Market research can be daunting, especially when first starting out as an entrepreneur. The following reasons to perform market research should, if nothing else, provide some reasons as to why it is important for any business to pursue. Make sure to have paper and pen at the ready as well, as many of the questions that follow will lead to more information required in the start a business process.
The Purpose Of Market Research #1: Evaluating The Market
Market research assists business owners by demonstrating market demand, either in the form of a service or product. Research marketing can also help along the same lines with determining the best location for a business. Other questions that can be answered with regards to evaluating the market are:
- What kinds of people, demographically, are a part of the target market today and in the future?
- How many people are a part of this target market, and how many people can reasonably be captured by this business? How many of those customers are already being serviced by competitors?
- Are there enough people in this target market and geographical region to make the business a sound investment?
- Where will the customers come from, and how will they be cultivated and contacted?
- How can the business attract more customers?
The Purpose Of Market Research #2: Determining Market Response
When using marketing research for this type of analysis, it is to determine the potential for a product or service in the marketplace, and therefore should be checked out before introducing it to customers in general. Some of the marketing questions to answer in this category are:
- How often and how much do the potential customers buy this product or service?
- What kind of price will the customer pay for this product or service? Combined with the information gathered in the question prior to this one, at that rate can a profit be turned?
- What are the target customers’ needs for this product or service? Are competitors meeting these needs already?
- How are the customers changing as time progresses? How are their needs changing in turn? How can the product or service change to meet those needs?
Although these questions sound similar to a market analysis survey, there are differences. Market analysis studies more of the overall information with regards to the market, whereas this type of market research looks at the product or service specifically, and how it will fare in the marketplace.
The Purpose Of Market Research #3: Checking Ad and/or PR Effectiveness
This type of market research allows the entrepreneur to see whether or not their marketing message is being heard as it was intended to. It can also flesh out the costs associated with a specific marketing plan. Some of the questions to answer:
- What kinds of advertising would be the most effective in reaching the target market? Of those types, which are most likely to promote positive purchasing decisions?
- Is the current advertising promoting the kind of image that the business requires?
What promotional materials and mediums are the best to increase sales?