Market Research For Small Business

How to ID your Target Audience Determining what kind of business you want to open is only the first step in the start up process. It’s equally important to select your business’s target audiences or target markets. A small company cannot compete with mass- market businesses by being all things to all people. Your must identify a specific market that has enough profit potential for you to succeed. There are the steps to help you:

Kind of customers Start by thinking about the kind of customers you’d like to work with Example: you are planning to start a marketing busines. Determine whether you will be selling to businesses or consumers Drill down even further: If you are selling to businesses, do you want to sell to companies in a specific industry?

Identifying your experience & skills Your own experience and skills will help you determine your customers. Example: You have spent 10 years working in retail marketing, you may want to focus on retail businesses as your customers.

Next, Assess where and how these target customers currently buy the kind of product or service you’re selling. You will want to research how retail companies handle their marketing, which may entail contacting some companies directly. Your research may show you that large retaillers have in-house marketing teams, but small retaillers don’t.

Next, The next step in identifying your target market is PINPOINTING A NEED. Your research show that small retaillers have a need for your service, so it makes sense to focus on them!

Next, Once you have some potential target markets identified, assess each one using Market Research to answer these questions:

Market Research Questions How big is this target market? Is it growing or shrinking? What is the average income of this target market? How much do they spend on your type of product or services? Where are these target consumers located? If your business will rely on a local market, it’s important that more of your target market is moving into the area than moving out.

Market Research Questions (cont) Will this target market generate adequate sales volume to meet your business goals? What is the profit potential of this target market? Who else is competing for this target market? How much of this market can I realistically expect to capture?

Key to success When you are starting your business – and when you business is growing and expanding into new markets, products or services Understanding the basics of market research is key to success.

Do your Market Research To run a successful business, you need to learn all about your existing and potential customers, your competitors and the economic condition of your marketplace.

What is Market Research? Market Research is: The process of gathering and analyzing consumer and economic data to help you understand which products and services your customer want, and how to differentiate your business from your competitors.

Market research can provide valuable insight to help you to: Reduce business risks Spot current and upcoming problems in the current market Identify sales opportunities Develop plans of action

How to Conduct Market Research? It’s often difficult to know where to begin when making decisions about a business. A little planning can go a long way. So your first step is to learn about how to conduct market research.

Market Research Helps you understand 3 things: 1)Your industry 2)Your competition 3)Your target market

There are 2 kinds 1)Primary research 2)Secondary research

Primary Research Holding in-person focus groups with members of your target market Interviewing members of your target market in person or by phone Visiting your competitor’s stores or locations Conducting surveys of your target market either online, in writing, or through social media tools such as Facebook or Twitter Observing your target market (such as at a mall or community event) and noting how they behave

Secondary Research Reading articles in trade journals, industry publications, or websites Doing internet searches Visiting a reference library Contact industry associations or trade organizations Visiting public agency or government websites, or reading their reports

Questions to Ask Whether you are doing primary or secondary research, there are some key questions to ask…

Industry What stage is this industry in (inception, mature, or declining)? Is the industry outlook favorable, or is it shrinking? What challenge is this industry facing? What trends are creating opportunity for this industry? What is the average profit margin in this industry?

Competitors Who are your key competitors? How big are they? Are they small businesses or global corporations? Where are they located? What is their business model? How do they make their money, and what sales channels do they use? How much do they charge, and how profitable are they?

Target Market What are their demographics (age, sex, race, marital status)? What is their income? How much do they spend on products or services like yours? What purchasing channels do they use (retail stores, online, consultative sales)?

The Answers… The answers to these questions will help you determine the feasibility of your business model, plan your marketing strategy, and pinpoint your target customers.

Market Research for Opening a New Location Before opening a location for your business, you will need to do some market research in that area before making the plunge. You need to considered the following questions:

Market Research for Opening a New Location What products or services are most needed by customers in that area? What customer needs and expectations are other companies not meeting in the area? Who will be your biggest competitors in the area? To whom will you lose sales most often,and why do you lose these sales?