Market Research

Industry trends, competitor strategies and customer preferences constitute the market for your business.

An overview of these can be gained by doing some simple marketing research. This overview will usually give you an indication whether you should proceed with your business plans or not. If you decide to proceed, you might need more detailed research to develop your marketing strategy.

Industry Research Reveals Longer Term Prospects

Researching the market starts with a look at the trends in the industry that covers your business. If the industry is declining, you might not be able to continue in that business for long.You will also have to face intense competition from existing players fighting for a share of the declining market.

Products and services are getting obsolete fast in today's markets. If you jump in without checking industry trends you might find that there is no market for the product by the time you have organized the facilities. For example, who will buy a 40MB Hard Disk drive these days?

Collecting Industry Information

In earlier days, you had to buy printed market reports to get much of the data. These days, considerable information is available on the Web if you are willing to put in the needed research effort.

Trade and indsutry associations will have their websites and you will typically be able to find a great deal of information about industry trends, competitors and customers. Even where they do not provide free information, you will be able to find where to get needed information by spending a little money.

You can also search for specific information about the industry at Google, Yahoo and Bing for example, and might land on a government or other website that provides what you are looking for.

Competitor Research can Teach You Business

Competitor research tells you about competition in the market, including:

• Who are your competitors?
• How strong and established are the competitors?
• What weaknesses were noticed for each competitor?
• Is there any market segment where competition is not too intense?

In addition to generating information about the identity and strengths of competitors, competition research can produce high-value information on how to compete in the market. Just observe carefully how competitors are promoting their business and you will get plenty of ideas. Answer questions like:

• What types of publicity campaigns does each competitor use? Some examples are:
  • advertisements in local or national press
  • door-to-door delivery of publicity materials
  • displays of different kinds at public places
  • special offers publicized using some publicity method
• What features do each competitor emphasize in their publicity campaigns?
• What prices do they charge? Do they offer discounts or make special offers?
• How do they manage to get the attention of prospective customers and make these people do business with them?
• What makes the competitor so strong? Examples of strength include:
  • a locality convenient to customers
  • recognized and trusted brand name
  • difficult to replicate facilities and staff
• What makes the competitor weak in specific areas? Examples of weaknesses include:
  • poor customer service
  • a locality or timings that are inconvenient to customers
  • poor quality products
  • unavailability of merchandise customers are looking for
  • incompetent staff

Collecting Competitor Data

Competitors will also have their websites and you can learn much about their offers and strategies by going through their web pages. Information not available at the site can be gathered through published reports, news and direct observation as suggested below.

• Annual Reports of Companies that you can get at websites like MSN money. These might also be available at the company websites.
• Press releases issued by the company, which are quite likely to be available at the website.
• The sales pages at the website will give you an idea about each competitor's promotional methods, as well as the prices they charge and their terms for shipping etc.
• By visiting the competitor premises and even talking to their people, you will get valuable insights into their operations and approach.

Customer Research Helps You Develop Your Strategy

Customer research involves getting to know your prospective customer. You ask questions like the following.

• Who are my customers?
• What basic need do they fulfill with my type of product or service
• How do they make a buying decision? What factors affect their choosing a particular supplier, e.g. convenience, personal contacts, excellent service?
• What do they expect to receive in addition to the product/service when they make a purchase? Examples include:
  • helpful guidance and information
  • convenience of purchase
  • guarantee for performance
• Are they presently getting what they expect from other suppliers
• Are they dissatisfied with existing supply sources in any way?

If you have been carefully following the discussion so far, you will notice that the answers to the questions can generate specific ideas to promote your business.

The issue is how to answer these questions. We look at this issue in the following sections.

Collecting Customer Data

The research done on industry and competitors will have provided you considerable information about your prospective customer. This information can be supplemented with information of even greater value through focused customer research.

Try to answer the questions about customers through direct observation of customer actions and through personal interactions with members of the customer group. When you sit down to it, you will find several ways to do these things.

Marketing Strategy for Your Business

List the information about developments in the industry, about your competitors and their practices, and about your customers and their existing buying experiences. Review and categorize these into related categories. You will now have invaluable inputs for your marketing strategy formulation.

Try to find a gap where you can focus. Select pubicity methods that appear to be most effective. Develop sales messages that will carry conviction. Start reaching your prospective customers with these messages, offering them some incentive to contact you.

We will look at pubilicity methods, sales messages and marketing channels in separate articles.