Researching Your Market
I once knew a man in the garment industry whose marketing strategy
was to drive to a fairly large city, pick up a phone directory, then
go to his hotel room and go through the yellow pages calling people
and making appointments to see the ones he thought might be interested
in his products. You could call this "on-the-spot" market
research. Evidently this didn't work too well because the man is no
longer in business.
To be successful, a business must know its market. This requires marketing
research, which is simply learning about people—the people who
do or might buy your product or service. Stated another way, marketing
research is an organized way of answering the basic questions every
owner must ask:
- Who are my customers and potential customers?
- What are their demographics?
- Where are they located?
- Am I offering them the goods and services they want, at the best price,
at the right place and in the quantity they want?
- What do they think of my business, and how do I compare, with my competitors?
The marketplace is a dynamic system that is constantly changing, which
makes it imperative that business owners engage in ongoing marketing
research. It is an objective way to find out how things are—not
how you think they are or would like them to be. Also, it helps you
learn what people want to buy, not just what you want to sell them.
Marketing research focuses and organizes marketing information. It
ensures that you have timely and accurate information to help reduce
business risks. It will also help you spot problems and potential problems
as well as potential profit and sales opportunities. By getting the
basic facts about your market, you will be able to make better decisions
and establish a plan of action.
One of the first steps in marketing research is to define the problem
or opportunity. It is very easy to confuse the symptom of a problem
with the cause. For example, a decline in your customer base is a symptom
of a larger problem, and you must try to discover the cause. You can
begin by brainstorming. Write down all the possible reasons you can
think of for a decline in customers. Next, gather data about the things
that are measurable. For example, check the census data to see if population
is increasing or decreasing, and check consumption patterns for use
of your products or services. These and other facts will help you see
more clearly what is the root cause of your problem.
Now that you have defined the problem, you will need to gather and
assess additional information. For instance, you might interview customers
and suppliers, interview employees, search other sources of secondary
data, review your own records and files and, finally, collect primary
data if you can't find the desired information from another source.
Next, you must organize and interpret the data so that you can make
an informed decision. Now, make your decision, and monitor the results
to see the impact on the problem.
One of the dangers associated with marketing research is to think
you need more information than you really do to make the best-informed
decision. This may cause you to spend too much valuable time waiting
for information you may not need. Our customers' wants and desires are
changing constantly. We will never have all the knowledge we need about
a particular problem. So move quickly to gather what you do need and
to ensure you do not miss any key opportunities.
Send this article to a friend
Authored by: Rick Sparks, Business and Industry
Specialist, University of Missouri Extension
Source: Creating Quality Newsletter, Volume 11,
Number 6, June 2002
go
back
Newsletter archives: 2004
| 2003
| 2002
| 2001
