Gathering Information
Through market research, businesses gain a truer understanding of the market they operate in. It’s an important marketing tool used in the development of a business’s strategy.
For larger businesses it is a key tool used to keep the key decision makers in touch with market developments. Smaller companies can still benefit from the process by adding some structure.
Through market research, businesses gain a truer understanding of the market they operate in. It’s an important marketing tool used in the development of a business’s strategy.
Key Deliverables
The feedback you can gather from market research covers both market, competitor and product data:
Market Data
- Market Size – Value and/or volume and whether growing/shrinking by how much in what time
- Segmentation – Age, Gender, Wealth, Education, Interests etc.
- Needs – key requirements, this can be linked to what is needed for each segment
- External influences – factors that may change the market
- Evolution – Where is it going and what will be needed
Competitor Data
- Who they are and their market shares
- What are they offering – specifications, claims and marketing message
- Strengths and weaknesses
- Price positioning
Product Data
- Fit of products to market needs
- Customer likes/dislikes
- Competitiveness
- Familiarity – how well is it known in the market
- Image – does it perform, is it reliable etc.
Depending on the business, there may be more, some will only need to look at a few areas.
Market Research can use a broad range of tools and techniques.
Quantitative Research
This covers the more mathematical processes such as the analysis of customer surveys. Most of us are familiar with being quizzed about a product or service. Somewhere hidden away, this data will be analysed and quite likely presented in graph form at some stage to management.
In many industries, market data can be bought from specialist companies. This allows you to calculate your market share shows market size trends.
Modelling using tools like Excel enable you to plot market and product trends, adding different scenarios and “what ifs.” Tools can be extended to indicate turnover and profitability forecasts.
Qualitative Research
This complements Quantitative Research. Whilst the numbers may ultimately give a go/no go decision, the more human factors needs covered here, point you in the direction you need to travel and/or tell you if you are on the right road.
Exhibitions although primarily sales focussed are also good for getting customer feedback. If competitors are present at the show, you also get an indication of how well you compete.
Focus Groups are a classic tool, getting a group of potential and existing clients together will provide valuable information on market needs, its direction, product needs and how well you are doing. There are risks, the process may expose your bad points and customers may be made aware of competitors advantages. To be effective, the group needs to represent all segments of the market, avoid the trap of just inviting friendly long term customers. Industry experts can be valuable members in a group, they have the benefit of helicopter vision.
Getting Started
Online surveys are easy to implement using email, both your own and possibly external prospect databases where Web-Clubs can help. By using Survey Monkey, simple online surveys are easy to implement.
Industry associations are good place to look for market data, if they have it available it is likely to be cheaper to buy than from specialists analysts.
Keeping in touch preferably face to face, but at least by telephone keeps you aware of market developments.
Market Research Agencies
If you are unsure how to proceed, and particularly if you are thinking of entering a new market, using a specialist agency such as Insight Engineers may be justified.
Informal Chats
Meeting over a coffee or something stronger with knowledgeable customers or industry experts is worth a small investment. Away from the working environment in a casual setting you are more likely to get honest feedback.
Events
Exhibitions, Seminars and even Web conferences allow you to find out what competitors and influential players in a market are doing. For some businesses local networking groups can be valuable.
Using the Results
Gathering the information is one thing, putting it to use is another! It is important that all data, both quantitative and qualitative are recorded. Graphs are much easier to interpret than tables of numbers, fortunately, they are easy to produce in Excel.
With more qualitative issues, pick out the key statements and points.
Don’t Ignore What You Don’t Want to Hear
Many years ago I was part of a team evaluating a planned new software product. After several weeks most of us in the team concluded the product wasn’t going to be competitive. We presented our findings and very nearly all lost our jobs, it didn’t go down well! The product went ahead, many thousands more dollars were spent only for it to be discontinued eighteen months later.
Good Market Research will stop you for making those mistakes. Importantly it will signal that you may need to change direction if your existing market and product is dying. Ignoring the issue will not help!
Knowledge Base – Marketing:
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