Market research is defined as research that gathers and analyzes information about the moving of goods or services from producer to consumer.
There are two main approaches to conducting market research. These include:
- Developing primary data via surveys and focus groups
- Using secondary data, that which is available through publicly accessible sources Surveys
Once we have determined a particular item or range of data that will assist in our business planning, a choice must be made as to which of the several survey methods available will be used to acquire this information. Online, mail, telephone, and face-to face are the main methods being used. You can commission a market research agency to carry out any of these survey methods if your budget allows.
Surveys allow you to find out the views of a targeted population. The more individuals surveyed, the more reliable will be the results. Online and mail surveys are generally not random and can over- or under- represent segments of the population. Telephone surveys are generally more representative of the population, though wide use of cell phones has complicated the issue.
The secret to a successful survey lies in questions that collect the information you need. Make sure you ask each respondent exactly the same questions and try to avoid any which are leading or ambiguous.
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This a small group of people with similar characteristics selected from a wider population for an open discussion of its members’ opinions and emotional responses to a particular subject or area. Generally a group consists of about ten members in a room with a researcher. This is an example of qualitative research, i.e., non-numeric.
Secondary research uses publicly available data. The upside is that there is no need to conduct surveys; the downside is that such data may be out of date, does not apply to your target market, or that techniques for collecting the data were faulty. Still, this is the most widely used technique.
Secondary data sources you should try include:
- Articles on Demographic Research, via About.com
- American Fact Finder, a better indexed version of census data.
- Biz Stats, comparison of performance for similar businesses.
Much of available commercial and industrial data is organized by a market segment code, generally NAICS but sometimes by the older SIC code. As an example of how to use a code, let us say you want to make chocolate candy for sale; you plan to purchase the chocolate. The NAICS codes are progressively detailed as the length of the code increases:
Manufacturing 31 Food Manufacture 311 Sugar and Confectionery Product Manufacturing 3113 Confectionery Manufacturing from Purchased Chocolate 31133
Data for NAICS code 31133 will be very useful to your research. For an example of how to find such data, see http://www.census.gov/econ/industry/current/c31133.htm.
Researching Your Competitors
This process begins with finding your competitors. This generally produces answers about who, what, where, when and how. One can obtain this information through Internet searches, looking through industry journals, or talking to knowledgeable sources.
As well as knowing who your competitors are, this will also tell you what they offer and their propositions. This will help you identify your USP. See What’s Your Unique Selling Point? See also “Researching Your Competitors.”
A lot of data exists within trade associations. To find the publications for a specific industry simply Google the words “trade magazine xxxxxx” with xxxxxx being the product or service. For example, “trade magazine chocolate manufacture” provides a link to the National Confectioners Association. Other good sources for trade association data include:
Sometimes it is helpful to have someone not so close to the business help with strategy. If you would like to request a free SCORE Mentor to assist you with developing your strategy request one here.