10:30AM BST 28 Sep 2015
Good market research can either create the right strategies for growth and real potential or save you a lot of wasted time, effort and money
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When you are running a small business it can be tempting to take short cuts when doing market research, in the excitement of getting a product on to the market as quickly as possible.
But good market research can spell the difference between creating a product or service which has real potential and one which is destined to go nowhere. So it is worth taking the time to do it properly.
Start by identifying your target customer. Create a picture of who they are: their age, gender, lifestyle, income, job, and how often they will be buying your product or service and why.
Now go to where you expect to find them – in a train station, for example, if you are creating food to eat on the go – and ask them what they think of your product.
This kind of qualitative research will give you a good indication of whether you are thinking along the right lines, which you can then back up with some number-crunching quantitative research.
Put together some focus groups too, of people who meet your ideal customer profile, to drill down into what exactly they like or dislike about your product and what they would be prepared to pay for it.
And make sure you do a lot of the research yourself. Don’t rely on an agency to do it for you. While they can be useful for counting footfall, for example, as the SME leader you really need to be out there talking to potential customers and gauging their opinions yourself.
Use the internet to find out what customers are actually looking for too. Google AdWords has a free keyword tool that can tell you how many people are using particular search terms to find things on the internet in a certain time period. You can discover what kind of holidays or picture frames people are interested in, for example, and tailor your products or services accordingly.
Use your common sense too. Before you spend thousands hiring a firm to do in-depth market research, analyse the information that you can find out yourself for free first.
If you are thinking of bringing out a new product, do your own basic audit of all the other similar products out there, by scouring supermarket shelves, talking to friends, looking at social-networking sites.
“If there are already 32 similar products to yours on sale, ask yourself whether it is really going to be worthwhile spending all that time and effort bringing out a 33rd one.”
In all of this, don’t lose sight of what you are trying to achieve. The basic question you are trying to find the answer to is: are there enough people out there who will buy your product or service, at the price you want to sell it to them, in sufficient quantities to make it worth your while? Anything else is just noise.
Edwina Dunn, the chief executive of Starcount, the digital insight business says: “Market research is a crucial element to any business plan. It is a catalyst for growth, offering invaluable insight into your target audience and the market in which you operate.”
With this knowledge an SME is able to develop an effective business plan and implement the right strategy in order to achieve growth.
For SMEs social media can offer a cost-effective and in-depth tool for gaining insight into their chosen market. Through social media you can build a detailed profile of your target audience, track trends in real time and analyse consumer culture and behaviour on a large scale.
From this an SME can deduce the best way to reach both its existing customers and its target audience.”
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