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Market research is the process of gathering and analysing information to help identify and define marketing opportunities and problems, and generate sales. Through it you can refine and evaluate all your marketing activities; monitor your marketing performance and continuously improve your marketing processes and efforts.
 | How market research can help you find customers (PDF 70Kb) |
| Provides information on what is market research and how it can help your business. Also covers what are the four P's of marketing strategy and a six step approach to conducting market research. |
Money spent on professional market research of a high quality will rarely be wasted. It can mean the difference between success and the heartbreak of failure and bankruptcy.
However if you have to do your own market research there are six steps to follow:
The size of the market e.g. How many people are gluten intolerant in Victoria? or How many other businesses are selling what I'm selling?
How much my customers will buy e.g. How many times a year my identified market uses this service each year?
Where is the best place to sell my products? e.g. My market regularly goes to the Cardinia Farmer's Market so I should set up a stall there?
This is a crucial step and should not be rushed. Time and money spent on determining the exact nature of the problem often saves time and money in the long run.
You need to develop a clearer definition of the problem and where you may be able to gain information and answers. You can get the possible answers by examining published data (such as journals, marketing magazines, and government reports) or by talking with people who have some experience with the problem (e.g. consultants).
It is important at this stage to identify if information is available or if you need to conduct your own research to gather the information.
You can find out more about your marketplace by following market trends and watching for changes, reading your market trade newsletters and journals, knowing about government regulations which affect your market and researching statistics at the State Library, Australian Bureau of Statistics and using other online tools (see External links to the right).
At this stage, make a plan on how to gather the data. Some of the techniques to use include surveys, market measurements (e.g. market share, size and growth), motivation research (what motivates the customer to buy) and sales forecasting (how often people buy and when).
Most commonly used market research methods are based on asking questions.
Qualitative information is more investigative and involves a fewer number of people e.g. focus groups and in-depth interviews. It's purpose is to understand buyers' attitudes and beliefs
Quantitative information used to draw specific conclusions and involves a large number of respondents e.g. surveys and questionnaires
Collect your data. For surveys and keyword research use inexpensive online services (See External links on the right). The most commonly used methods of gathering information are telephone polling, mailed questionnaires and personal interviews.
The choice for the type of data gathering technique varies according to the type of enquiry and the depth of information required. A simple yes or no can be done on the phone, but personal choices such as colour preferences usually need to be face-to-face.
Your research findings must be interpreted to be made sense of and to determine what choices you have available. This gathered information or data is organised according to the problem you are trying to solve.
A conclusion can be drawn on what is the next logical step to take once the data has been interpreted. However, in some cases, reaching a conclusion may not be so easy because of gaps in the information. If you’re lacking evidence it's important to say so when drawing a conclusion. A valid conclusion might be that you need further information to be able to make a decision.
The key to market research success is a systematic approach and the completion of each step before the next starts.
Once you have finished your market research you should be using it to complete your marketing strategy. This is a systemic way to make sure all your marketing, from setting your price to deciding on your advertising, attracts the most customers possible.
