Market Research – Build Your Business On a Foundation of Facts

Market Research – Build Your Business On a Foundation of Facts

Market Research is the key to developing both a sales and marketing strategy and an overall business strategy for your small business. It ensures you have examined both the market, including an assessment of your competitors, and your potential customers. Building your business based on hard facts and realistic analysis ensures a strong foundation on which to build your business. Let’s take a look at the questions you need to address.

A Description of Your Product or Service

Is it a product or service or do you offer both? Is it manufacturing, retail or wholesale or a combination of these?

The Nature of the Market for Your Product or Service

Is it a domestic or export market or a combination of both? Is it a niche or seasonal product? Is it an emerging market based on customer demand?

Identify the Target Market Segments

You need to undertake research to determine who will buy your products or service and then examine these segments in detail to determine their purchasing triggers, buying behaviours, their aspirations, consumer needs and demands.

Establish the Market Size

Determine the size of the market and based on where you aim to sell your products. This includes your local, state, national, regional and international markets. This provides the context of the market you are operating in. Where are your customers congregating in large numbers, both in the real world and in the online space.

Analyse the Competition

Who are the major competitors in the market and how many are there? How long have they been in business and how do they position themselves to compete in the market? What share of each market segment do they hold?

Determine Your Marketing Costs

How will you promote your product and service? What distribution channels are most appropriate for your product or service? Where will your business be located or is the location, as is the case for many online businesses, irrelevant? What will it cost to do the above?

Determine Your Pricing

How much are your competitors charging for their product or service? Are there any government fees or charges, such as GST, that customers have to pay as part of the pricing equation? How much demand is there for your product or service and what price will your customers pay?

Estimate Your Sales Revenue

You need to determine, especially for the first year, what your sales income will be. You do this by multiplying expected sales volume by the price per unit at which you have decided to sell your product or service.

Market research takes time and it can be difficult to locate the information required. However, you can consider the market research component of business planning a test of your resolve to own and operate your own small business. Also, if done correctly, your market research will provide a sound foundation on which to base your sales and marketing decisions. Relying on perceptions when making decisions for your business is always risky. It definitely pays to examine your business in light of fact based analysis.

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