The general premise of market research is testing a pool of potential consumers to gauge a particular demographic’s interest in a service or a product. It is often used by a business to figure out, quite simply, what part of the population will purchase a product based on income level, gender, location, age and numerous other factors. This lets companies learn about prospective customers, including specific likes.
One of the biggest factors in whether or not a product succeeds is the need of a customer. If the company guesses what the customer wants and builds a product around it, then it runs the risk of making something that nobody needs or even wants. The importance behind market research cannot be understated; by giving the developing company thorough data, market research shapes products and services to suit all parties involved.
In a similar vein, no small business will be able to succeed without knowing what its customers want and how they feel about the company’s products. Regardless of the field, chances are the competition is steep, so working without proper marketing research will give a disadvantage that a small business cannot afford to have.
With primary market research, the ultimate goal is to get data by reviewing sales and practices. This takes other competitors into accounts and helps companies gain insight about the others in the market. Some means of gathering data include questionnaires, interviews and surveys. Some questions might include what a customer thinks when purchasing a product, what they like about current products and what they would suggest for a means of improvement.
There are also two kinds of data collection: quantitative and qualitative. The former uses math formulas and requires a rather large group of people to sample. One way to find the results on a company website is through Web analytics. There is plenty of information here, such as what part of the Internet is bringing leads, how long visitors stay on the website and what page was the last one open before exiting the website.
In the case of the latter, this is a means to fine-tune research methods, helping owners figure out problems and interview customers about their values, opinions and thoughts. With this kind of research, a small group of people will suffice.
So how can a small business conduct this kind of research without breaking the bank? When some research requires large focus groups, it can seem daunting trying to figure out how to conduct necessary research without the huge budget that a large corporation would sneeze at. Fortunately, there are a couple of ways to conduct market research at no or a low cost.
For example, local and federal agencies both regularly collect information that a company would find useful. Best of all, there is no cost to access this information, which can be found at both libraries and on the Internet. Some references that can assist in this way includes the reports by the United States Census Bureau, trade reports, telephone books and similar federal publications. Companies can also use SizeUp, a free online tool by the SBA that is designed for small businesses in this research predicament.
For absolutely no cost, it is easy to uncover a considerable amount of information about the competition and customers as a whole. This data can include some of the same information that requires large focus groups, such as spending habits, ages, sizes of households and household income.
Another method is to form a small focus group, directly asking in-depth questions to learn opinions, preferences, motivations, habits and other factors that can help determine the effectiveness of a prospective product or service. While this can cost a bit more than other means of market research and can be a bit more complicated to organize, they are very useful in getting in-depth information that can be of considerable value.
Though saving money is an important factor, there are a few low-cost methods that should be avoided. For example, by relying on a published work to get secondary research, it is not possible to get a complete picture. While it is still valuable as a starting point, this can cause a gap in relevant information. When taking this route, only use it as a supplement to active research.