What is Market research? - Importance to your Business Plan
Funny Marketing Cartoon
Understand your customers with market research
The simple and frank fact is that those companies who understand customers, their buying habits and listen to those; do better. They sell more effectively, can compete in the market, target new customers and identify new opportunities quicker than their competitors.
There is a wide variety of publicly available information and you can perform your own research especially if you are initially going to be operating within your locale. All of this builds up an a picture of customers buying habits and allows you to make more accurate predictions about the market you will be operating in.
With this in mind why would you not do your market research? I have heard so many excuses, the usual culprits including, "I haven't got time", "It costs too much", "I don't know what I'm doing", "I don't want to ask people questions" To be honest my answer is almost always the same, you can't afford not to do it. Understanding and engaging with your market is vital if you are to succeed in your business.
Customers Buying Habits Part 1
Researching your customers
Knowing your customers especially, satisfaction levels, brand loyalty, spending habits, will make you a more successful business. By knowing customers buying triggers you will be able to ensure that you adapt your sales methods in-line with their needs.
Knowing all the basic demographics, age, disposable income, gender etc will help you with your marketing and sales, but knowing things like
- what your customers think of yours and competitors products
- how they rate your business against your competitors
This is truly the holy grail of market research as it will allow you to improve your business offering and improve customer satisfactions and ultimately customer loyalty.
Work out what questions you need to ask in order to get this information and get feedback on your business and or proposed business. If you are not sure then check out my Hub on understanding your customers needs
Customers buying Habits Part 2
My Business Plan Blog
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If you are looking to write or improve your business plan then check out my blog, which has plenty of information regarding each component of the business plan in simple easy to digest posts.
The low down on Competitors and Market Trends
Knowing your competitors strengths and weaknesses can only be a positive thing, perform a SWOT analysis on them, try and understand their business and predict their next moves, this will allow you to stay ahead of them and vie for business that could otherwise have been theres. As aggressive as it sounds you must exploit your competitors weaknesses.
However not all of it is about looking for the short fallings of your competitor, you need to understand the market, it's trends, it's drivers, you need to be proactive and be pioneers and not sheep, you need to learn to drive innovation within the market and not be dragged along by it, this will ensure that you become a market leader and determine your success within it.
In your quest to achieve this you need to get information on the following things:
- Is demand for your products growing or reducing
- what is the size of the market and it's economic trends
- How are customers buying now and more importantly how will they buy in the future
- Are there any products in development, that could make yours obsolete
- Any planned changes of your competitors
- How much do your competitors charge and any special offers
- What promotion and advertising tactics do your competitors utilise
- Is there any legislative changes upcoming which could affect your business or market
Where can I find information?
You can get information from so many places including:
- local business reference library
- your trade association, local authority or Chamber of Commerce
- the Office for National Statistics - for information on the economy, population and social trends
- the business pages of national newspapers
- commercial publishers of market reports - including KeyNote, Euromonitor, Mintel, Datamonitor, The Economist Intelligence Unit and Market & Business Development
- data from your own business, or previous companies. This is why keeping detailed records is so important.
- your customers - allowing for feedback and monitoring customer satisfaction and buying habits is of vital importance
- Field research including questionnaires, phone interviews, leaflet drops, door to door, cold calling and many others.
Getting this information is the easy part, using it in a useful manner is what's important! Remember that statistics can be misleading and an average income in an area can hide the fact that there are a few mega wealthy people with a majority on a poor income, there is no substitute for knowing and area. Also make sure to keep an open mind, don't go in with the idea of confirming your opinion.
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