As an entrepreneur starting a new business or venturing into a new market, any person you approach for advice will likely tell you that it is important that you do some research before you take the plunge.
There is just one problem with this advice – often, nobody seems to tell you how exactly you are to conduct your research. What type of information you need, where to find the information, what factors to consider or the scope of research needed is just some of the factors that you need to look into to effectively carry out marketing research.
In order for your research to be valuable to your marketing process, you must first have a clear picture of what it is you are doing. Many first time business owners and novice marketers usually confuse ‘market research’ with ‘marketing research’. The main difference between the two is that the latter is on a larger scale as compared to the former. Market research entails analyzing a specific market for your product whereas marketing research not only includes conventional market research, but also new products and services, distribution channels and the consumer’s wants and needs. In a nutshell, it is an all encompassing research on the market that includes product, processes, people, places and competitors.
Even though you may have clear understanding of the type of product you want to sell and how it fits into your company’s overall mission and goals, this is not necessarily sufficient to make sure that your product sells. Marketing research can eventually help increase your sales revenues. To perform the research, you can follow the below steps:
- The first step is to define your business goals as far as the product is concerned. Try to be as specific as possible as this will eventually help you obtain an accurate report.
- Set a budget for your research and develop a timeline for research completion.
- Think about the type of data you will need – There are two sources of data – primary and secondary. Primary data is data that you collect in relation to your product and is created from your own observation, understanding and analysis. Primary data can be collected by interviewing the general public through calling a set of randomly selected numbers or observing market reaction to a similar product. Secondary data is information that is obtained from books, journals, industry reports and any other information gathered by a third party. For secondary data, you can use the internet which has a large collection of e-books and company research reports, product information and market statistics. You can also check the library for product research conducted by various companies. Local chamber of commerce and trade and industry offices are another place you should stop by as these not only have research documents you can go through but can also provide vital advice on your intended line of business.
- Analyze the data collected – This is where a lot of the work lies. You have to determine how to represent the data, what software to use and the acceptable margin of error based on the sample you collected and the methodology used to collect the data.
- The final report – The information gathered should help you come up with a report that will help you decide what marketing strategy to employ. This report should ideally include charts, flow diagrams and statistics that back up your research and your intended strategy.
Conducting research requires patience and practice – the more you dig in, the more effective you will become.
By Liam Dawe