Market Research

Dr Noor Muhammadnoormuhammad@giki.edu.pk

Learning Outcomes

1. Define what is market research?

2. How to conduct market research?

3. Where to find useful information?

What is Market Research?

The collection of organised information on customers

and markets.

The gathering and analysis of data relating to market

places or customers; any research which leads to

more market knowledge and better informed decision-

making.

www.cim.co.uk

This is an important part of small business strategy.

http://www.cim.co.uk/

What does market research do?

1. It identifies your potential customers and the nature of the market

2. This is vital knowledge, without it you are shooting in the dark!

What Does Market Research Do?

1. Who will purchase my products/services?

2. What are my potential customers looking for?

3. Does my products/services meet customer needs?

4. How are my products/services different from those of competitors?

5. How will customers perceive my business versus competitors?

6. What are competitors doing?

7. What is the number, size and nature of competitors?

8. What kind of people are my customers?

9. How old are they?

10. Are they male or female?

What Does Market Research Do?

11. What are my customers occupation?

12. What is their household income?

13. Where do they live?

14. How often will they buy my products/services?

15. What are their hobbies and interests?

16. Why should they buy from my business?

17. What hours will they prefer to shop?

18. Which advertising media are likely to reach them?

So?

Market research enables you to:

identify likely customers

who they are (segmentation)

their spending or consumption patterns where they are

The market (the sum of the customers)

extent and volume of possible sales

Importance For Funding

Market research is not only essential for your products/servicessuccess in the market but will also prepare you for meeting theinvestors criteria.

Before offering any investments in your business, they will bekeen and insist that you carefully research yourproducts/services markets.

Lack of careful market research is one of the main reason fornew business failure.

It is therefore a vital part of planning for you

Why Do You Need Market Research?

1. To build credibility for your business idea

2. To develop realistic market entry strategy

To achieve these objectives, market research will carefully examine the

following:

1. Your customers

2. Your competitors

3. Your product or service

4. Your price

5. Your promotional material

6. Your location

Methods to Collect Information

How can entrepreneurs collect valuable market and

customer information? There are two methods:

1. Primary research

2. Secondary research

1. Primary Research

Following techniques can be used to collect primary data:

1. Customer surveys and questionnaires

2. Focus groups

3. Face-to-face interviewing

4. Observation methods

5. Web based research

6. Any other method

Your Target Market

Many new businesses fail simply not knowing enough about their target

customers. Therefore, it is very important to research:

1. Who are your target customers?

2. What characteristics describe them (location; demographics; behavioural factors)?

3. How large is your target market?

4. How fast is your target market growing?

5. Is there room for you in that market?

6. Can the market expand to include you?

7. Why will customers in your target market purchase your product or service?

Your Value Proposition

If customers choose to buy your products/services, what uniquebenefits will they get from your offerings. For example ask yourself:

1. What are your solutions to customer problems?

2. What customer pain will your product or service ease?

3. What are the benefits of your offering for those buyers?

4. How will customers differentiate your product/service from your

competitors offerings?

Your Competitors

Competitor is any organisation that offers the same, a similar, or a substitute

product or service in the field of endeavour in which a company operates.

http://www.quantum3.co.za/CI%20Glossary.htm

The market research exercise should aim to answer the following questions

with regards to your competitors:

1. Who are your competitors?

2. What are the strengths and weaknesses of your competitors?

3. How much market share does each competitor control?

4. What are their marketing strategies?

5. What are their key success factors?

http://www.quantum3.co.za/CI Glossary.htm

Your Competitors

6. What differentiates your product/service from competitors offerings?

7. How much of a threat are your competitors to your venture?

8. Do they enjoy strong brand recognition of their products?

9. Will they aggressively block the entrance of a new rival?

10. Will they recognise your differentiating attributes and appropriate them for their own products or services?

Your market research activities should quantify (realistic and justifiable

figures) your claims about your target market and competitors.

2. Secondary Research

This method is less expensive as the data already exists in some formats. Secondary data can be collected in the following ways:

1. Business directories2. Direct mail lists3. Demographic data4. Census data5. Consumer surveys and reports6. Libraries (Also see Entrepreneurship

Resource Centre and COBRA)

7. Articles8. Local data9. World Wide Web10. ONS (Office for National Statistics)11. Keynote

12. Other government publications

How to Become an Effective One-to-One Marketer?

Successful One-to-One Marketing

Identify your best customers,never passing up the opportunity to get their names

Enhance your products and services by giving customers information about them and how to use them

See customer complaints for what theyare a chance to improve your service andquality. Encourage complaints and then fix them!

Make sure your companys product and service quality will astonish your customers

Know what your customers buying cycle is and time your marketing efforts to coincide with it - just-in-time marketing

Calculate the long-term value of customers, so you know which ones are most desirable and most profitable

Collect information on these customers, linking their identities to their transactions