Although most–hopefully all—business owners know that conducting market research is an essential part of doing business, many of them probably do not know where to start or the theory behind its importance. This article will answer many common questions and give you a guide on how to go about conducting market research of your own. Market research and business go hand-in-hand, and after you read this you will be ready to pair them appropriately.
What Is Market Research?
Market research is simply how it sounds: researching the information about your market, also known as a target market or customer base. It answers the questions about who is buying your product or using your service. It also covers what their needs and desires are, the typical cost that allows most people to access this product or service while still making it seem desirable, and the current trends surrounding other products and services similar to your particular offering.
When Do Businesses Use Market Research?
Businesses use market research when they are in the beginning stages as well as throughout their years producing and selling. Often, a start-up company will use secondary research (information that has already been procured by another organization or affiliation) because it is quickly accessed and free or inexpensive. Then, they can perform primary research (from their individual experiences) over time as their business develops and as they gain resources.
Truly, when someone ‘goes into business,’ they have probably been doing market research for a great deal of time. Someone goes into business offering a service or creating a product because they have seen a need and believe that they can meet that need.
Why Is Market Research Important to a Business?
As mentioned above, market research and business go hand-in-hand. How would a business know who to market to, with what keywords, the pain and access points of their customer base, and appropriate pricing… without searching out that information?
Obtaining market research at the beginning and continuing to use it throughout a business’s evolution will allow for any company to manage risk and optimize investments in product, marketing, and building its brand. A business may start off successful but fail to grow and change, eventually becoming stale and losing out to newer models with more appropriate offerings. In contrast, a company might struggle at first, but when they stay humble and find ways to innovate, they will steadily rise—even out-earning their competitors.
Is Market Research Useful for a Small Business?
Market research is incredibly useful for a small business. Small businesses are notorious for struggling as they often lack resources (monetary and otherwise) that large businesses have in abundance. If they have a hurdle or a setback, it can be much more difficult for them to bounce back. However, if a small business uses market research effectively, it can ensure that they are doing everything in their power to stay ahead of the curve.
What Makes for Effective Market Research?
Market research for a business is effective when it applies to the umbrella business as well as the individual company’s niche. This is often where primary research and secondary research combine. For example, secondary research might give a broad idea of restaurants in a certain area and what brings diners to their tables, while primary research might be obtained from the customers who are eating off an individual restaurant’s menu.
How Can Market Research Improve Your Brand?
Market research helps a business build and strengthen its brand when it compiles information on what customers feel they need. For example, household name companies such as Apple, Target, Ford, and Nike don’t sell products, they sell solutions. Apple doesn’t sell technology products; it sells streamlined ease. Target doesn’t sell groceries and clothes; it sells an enjoyable one-stop shopping experience. Ford doesn’t sell cars; it sells strength and reliability. Nike doesn’t sell shoes; it sells athleticism and status.
Who are you as a company? Who do you want to be and who do you want to attract? Market research will help you align these visions and goals and keep you competitive with your target audience.
