Market research is something that a lot of small businesses often overlook when they really shouldn’t. It is no secret that the most valuable resource in the 21st century is information, and those who possess it, are more likely to succeed.
Knowing your current or potential market well is an advantage you would love to have. Why? Because it:
- helps your planning (strategic and tactical)
- allows you to anticipate the moves of your competitors
- provides you with great insights on customer needs
- raises your awareness of market trends
- saves you money and time while preventing you from risky moves
Do you need more proof? Every major business out there has a special department, the sole task of which is to gather, process, and analyze various market-relevant data.
The result is usually a meaningful report that gives enough insight to top management to make a strategic decision. When millions of dollars and public reputation are at stake, you cannot be too cautious.
Are small businesses any different? Well, they do not have millions of dollars to risk (yet) and noticeable public reputation to damage (again, yet) but other than that, they are no different. Small businesses need data just as much.
Market Research Process
Market research process usually involves researching, gathering, collecting, processing, analyzing, and summarizing the information that is relevant to the challenge that a business is currently facing.
There are two main types of data you can possibly get:
- Primary information – data that has been gathered and processed specifically for your business, whether you did it yourself or hired someone else to do it.
- Secondary information – already existing data that is available for public (as a rule, not for free). This may include various statistical reports and studies made by the government, trade associations, and other institutions.
Obviously, primary information is more helpful as it gives answers directly to the questions and challenges you might face.
A typical market research process comprises six distinct stages, each having its own characteristics. Here is what we need to do in order to get a comprehensive and informative report.
1) Define the Problem
As it often happens in business, you start with a major problem or challenge that you have. “Should I enter market A with product B?” “What price should I set for my new product?” “How should I build my distribution process in this area?” These are the potential questions only to be answered after you get enough data on your hands.
The more precise your problem is, the more detailed the information you will get. This is the foundation for many of your future decisions so it is worth taking some time to define the problem correctly. Wrongful questions lead to wrongful assumptions, which, in turn, lead to wrongful decisions.
2) Develop the Research Plan
Once you have realized the scope of the problem, it is time to think about the information and data that might potentially help you – and the ways of collecting it.
Not all the data is easily obtainable so there has to be a thin balance between the availability and the need in a certain type of data. Some information takes hours to collect, other may require months of research.
There are two common types of data:
- Must-have data (crucial to your final decision)
- Data you’d like to have (would be interesting to look at)
3) Collect the Information
This is where the actual work begins – using all available channels and methods, we collect data. While doing so, you need to be aware of these things:
- The data has to be fresh (the rate of technology development and market changes is so high these days that sometimes even last month’s data may be irrelevant to the current situation)
- The data must come from respectable and trustworthy sources (obviously, you can’t bet your money on somebody else’s hunches and guesses)
The ways of collecting information may include:
- Interviews (face-to-face or over the phone)
- Surveys (usually online)
- Questionnaires (online or by mail)
- Focus groups (getting a sample of the target audience and asking for their direct feedback)
4) Analyze the information
When you are in the process of collecting data, you do not usually think much about how you will process and store it later. Well, you should – because it really makes the whole market research process go a lot easier and smoother. Creating basic categories and splitting the data by sources, topic, relevance, and other criteria are all signs of a good marketer.
The rough data that we get is like a raw, uncut diamond – it is already precious but it will start to shine only after you give it a proper cut. So, to make the data “shine”, we need to cut away everything irrelevant and excessive leaving only the needful stuff.
5) Present the Finding
Not everybody is good with numbers – running, viewing or understanding them, especially the big data. However, most people are rather good with charts, diagrams, and graphics.
To present the final data in the most comprehensible way, we need to rework numbers into nice visuals that will be easy to use, discuss, and refer to.
6) Make a Decision
The final step of the process – this is what we are ultimately after. After studying the numbers, much debating and calculating, we are ready to come up with the final decision – or a few, for that matter (nobody said having a plan B was a bad thing).
The result may come in the form of a presentation or a report.
More information you will find in one of our market research process article.
Market Research Data
The data that you get in the process of conducting your research using various collecting methods is called “market research data.” Every piece of that data can be attributed to either of the following categories:
- Qualitative data
- Quantitative data
Qualitative data yields descriptive, non-numerical information. For example, when you are conducting a survey on smartphones and one of the questions is “What factors matter the most to you when purchasing a smartphone and which ones are decisive?”, obviously, you will have people listing the qualities (hence the name) that matter the most for them.
Despite not being easy to quantify at times, qualitative data nevertheless is extremely helpful as you are not limiting people to certain pre-made reply options and more likely to get relevant, meaningful data straight from the primary source.
Quantitative data yields information that can be presented through numbers – this is something that we all are used to seeing in various reports, stats, and analytics tools. App downloads per day, the number of Android users in North Carolina, median household income in Canada are all examples of quantitative data.
When dealing with data, we also need to be aware of its accuracy, which depends of the quality of research and its sources. Research can be considered well-done if it has been successfully tested for:
Why Is Market Research Important?
In case you have not realized it yet, market research is extremely important for modern day businesses regardless of their type, scale, or goals.
Behind every major success in business, there are months and sometimes years of study and research. It is not that hard to do “something” – everybody does “something” with a varying degree of success.
However, when the time comes to hit just the right target at the right time and in the right place, common knowledge, hard work, and good luck is not enough. You need to be SURE, and that is what research gives you.
Who can benefit from quality market research the most:
- Small businesses and startups
- Companies considering to launch new products or services
- Non-profit organizations
When you got your data gathered, analyzed, and presented the right way, making the final decision is much easier - a decision that is highly likely to come out as the right one and bring your business to success.
It happens because:
- Your decision is based on concrete data and facts
- You can predict the tastes of consumers and anticipate the moves of your competitors
- You can prevent yourself and your business from a potential failure, thus saving money and time
If anything, all successful businesses have one thing in common – they all did their fair share of research when they had to. Now it is your turn!
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