Market Research, what is it? What does it do? All good questions.
Market Research is broadly defined as the action or activity of gathering information about consumers needs, wants and preferences. Pretty dry indeed, but of the utmost importance if you want a successful business.
No matter which industry you are in, understanding the cultural, social and economic context in which you are operating is crucial. It’s more important than ever and only becoming more so with ever increasing globalisation and internationalisation of markets. Gone are the days when a small business only went up against similar local businesses. Now a business must take on local competition, competition from national and international businesses with huge buying power and the almighty INTERNET!!!
Yes it can seem fairly daunting as a potential business owner but with some quality market research, you can still carve out a successful niche.
To do so, you will need to discover some important details about your potential enterprise, such as, if there is a market for your product or service, how much demand is out there, who your potential customers are, what are they prepared to pay, how often are they prepared to pay it and are you going to be able to make money from what people are prepared to pay for your product or service?
It’s quite a list, but if you don’t get this information prior to embarking on your business journey, things can go awry: your product/service might already exist, it could need serious tweaking, it could have a dud name or it could be too expensive or even too cheap.
To help get the right information you should first decide the questions you need answers to, decide what information you need to collect in order to answer those questions, decide how you are going to collect the information, how you are going to analyse it, and what you are going to do with the results.
Once that hurdle has been passed, it’s time to undertake the research!
There are two broad categories of research: primary and secondary.
Primary research involves actually getting out there and talking to potential customers. This could be through focus groups and paper and online surveys. Paper surveys are a good option if you have the time and an area where your target market gathers, for example, a university campus.
Alternatively, online surveys are very accessible and you can gather information from people of diverse cultural and socio-economic demographics. Websites like Facebook and LinkedIn make it quite easy and cheap to gather this information.
A focus group is the ultimate primary research tool as you can gather insightful quantitative and qualitative data based on direct contact with your product/service. However, they are time consuming and expensive.
Secondary research is gathering information already at your disposal. This can be done on the internet very quickly due to the amount of already compiled data available. A good place to get general data about demographics is the Australian Bureau of Statistics. You can get excellent data about age groups, locations and occupations at the ABS. Regional chamber of commerce websites will provide more localised information. Annual business survey and business groups related to your industry are excellent resources also. General web searches will also provide a plethora of data.
Undertaking market research periodically throughout the life of the business is also recommended as a health check on your business.