The Importance of Market Research to Your Business
Just contemplating the need to do market research for your business can feel overwhelming. However, you need to jump in because market research is key to the success of your business. First, you need to understand the difference between "market research" and "marketing research."
Market research is when you have narrowed down a specific "target," and you are delving into the behavior of that target. In other words, its research into a very narrow group of consumers.
Marketing research entails dealing with a broad range of consumers. Marketing research includes "market" research, but it also delves into more. The best way to differentiate the two is to understand that marketing research is essentially about researching the marketing "process" of a company—not just "who" they are targeting.
First, let's look at how to implement marketing research, which includes the following steps and the questions you should be asking yourself along the way:
- Problem definition. The problem is the focus of your research. For example, "why are sales soaring in your Midwest territory, but dismal in other parts of the country?"
- Data collection method and needs. This is where you ask, "how will I collect the data I need to solve the problem? Do I use surveys, telephone calls or focus groups?"
- Determine the sampling method. Sampling represents those you will be collecting information from. You need to ask yourself, "what sampling method will I use? Will it be a random sampling, a sampling that contains a similar element, or a natural sampling?"
- Data analysis. You need to figure out how you will you analyze the data. Will you use software or do it by hand? Also, how accurately do the results need to be?
- Determine budget and timeframe. You must determine how much you're willing to spend on the research and how soon it needs to be completed.
- Data collection. Now it's time to collect all the data you have available after following steps one through five.
- Analysis of the data. At this point, you conduct the analysis of the data that has been collected in the previous Steps.
- Error check. Be sure to check for errors in the data you've collected and analyzed. Errors can occur in the sampling method and data collections.
- Create your report. The final step of marketing research is to draft a report on your findings. Your report should contain tables, charts, and/or diagrams. It's important that your report clearly communicates the results that you found. Your findings should lead to a solution to the problem you identified in Step One.
3 Key Benefits of Market Research
Market research also provides many benefits. It takes the guesswork out of marketing and gives you data that you can use to drive your marketing strategy—and accomplish your objectives and goals. It's a systematic approach that can make your marketing not only easier but more effective.
Market research includes the following benefits:
- Communication driver. It drives your communication not only with your current customer base but your target prospects as well.
- Identifies opportunity. Market research shows you where the opportunities are and helps you identify not just high-level opportunities but assists in showing you the more immediate "low hanging fruit" opportunities.
- Lowers risk. Detailed data keeps you focused on the real opportunities and helps you avoid unproductive areas.