 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
|
Business Owner's ManualMarket ResearchIn order to write your marketing plan and develop effective marketing strategies you will need to gather facts about your business environment. Market research is simply the systematic process of collecting and analyzing data to find answers to questions you may have regarding your customers, your competitors, and your industry.
Getting Started Market research doesn't need to be costly. The Internet has become an important tool for gathering marketing information, and a number of free market research sources are available to small business owners. While many business sites offer free access to their online resources, you may still find that the most current and valuable information comes at a price: fee-based online resources are increasingly common. Your local library or, when available, a business library can also prove invaluable. There are a variety of useful business and industry resources that can be found in libraries, including company and trade directories, electronic databases, industry surveys, etc. The New York Public Library's Science, Industry, and Business Library also offers a free public class on doing market research, which includes an overview of the library's print and electronic resources for gathering market research data and hands-on training in the use of these tools. A complete list of courses and a weekly class schedule are available on SIBL's Web site.
Two Types of Market Research There are two main types of market research: primary and secondary research. In general, secondary research is the method used most often by small business owners since it is cheaper and less time-consuming than primary research. The choice will depend on many factors such as your budget, the products and services that you are selling, available time, etc.
Secondary research involves the use of existing data that has already been compiled by someone else and is available in published form (e.g. demographic data that is compiled by the U.S. Census Bureau). This section focuses mainly on doing secondary research. Market research reports published by marketing firms are available for many industries, products, and services. If you don't have the time to conduct your own research, a number of directories can help you to locate current market reports covering your industry. Keep in mind, however, that market reports published by professional marketing firms can cost thousands of dollars, depending on the industry and the length of the report. Findex, a worldwide directory of market research reports, is available both in print format and on the Web. The American Marketing Association's GreenBook includes the full range of marketing research companies and services worldwide. MarketResearch.com Academic also provides access to full-text market research reports on various products and services. Access to the MarketResearch.com Academic database is available for free in the Science, Industry, and Business Library's Electronic Information Center. Before you begin doing your actual market research, you should consider three main questions: 1.) Who are my potential customers? 2.) Who are my competitors? 3.) What is the current state of my industry? Customers In order to market a product or service, it is essential that you identify and define your target market. Remember that the more you know about your consumers, the more effective your marketing strategy will be. Your target market is simply any group of current or potential consumers of your product or service. Once you have identified your target market, break it down into smaller segments so that you can direct your marketing and sales efforts at the segments that are most likely to buy your products or services. Try to define your "typical" customer or target audience, in terms of demographic, psychographic, and lifestyle characteristics:
To identify your target consumers - and segment your market - you can use a varity of print and electronic resources. Visit SIBL's webpage - Who Are My Potential Customers - to identify these resources. demographics:
purchasing power:
buying habits:
psychographic and lifestyle characteristics:
By now, you should have developed a fairly good profile of your target consumers. Remember that the more you know about your customers, the more you will be able to fulfill their specific needs.
Competitors Finding what your competition is up to is crucial to the survival of your business. Identify your main competitors, review their business operations, analyze their weaknesses and strengths, their pricing strategies, their market share, etc. Who are their customers? What are their sales volumes? This information will help you assess the position of your company in relation to your competitors. If you find out that the market your are targeting is too competitive, for example, you might want to reconsider your initial decision or adopt a new strategy. The Internet offers a wealth of free resources, from news clips and press releases to stock quotes and company profiles. In some cases, fee-based Web services, like Hoovers, will also provide limited access to certain parts of their Web sites for free. Financial statements such as annual reports and 10K filings, as well as other public reports, can be found on a number of sites like FreeEdgar or Tenkwizard. Also, remember that you can collect a lot of useful information just by visiting your competitors' Web sites. As a small business owner, you will most likely need to research small and medium-sized companies. This kind of information — on small, private companies — is much harder to find. Often the best (and sometimes only) way to find information on small businesses is to search for articles published about the company in magazines, trade journals, and newspapers. An Internet search may be used as a starting point, but for more comprehensive information electronic business databases are usually better sources. The Science, Industry, and Business Library provides free access to Advertising Redbook Online, Business and Company Resource Center, Business Source Premier, Factiva, idEXEC, Reference USA, and a variety of other business and periodical databases. Company directory databases like Dun & Bradstreet and Reference USA will also help you locate competitors in the area you have chosen for your business. You can search these electronic directories by industry, geographical area, size of the company, etc. They provide basic company information, such as address, key officers, lines of business, number of employees, and, when available, credit ratings.
Industry Trends Analysis An in-depth analysis of the environment in which your business operates is an essential part of marketing research. Ask yourself how your business fits in the marketplace: What are the current and future trends? What is the size of the market? Is the market big enough? Is it shrinking or growing? What is the demand for my products or services? In some cases you may need to look closer at economic, political, legal, or technological issues affecting your industry. Some questions to consider might include the following: What laws and regulations will I have to comply with? How are new technologies going to impact my business operations? Trade journals can be used to keep track of trends within an industry. Your local business library may have subscriptions to the journals for your particular industry. Below are some of the directories which list trade journals for different industries.
Trade associations can also provide useful marketing information such as industry reports, statistics, market surveys, etc. Keep in mind, however, that you may have to pay membership fees to get access to the information. The Encyclopedia of Associations, a directory that covers regional, national, and international associations, lists trade associations in different industries. The American Society of Association Executives also provides access to its Gateway to Associations Online. This database of U.S. trade associations on the Internet is searchable by keyword, category, or geographic location. |