Small Business Market Research
What is "market research"?
Market research is where you do everything that you can to find out what is about the market, what the market wants, what the market will pay, everything you can, there's 10,000 factors you want to find out about this, this is what you're researching the market. My mentor Peter Drucker, the management guru- brilliant guy, he used to say that , "If you've done your marketing right, selling is unnecessary." Now he was exaggerating a little bit , but the basic essence is that if you do marketing correctly, then you know what kind of product your customer wants and you design your product to fill that need. If it's done perfectly, what he was saying, they see it and they buy it. Well, there's more to it than that of course, but the essence isn't bad, and that's why market research is very, very important.
How much does market research cost?
You can't say that there's a fix figure for how much. It can be expensive though and that's one the considerations that you always, I think anyone that wants to do market research should think about. There is a cost associated with it. It also takes time to do. And of course in some case, it allows your competition to see what you're doing. So, it's not automatic, I mean, one of the things warn about market research it is “good” but it's not that, you know, go down a check list, okay now I got to do market research start doing market research. It's not like that. So, you really have to think about it. And also, the cost the amount that you invest has an affect on how much you want to do. In other word, maybe gee you like to do a million dollar worth of research, but you don't have that much money floating around. And so, you do what you can.
Is market research worth the cost?
Well, sure, if it gives you the right answer. You have to tailor it into what your project is. The first thing you want to do is you want to say, "What am I trying to do? What's my objective in this whole thing?" And then determine whether even market research is necessary, and if so, what kind it is. But I don't think you can say it will cost this much or that much. You can tailor the amount of research and tailor the kind of research to the objective you're trying to achieve. And that's the basic thing. What are you trying to find out? What and why. What is is that you want to know?
What is a "target market"?
Target market are those folks that you are eventually going to sell to, whether it's a service or whether it's a product. Because the market is not all the same. I mean, sometimes you've heard people talk about the mass market, but even in the mass market there's a seperate mass market for books. Well that's not so. There are people who don't read. You're not part of the mass market. So that's a segment even though it's a much, much larger segment. But if you really want to make money, and I'm sure we do as an enterpreneur, we want to pick a segment that's most likely to respond to a product or service that you're offering. And that's who you want to market to, and that's your target market. You aim at them, it's just like a target. That's your target market.
What are the different types of market research?
Well, you can categorize in all kinds of ways. The easiest way, and the simplest, by the way, I suppose (in some ways it is anyway), is called 'secondary research', and that just means that someone else has done the research; where you're looking up some figures and you don't have to do anything, running around yourself and you just look and see what you've got and you say, 'okay, I know in this area of town where I want to start my restaurant that I've got a hundred thousand people that like Vietnamese food, so that's pretty good, that's it.' You find that out from the chamber of commerce, a lot of times you can find a lot of information like that, about your target market from the chamber of commerce and what they have and so forth. Or, if there's a product that's pricey or not pricey you can find out all the demographics that way. So that's secondary research.'Primary research' is really where you actually do it, somehow, some way yourself. The three basic ways used to be interviews, which can either can be face-to-face or interception: you go to a front of a grocery store or something like that and you're talking to people, or telephone or mail. They all have their advantages or disadvantages. Now the Internet, of course, is a tremendous one also. The cautionary notes are you want to make sure that they're representative of the people; representing this big segment. If they're not representative, you might as well save your money, you're not getting anything, you're not learning anything.
What are the steps involved in market research?
The First thing is concentrate, be calm and sit down, and think what's the problem? I mean, what are you trying to do ? Look at the problem. "What am I trying to find out?" Look at the market and say, "OK, how can I best do this?" Because, remember, you've got all these different ways of researching. A telephone is very quick, for example. If I've got a list, I will start making these phone calls and maybe some people don't want to talk to me, whatever. But it's quick. Mail takes a lot longer. It's takes time to get it, and send it out to these people and so forth. Personal interviews are very expensive. If you have a long interview with someone that takes the time of the person involved and that's the most expensive way. Internet also, maybe you're interviewing the wrong people. I mean, one thing that you, if you interview on the Internet, they all have computers and maybe that means they're not something else. I mean, you want to make sure that it all fits together. So you want consider these other things. So these are the different methods that you would use to get the market research. And now, once you have decided that, then you start designing your survey form. As I mentioned, difficult questions toward the end, keep it short as you possibly can, and then implement it, analyze it, what does it all mean, and come to conclusions and make a decision what you're gonna do.
What is market research "sampling"?
Ideally, in your market segment, you are aware that there are million people in my city -or 10,000 people in your city, perhaps - and that's your market. Ideally, you talk to everyone of the 10,000 to one million. But let's face it, around about number 5,731, that's getting tough, and it's very expensive. What you want to do is take a sampling from that and assume the responses you'll get are the same way everyone else answers. This market segment is not always perfectly accurate but can be okay.
What are tips for designing a survey?
The difficult questions go to the rear, your easier questions up front, so you can get people talking. There's a cautionary note. When you're breaking down numbers, don't make them ambiguous, so that you have, let's say, 1 through 10 and 10 through 20. You just said 10 twice. Where do they put it? Do they put it in 1 through 10 or 10 through 20? So it goes 1 through 9, 10 through 19, and so forth like that. The best suggestion I have, though, on that, is either, if there are many books, you can go to the library and they'll show you how to do these surveys. That's one easy one. Another is over the Internet. My book of course covers it. No matter what it is, you want to keep the survey short, understanding that people are doing you a great favor in doing this thing, even if you offer an incentive of some sort. So you want to make sure that it's easy to do. The other thing that a lot of folks do which is a good idea is to do a small test first, and see what didn't go right or the way you thought. Then you can make these changes as you roll out the entire test.
