Know Your Market

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Market research is a vital part of understanding the market, knowing your competitors and for discovering what niches there are for your business. Last time I told you about primary research and this is vital to your business but you can also discover a great deal about the market in general from secondary research.

Secondary research

Secondary research allows you to analyze a wide range of data that is published in your area of interest. You will get to find out who your competitors really are and what they're up to, identify sections of the market for you to target with your own products and services and you will be able to assess current and future trends that could affect your business.

With secondary research you can find out more about your customers -- their lifestyle, age group, gender, behavioral patterns and so on.

Analyzing your data

There are two methods of analyzing your data:

  • Quantitative
  • Qualitative

Quantitative methods

Quantitative methods use mathematical analyses to look at statistically significant differences. For this method you need large sample sizes and they are generally more accurate than qualitative methods.

You may already be using quantitative analyses in your business. If you have Web analytics (available from Google) you will be able to find out how many visitors your website is getting, how long they stay on the site, where your leads are coming from and which pages they are visiting, and so on. These can be very valuable data that can help you develop your business.

For example, if you have been running your business for two years and you notice that hardly anyone visits the page on a particular product, you have to ask yourself if it's worth continuing to offer this product. Focus instead on the products and services that people are interested in and develop them further. It's pointless flogging a dead horse!

Qualitative methods

Qualitative methods are useful for understanding your quantitative analyses. They can look at the details of why it is you get the results you do – basically, it is the discussion around your results. Qualitative assessments help you to uncover problems and find solutions, which could lead to better services, new products and effective ways to diversify your business.

Qualitative methods generally have small sample sizes and rely on questionnaires, surveys, asking customers what they think and so on. They depend on getting people's opinions, beliefs and values.

Mistakes

Failing to do enough market research is one of the biggest mistakes that business owners make. Many people gloss over this important step in understanding the market. I have to say that many business owners think they already know what their customers want and don't believe in undertaking market research -- however, their arrogance is likely to be their downfall. You simply have to understand what your customers want if you want to be successful and as the market can change and evolve very quickly you have to conduct on-going research. A quick questionnaire to half a dozen customers won’t give you an accurate picture.

Here are some of the common mistakes:

  • Only using qualitative methods: mistakes include only using qualitative research methods -- gaining people's opinions -- rather than getting quantitative data. It is vital that you use both methods so that you can achieve an unbiased picture of the market. Relying on qualitative data only will severely limit your understanding and could lead you completely down the wrong path.
  • Only using secondary research: you should conduct your own market research, which is based on your own particular business, rather than relying solely on secondary research which is more general. Secondary research can give you a good idea of what's going on in the market, but will not give you the specific information you need to be able to make decisions about your business. Also remember that secondary research can be out of date -- sometimes by several years -- and markets can move rapidly. If you rely solely on out-dated secondary research, you will be effectively living in the past and not addressing current or future trends, allowing your competitors to get the upper hand.
  • Only surveying people you know: this is a common mistake that small businesses make. They only conduct market research among people they know, such as family members, friends and associates. However, this is not always the most effective way of gathering information -- you need to survey real customers to find out what the market wants and needs and what they expect to get.
  • Relying solely on the Internet: the Internet is a fantastic source of information! The problem is that most of your competitors will have exactly the same information available to them too -- all it takes is a keyword search to come up with the same website as your competitors have access to. To get a more accurate and a fuller picture, you should use a variety of resources both off-line and online. Universities, colleges and libraries as well as business centers have a wealth of information available -- much of which your competitors won't bother to get.

Market research is important

The main purpose of market research is to help you develop the right products and services for your prospective customers. It can help you solve marketing problems and highlight the best ways to find your customers and deliver your offers.

Whether your business is fairly new or whether you have been established for many years, market research is absolutely essential and is an on-going task that you should make time for. As I have said before, the market can change very rapidly and you will be left behind if you don't keep up with current market changes and trends. Also keep an eye on the future, for example the social and technological trends. I will be highlighting some of these as we go through the course.

Here’s a head start at some secondary research but it’s up to you to go out there and find out as much as you can about the market and how it applies to your business.

Market research head start

About

My name is David Anderson, owner of David Anderson Wealth. I am business professional with over 30 years of experience in small, medium and large (corporate) business. My goal is to teach anyone who wants to learn, how to make money online, improve a current business or develop a strong start up business online, from home or brick and mortar.