An essential part of early planning for your start-up lies in market research. It’s the key to analysing your market, helps you to develop a workable business plan and a successful brand.
Effective market research will not only shape your marketing, but will also influence who you target, when you should target them, the pricepoint you choose and whether you need to make changes. There are two elements to effective market research: desk research and field research.
Field research
Social networking, and the internet in general, have had a massive impact on how most companies carry out market research. It has widened the parameters for desk research and allows you to explore the secondary data available online.
However, this doesn’t negate the importance of proper field research. This means talking to customers directly, personally testing your service or product and building your brand through user interaction.
You also need to get out there and find out any facts that haven’t been covered by desk research. And while you may quite easily find general market data and information, it’s not always as simple when it comes to a specific town or region.
Here are some major areas of field research you should undertake:
- Observe the market for your business
Observation is your friend when it comes to testing out the reality of any data you may have on paper. There is generally an inconsistency between what people say and what they choose to do. Customers might have had a problem properly understanding the product or service when they filled out any kind of questionnaire, and this isn’t something you’d know just from the data.
Therefore, observing your market can give you useful insights on how things look to an outsider, whether that’s a supplier, customer or potential employee. This kind of research should be used to provide context to another research method, as it may not be indicative of the general trends.
- Face to face time
Holding face-to-face interviews with potential customers can be very effective. Talking and listening to people is both the most basic and most often used method of carrying out qualitative research.
Interviews are different from surveys, in that they are generally less formal and go deeper than initial questions. This method needs good interpersonal skills, empathy and a real interest in the potential customer.
- Focus groups
These are a way to interview multiple people as part of small groups. They usually consist of around eight to 10 people specially selected for different reasons, whether that’s certain experiences they have or their socio-economic characteristics.
Participants attend informal, relatively short discussions sessions centred around a specific topic. They can help an entrepreneur really understand where their start-up would realistically fit into the market. They are also almost exclusively used by big brands to research decisions including pricing, packaging and product design.
- Market research survey
This is a very common method of field research used by most companies to understand market potential and customer satisfaction. Around 50% of surveys are held face-to-face, and this is thought to best for consumer markets. Next comes telephone surveys, followed by email and web surveys, which work particularly well for organisations.
Postal surveys used to be very popular but, not surprisingly, now account for less than 10% of market research survey work.
- Test the market
This is perhaps the ultimate form of market research and involves finding real customers to buy or use your product/service before you fully set up your business. This could be by selling into a limited area or exclusive section of your core market. By doing this, if it becomes clear that it’s not going to work as a product or service, then you haven’t expended too much time or money.
Whichever method you choose, market research is invaluable as part of launch preparation for a small business. It will help you get your idea known and build useful data to include in your long-term business plan.
If you’d like more help and advice in setting up your small business, contact the team at Turner Little. We can help.
About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction/repair, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.
