What is Market Research?

Many companies go into business without doing any research.  As a result they chose a wrong location, start a business whose market is already over-served, or develop a product with no consumer testing that may have major flaws they did not see because they are too close to it.

It is very important to do your research before starting any business or adding a new product or service.  Some research to consider includes:

  • How many businesses within your geographic target market are doing the same thing already? 
  • Is there a demand/market for this business within the geographic target market of your business? 
  • What are the purchasing patterns of your products/services?  Will there be any seasonality to it?

These statistics can be found online and at some libraries, especially your major metro libraries have a business reference center to help you get much of this information.  Assistance at the library is free.

If you are developing a new product, what similar types of products already exist in the marketplace?  How are those better/worse than your product idea?

Do some testing – not with friends and family, rather use people who are in your target market and don’t know you.  They will be far more honest and objective than those you may know (acquintenances, friends, family).  If you need asssistance in gathering this information, hire a company to do any of the following:

  • Formatting surveys properly - surveys should only ask questions that will assist in making a decision.  Writing survey questions properly is very important, so as not to ask leading questions and to get an accurate poll of opinion.
     
  • Conducting focus groups - focus groups can be helpful, but need to be done very carefully.  Consult with a professional to assist you with focus groups.  A focus group is great to show a product to a group of people.
     
  • Conducting one-on-one user interviews - one-on-one interviews can be very beneficial.  They are similar to a focus group, just done one-on-one.  The benefit of a one-on-one interview is individuals are not persuaded by other's opoinions - which is what can happen in a focus group.

Market research takes on various shapes and sizes.  It is important to your strategic marketing plan and should be done.  For more information on market research, click here.

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