As seen in Wave’s small Business Blog
5 Types of Data you should gather when doing market research
Market research is an integral part of your small business’ strategic plan. Market research consists of fact finding, analysis and problem solving; all are crucial in deciding how to best market your product and configure the potential growth of your business. When collecting your market research, there are five types of data that you should consider:
1. Identify your target market
Promotion helps you reach your target market, but first you must know who they are. Gather statistical information regarding your target market’s demographics, market segment, needs and buying decisions. Use your research to clarify which media will best promote your product, whether print, online or broadcast. Become an expert in your field and create personal profiles for your ideal customer. How old are they? Are they male or female? What is their job? What salary bracket are they in? What do they do for fun? Do they own a car? Do they have kids? Such details will help you clearly define pricing, promotion and place.
2. Understand the strengths and weaknesses of your competition
Collect data on how your competition promotes their products. What is their price point? What do you like and what don’t you like about their marketing campaign?
3. Develop a pricing strategy grounded in market research
Small businesses can set a price for their product or service based on popular profit margins, competitors’ prices, financing options, or the price a customer is willing to pay. A popular profit margin examines the profit of similar products also in your market. Profit margin is a very helpful measure when looking at other companies in your industry. Many industries have profit margin standards which are easily accessible on the Internet or through your Better Business Bureau.
4. Research similar products
Whether you sell a service or a tangible item, it is important to know what is currently on the market, and what the competition is offering. You can improve your product or service based on findings about what your customers really want and need. Focus on things like function, appearance, customer service and warranties.
5. Identify the best placement or location for your product or service
Where should you set up your product? Where should you distribute from? Is a department store the best platform for your product, or are your needs best met online?
This information will help you to avoid unpleasant surprises when starting, maintaining and growing your business. Regular market research will ensure that your business is aware of market trends, demographic shifts and changes to the economy. Your business can then evolve accordingly, growing steadily and increasing profits.