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What is Marketing Research?
According to the American Marketing Association, marketing research is the
systematic gathering, recording, and analyzing of data about problems relating
to the marketing of goods and services.
Every small business owner-manager must ask the following questions to devise
effective marketing strategies:
- Who are my customers and potential customers?
- hat kind of people are they?
- Where do they live?
- Can and will they buy?
- Am I offering the kinds of goods or services they want - at the best
place, at the best time and in the right amounts?
- Are my prices consistent with what buyers view as the product's value?
- Are my promotional programs working?
- What do customers think of my business?
- How does my business compare with my competitors?
Marketing research is not a perfect science. It deals with people and their
constantly changing feelings and behaviors, which are influenced by countless
subjective factors. To conduct marketing research you must gather facts and
opinions in an orderly, objective way to find out what people want to buy, not
just what you want to sell them.
Why do it?
It is impossible to sell products or services that customers do not want.
Learning what customers want, and how to present it attractively, drives the
need for marketing research. Small business has an edge over larger concerns in
this regard. Large businesses must hire experts to study the mass market, while
small-scale entrepreneurs are close to their customers and can learn much more
quickly about their buying habits. Small business owners have a sense their
customers' needs from years of experience, but this informal information may not
be timely or relevant to the current market. Marketing research focuses and
organizes marketing information. It ensures that such information is timely and
permits entrepreneurs to:
- Reduce business risks
- Spot current and upcoming problems in the current market
- Identify sales opportunities
- Develop plans of action
How to do it
Without being aware of it, most business owners do market research every day.
Analyzing returned items, asking former customers why they've switched, and
looking at competitor's prices are all examples of such research. Formal
marketing research simply makes this familiar process orderly. It provides a
framework to organize market information.
Market Research - The Process
Step One: Define
Marketing Problems and Opportunities
Step Two: Set
Objectives, Budget, and Timetables
Step Three: Select
Research Types, Methods, and Techniques
Step Four: Design
Research Instruments
Step Five: Collect
Data
Step Six: Organize
and Analyze the Data
Step Seven: Present
and Use Market Research Findings
Define the Problem or Opportunity
The first step of the research process, defining the problem or opportunity,
is often overlooked - but it is crucial. The root cause of the problem is harder
to identify than its obvious manifestations; for example, a decline in sales is
a problem, but its underlying cause is what must be corrected. To define the
problem, list every factor that may have influenced it, then eliminate any that
cannot be measured. Examine this list while conducting research to see if any
factors ought to be added, but don't let it unduly influence data collection.
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