe, what are their needs, how they can meet those needs and how your company can help them to meet those needs.
This process doesn’t occur only in large companies with many employees and a large budget. You as a small business owner will also need market research and the only difference is in dimension and quantity of the markets that will be analyzed because large companies have markets with larger dimension and quantity than small businesses.
What is Market Research?
However, what is a market research?
First, it is a collection of activities with a final purpose to bring you an understanding of your customers’ behavior in a particular market where your business operates. Second, it is the processes that take information from the market and after that extracts specific data related to current and future customer’s behavior in order to enable you to prepare an effective marketing strategy.
Despite customers, market research as a process will also analyze your competitors in a specific market. Another important thing that is covered with research is effectiveness analysis of small business marketing campaigns.
Basic Questions You Need to Answer Through Market Research
So, when you approach market research you will need to answer the following basic questions:
- Who are the target customers for your company?
- How often those customers will purchase specific products or services?
- What is the price of the specific product or services that your competitors offer on the market?
- How much they are willing to pay for that products and services to you?
- How much is a dimension of the market that is currently served by your competitors?
- What impressions you are making with your own marketing campaigns?
The Benefits of the Market Research
There are many benefits for entrepreneurs and small businesses when it comes to market research process. Here are some of them:
- Excellent market research and quality decision making based on the facts received from marketing research will ensure sure survival of your company on the market.
- With quality market research, you can identify opportunities for your company and at the same time will prevent threats that will come from the market.
- You will always know and constantly will learn about your customers, your competitors and your marketing efforts.
- You can easily succeed in lowering 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.
- This process will give you all basic marketing benchmarks that you must complete. In such a way, you can evaluate your marketing efforts and constantly improve the overall marketing strategy of your company.
Market Research Process
The basic process of market research can be explained with six different stages::
- First stage: identify the research purpose;
- Second stage: collect data from the market;
- Third stage: evaluate already collected data;
- Fourth stage: analyze already collected and evaluated data;
- Fifth stage: interpret already analyzed data;
- Sixth stage: disseminate the final product from market research to all decision makers in your company.
Sources of Information for Market Research
In these processes the second stage is one of the most important and also the hardest stage to complete. The quality of the research in large part will rely on the quality of the data collected from the market. Information about the markets can be covered from different sources.
Here, I will mention some possible sources that you can use in order to collect required data from the market:
1. Current customers
Collecting data from the current customers will depend on your own creativity. You can collect data simply asking for customer’s feedback. Also, you can collect this data from your sales team, that is in continuous contacts with the customers. Information received directly from your customers is one of the most valuable information for you. This information will bring you really good background for your research. Your current customers also can tell you what your strengths are and more importantly your weakness.
2. Business magazines
Business magazines are a valuable sources of business information that can be useful for the purpose of your market research. In magazines you can find already finished analysis that can be valuable for your business. You can find information about your customers, competitors or different marketing campaigns in the industry.
Surveys also can be used to collect information about individuals and their opinions about the different products 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 and so on.
4. Government agencies
Government agencies collect the most important statistical information about markets. Also, they give some type of forecasting related to the specific markets. Contact these type of agencies and ask for information about your target market.
The internet is an unlimited source of information. Google is a good starting point to see what an internet user search for. You can also use Google’s trends 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 for the purpose of your research. Read more about how to use google search data to improve your business offer.
As you can see, required and need information can be everywhere around you. The key point is simply to start noting information and use it for your market research and decision making process.