According to the Small Business Administration, “to run a successful business, you need to learn about your customers, your competitors and your industry.” Market data is important because without it you cannot understand what is relevant in your industry, what customers are thinking and what their buying habits are, how your competitors are performing, or what kind of revenues you can expect.
Why You Need Market Research
Market research takes the data and analyzes it to help you reduce your business risk. With the information you can spot current or upcoming industry problems and issues, identify potential markets and sales opportunities, pinpoint customer buying patterns, understand competitor performance including strengths and weaknesses. This kind of information helps you make better business decisions.
How to Conduct Market Research
The government has a broad range of data and information about business, industries, and economic conditions. The following sources provide extremely valuable information about your customers and competitors and offer a good place to begin market research:
U.S. Domestic Market Data
There are a variety of resources you can access for valuable market information. These resources can include the Economics & Statistics Administration and the Bureau of Labor Statistics. Other sources of market data include:
• Academic institutions and business schools
• Trade groups
• Business magazines
• Third party research firms (expensive)
International Market Data
We live in an era of globalized trade so it is important to understand the international factors that influence your business. The following resources help you with researching potential international markets for your products or services:
• Trade Compliance Center
• U.S. Commercial Service
Surveys and Questionnaires
Another useful way to collect market data is through the use of surveys and questionnaires. There are many sites that provide templates for your survey and make it easy to for you to gather information. You can also take your questionnaire to the streets. However you choose to administer your survey or questionnaire it is important to make sure the questions are targeted to get the information you are looking for. Make sure you give clear instructions at the beginning of the questionnaire. Keep it simple and start with more general questions and work into more specific questions. Mix the types of questions. You can use multiple choice, scale ranking, open ended questions requiring a written response, or yes/no questions. Always test the questions to make sure they are clear and not ambiguous. Use family and friends to test the questions.
There are many research companies that can collect the data and do the research into your industry and market niche. For example, paid surveys in Australia are frequently used to gather valuable information from consumers who then receive a fee for submitting their feedback. Research companies customize the market data to your specific needs. Such companies can provide in-depth market research but there is a cost for this service and most require a large budget. The benefit of paid research is that they can get you exactly the data you are looking for faster and more thoroughly that you can probably accomplish.
All Businesses Need Data
Market data is not just for start-ups. Primary market data (surveys, questionnaires, interviews) provides vital information about your customers, your industry, and your competitors. It is information your company may collect. Alternatively, more in-depth and broader scale market data is often purchased from market research firms and is referred to as secondary data.
Businesses constantly rely on data. It is not enough to do it once and think you are done. A regular cycle of market research keeps you on top of the latest developments and trends within your industry and within your own business. It is essential to consistently monitor your customers and potential customer base to identify trends, predict inventory requirements, test new products, and understand the economic climate in which your business is operating, because that helps predict the financial needs of the company. Investing in solid market research helps you make the best and most informed business decisions for your company and significantly reduces the risks.