1. How To Do Your Own Market Research

 

What is Market Research and Why is It Important?

In a competitive economy, recycled-content products and services must have enhanced value, excellent performance, and/or aesthetic value, to survive and thrive in the market place. Profitable decisions come from satisfying the needs or desires of the market, not the desires of the entrepreneur or product development department. Marketers must stand in the shoes of their customer and ask themselves if they would be willing buy spend the money and effort just to get their product.

Market research assesses the demand for, or interest in a product or service, and how the product or service might be more marketable. Market research is a must before business planning, equipment purchase, and marketing efforts. Identifying the right product and target market up front, saves time, money and heartache down the road.

Simply put, market research is the process of talking with likely or target customers and asking them what they think of a business idea.

What is a "Target Customer"?

The individual, entity or organization that:

- will buy the product, process or service at a price that the manufacturer can make a true profit;
- understands the product or process and will substitute, replace, or supplement current products/processe;
- understands that the product/process/service meets a need or solves a problem not met by other competitive solutions; (don't waste time and energy trying to convert the wrong businesses to your system or solution);
- will order in a quantity that a manufacturer can actually build today as well as finance raw material acquisition without going into debt;
- will pay costs of freight and packaging;
- agrees to the manufacturer's payment terms;
- is interested in long term purchasing as long as they receive the product quality and customer service they expect.

Small businesses can do market research on their own. Specialized market research firms do more formalized studies to test the validity of a product, concept, or marketing approach.

Two important facets are primary and secondary market research. Primary research is collection of first-hand information and opinions from potential customers. Small entrepreneurs, via a facilitated discussion group or by phone, survey, or other direct contact, can do this affordably with target customers. Secondary market research is collection of written information on the product area, competition, and marketplace.

Primary Research
Using primary research methods, a company collects information from customers and about competitors. The intent is to discover whether:
· supposed potential customers are the right target market to pursue;
· potential customers like or dislike the product and why or why not;
· they would buy and use the product as originally designed or if changed
· they would go or NOT go to purchase the product/service;
· pricing is right or where it was not valued enough when at a lower price;
· additional services might make the product more marketable
· the right distribution channel is a distributer, direct to a consumer/end user, with a partner, or some another channel.

Primary Research Methods
· Discussion Groups
· A Telephone or E-mail Survey

Secondary Research
Secondary research involves searching out articles, books, online information, etc., written about similar products, competitors, the distributors, and other market factors related to your industry. This research work is intended to help understand the competitive environment and pricing, whether there is room for another such product or service, demand for competitors' products, and how the competition delivers, packages, and produces their product or service.

What To Do With Research Findings?

Look for holes or what isn't being offered in the market.

Develop a competitive analysis chart, laying out all the players and their offerings.

Identify, from the customer's perspective, desirable products that are not available in the marketplace. Listen to what potential customers think and re-shape, re-format, re-work, re-price, add components and services, and refine product distribution and service strategy until it meets customer desires.

If product changes are made, go back to the original participants of the focus groups to find out whether changes are appropriate. Launch the re-worked product. The result? The market responds to businesses that do their homework.