Market research is an organized process to collect information about the business environment before the business starts. It includes talking with customers about their occupations, interests, buying habits, trends and future plans as well as listening to customer requests for products and services because customers are the foundation of any successful business. That is why market research should:
1) Identify customer’s needs and wants
2) Determine if the product or service meets customer’s needs
3) Identify potential target markets and
4) Determine the best advertising technique for each of customer group.
In order to achieve all these four objectives the producer should follow some steps:
a) Identify customer ‘s profile which will help determine if a market segment is large enough to be profitable. For this can be asked some questions to identify important customer’s characteristics:
- Who buys the product or service?
- What are the similarities and the differences between my products and customers and my competitors products and customers?
- When do customers buy? Are there seasonal factors?
- What do customers buy? Can complimentary products or services be offered?
- Where do customers buy? If not here, then where?
- How do customers buy? Cash, credit etc?
- Why do customers buy? Convenience, price, quality, reputation, location, selection, brands, etc?
b) Identify the competition – compare what customers need and want to what competitors offer. Develop a checklist of factors important to customers.
c) Obtain market research information from a variety of sources such as:
- Census Bureau – there is a vast amount of information available, and much of this is online
- Chamber of Commerce – get to know the people in your local office. Offices usually have a wealth of information about localities, sources of networking, community resources.
- Department of Commerce – has offices in various regions across the country and publishes a wide range of information about industries, products and services
- The local library – includes reference materials, magazines
- An annual survey of buying power