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Basic Market Research for Small Business
Market research is not just for
the big corporations. Small and medium-sized businesses can also conduct
market research with relatively little expense. All that is required is
a carefully structured, properly targeted approach to obtain invaluable
market information.
For many small
business people, research is thought of as an activity for major
corporations with deep pockets.
Most commonly they think of national surveys, long lead times and untold
expenditure that may or may not pay dividends.
But research does not have to be like that. Carefully structured,
properly targeted research can provide invaluable market information
without being an ultra expensive activity.
That’s true for both quantitative research (that aims to give you a feel
for the numbers) and qualitative research (that’s designed to maximize
understanding and explore issues in some depth).
Essentially for any business, market research is a management tool. It
can be used to reduce the financial risk inherent in marketing
decisions. It can help in the gathering of factual data for predicting
consumer behaviors.
Research can also help traders understand the strengths and weaknesses
of competitor products or services.
In many situations market research is all about gathering information
relating to the behavior, characteristics and attitudes of consumers. It
is used to facilitate the marketing of appropriate goods and services
and to discover how such products rate in comparison to competitive
offerings.
To uncover usable market information, without even talking to
professional market researchers, there is a great deal that the small
business owner can do with an up-to-date relational database.
By applying market research techniques to a customer database, companies
can now develop a realistic picture of the buying habits of their
customers.
The detailed information available from customer records, such as credit
records, spending patterns and income levels enables companies to build
a profile of good customers.
They can also segment their customer base into groups such as top value
customers, repeat customers and new customers. From that point, they can
then angle their prospecting to attract the type of people who best
match the profile of their top customers.
By using your database to gather information, you are dealing with
actual customers. With such an approach your research is much more
consistent and enables you to test new products in a controlled
environment among advocates of your brand.
In the ideal world, if you use your database fully you can track the
buying habits of your customers so closely that eventually you will be
able to offer them only what they want. This is practical research at
its best.
Apart from the value of the database, for SMEs there are numerous
effective alternatives for collecting information. Some of these may not
even be thought of as research. Yet they are generally available and in
many cases they are free.
Such techniques include:
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Talking to customers.Your
own customers can be an invaluable source of information about the
strengths and weaknesses of your own product, how they use your
product and the competition.
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Talking to team members.
They are involved in your business. Team members are usually alert
to relevant internal and external activities and there needs to be a
methodology for tapping into this source of data.
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Warranty cards.
If you receive these and you are not using them as a channel of
critical information, you are missing out on detailed information
about your current buyers.
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Trade Associations.
These can be particularly useful in relation to your competitors.
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Governments departments.
Each country has a department specializing in small business that
can provide factual data about a wide range of business matters.
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Chambers of Commerce.
Similar to trade associations, but on a broader scale, these can be
a great source of information.
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Suppliers.
Because they usually deal with your competitors and sometimes your
customers, it is a smart move to develop an open channel of
communication with as many of your suppliers as possible.
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