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Starting a Business - Researching Your Market

Marketing Basics

Marketing Primer

Researching Your Market

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Researching Your Market

Research will help you with a wide variety of business decisions. You will likely have to make decisions involving:

  • A good location
  • Sales projections
  • Your product line
  • Your pricing strategy
  • Where you advertise
  • Offering credit
  • How much capital you require
  • How much floor space you need
  • How much inventory you order
  • How much equipment and supplies you require
  • How many employees you hire, etc.

Business information is required to make sound decisions and to prepare a credible business plan and cash flow forecast.

Where to find informationIn most cases business information can be gathered at no charge. The following are sources of information on your industry.

   Neighboring businesses
   Sales representatives
   Trade suppliers
   Business friends and associates
   Chamber of Commerce/Board of Trade
   City or Municipal Hall
   Local Government Agent's office
   Downtown business associations
   Trade associations
   Shopping center developers
   Newspapers, radio and T.V.
   Various directories
   Business Service Centers
   Business Information Centers
   Gov. Statistics
   Trade publications
   Similar businesses in another city
   University or college
   Advertising agencies
   Post Office
   Business section of library
   Phone book, Yellow Pages

Observe Your Competition
Get out on the street and study your competitors. Visit their stores or the locations where their products are offered. Analyze the location, customer volumes, traffic patterns, hours of operation, busy periods, prices, quality of their goods and services, product lines carried, promotional techniques, positioning, product catalogues and other handouts. If feasible, talk to customers and sales staff.

Consider how well your competition satisfies the needs of potential customers in your trading area. Determine how you fit in to this picture and what niche you plan to fill. Will you offer a better location, convenience, a better price, later hours, better quality, better service?

Talk to your Suppliers
Conversation with your suppliers can tell you a great deal about how your industry works and what trends are taking place in your market. They may be able to tell you valuable information about pricing techniques and mark ups, about the fastest moving lines and why they are selling, and why some competitors are successful. (They can also provide you with information about credit terms.)

Talk to your Customers
Conversation with your customers or potential customers can give you insight into what their needs are. They can indicate what they look for in your industry, what they think of your competition, what price they might pay and what level of service they like.

Surveys and Focus Groups
Surveys and Focus Groups represent more formal ways of getting insight from your customers.

If you have a specific information requirement and a definable audience, it is likely that you can undertake a useful survey. Designing a non biased questionnaire requires attention to detail. There are many good books available on questionnaire design and initiating a survey. If you are depending on the survey to assist with a costly decision, you may want to consider hiring a professional marketing research firm.

A focus group involves getting feedback from a specially picked group using controlled interview techniques. The process usually allows the participants to provide their opinions, come up with new ideas and brainstorm.

This is valuable for generating new concepts, getting feedback on proposed advertising or gaining insight into attitudes and opinions about a new product. Focus groups require a skilled interviewer and hand picked participants. Professional firms can be hired to tackle the project for you.

Hire Students to do a Survey Community colleges and university's have marketing management programs where students can be hired on a confidential consulting basis as part of their curriculum. The students do not have the experience of professional firms, but will often do a reasonable job at little cost.

You will probably have to cover expenses incurred by the students and course objectives and timing may compromise your requirements.
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