You get to know people before forming friendships, and the same goes when dealing with your target market – get to know them first. Understanding how they live, their habits and preferences will ensure you can best cater your product or service to their needs.
So how do you get to know your audience? The answer is of course, Market Research.
Market Research is a process of gathering, analysing and interpreting information which can help you paint a picture of your intended target market. Instead of firing advertising arrows into the distance and hoping for the best, you’ll have a clear target to aim for.
Research to Reduce Risk
Market research is an exercise in reducing the risks you take in your business, that is, by making better informed decisions based on real life market information.
From a new product perspective, Market Research can assist with helping your ‘bright idea’ come to fruition by shaping characteristics of the product, and indicating where, in what quantities and at what price it should be sold.
Market research can also help a business continually improve by understanding the strengths and weaknesses of the competition and incorporating this information into a business and/or marketing plan.
Which type of market research?
The stage of your business and type of product will also affect what type of research you engage in.
For a new business, the research must ask and answer questions about market size, characteristics, trends, customers, sales forecasts, and market share. Businesses that have been operating for an extended period might want more information about the effectiveness of existing practices and any new trends emerging.
Market research can also help a mature business co-ordinate trading hours and locations with customers, and determine whether there is any scope to increase prices.
Where to start…
From the very start, my recommendation is to decide exactly what you want to know. This will reveal the research issues involved, scope of the inquiry and any constraints that may limit the research. It will also determine what sources will be used and measures that will be put in place to collect and analyse findings, such as a questionnaire or focus group.
Primary sources of Market Research include:
- Field studies
- Focus groups
Secondary sources of Market Research:
- Australia Bureau of Statistics
- Trade journals
- Business records
A good way to analyse your findings is by putting them into tables or categories, which will make any trends or patterns clear. Ideally, you’ll find an answer to your initial questions, but any gaps in the information can also be taken into account and used to make decisions.