Market research is about gathering, analysing and interpreting information for decision-making purposes. It enables you to be better informed about your target market – their characteristics, trends, needs etc
Market research helps you get to know:
- who your customers are
- what your customers need
- where your product or service fits into the market
- what your competitors offer.
Market research can be low-cost and you can do much of it yourself.
Why research your market?
You might think you have a brilliant idea for a product or service, but an idea alone is not enough. You must identify your target market – the people who will buy your product or service.
Market research will enable you to answer such questions as:
- what products or services to sell
- where, in what quantities, and at what prices to sell those products
- what competitors are selling, where they are, and their strengths.
Learning something about your market that you didn’t know can be one of your greatest thrills in business. You could, for instance, discover an unsatisfied need giving you a vital competitive edge.
Market research also enables you to attach numbers to your plans and verify your marketing strategy.
Questions market research can answer
Develop a list of questions you would like answered by market research.
For a new business
When you are planning to start a new business you need to produce questions that will provide you with:
- market size
- market description
- market trends
- customer profiles and target markets
- preliminary sales forecasts
- estimated market share.
Ideally your market research should also tell you:
- how you will hold your share of the market
- who your best suppliers will be and why
- the best location for your business
- how your building will contribute to your marketing strategy.
Here are some examples of questions you might ask:
- What are the long-term trends affecting my business?
- Where should I locate my business?
- How much business can I expect if I open at a certain location?
- Will people buy my products or services?
- Who are my competitors?
- What range of products or services do my competitors offer?
- What level of sales do my competitors generate?
- Who are my customers likely to be?
- What types of products or services do they want?
- What types of products or services do my customers not want?
- What type of advertising will attract customers to my business?
For an established business
Market research conducted for an established business is likely to have different aims.
Develop a list of questions tailored to the needs of your business and designed specifically to obtain the information you would like to know. Your set of questions might look like this:
- To whom is my advertising directed? Is it reaching them?
- Is there a change in my customers’ spending habits?
- Have my competitors made any recent changes?
- What services should I offer my customers?
- Should I be offering more than I offer now?
- Should I vary my trading hours?
- Should I establish another outlet?
- What changes have occurred in the market?
- What scope exists to increase my prices?
If you’re already in business, your business records will offer a wealth of information that should be assessed before seeking additional data. For example, customers’ names and addresses will give you a sense of your market area. You may then be able to target your advertising dollars.
Talk regularly to your customers to learn about their attitudes, occupations, interests and buying habits.
Content edited from www.sa.gov.au
