TYPES of Market Research

There are basically 2 types of Market Research that you can carry out to help you develop and evaluate your business idea, these are

Desk Research

Competitor Analysis

Field Research

Although market research is so important, very few people carry it out and it is something that may never be done, unless the business gets into trouble.

Very often businesses promote to the wrong people, in the wrong place, at the wrong time and end up wasting a lot of money for little return.

Market research should be an ongoing thing - remember to get feedback from your customers, on a continual basis: always ask where they heard about you. What they thought about the product, or service? What could be done to improve it? etc.

Desk Research

Desk Research is the analysis of information that already exists, in one form or another. Useful sources of information can be found in a variety of places:

These are just a few of the sources of information you might want to look at - The underlined items have been set up as a link to an Internet Web Site. If you click on any of them you will be taken there. To return to this page simply close the new page that has opened and you will be back here

Yellow Pages

Thompson Local

Kompass

Kelly

Keynote

Internet Search Engines

Scoot

Small Business Service

Local Authority

Electoral Registers

The main purpose of desk research is to gain information and intelligence on the following:

Competitors - Who, Where and how many are there?

Businesses - How many of a particular type are there and where are they?

Economic Trends - Are people spending more, or less, on certain things?

Householders - How many of a particular type in an area?

Market Trends - for particular business sectors?

More sources of market research sites are being added constantly to our useful contacts pages, these will help your market research and also give the contact details for Local and National support networks and organisations. If you wish to take part in Market research click the link at the top left.

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Field Research

This is research, by direct contact, with an identified (or targeted) group of potential clients.

The main reason to do this is to determine such information as:

How often do customers purchase?

How likely are they to purchase from you?

What is the expected market price?

How do they decide on a supplier? (Marketing Mix)

Are there enough customers to build a viable business?

What are the main factors considered when customers buy? (Marketing Mix)

The main methods used in this type of research are:

Face to face questioning

This is really getting out there where the customers are. Once, having profiled your potential customers, you know where they go you can design a questionnaire to give you the answers to the questions you need to know.

But how do you find them? If you remember the example of the Computer Games Shop profile (remind me) you know that your potential customers frequent computer games shops.

For example: Let's say you were trying to find the ABC1 ladies in the example on residential homes (remind me). Where would you go in your town, or area, to find 40 - 55 year old, middle class women?


 

 

Got the idea? In other words certain people go to certain places where they are attracted by the image, the aura and the fact that like minded people go there too.

The questions you ask should be designed to give you the information you need to know - not necessarily the answers you want to hear.

There are 3 types of question as follows:

Open Question - "when eating out which type of food do you prefer?"

Multiple Choice Question - "When eating out do you prefer Indian, Mexican, Spanish, etc.?"

Closed Question - "Do you like Mexican Food - Yes / No?"

Obviously the first one involves more writing and a lot more analysis, but can be the best route to get a true idea of their likes and dislikes. The closed question may be difficult to answer if they have not tried mexican food!!

This is an example of a research questionnaire

 

Telephone research

(mainly business to business)

This type of research should be used mainly for business to business, since there are so many direct sales companies ringing homeowners that it may be difficult to get a reasonable response when you call.

In addition, it doesn't matter when you call - they'll be having tea / dinner / a crisis / etc.

However, if you are using this for business to business, it is often better to call and ask the name of the person responsible for ... (whatever it is you're selling) ... say thank you and then goodbye.

Build this into a client contact database and then telephone sometime later and ask to speak to him / her, by name - you will get a better response.

Don't try to sell the receptionist / secretary on the survey you are doing - they possibly won't know the answer but will usually prevent you talking to the person who does.

Group discussion

This is a useful type of research for new product development, testing of existing products and consumer opinion on such things as image, service, marketing mix, etc.

It can be carried out in a very 'controlled' or fun way

Again, as with the face to face, the type of questions asked and the way they are phrased can often lead the research into giving the answer you want.

Better to find out the truth (good or bad) before you commit too much to anything.

Postal surveys

This can be used with members of the general public or business to business

Try to make it as simple as possible for people to respond. Don't expect them to go too far out of their way to give you the information you want (unless you are offering some type of reward)

Keep any sort of questionnaire as simple and quick to complete as possible, make it easy for them to get it back to you.

For instance if you print their name and address on a label to send it to them why not print 2 labels and stick one on the questionnaire - then they won't have to write their own name and address - similarly think about whether you should include a stamped addressed envelope for their response.

In any event, unless you are offering a chance to win £10,000 don't expect a huge response (2% -4% is fairly typical).

Try to be as objective as possible, it is easy to design the research so that you become convinced there is a market there and it's not until you set up that it becomes clear that the market isn't big enough to give you a living income.

Be objective - even negative

The only person you can fool is yourself!

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Competitor Analysis

It's a good idea to have a clear picture of who your competitors are and what their strengths and weaknesses are, before you set off in business. After all, they are the people that are probably servicing your prospective clients right now!

The sort of information you may require is :

Who are the competitors?

Where are they?

What do they charge?

What are their strengths / weaknesses?

What are the benefits they offer the customers and why do they buy from them?

It's unlikely that there are no competitors, unless you have a totally unique product, or service - be honest!

A typical competitor analysis is usually laid out like this


 

 

Remember that the benefits offered may make someone who doesn't seem to be in competition a competitor - for example all leisure activities compete with each other for clients leisure time, and money, so if you were setting up a ju-jitsu club then a swimming pool is in competition with you.

Now you've completed a mass of market research it's time to look at what it costs you to work and what you should charge the customer

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