How Well Do You Know Your Market?

Article on the importance of research to help you understand your business market.

It may seem obvious to say that every business, however small, should take time to identify its marketplace, its customer types and what benefits these customers are looking for.

However, you’d be surprised how few businesses feel that they have the time or resources to  really research this thoroughly. Nevertheless, research is a fundamental aspect of marketing. Not only can it provide a snapshot of your business in a competitive context, it can also set the direction for future marketing activity. Even a few days gathering information about your marketplace can be of valuable assistance, especially if you are just starting out.  

Here are some ways you can begin to undertake research for yourself:

Step 1: Existing Information (Desk Research)

Start with available, published research information, sometimes available in urban business libraries. It can help you understand, for example, how big the overall market is, if it is growing or declining, what the trends are and what competitive products are available. Likely sources of information include:

• national market reports - e.g. Key Note and Mintel, which cover a wide variety of consumer and industrial topics, often with market forecasts.
• trade press - you can identify if there is a suitable publication relevant to your market e.g. through Benns media guide or Willings press guide. Obtain copies; what topics are these publications writing about?
• Office for National Statistics (www.statistics.gov.uk) - for social, economic, business and regional information, including population census. What demographic information do you have regarding your target audience?

Also take a look at:

• regional directories and publications - for local area/business information.
• national company directories - e.g. Kompass.
• individual company reports, catalogues and websites - for competitor information
• exhibitions and trade fairs - for market trends.
• trade associations.
• Chambers of Commerce.

Consider starting a simple filing system to collect information so that you will always have something to refer back to for inspiration.  Let your associates and even friends and family know which areas you are interested in, so that they can also act as your eyes and ears. If you can’t find something specific to your own marketplace, find out about related products or services that might impact upon your business. Keep speaking to your suppliers and distributors about market trends, they will also be planning ahead.

Step 2: Direct Customer Research

Stage one should help you understand more about market trends and the competitive environment and even help with profiling ideal customer groups for targeting purposes. However, you are still likely to have some unanswered questions about your specific product or service. Stage two therefore is about talking directly to existing or potential customers. Assuming that budget will not allow for an external research agency to sample your customer base, then you could try gathering feedback yourself. (Please be aware of data protection issues regarding use of databases and making contact; do not confuse research with sales calls).

Questionnaires and suggestion schemes provide an ideal opportunity (potentially incorporating a competition or suitable incentive), or you may be able to speak to customers directly, if you are in a retail environment.

Typical areas to probe might include:

• identifying how new customers heard about you.
• understanding what specifically appeals to customers about your particular product/service and how important that is to them.
• objectively identifying your product/service’s strengths and weaknesses in customers’ eyes (and if there is a difference by customer group).
• asking how they rate competitive services/brands.
• enabling customers to make suggestions for potential improvements/new products or services.
• inviting feedback as you develop new offers – an informal ‘customer panel’.
• in a business to business environment,  clearly identify all the decision makers involved in the purchase and make sure you understand all their different needs (e.g. an IT product might involve an IT contact, several departmental heads, the Finance department and the MD!).

Importantly, the feedback that you gather in stage two should help you pinpoint what makes your business different or indeed  ‘unique‘ in the marketplace and what benefits customers perceive that you offer. (See article on “Do You Know Your USP?”).

Article kindly supplied by Lorraine Davidson (www.freelance-marketing.com)

Lorraine Davidson is a qualified Chartered Marketer and a Fellow of the Chartered Institute Of Marketing. She established North Yorkshire based Freelance Marketing in 1998. The consultancy offers market research, strategic marketing planning and marketing communications services to both the consumer and business to business markets.

Since all businesses have specific requirements, this article should be used for background guidance only and should not be understood as one to one, personal business advice. No liability can be accepted by Freelance Marketing Ltd.