MARKET RESEARCH the big picture WHY DO MARKET

MARKET RESEARCH the big picture

WHY DO MARKET RESEARCH Market research is essential in business. In order to sell a product or service, you have to make sure someone needs it! To ensure there is an actual market for your product / service. Bottom line, if you aren’t solving a problem or meeting a need, why would anyone buy the product or service from you? Tony gets very dry skin during the winter but is allergic to many ingredients. He is in need of a lotion that will hydrate his skin but not cause an allergic reaction. Sally sells oatmeal-based cosmetics. Sally thinks her product provides a solution to Tony’s skin issues. The big picture when it comes to market research is that you want to ensure the solution you are providing actually meets the needs or solves the problem for your potential customers (this is your target market). Sally has made assumptions that her product meets Tony’s needs and provides a solution to his problem. Assumptions being made: a. customers will use oatmeal-based cosmetics b. Tony will not have a reaction to oatmeal c. there is a target market for customers to buy cosmetics for allergies or sensitive skin

WHY DO MARKET RESEARCH Additionally, you want to understand the following when it comes to your product or service. A. Who your customers is – so you know better what their needs and problems are so you can better solve them B. Who your competitors might be – so you can figure out your competitive advantage, why your product is different and better than theirs and start to understand what price you may get for your product or service C. The overall industry for your product or service – you want to know the industry, to be aware of the current trends, trends for the future, and what is happening to it at all levels of business. The more informed you are, the better off your business will be. You will gain this understanding through both primary and secondary research.

WHAT IS MARKET RESEARCH Primary Research Secondary Research When you find out information on your own specific to your product or service. You ask the questions and get answers. When you look to experts to find information about your product or service, about the industry, and other important information that will help inform what you provide, how you provide it and/or produce it.

EXAMPLES Primary A. Surveys B. Speak with stakeholders directly Stakeholders are anyone affected by your business – employees, customers, community, investors, etc. through Interviews or Focus Groups C. Observations D. Analysis – involves collecting data and organizing it based on criteria you develop. Sally collects info from people with dry skin issues about how they currently treat it and if the treatment is working for them. She can then figure out how many people use what treatment and to what success they are using this treatment.

HELPFUL TOOLS Primary – surveys A. Create an easy to use survey D. Promote the survey online: * Only design actionable questions – meaning ask yourself, “what will I do with the info they give me? ” 1. Survey Monkey & Poll Daddy can assist * Craft great questions using this guide & this resource * Make sure it is not confusing or long 2. Post on Facebook in city or town groups * 3 – 6 questions 3. Post on Linked. In B. Use Survey Monkey or Poll Daddy to conduct a survey 4. Post at locations with a community bulletin C. Build a contact list that you can email out to, use something like Mail Chimp 5. Use other social media 6. Post a video with info about it on

HELPFUL TOOLS Primary – speak with stakeholders Primary – observe A. Know questions beforehand A. Separate own thoughts from facts * Craft great questions using this guide Ex: how many people go in and out of store, how many buy coffee? * use a survey tool B. Interview Do’s and Don’ts C. Focus Groups – are people you pull together in a small group to ask them about the product / service. You can alter your questions according to how they answer, which an help you find out more in real time. Here is a great guide on how to conduct. B. How will you record? Notebook, photos?

EXAMPLES Secondary A. Use of industry tools, such as market research reports and trade association reports B. Use of the MCC Library Market Research Guide C. Analysis – involves collecting data and organizing it based on criteria you develop. Sally collects info from the cosmetics industry about how much people spend on dry skin treatment each year and what the latest science is in treating dry skin. She can then figure out how many people are using oatmeal-based ingredients and what kind of info is being spread about it.

HELPFUL TOOLS Secondary – industry tools A. Market Research Reports – most of the time market research companies will charge a lot of money to provide a detailed report about an industry or specific product / service. Example Sometimes you can find some info for free * Statista Sometimes you’ll have to dig For example, here is a magazine that offers subscriptions, but then also offers a blog with lots of free info. Some useful info can be provided by government sources as well: Trade. gov - while focusing on exporting, may be helpful. Data. gov has info on consumers. Small Business Administration website – scroll to “Free Small Business Data and Trends” B. Trade Associations –“an association of people or companies in a particular business or trade, organized to promote their common interests”. Associations help businesses know the latest trends, issues facing the industry, and lobby to the government on behalf of the industry. Learn more here. *Look at “Industry Stakeholders” at bottom of the page for Consumer Goods related examples. * Food and Beverage related examples * Various lists of associations * Federal Trade Commission list *A simple Google search

HELPFUL TOOLS Secondary – MCC Market Research Guide Use the sources listed on the market research guide to help you figure out more about your target market, competition, and industry. B. State Office of Demographics and Economic Analysis A. Directories – check these out to find out what is happening in your geographic area and to find out more about your competition. You can find more that are specific to your industry as well. C. Business & Industry Statistics – use the Census to help you find out more about the industry & Small Business Trip Advisor Yelp Four Square SBA Size Up Tool Local chamber of commerce Local convention and visitors bureau State chamber of commerce D. Consumer Expenditure Survey – info compiled that helps you figure out who is buying what, how much, how often, etc. E. Census Statistical Abstracts – dig into Census data to hear more of a story F. Google Trends - allows the user to compare the volume of searches between two or more terms

LET’S GET SPECIFIC Specific info to find out from Primary Research What is their problem? Or need? Do they currently use a product/service that addresses this problem? How frequently do they will spend on this solution? How effective is the current solution(s)? How they find out about this solution? What can be improved in the current solution(s)? What is missing? What “pain” is still experienced even with the solution? How they decide to buy this solution? How much do they pay? What geographic area do they come from? What do they value? (quality, service, uniqueness, convenience, status, selection, safety, price, brand, etc. )

LET’S GET SPECIFIC Specific info to find out from Secondary Research How is this problem currently being addressed? What products/services are currently in the market that address this problem? Who currently provides solutions to this problem? (find competition) Describe how the solution is currently being implemented/delivered? How effective are the current solution(s)? (Is there info that explains this out there? / may need to be a primary research question) What can be improved in the current solution(s)? (Is there info that explains this out there? / may need to be a primary research question) Who pays for current solutions? (any demographic, geographic, psychographic) How much do they spend a year? What are the market trends for the industry? What factors seem to be changing the market, or changing the business? What developing trends can make a difference?

LET’S GET SPECIFIC Define your target market What geographic area do they come from? Do they have common demographic and psychographic characteristics such as age, race, sex, income, educational level, occupation, skills, hobbies, religion, lifestyle, political affiliations, etc. ? Amount they will spend on this solution? (Is there info that explains this out there? / may need to be a primary research question) How frequently they will spend on this solution? (Is there info that explains this out there? / may need to be a primary research question) How they find out about this solution? How they decide to buy this solution? (Is there info that explains this out there? / may need to be a primary research question) What do they value? (quality, service, uniqueness, convenience, status, selection, safety, price, brand, etc. ) (Is there info that explains this out there? / may need to be a primary research question)

LET’S GET SPECIFIC If you are considering opening a brick and mortar location Will your target market go here? Why? How many people are milling around during the times of day your product/service would be offered? What days of the week are they there? Evaluate the location How will your target market get there? Is there proper parking? What is the reputation for the area? What other stores are nearby? Competition?