The value of Market research
Market information is just as important for your business as any other asset that you have in your company. Those that said that information is power, were correct indeed. But surprising , few organisations carry out research. Market research is a vehicle for gathering information that serves as the foundation for your marketing plan and without it , your plans are doomed to fail because you have nothing to base them on. You also need market research in order to improve the satisfaction levels of your existing customers and to find new ways to attract new ones. Conducting market research enables you to answer the following questions.
~ Who are my customers/ potential customers?
~ What are they looking for?
~ What kind of people are they?
~ Where do they live?
~ How often do they buy?
~ What styles , models, colours do they like?
~ Why do they buy from my company?
~ Which advertising channels will most likely reach them?
~ How can I capture their attention?
~ How do they feel about my competitors
~ Is my new product going to be bought?
~ At what price are my customers willing to buy my product at?
How to carry out your research
1. Start with the end in mind
Have a clear objective when doing your research. Make sure that you are not confusing a symptom with a cause. For example , dwindling sales is not a problem but a symptom of a problem. To get to the heart of the matter, you need to list all the possible factors that could be possible causes of your symptoms and one by one, do your research until you have found the answer, the cause of the symptoms. In other cases , you may be interested in researching the viability of a new product , your customers’ income levels , your customers’ buying decisions etc. In these instances, be as specific as possible about what it is that you want to find out and the decisions that you need to make as a result of the research.
2. Collect the data
If you have customers, you have possible sources of information. Much like gold nuggets waiting to be discovered, significant amounts of valuable information about customers and their buying habits is hidden inside many businesses, tuck away in computer databases. If you are bewildered by technology, do the next best thing: Ask your customers what you need to know and they will tell you!
The primary forms of research that you can use include:
~ Customers surveys and questionnaires
Draft a short questionnaire and include it in the menu at your restaurant, leave it at the counter for customers to fill out while you are serving them, or better still, have a dedicated resource that asks your customers the questions as they are in your store or get visitors to your website to answer a short survey.
~ Focus groups
Focus groups are an ideal way of collecting information from a larger number of people, usually 8 to 10 ,at one sitting. They however require more thought, more time to organise and will need a suitable venue , a trained person to ask questions and take notes.
~ Personal interviews
These are one on one interviews that can be done in the comfort of your office. Interviews are a great way to get in-depth information from customers. However, be cautious not to digress from the questions at hand and not to take too long. You will still need to take down notes and transcribing interview notes can be time consuming.
3. Analysis and interpretation
The results of your research do not provide the solution to the problem. You need to attach some meaning to the results. What do the facts mean? Is there a common thread running through the customers’ responses? Do the results suggest any changes needed in the way that you run your business? Are there opportunities you can take advantage of?
There are no hard and fast rules for interpreting market research. And since your is not an academic research project, you can get away with being slightly subjective. However, if the decisions that you have to make allow for very little margin of error, get another person to also read and interpret your findings and compare notes. Two minds are almost always better that one. And this will help you to generate more reliable and valid information.
4. You are not done until something is done
Your research effort is not complete until you do something about what you have found out. Action and evaluation of your actions against your initial objective and your customers’ responses are the last and dare I say the continuous process that you need to undertake.
In this day of corporate financial austerity and belt-tightening, companies cannot afford to make mistakes with their customers, their products and services. Without market research it is very likely that you will make mistakes that may cost your company dearly. Market research does not have to be expensive and in many cases, with a little guidance, a market research article or two, you can do it yourself.
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