Market Research for Small Business Success Market Research for Small Business Success

Marketing research can help small businesses develop thriving ideas. Removing the guesswork through market research can guide your business to the right market while minimizing expenses.

Types of Market Research

Marketers focus on four types of research information: primary, secondary, qualitative, and quantitative. Here’s a breakdown:

Primary research - Primary research is gathered firsthand from customers, users, or key constituencies. This process can be through surveys or focus groups. Generally, this information is proprietary to your company.

Secondary research - Secondary research has already been gathered and can be readily implemented. Information like this can come from an industry association, general or trade media, and third parties. Companies like Forrester Research conduct market research to create market profiles, which are available for a fee.

Qualitative research. This type of research focuses more on open-ended questions and consumer motivations rather than numbers. Through surveying consumers, qualitative research seeks to determine people’s wants, needs, likes, and dislikes.

Quantitative research. The result of this research is numbers. Quantitative research offers concrete figures on how many people will use a product, the price they are willing to pay, the number of competitors, and projected sales forecasts.

Market Research: Basic Topics

Start with your company, potential customers, and the competition.

  1. Your Company. Start by evaluating what your company currently provides: products, services, customer benefits, your brand, and how your new idea fits into your existing operations. To serve a new market profitably, your operations must be cost-effective in servicing that market, especially if you have competition.
  2. Potential Customers. The size of your market is essential. Look at the number of potential customers and their demographics (age, income levels, spending ability, etc.). Establish a geographic limit on your market that you can effectively service unless you offer e-commerce.
  3. Competition. Identifying your competition is crucial to success. Evaluate who serves the market locally, nationally, and remotely. Take this research further by researching the competitors who are likely to enter the market at a later date.

When you complete this process, you won’t have a full picture of market feasibility, but you will have a much clearer picture of the possibilities.

To round out your research, closely examine the competition you identified. Visit their stores or websites. Check out prices, delivery, service levels, etc. Note strengths and weaknesses. Pay special attention to opportunities to distinguish your product or service.

Most importantly, determine if there is room for your business within the marketplace. All businesses need customers to succeed and thrive. If storefront doors at businesses like yours aren’t swinging open, you should reconsider your business idea.

Additional steps in determining the viability of your business idea include:

  1. Gathering information from databases, market surveys, and competitive intelligence firms.
  2. Talking to prospective customers. Ask how they feel about their current vendors or suppliers. Ask what factors are most important in their buying decisions.
  3. Talking to potential suppliers. Product suppliers have a great sense of different markets. They can tell you if a market is under-served or over-served and are typically willing to do so since they have a vested interest in finding good customers like you.

Make sure you use objective data to make decisions. It’s easy to get excited about an idea. Temper your excitement with data, information, and research. When your market research results match your expectations, your idea has the greatest chance of success.