The importance of market research2 minute read
Market research should never be underestimated. Many successful new businesses enjoy longevity because their owners conduct regular market research to understand their target market, identify consumer problems and pinpoint realistic competitors.
There’s a bit of planning and a lot of discussions, then trading begins; often with insufficient attention paid to that most basic of business processes – market research. That may be because there’s a resistance to the idea of handing out a questionnaire in the local town centre, which is what can spring to mind, but there are many ways to research your market and they are all better than no research at all. You don’t even have to look further than Google. Look at a product/service like yours, see where it sells, who buys it, what they pay, how it gets to them. Look at the demographic group you propose to sell to, and establish their purchasing habits, lifestyle, preferences – for anything they buy, not just direct competitors. If they spend money, how can you convince them to spend it with you?
The process is an old one – if you go back a few years, on Market Day there would be a pie seller visit your town, with the intent of selling pies to the townsfolk. The process was simple – stand around the market square, possibly ringing a handbell, shouting “Buy my pies”. That’s a beautifully straightforward business model but it does contain the basics, particularly market research. Market research is a grossly under-exploited process for a huge number of small businesses and is in concept extremely simple.
What are you going to sell: (pies)
Who to: (market-goers)
How much for: (determined by costs and what the market will pay)
Will they pay that: (that’s down to the pie man's persuasive skills)
How do you reach them: (hold a load of pies, ring a bell and shout “pies”)
Your pieman back in 1764 knew there was a market because at some time he’d trialled his product and he had a good idea of the most he could charge because he knew what the other food offers were. However, for many reasons there are a large number of business starts operating on belief rather than evidence.
The conviction that “everyone” is the market and that because you believe passionately in your product/service it will sell, just doesn’t hold water. I suspect that there are times when no market research is carried out because it may show up weaknesses in the product or its sell-ability, and no-one likes having a weakness brought to their attention. WRONG!! Find out if the product has a market before anything else: if there’s no market then go no further.
Three hundred years ago the pieman only turned up when there was a market for his product-market day, a public execution, a public holiday, some reason for the local population to gather in numbers. Having the right product at the right price matters not a jot if there are no customers within reach. And you know, of course, that “within reach” in these enlightened times includes online activity, where the attention spans are short and the competing messages are many.
Always research your market – don’t skimp on the activity. It’s what will tell you if there’s a business there at all. Self-belief and general positivity combined with uninformed decision making is dangerous; you need self-belief but you also need realistic, timely and accurate market information.
I see that small business owners agree that drinking hot drinks and listening to music helps them focus (instantprint’s Small Business Survey). So, put a record on, put the kettle on, enjoy that retro sixties vibe and focus on understanding your market and customers. Or find out where all the small business owners hang out and sell them some coffee and headphones.
Mick DobsonBusiness Advisor and Incubator Manager
Got a business question?
We're here to help. Get in touch.
Book your free appointment below: