Intro to Market Research

Knowing who your customers are, what they need and how to reach them is essential to running a successful business. Market research can help you gain accurate and specific information about your customers and competitors, which is one of the crucial steps for anyone wanting to start or grow their business. Customer demands will have a direct impact on all of your business operations and will determine the success or failure of your business.

Why conduct market research?

The environment in which your business operates can be very dynamic. The way you work may therefore be affected by fluctuations in the economic situation, by demographic changes, by new regulations or by technological developments.

Market research helps you:

  • better understand the particularities and preferences of your customers
  • discover opportunities to improve your sales and grow your business
  • monitor the state of competition in your market
  • reduce the risks related to your business decisions
  • develop and complete your business plan

Established businesses that are thinking about undertaking major changes, such as an expansion or relocation, can also use market research to make more informed decisions. A few other common situations can also benefit from market research, including:

  • the launch of a new advertising campaign
  • increase in production or inventory level
  • the introduction of new lines of products or services

How do you conduct market research?

Above all, set clear objectives for the market research you will undertake. You should start by defining what you want to know and why you need this information.

Once you have determined your goals, develop a strategy and choose the techniques you will use to gather this information. There are two main types of research: direct research and indirect research.

Primary research is gathering data directly from your potential customers through surveys, focus groups, on-site testing, etc. You can carry out the study on your own or use the services of a company. If you choose to conduct the research yourself, you will reduce your costs in addition to having the advantage of better knowing the profile of your clientele.

The disadvantage with primary research is that it can be time consuming and expensive, especially if you employ the services of a marketing firm. On the other hand, this method has the advantage of allowing you to target specific groups (such as your customers or the geographical market of your company) and to provide you with clear answers to the precise questions that you will have chosen to include in your study.

Secondary research involves tapping into existing resources such as demographics or industry statistics and using that information for your own business or marketing plan.
Secondary research uses pre-existing resources such as company registries, surveys, research studies and books. It generally takes less time than a direct search and can also be less expensive.

Although secondary research is less targeted than primary research, it can still provide you with useful information.

Here are some examples of questions that can be answered through secondary research:

  • What are the current economic conditions? Are they changing?
  • What are the general industry trends?
  • Are there international markets for my products or services?
  • Who are my clients? (population, age groups, income levels, where they live, etc.)
  • What is the state of the labor market?
  • Statistical data from recognized statistical agencies or private associations and organizations are also indispensable resources for secondary market research.

What should i find out from market research?

When you conduct market research, you are looking for answers to certain specific questions. These answers may be provided to you by primary or secondary research. You might consider the following questions:

Who are my clients?  Knowing your customers will help you choose a location for your business, set prices and plan your business strategy. Ask yourself the following questions:

Who will buy my product? What are my customers’ habits and preferences?

Is there a demand for my product or service? Make sure your product or service meets the needs of your customers.

Who are my competitors? Figure out who your main competitors are, try to assess their strengths and weaknesses, and compare your business to those competitors.

Where are my customers? By locating your potential customers, you will have an easier time choosing a location for your business, knowing what type of promotion you should use and what marketing strategies to adopt. It can also allow you to be aware of changes in your industry and how these changes affect sales.

How will I set my prices?
The goal of your business is to maximize its profits while remaining competitive. Pricing can have a huge influence on the success of your business. You will therefore have to take into consideration the prices charged by your competitors for similar products and services and assess your ability to maintain your prices at the level you have chosen over a sustained period.

How should I promote my product or service?
Be sure to use the most effective methods possible to promote your business. When you have to decide on the best communication strategy to adopt, assess what your competitors are doing and what type of media would be most likely to reach your customers (online media is well suited to the teenage market, for example).

You may find it difficult to obtain the information that will help you make the best business decisions, or some of this information may be expensive. Be aware, however, that there are several affordable statistical and analytical resources, in addition to services aimed at helping you navigate through all the available data.

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