Market Research Methods
It can be hard to obtain facts and figures about your market because the data simply doesn't exist or is expensive to obtain.
You can uncover essential information about your potential customers if you structure your analysis correctly.
If you can't obtain published data, then options exist to conduct surveys and questionnaires to expand your proprietary data set.
Why use Market Research?
Understanding whether the markets you're entering are trending downwards or unprofitable is essential information to uncover. Understanding your target customer requirements and if these are changing over time helps shape decision making and communications strategies. The main reasons for undertaking research are:
|Overall Data||Understanding if markets are declining or increasing in value helps your decision making on whether to enter or withdraw from a market.|
|Customer Needs||Highlighting specific customer needs and requirements assists in product development and communication messages.|
|Niche Building||The information collected may help you discover additional niche opportunities to build new or extend existing products.|
|Competitors||Analysing competitor information and strategies ensures your products are well-placed against external forces.|
|Trend Data||You should be able to obtain key financial data such as pricing, unit costs, profits, product margins and general trends. All data assists in product development and keeps you abreast of changes happening with your customers.|
Understanding market trends means getting the details of customer buying decisions. Market conditions change due to demand or economic factors and introducing known facts within your company helps target investment correctly.
With markets being composed only of customers, many organisations split groups of customers into segments. Segmentation can be useful as each unique group is different in many ways even though you're selling the same product or service.
- Different decision makers and end users.
- Higher volume customers may require pricing discounts or added value services.
- Ad hoc users may demand more of your time.
- The selling functions within your organisation can target separately. For example Telesales to ad hoc users or Account Managers for Corporate Accounts.
The needs of your customer could also vary. Basic segmentation starts with a broad definition of the analysis and diversification generated from research results. Most organisations involved in market segmentation usually have three or four key sectors.
Market Research Definition
The definition of market research is: "The process of obtaining information about customer needs and habits and interpreting the results to support strategic decisions in a business environment."
Obtaining the Data
Putting theories into practice requires an understanding of reports that are publically available. Not all will be readily available in the format you require.
General statistics about the UK economy are published by the Office for National Statistics for free.
Here are examples of the type of publically available material for every industry.
All major companies in the UK have an investor relations department. They publish detailed annual reports to their shareholders online. These reports often contain invaluable snippets of information on internal performance and market trends.
Large organisations submit press releases on a regular basis of new services launching from their company. These often contain interesting facts and figures together with research they have undertaken into their customer requirements.
Many independent organisations have monthly, quarterly or yearly monitors for the industry concerned. Although these reports are expensive, you can often find the key findings published online. News organisations present these reports with further analysis providing additional insights into the data.
Every industry has a trade organisation that acts on behalf of their members. By joining, you'll get access to their research data.
Some smaller companies may also publish their data. National newspapers and online news portals have journalists investigating various news stories. Try searching online for "market profits" or "market growth", substituting "market" for your industry, to see what's available.
If there's limited information available or you want to compliment your findings, then consider undertaking your own research. Conducting a survey through questionnaires can build or confirm a hypothesis you may already have. Conducting effective surveys is an art and requires careful thinking and expert knowledge.
Current Research and Trends
Although some reports you obtain may be some years old, you're looking for overall trends over time. The data is providing you with a framework of essential information to hone business strategies, and it's worth spending time researching the market for the best information.