How to do it
Without being aware of it, most business owners do market research every day. Analyzing returned items, asking former customers why they’ve switched, and looking at competitor’s prices are all examples of such research. Formal marketing research simply makes this familiar process orderly. It provides a framework to organize market information.
Market Research – The Process
Step One: Define Marketing Problems and Opportunities
Step Two: Set Objectives, Budget, and Timetables
Step Three: Select Research Types, Methods, and Techniques
Step Four: Design Research Instruments
Step Five: Collect Data
Step Six: Organize and Analyze the Data
Step Seven: Present and Use Market Research Findings
Define the Problem or Opportunity
The first step of the research process, defining the problem or opportunity, is often overlooked but it is crucial. The root cause of the problem is harder to identify than its obvious manifestations; for example, a decline in sales is a problem, but its underlying cause is what must be corrected. To define the problem, list every factor that may have influenced it, then eliminate any that cannot be measured. Examine this list while conducting research to see if any factors ought to be added, but don’t let it unduly influence data collection.
Assess Available Information
Assess the information that is immediately available. It may be that current knowledge supports one or more hypotheses, and solutions to the problem may become obvious through the process of defining it. Weigh the cost of gathering more information against its potential usefulness.
Gather Additional Information
Before considering surveys or field experiments, look at currently held information: sales records, complaints, receipts, and any other records that can show where customers live and work, and how and what they buy. One small business owner found that addresses on cash receipts allowed him to pinpoint customers in his market area. With this kind of information he could cross-reference his customers’ addresses and the products they purchased to check the effectiveness of his advertising.
Customers’ addresses tell much about them. Lifestyles and buying habits are often correlated with neighborhoods.
Credit records are an excellent source of information, giving information about customers’ jobs, income levels, and marital status. Offering credit is a multifaceted marketing tool with well-known costs and risks.
Employees may be the best source of information about customer likes and dislikes. They hear customers’ minor gripes about the store or service the ones customers don’t think important enough to take to the owner. Employees are aware of the items customers request that you do not stock. They can often supply good customer profiles from their day-to-day contacts.