The goal of doing market research is to equip yourself with the information you need to make informed business decisions about start-up, innovation, growth and the 4 P’s:
- Product — Improve your product or service based on findings about what your customers really want and need. Focus on things like function, appearance and customer service or warranties.
- Price — Set a price based on popular profit margins, competitors’ prices, financing options or the price a customer is willing to pay.
- Placement — Decide where to set up and how to distribute a product. Compare the characteristics of different locations and the value of points of sale (retail, wholesale, online).
- Promotion — Figure out how to best reach particular market segments (teens, families, students, professionals, etc.) in areas of advertising and publicity, social media, and branding.
Market research can help you:
Understand your customers and their preferences (4 P’s)
- Profile your customers (location, age, gender, income level, etc.)
- Create more effective marketing campaigns
- Find the best business location
Identify opportunities to grow and increase profits
- Recognize changes in demand
- Offer new products or services for the new demand
- Find new markets within and outside of a country
Recognize and plan for industry and economic shifts
- Shift inventory, price and staff levels as needed
Monitor the competition in your market
- Identify competitors
- Get information on how your competitors operate
- Learn how customers compare you with your competitors
- Mitigate risk in your business decisions
- Use information, not just intuition, to drive your business decisions
When to conduct market research?
Market research is widely viewed as a component of the planning stage of a business. Indeed, market research is critical for new start-ups and should be a key element of any entrepreneur’s business plan. Market research data feeds into a number of areas of the business plan, contributing to sections on:
Determining the sales potential of your products and services
- Identifying the demographic characteristics of your customers
- Selecting the appropriate business location
- Setting the price for your products and services
Attracting customers to your business
- Establishing your company image
- Setting prices for your products and services
- Ensuring advertising is on target
- Selling to customers and earning repeat business