The Government has just published the 2014 Small Business Survey and it seems that confidence in this sector is improving…so much so that 73% of SMEs are planning for growth. However, only 28% feel confident to enter new markets and 66% are worried about competition.
That’s not too surprising, we can all feel a little hesitant about entering unknown territory. So, we’ve put together a useful guide on market research and how you can use it to explore new market opportunities, or just to make sure you stay one step ahead of the competition.
Market Research…a guide for Start-ups and Small Businesses
Whilst experience, common sense and intuition may tell you a great deal about your chosen market, some more in depth research to establish the viability of your new product or business venture is often necessary. Unfortunately, the market research industry is prone to jargon and can seem incomprehensible to beginners. To help you get to grips with this essential business tool, let’s look at some of the most common methods of research and explain how you can use them to better understand your market.
Often the fastest and cheapest option, this simply means analysing available information on the market you wish to research. This could include:
- Published research from companies such as TGI, Mintel or Euromonitor
- Online research from Google and other search engines
- Trade association research
- Trade magazine research
- Government statistics and surveys
If your business is already up and running, you should also look at sales reports, stock records, company accounts, customer records and customer complaints.
Whilst desk research is a quick and easy way to get a broad overview of the market, it can be out of date and lacking in detail. It is best used to identify areas for further research.
Uses surveys, questionnaires or panels to ask large samples* questions like:
- How many?
- How often?
- Where from?
It then measures and analyses the answers to produce objective, numerical data for analysis and interpretation. The research can take place by phone, online or in the street.
It is most commonly used to calculate:
- Size of a market or segment
- Brand share
- Frequency of purchase
- Customer attitudes
- Customer satisfaction
- Customer loyalty
If you’re just starting out, you could use it to estimate the size of the market, estimate the sales you might achieve or how to target potential customers.
The easiest way to conduct your own Quantitative Research is to email contacts with an online survey using a free provider such as SurveyMonkey. Adding a question to an omnibus survey is also a relatively cost effective way of collecting demographic data, as well as responses to a specific question.
*A representative sample will reflect the group from which it is drawn. The larger the sample, the more precisely it reflects the target group.
Provides non-quantifiable, subjective information based on the opinions of a small group of selected individuals. It uses open ended questions to find out why people buy and how products meet their needs.
The two main qualitative methods are depth interviews and focus groups, both of which can be used to:
- provide more depth to the understanding drawn from quantitative research
- suggest the reasons for a trend
- tap into consumer creativity when developing new products, packaging or advertising
However, both these techniques need highly skilled researchers, which puts them out of the price range of most small businesses.
This is carried out by simply observing customers in real life situations, without their being aware. For example, a Mystery Shopper could take notes on:
- how customers shop
- which products interest them
- how your staff relate to them
This type of research can be relatively quick and easy to set up. It doesn’t rely on people giving opinions, being honest, or using their memory. It simply shows how people actually behave, what they buy or how they react to certain conditions. If you can experience it first hand by keeping a log of how customers behave, it may give you a better insight than other research methods. However, it can be time consuming and it is open to misinterpretation.
Which type to choose?
Whichever type of research you choose, make sure that you first define your objectives:
- What do you want to know?
- Why do you want this information?
- How will the information you gather be used in your decision making?
Jackie Wilson Dip.M MCIM Chartered Marketer
Blue J Marketing
Jackie is a Chartered Marketer, Doncaster 100 Mentor and Yorkshire Business Collective Advisor with extensive management experience across a wide range of industry sectors and a passion for delivering effective