Market research does not have to be highly sophisticated, expensive or complicated. It can be a do-it-yourself thing. The important thing is to ensure the research gives you reliable information that you can use in building your business. Market research provides information about the market potential that provides the basis for accurate sales forecasting and your marketing strategy. Its basic components include: Show
Market research involves activities designed to obtain data about the market and falls into two main categories.
In addition to conducting research, it is quite valid to rely to some extent on your own opinions and observations, especially if they have to do with your local community. "Outsiders" will not know a community like the people who have spent their lives there. However, it is important to back up your opinions with data and research. Don’t rely solely on your intuitive feelings; they’re probably not enough to go to the bank. Resist the temptation to only look for data that confirms your opinions. Information you gather goes into estimating the sales your company will achieve during its first few years of operation. The feasibility study and business plan you are putting together are built upon these estimates. Because research is one of the principle tools for determining whether the business will work, it is worth making an investment. You need to be as specific as possible about the dimensions (size, trends) of the opportunities your business faces. Since a new business doesn’t have a track record, your research must be thorough enough to enable you to make realistic sales estimates. Primary research is information you gather firsthand. Common examples of primary research information-gathering techniques include personal interviews, surveys and focus groups. ObservationObservation is also a common technique. You record what your customers do naturally. Through observation, market researchers determine how consumers behave as they buy and use a product, or how they are influenced by some marketing strategy being used by the business. This method works very well in a retail environment. It is a useful technique to learn how and then, perhaps, why customers purchase a product that is in direct competition with your product. If your product is already being sold, you might watch how your customers act while purchasing your product. A pitfall of the observation technique is that the presence or bias of the observer can influence the behavior of the subject. As you observe customer behavior in stores, markets, etc., try to be inconspicuous in your presence. Qualitative DataWhen businesses gather primary data, they often are gathering qualitative data. Qualitative data is data that cannot be counted. It reveals the quality of a subject’s experience or beliefs. Qualitative research is gathered by allowing customers to answer questions in an open-ended, unstructured manner. Customer preferences might be examples of qualitative data. Focus groups, one-on-one discussions or interviews can provide qualitative data. Quantitative DataQuantitative data describes things that can be measured and analyzed with statistical analysis. These are expressed in numbers and reveal such things as the quantity of customers with a particular characteristic. How much do your customers earn each month? How old are they? How much do they spend each month on groceries? Using BothBoth qualitative and quantitative information can be important to you as you do your market research. There is a problem with using only quantitative data gathered from a small number of individuals. It may not be a large enough number of people, with a large enough product sampling to be reliable for decision-making. Would you make the decision to completely change your product based on the thoughts of a handful of customers? When you combine quantitative and qualitative data, however, you can expand what you learn by combining or showing connections between observations, preferences and the quantitative data you have developed. You can develop a good base of information, for example, about the characteristics of your typical customer. Customer ProfileThe place to start your primary research is with your customer. You may ask, “What information should I find out about my customer?” The answer is “everything.” The better you know and understand your customer’s wants, needs and desires, the better able you are to meet those needs with a product that sells. The goal of gathering and analyzing customer information is to prepare a customer profile. This customer you expect to market your product or services to is called your target customer and represents an average or typical customer. It may be one profile of one customer group or several profiles covering several customer groups. Demographic vs. Psychographic Customer DataBusinesses gather demographic and psychographic data in order to discover more about their customers. Demographic data describes specific characteristics of an individual such as age, level of education, occupation, income, marital status and address. Psychographic (lifestyle) data describes an individual’s activities, interests, opinions and beliefs. This data give marketers insight into such things as how potential customers live, make buying decisions or plan for the future. To illustrate the magnitude of demographic and psychographic trends, consider the following psychographic trends that have directly impacted marketing strategies today.
These are only a few of the major trends you can observe, research or read about that could affect the products you wish to take to the market place. Analyzing Your Market PotentialAfter gathering your primary and secondary research information, you are ready to analyze your market potential. You should be ready to answer these questions.
Resource Adapted from Marketing, Research and Analysis; NxLevel Training. * Reprinted with permission, Agricultural Marketing Resource Center, Iowa State University. Mary Holz-Clause, former co-director, Ag Marketing Resource Center, former associate vice president for ISU Extension and Outreach Which marketing research involves the gathering of data to determine information?Descriptive research is more structured than exploratory research and involves gathering information about a market to explain the current market condition, current demographics or a current business problem.
What is the process of gathering market information called?It's called marketing research. Marketing research is the process of collecting, analyzing, and reporting marketing information that can be used to answer questions or solve problems so as to improve a company's bottom line.
Is the process of gathering information in order to determine who will buy the product?Marketing research involves the gathering of information in order to determine who will buy the product and what the most effective promotion strategy would be. If the market for a new venture is highly concentrated, it is advisable to consider direct sales.
What is research data in marketing?Market research (or marketing research) is any set of techniques used to gather information and better understand a company's target market. Businesses use this information to design better products, improve user experience, and craft a marketing strategy that attracts quality leads and improves conversion rates.
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