Before undertaking any form of marketing campaign you must understand your customer. You should also know as much as you can about your competitors. Business is all about winning – so unless you understand how to win it is unlikely that you’ll come first!
Market research makes sure you can make informed decisions rather than leaving it to luck. As such it can help to reduce risks by getting your product, your promotional messages and your pricing strategy right first time.
There are two main types of market research – quantitative research and qualitative research. Quantitative research focuses on coming up with numbers, for example, what percentage of the population buys a particular product. It is gathered using surveys and questionnaires. It sounds complicated but if you are an established business you can do simple quantitative research yourself by talking to your existing customers. If you are a new business you might need some assistance to gather this data.
Qualitative research concentrates on emotion. It helps you to understand how potential customers feel about your product or service and what influences their decisions to spend. Researchers use questionnaires and focus groups to gather this intelligence and interpreting the results requires skill.
There is a huge amount of research available in the public domain. The internet is of course a very useful tool, and you can also purchase data from industry organisations – you may even find that some if it is free. This information tends to provide data on market sizes, sales trends, customer profiles and competitor activity.
Market research is also important to enable you to think about how trends change. For example is there much point in trying to set up a new magazine when people are choosing to use the internet rather than printed material?
Effective market research starts with knowing what you are trying to achieve and what information you need – whether you do your own research or brief a professional. It is a vital element in developing business and marketing strategies, so ignore it at your peril!