Rituparna Kakati | 21 Jun, 2011
No business can succeed without having a close understanding of the market where it woks in. The ultimate goal of any business is to sell its products or services to its customer, and without having a close understanding of its customers, success is impossible to achieve.
Market research refers to the gathering, analyzing and interpreting of information about customers, market, market niches and competition, and the industry in general. Market research is an integral part of business planning and most important for a business to be successful. In this guide, we are going to explain why you need and how you can research your market and customers, how to build your knowledge, how to use field research effectively to meet business success and other aspects of market research.
Understanding your customers:
Understanding your existing and potential customers can make a big difference to your business. But what should you know about your customers? If you primarily deal with business customers, it is important to be well informed about the size of the businesses, the sectors where they are in, and the products or services they deal in. Such kind of information would certainly be useful but not sufficient as it is only the end users who mainly define the success of a business. That is why a business must keep the end users in mind while making their marketing strategies.
What one should know about one's existing customers:
To do business without knowing the requirements of your customers is like shooting an arrow in the dark. One should always ask oneself these questions to succeed in business-
- Why the customers need your type of products?
- What they expect from you, eg cheaply priced or superior quality products?
- Why your existing customer prefer your products or services over those offered by you competitors?
- Are they satisfied with your customer services, delivery schedules and after sale services?
- Is they expect any refinement of your products or services?
- What do they think of your prices? Compared to that, how do they rate your products or services?
What one should know about one's potential customers:
Keeping the existing customers and at the same time expanding one's clientele is very important. If the client base doesn't increase, sooner or later, you will realise that your business is becoming less profitable. Make sure you get the answers to the questions given below:
- How many potential customers are there in your target market?
- Into what groups your potential customers grouped?
- How much these customers buy from you competitors in the market?
- How can you make them to buy your product or service? Do your products or service need any improvement to suit their expectation?
- What affects their buying decision, eg price or quality?
Certain valuable source of information:
- Contact your local trade association. It can provide you with useful information about your market sector. You can also browse the official website of the Indian Government www.india.gov.in for official statistics.
- Business websites, magazines and newspapers are a handy source for all kinds of business information.
- For local information about the industry, you can approach the local authorities and different chambers of commerce. Also give importance to information you have collected yourself.
Analyzing market trends:
Analyzing short term and long term market trends is of great importance and an integral part of any market research activity. Besides delving deep into the requirements of the target customers, it is also wise to ask yourself whether these requirements can change totally in the future. Other things which must be considered at the time of researching the market are the strength of the business competitors, competitive pricing of products, marketing and promotional activities, and also the legal requirements a product or service must meet.
Analyzing Market Information:
- The market information you have collected from some readymade source may be collected earlier for a purpose that does not match with yours.
- Is the data collected by you is updated? Often, information published on the Internet is not updated. Some of them may be even unreliable or biased.
- Do not try to use the information to confirm what you believe. Don't make your mind earlier. First, get the information and then interpret it.
Collecting market information:
You can prepare a fixed set of questions and use them to carry out a survey. You can consider face-to-face interviews, telephone interviews, online questionnaires as means of carrying out the survey.
- Discussions are also effective to collect field information.
- Observe people's reaction rather than what they say.
- After getting enough information, it is now the time to determine how much time and money you have to carry out the survey. Also consider the manpower and logistics related requirements you need to carry out the survey.
A Few Tips for Field Research
- Targeting the right people is very much important to be successful in your field research. For example, if you deal in ladies garments and targeting males in your survey, your field research would certainly be a great failure.
- Ask as more people as possible. It helps to get a complete picture of the market.
- Do not encourage people to give the answer you want. Be impartial.
- Be realistic. Never ignore negative results and keep yourself prepared to modify your plan if necessary.
- Interpret your results carefully and try to draw the right conclusion from your market research.
To conclude, it may be said that market research should be used by a business as a means keeping itself in touch with the requirements of the existing and potential customers. It helps to understand customers' needs as well as market trends, find more promising markets, identify market segments and niches, overcome barriers to market entry and to determine how to price your products. You may start your business without any market research, but research has revealed that businesses which invest time in market research are more likely to achieve success.
