Market research is an essential part of any business activity starting from the time when the company has not even come into existence. Market research is very important for the success of both new and developed businesses. According to expert, researching your market prior to entering is a sound decision for any business owner. It is often overlooked ignored by many owners. Small businesses need to be aware of their market niche and the strength they bring to the market. Research can help entrepreneur to be conversant with the operations of the intended business.
Companies often undervalue the impact of a marketing plan on their own people who want to feel part of a team engaged in an exciting and complicated joint endeavour. Your marketing plan gives you troops something to rally behind. You want them to feel confident that the captain of the vessel has the charts in order know how to run the ship and has a port of destination in mind. Many people don’t understand financial projections but they can get excited about a well-written and well-thought-out marketing plan. Consider releasing your marketing plan, your employees will appreciate being involved. After you have written your marketing plan for a few years, you can sit back and review a series of them, years after years and check the progress of your company. Sometimes this is hard to make time for but it can provide an unparalleled objective view of what you have been doing with your business life over a number of years. It will also shape your focus.
Types of Market Research
Market research is a broad category. In fact, there are many varieties of market research that you can use to meet the specific goals of your business. Below, we’ll explore the different benefits of each type of market research.
Brand research: Brand research is focused on creating or refining your company brand to make a bold and favorable impression on your target market. You could look into the level of brand awareness among your target audience, how loyal customers are to your brand, what sorts of qualities people associate with your brand, and other aspects of customers’ relationship with your brand.
Marketing campaign evaluation: Some market research focuses specifically on marketing campaign effectiveness. You can evaluate how many people have seen your online ads and what the click-through rate has been, for example. This type of information can help you make adjustments if needed and inform future campaigns so you reach consumers effectively and keep customer-acquisition costs down.
Competitor research: Competitor research focuses on the competition to help you gain insights into how your company can pull ahead. Looking into a competitor’s marketing campaigns, brand reputation, revenue or sales volume, and other important data points can help you learn from their strengths and weaknesses.
Monitoring the activities of your competitors
Market research allows you to keep a close eye on the performance of your competitors and answers important questions like — Why do customers prefer a particular competitor? Are competitors selling more product than me? What do customers think of the competitor’s branding and marketing? This information can help you devise business strategies that keep you ahead of the game.
Customer segmentation research: An important type of market research, especially for new businesses, is customer segmentation. These studies divide your larger consumer base into different groups or personas. Understanding the different types of consumers you want to connect with can help you create individualized campaigns tailored for each group.
Consumer research: Nearly all market research involves the consumer in some fashion, but some research is focused specifically on understanding consumers within a certain segment better. You may want to learn about their purchasing habits, interests, motivations, and more. The better you understand your consumers, the more effectively you can appeal to them.
Product development: Developing products calls for market research first to ensure the concept has value and then to refine the product over time. For example, you may see sales dipping on a flagship product and discover that customers’ needs have shifted and this product should offer a new feature to be more useful or convenient.
Usability testing: Similar to product development research, usability testing is focused on products. However, the focus here is on how consumers use your product. You may release a beta version of your mobile app, for example, and get feedback from users to find out if there are any bugs or other problems you need to work out.
Requirements For New Businesses To Succeed
Poor administration and lack of a good business plan can cause an early death of a new business. Experts has reviewed that nearly 33 per cent of all new businesses fail in the first two years of operation. Businesses succeed as much as they fail. To run a successful small and medium business, apart from adequate capital investment, there are some basic criteria that must strictly adhered to by the entrepreneur. The neglect of these criteria contributes to the failure of most start-up business. Entrepreneurs who are just starting out in business must appreciate the fact that shrewd businessmen treat business failure as a milestone on the road to success. They must try to bounce back notwithstanding the fail. Real entrepreneur count on learning from their mistakes and use the experience to move to the next idea. Start-up owners should learn from the mistakes of others to avoid the pain and suffering associating with business failure. Entrepreneurs should consider the following when setting up a business.
A good business plan
Many entrepreneurs often neglect the essence of writing out a business plan for their business. You should not believe the myth that a business plan is not worth the effort. The time and energy put into writing a plan shows that the entrepreneur truly want to transform his idea into a business. It is one thing to come up with a business plan and another to astutely execute the idea, an idea alone is not really worth nothing. The idea is useless if not executed.
Unlimited revenue sources
It is worthy of note to understand that even some non-profit organisation generate revenue or donations to offset operating cost not to talk of a business outfit established for the purpose of generating income. If your product is free or you lose money on every sale it will be hard to make it up in volume. Your product must be one that will attract customers with adequate purchasing power. If your customers have no money your business won’t last for long.
Develop your business
Increasing the size of your small business can be a daunting task, because unnecessary over-expansion can cause a business to collapse. Market research allows you to determine if an expansion of your business is the correct path to take, giving you the assurance that you need to invest wisely. It can help you develop new products or services, make changes to distribution channels, increase/decrease output and much more. Market research gives your business some certainty about the decisions being made.
Monitoring the activities of your competitors
Market research allows you to keep a close eye on the performance of your competitors and answers important questions like — Why do customers prefer a particular competitor? Are competitors selling more product than me? What do customers think of the competitor’s branding and marketing? This information can help you devise business strategies that keep you ahead of the game.
Passion
This is one reason why many entrepreneurs give in too early. The most common cause of start-up failure is when the entrepreneur just gets tired due to lack of passion for the business and shuts down the company. Despite setbacks, many successful entrepreneur remained committed to their vision until they found success. The reason why most first time businesses fail is as a result of limited business opportunities for their products or services. Some good ideas may not succeed in the end. Customers at times are indifferent to some products whether such product is great or not. That is why it is vital to conduct market research before manufacturing a product.
Strong competition
Too much competition for customers may signals danger for a growing business. Budding businesses which have so many competitors may find it hard to penetrate the market; this is why it is important to embark on thorough market research before starting up a business. An inexperienced team will drag a business aground, investors fund people and not ideas. First-time entrepreneur must get workers with requisite experience if he desires funding from investors. Investors look out for people with real experience in the business domain of the start-up. Investors want to invest in people with real experience when it comes to running a start-up business. It is important the young entrepreneur to partner with individuals with sound experience of the business.
Important tools
Some entrepreneur underestimate resource requirement for their businesses, a major resources for any business is cash funding. However, other resources such as industry contacts and access to marketing channels may be more important for certain products. The tools needed for the marketing of these products are also vital otherwise the business may collapse. You need to get the right tools as an entrepreneur to succeed. First-time entrepreneurs must also embark on aggressive marketing for their products and services. The word-of-mouth marketing strategy is not enough to make your product and brand visible to a large market. Take advantage of the media network, social media advertising and adopt other channels to make your product known and appreciated by the customers. Without effective and innovative marketing across the range of the media, you won’t have customers and this might lead to business collapse.
Lack of market research is responsible for most business failure today. There are endless possibilities of business ideas that range from products and services but however, many entrepreneurs forget the important component of their future businesses. They neglect checking if their ideas are still feasible to attract large and sustainable market by conducting marketing research as a result of this, many promising businesses crash due to the lack of business panache by the entrepreneur. Marketing research is the process of gathering data that can be used to make wise business decisions about what products or services to offer, who to market these to and how to best promote it to reach large audience. Conducting market research allows business owners to create products that meet consumer needs effectively, increasing the likelihood of successful product launches and increased profit spontaneously. Marketing research will help you to identify consumers’ needs, create products and services that appeal to them and improve existing offerings. Marketing research allow those tasked with marketing to make wise product packaging and promotional decisions, and to develop effective marketing messages.
Creating a market plan for your business
Business journals are also worth checking out. Look out for other local business and organisations that offer seminars and workshops for future entrepreneurs. You need to keep in mind that there is no easy way to success and that your effort is necessary to see the right results. Firms that are successful in marketing invariably start with a marketing plan while large companies have plans with hundreds of pages, small business can get by with a half dozen sheets. It is better to put your marketing plan in a three ring binder. You can come to it at least quarterly or even monthly. Things changes, customers come and go and market evolve. It is also important you create a section of your plan that addresses the medium-term future, two to five years down the road. The bulk of your plan should also focus on the coming year. Executing the plan has its challenge, deciding what to do and how to do it is marketing’s greatest challenge. Most marketing plan kick off with the first of the year or with the opening of your fiscal year if it’s different.
It is almost impossible to do a marketing plan without getting many people involved, no matter what your size, get feedback from all parts of your company finance – manufacturing, personnel, and supply and so on in addition to marketing itself. This is important because it will take all aspects of your company to make your marketing plan work. Your key people can provide realistic input on what is achievable and how your goals can be reached and they can also share any useful insight they have on any potential dimension to your plan. If you are essentially a one person business operation, you will probably have to wear all your hats at one time but at least the meetings will be short for you.
Know the type of market research
There are two majors’ types of marketing research which are quantitative research and qualitative research. Quantitative research is designed to help discover statistical data such as how many people in certain demographics groups are likely to purchase a particular product or what percentage of current customers are first time clients. Multiple choice questionnaires and analysis sales data are examples of quantitative research techniques. Qualitative research is designed to provide information about why customers view products, services or marketing messages the way they do. Open ended survey questions and focus group are example of qualitative research.
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