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Knowledge is power: How to do market research for your new business

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Knowledge is power: How to do market research to make a business idea a winner
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However, because surveys result in relatively impersonal data, it's important to ensure that your survey is designed in a way that allows data to be easily quantified so that you can derive meaningful trends from it. For instance, a survey that simply asks customers to write about their experience with your business may not be the most effective choice, as this requires reading and analyzing each response individually to derive meaningful conclusions. A better idea might be to ask your customers to assign a number rating to multiple aspects of your business, like customer service, price, and so on.

This makes it quicker and easier to identify your strengths and weaknesses in addition to allowing you to quantify and graph your data. In our landscaping company example, we might try surveying our first 20 clients by asking each to fill out a small ratings card when they pay their bill. On this card, we might ask our clients to give a rating from in the categories of quality, price, speed, and customer service.

If we get lots of 4's and 5's in the first three categories but mostly 2's and 3's in the last, some sensitivity training for our employees might improve our customer satisfaction and increase our referral rate.

One way to determine how your customers might react to a proposed strategy is to invite them to participate in a focus group. In a focus group, small groups of customers gather at a neutral location, try a product or service, and discuss it with a representative. Often, focus sessions are observed, recorded, and analyzed later. In our landscaping company example, if we want to consider upselling lawn care products as part of our service, we might invite loyal customers to participate in a focus group.

At this focus group, we'd have them receive the sales pitches for some of these lawn care products. Then, we'd ask them which ones, if any, they would be most likely to buy. We'd also ask them how the sales pitches made them feel — were they friendly or condescending?

For the most intimate and qualitative market research data, one-on-one interviews with customers can be useful. Individual interviews don't provide the broad, quantitative data sets that surveys do, but, on the other hand, they allow you to dive relatively "deep" in search of relevant information. Interviews allow you to understand why specific customers like your product or service, so they're a great choice for learning how to most effectively market to your customer base.

In our landscaping company example, let's say that our company is trying to design a short ad that will run on local TV. Interviewing a few dozen customer can help us decide which aspects of our service to focus on in the ad. For instance, if most of our interviewees say that they hire landscapers because they don't have the time to maintain their lawns on their own, we might make an ad that focuses on the time-saving potential of our service.

Let us do the work for you! Companies considering implementing new products or services often let potential customers try their product or service for free so that they can iron out any problems before rolling it out. Bringing in a selection of customers for testing can help you determine whether your plans to offer a new product or service are in need of further review or not.

In our landscaping company example, let's say that we're considering offering a new service where we plant flowers in the customer's yard after doing our landscaping. We might let a few "test" customers choose to have the chance to receive this service for free under the condition that they discuss it with us afterwards. If we find that our customers appreciate getting the service for free but would never pay for it, we might reconsider our roll-out of this new program.

Part 3 Quiz Which of the following is a good question to ask in a one-on-one interview? Answer the original question that led to your research. At the very beginning of the market research process, you set goals for research.

These are typically questions relating to your business's strategy that you are attempting to answer — for instance, whether or not to pursue a certain investment, whether or not a certain marketing decision is a good idea, and so on. The primary goal of your market research should be to answer this question. Because the goals of market research projects vary so greatly, the exact information required to give a satisfying answer for each will vary. Typically, you're looking for predicted trends in your data that imply that a certain course of action is better than others.

Let's return to our landscaping company example in which we're trying to decide whether it's a good idea to offer a flower-planting service with our standard lawn care package. Let's say that we gathered government data that revealed that the majority of people in our market are wealthy enough to afford the added cost of the flowers, but that a survey we conducted revealed that very few were actually interested in paying for the service.

In this case, we'd probably conclude that it isn't a good idea to pursue this venture. We might want to modify our idea or even scrap it entirely. One common use of market research is to determine these aspects of a business. If it is applicable, the data gained from a market research project can be used to assess the health of the company as a whole by pointing out strengths, weaknesses, and so on that are not necessarily the target of the initial research.

Let's say, for instance, that as we tried to determine whether our flower planting service was a reasonable idea or not, we found that a significant number of participants in our testing noted that they liked the look of the flowers but didn't have the resources or know-how to care for them once planted. We might classify this as an opportunity for our business — if we do eventually implement the flower planting service, we might try including gardening tools as part of the package or as a potential upsell.

Find new target markets. In simple terms, a target market is the group or groups of people your business promotes, advertises, and ultimately attempts to sell its products or services to. Data from market research projects that reveals that certain types of people react preferentially to your business can be used to focus your business's limited resources on these specific people, maximizing competitiveness and profitability. For example, in our flower planting example, let's say that, although the majority of respondents reported that they wouldn't pay for the flowers if given the opportunity, most elderly people reacted favorably to the idea.

If backed up by subsequent research, this might lead our business to specifically target the elderly market — for instance, by advertising at local bingo halls. Identify further topics of research. Market research often begets more market research.

Once you've answered one pressing question, new questions can arise or old questions can remain unanswered. These can require further research or different methodological approaches to be satisfactorily answered. If the results of your initial market research are promising, you may be able to receive permission for further projects after presenting your findings.

In our landscaping company example, for instance, our research has led us to the conclusion that offering a flower-planting service in our current market is not necessarily a wise idea. However, several questions remain which may be good topics for further research. A few additional research questions are listed below, along with ideas on how to solve them: Is the flower planting service itself unappealing to customers, or is there a problem with the specific flowers we're using?

We might research this by using alternate flower arrangements in our product tests. Is there a certain section of the market that is more receptive to our flower planting service than others? We might research this by cross-checking our previous research results with demographic data from the correspondents age, income, marital status, gender, etc.

Are people more enthusiastic about the flower planting service if we package it with the basic service and increase the price slightly, rather than offering it as a separate option?

We might research this by conducting two separate product tests one with the service included, one with it as a separate option.

Part 4 Quiz What kind of analysis are you looking for in your data? Why customers aren't interested in certain ideas. How you might modify your ideas. What sort of future market research options you have. What sort of predicted trends you see. The right product depends on where you're marketing it. Conducting market research using the tips in this article should help you determine which products will sell well around you.

Not Helpful 0 Helpful 2. Answer this question Flag as How would an exporter conduct marketing research for his own product? Include your email address to get a message when this question is answered. Already answered Not a question Bad question Other. By using this service, some information may be shared with YouTube. Quick Summary If you want to conduct the online portion of market research, collect data from government websites, trade associations and publications, academic institutions, third-parties, and market research services.

Did this summary help you? Tips If you are making decisions that will cost you a lot of money if you are wrong, invest in a professional market research consultant.

Get bids from a few. You might be able to get local university students to take on your research as a class project. Contact the professor who teaches a marketing research class and ask them if they have such a program. You may have to pay a small fee, but it will be less than a professional research firm. There is sometimes more than one target market. Finding new markets is a great way to expand your business.

If you don't have much of a budget, look first for reports that are free and available on the net. Also look for reports that have been published by your industry association or in trade magazines magazines for professional hairstylists, plumbers, plastic toy manufacturers, etc.

Doing a thorough search of secondary sources. Use search engines to research topics that will keep you up-to-date on changes that are taking place in your industry, what new products are coming to market, and what your competitors are trying to do to stay one step ahead of you. Do a couple of focus groups. Get six to eight people to sit around a conference table and conduct several focus groups. Do a customer satisfaction survey. Take the issues you uncover in your focus groups and write a questionnaire that, when answered by at least 75 customers, will tell you which issues are driving or repelling sales.

Then take action and do more good things while also taking action to reverse the bad things. How important is it for small-business owners to conduct research on their customers? Ask customers to rate you on: Their satisfaction with the many aspects of your customer service.

The extent to which your products or services continue meet their needs and wants. The percentage of business you are getting from your customers, and how those giving some of their business to a competitor rate that competitor compared to you. What new products, services, marketing, or pricing approaches customers wish you would provide and by doing so would render them more loyal to you. Among the many, here are a few that are critical: Hold hands with your customers by changing or improving the way your sales and operations people serve them.

Make improvements to current products through additional benefits or features. Upgrade or change service, warranties, and guarantee policies that may be driving customers to a competitor. Will you provide some specific steps to help them do this? You could also try the Independent Consultants Group. There are a number of ways to gauge opinions on your business venture. Stopping people on the street in your local area to answer a questionnaire might be one of the hardest ways to get information, but it can often be the best way to get information on your target market straight from the horse's mouth.

It's important to keep things brief though, and make sure people know you are not trying to sell them anything. If you do meet anybody who is keen and willing to help, it could be a good idea to offer them a coffee in exchange for a longer chat. Try to be strategic about the times of the day and the places you target. You could consider cold-calling, particularly if you don't have the patience to stand outside and grab people's attention as they walk by.

There are databases you can buy, with email addresses and phone numbers, but you might find that people are not terribly receptive and a more personal approach works better. Another answer is to engage friends and family. Tell them to be honest with you and pitch your ideas to them, their help in refining what you plan to do and simply telling you what they would like out of a product or service can be invaluable.

The internet is one of the best ways to work out potential demand for your product or business. Although asking friends and family can be helpful to an extent, when it comes to investing your hard-earned cash in a new business, you need brutal honesty. To get a high volume of answers quickly and easily you could try using social media or online survey providers. Social media is one of the most useful tools at your disposal when it comes to getting a large volume of quick, and most importantly free, answers.

You can use anything from Twitter and LinkedIn to Facebook, but you will need to use a certain degree of common sense when deciding which social networks to use. For example, you will be better using LinkedIn if your potential clients are other businesses.

A community Facebook group, on the other hand, might be more relevant if you want to set up a new local shop. This approach will have the added bonus of advertising your new venture at the same time, as the people you interact with will ultimately be your potential customer base. You will have to be careful about revealing too much detail, though, as you don't want to give away any of your valuable ideas.

You could even try the This is Money forum. If you are looking for a more anonymous approach, you could try sending off a question about your potential business to an online panel.

For a fee, the online panel provider will circulate your question to a selection of people across different demographics - they are often made up of hundreds of people. But within 48 hours it will provide you with the answers and demographic information from 2, respondents. If you can persuade a sample of people to help you out, it is worth running a focus group.

If you do struggle to get people's attention though, offering them a discount or a freebie on your product or service might help. It is best to keep the group to around eight or ten people and to keep the session as short and sweet as possible, so that people won't lose interest.

You can get the ball rolling by giving the participants a brief questionnaire. After they have had time to answer each question get the group to to read their responses aloud to spark conversation. The dialogue is likely to be more illuminating than written responses, so make sure you take notes.

Once you have collected the data, analysis will help you figure out where your company will fit in best with the existing market. Don't panic if the results are not exactly what you wanted or expected, as adapting is part of the process.

For help on interpreting the data you have collected, take a look at the Independent Consultant Group's Commissioning Qualitative Research advice guide. Remember, opinions are rarely static and thus likely change, so it is worth repeating your research at different stages in your business start-up and beyond.

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Marketing research can give a business a picture of what kinds of new products and services may bring a profit. For products and services already available, marketing research can tell companies whether they are meeting .

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Dec 18,  · Small Business Center: Can you briefly define market research and its purpose? Robert Kaden: The purpose of marketing research is to uncover the needs, wants, wishes, desires, and emotions of customers and prospects so that you can get them, keep them, and sell them more/5(2).

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Showing that you know the state of the market and understand what you need to do to succeed is critical in a business plan. The Best Ways to Do Market Research for Your Business Plan. Mooney points to five key steps in the market research process: deciding the questions you need answers to, deciding what information you need to collect in order to answer those questions, deciding how you're going to collect the information, how you're going to analyse it, and what you're going to do with the results.

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How to Do Market Research for a Business Plan by Ivana Taylor Publisher of, ranked amongst most influential people on the Internet, Market Research . The Market Research Grid shows the two types of data sources and the three areas of research that are important to any need to gather information from and about your customers to focus your marketing efforts, maintain and improve your customer service, and to guide your efforts in developing new products and/or .