Are you trying to establish a small business?  A small business has to understand the needs of its target market in order to be successful, and this is how market research becomes an essential tool.

Consumer mentality is the same in general, depending on a certain demography.  As we are aware of, people from different demographic backgrounds also differ in physiological needs and satisfaction and this is one that companies should look out for.  Many businesses fail to study the type of consumers they are selling products to which can result in ineffective marketing strategies and poor sales.  Therefore, businesses should first conduct a market research to learn what factors will lead them to more success and profits.

Besides these objectives, a market research should also answer questions that a company designs according to what it needs to know about its market, competitors, right location for the business, product offerings, and at what price range consumers would be willing to buy a product or service.

What is market research?

Market research is often wrongly used interchangeably with marketing research but the latter is more comprehensive.  There are various techniques of market research used to obtain information, including markets in general, target markets, market trends, consumer satisfaction, competitors, and many other market elements.

All in all, these elements of market research are aimed for one common goal – to increase profit and survive the stiff competition in the market by finding out about consumer needs and wants, and how businesses can possibly meet these.

Doing a market research entails expenses, and many companies spend between .02 and 1 percent of the company’s sales.  However, there are instances when companies spend 50 percent of their budget for market research for purchasing research from consulting firms.

How to do a market research for small business?

Even large companies that have rooted deeply into the market continually conduct a market research to sustain or increase profit margins.  A market research is a powerful tool that will work to a small business’ advantage when the right questions are asked. 

Small businesses are specifically better off because they don’t need to spend much on a market research project.  For one, they have a much personal contact with their customers – they can talk with them everyday and one-on-one as well as answer a few questions that customers may have.  Hence, the market research data obtained are timely and accurate due to daily interactions with consumers.  Additionally, a timely market research facilitates the formulation of marketing strategies at such a point in time when they are most necessary.

Your market research project can include the following basic ideas:

Define the market, problem, or opportunity.  A small business should be able to tell what it wants to know, such as how many customers it possibly will have; if they buy the type of product you sell; and if they do, where they buy it from and at what price.

Project planning.  It’s important to plan how you will obtain the data since research has its associated costs.  You may choose from two types of data: primary and secondary.  Primary data is usually, but not always, expensive and time-consuming; and the more sophisticated the methods used, the higher the costs will be.  The contention with secondary data collection is the quality of data you can obtain.

Collect the data.  A comprehensive and thorough data collection may be a combination of primary and secondary data.  These can be census data, street intercepts, and/or personally talking with customers.

Lastly, all data collected should undergo evaluation and assessment.  If an effective method of obtaining data was used, your small business will usually benefit by having all your questions asked and planning the right marketing strategies that will work for you.

Remember that market research is a continuous process of ensuring that you have the most meaningful information on your hand, and a marketing strategy that’s built upon the current market situation.