Market Research – an important tool
Market Research is defined as the process of gathering data on goods and services to determine whether the product or service will satisfy customers’ needs. It is essential for the growth of a business, enabling stakeholders to identify threats and opportunities in the market place and therefore improve the competitive nature of the business and reduce risk. Good entrepreneurs are in fact risk-minimisers rather than risk-takers.
Market research is usually categorised into two kinds: primary research and secondary research. In turn, the information gathered is of two types: qualitative market research information comes from actually talking to people, asking for feedback and/or opinions, while quantitative information comes from compiling figures and numbers in the form of meaningful charts, statistics, graphs and tables.
Collecting primary market research information from both customers or competitors will be in the form of qualitative information. This is usually the most valuable market research information.
Secondary research is conducted by other people or organisations. It may not be specific to the core business but it can be a cost effective way of gathering information about the marketplace and general industry trends. Sources include internet searches, trade or industry organisations and Chambers of Commerce.
The employed team can also conduct a lot of market research in the course of running a business. Encourage staff to ask customers specific questions (e.g. “What other products or services could we stock to meet your needs?”) and ask them to keep a record of the responses. Hold regular meetings to exchange market research information. If staff know that these meetings are coming up, they will be more likely to take the process seriously and come to the table with something useful.
Everyone in business conducts market research informally every day – often without realising it. It happens each time the team engage with a customer, each time anyone reads the newspaper, each time an employee shares a problem, and each time there is suddenly that ‘great idea’.
Is your business conducting enough market research?
Adapted from an article in ANZ Biz Hub