Market research aims to understand the reasons consumers will buy your product. It studies such things as consumer behavior, including how cultural, societal and personal factors influence that behavior.
Market research is further split into two varieties: primary and secondary. Primary research studies customers directly, whereas secondary research studies information that others have gathered about customers. Primary research might be face to face or telephone interviews or online polls with randomly selected members of the target group. You can also study your own sales records to gather primary research. Secondary research might come from reports found on the websites of various other organizations or blogs written about the industry. For your plan, you can use either type of research or a combination of both.
The basic questions you’ll try to answer with your market research include:
Who are your customers? Describe them in terms of age, occupation, income, lifestyle, educational attainment, etc.
What do they buy now? Describe their buying habits relating to your product or service, including how much they buy, their favored suppliers, the most popular features and the predominant price points.
Why do they buy? This is the tricky one, attempting as it does to delve into consumers’ heads. Answers will depend on the product and its uses. Cookware buyers may buy the products that offer the most effective nonstick surfaces, or those that give the most pans in a package for a given amount of money, or those that come in the most decorative colors.
What will make them buy from you? Although some of these questions may seem difficult, you’d be surprised at the detailed information that’s available about markets, sales figures and consumer buying motivations. Tapping information sources to provide the answers to as many questions as you can will make your plan more convincing and your odds of success higher.
Market research isn’t cheap. It requires significant amounts of expertise, manpower and technology to develop solid research. Large companies routinely spend tens of thousands of dollars researching things they ultimately decide they’re not interested in. Smaller firms can’t afford to do that too often.
For companies of all sizes, the best market research is the research you do on your own. In-house market research might take the form of original telephone interviews with consumers, customized crunching of numbers from published sources or perhaps competitive intelligence you’ve gathered on your rivals through the social media. You can gather detailed research on customers, including their likes, dislikes and preferences, through Facebook, and use Google Analytics to sort out the numbers as they pertain to your web visitors. People are researching and making their opinions felt through their actions on the web, so you can gain a lot of marketing insight by looking closely at what is going on electronically.
If you need help to do market research for your business plan, contact us: vuthy@mrtsconsulting.com