Best Ways to Do Market Research for Your Business Plan
Do you know how to carry out a market research? What are the methods of market research? As you enter into the world of business, you gradually start realizing that business is more than just selling goods or services. Unless you do a proper market research, you really cannot survive, much less succeed.
Market research is everything you do to find out about your market size, needs, the behavior of customers, your competitors and geographical location of your consumers.
A common proverb says “leap before you jump”. A jumper that refuses to leap before making the jump can jump into a ditch, breaking his legs or losing a tooth. An entrepreneur cannot start a business or plan for growth of a business without undertaking market research.
Market research is the leap before the jump and it will definitely prevent a bad ending for the business and its owner, it is of a necessity that we must know how to do a good and efficient market research.
The question on “how to do a market research” has really being a great question startup entrepreneur always ask. Any mistake in this research process can cause a great problem for the business because it will totally focus a wrong direction which will end as an unprofitable business.
A perfectly done research will give you exclusive and useful information on the customer. It will tell you why they ought to choose your product, the quantity they can buy, and so on.
With this result, the entrepreneur or business owner will be able to decide on the right product to produce, he will also be able to decide whether he has to change a product, or improve some certain aspect of it, so as to suit the desire of the customers as reported by the research.
So how do you conduct market research?
Classification of Market Research
- Primary Research
Primary market research makes it possible for the entrepreneur to carry out the research themselves, rather than information from already published research. So, it is primarily a type of information that you gather by communicating directly with your target customers.
Primary research resources will allow you to generate information all by yourself through direct interviews like face to face interview and other methods specifically for your product or business.
Primary Research can be collected through:
- Focus groups
- Intercepting people (meeting people in their environment, on social media).
- E-mails to friends and relatives.
- Direct-mail surveys.
- Telephone interviews.
- One on one interview (face to face interview).
The kind of primary research resource you select in this aspect will depend on the kind of information you’re looking for and the also much you are ready to budget for the execution.
This is information others have acquired and already published, they have carried out the research which you will find relevant and useful for your own research. Secondary research is mostly employed after the primary research.
Ways by which we can carry out secondary research are:
- Demographic data
- Magazines and newsletters.
- Trade associations.
- Gender and other specialized publications.
- Financial reports on companies.
- Research Reports.
The outcome of the secondary resources employed depicts a perfect overall representation of your potential consumers.
Collection of Data
Collecting data from primary research and secondary research is broadly divided into two methods.
STEP 1: Quantitative Data Collection Method
Quantitative methods use mathematical analysis and require a very large sample size. It is used in testing a hypothesis of the customer’s decision, behaviors. It looks at the cause and effect of the consumer action towards the product and makes it possible for the entrepreneur to predict the best possible way for sustainable production. Most of the customers are randomly selected, though there are specific things the entrepreneur wants to measure such as attitude to the product, why they will invest in the product and so on. The result of this research can be generalized to all populations because they are mostly based on detailed measurements using structured, the type of data collected will be in form of numbers and statistics such as a certain population a study area.
STEP 2: Qualitative Data Collection Method
Qualitative data collection methods help polish and improve the already collected data from the quantitative method. It is used to understand and give meaning to social interaction concerning the entrepreneur’s business.
The customers to be sampled are not as large as the quantitative method and also are not randomly selected. The data are mostly in words and all form of representation. The data collected are in an open-ended questionnaire, participant observations, interviews, and reflections.
They are exploratory in nature which means the researcher develops a new proposition and concept from the records collected and will be able to find and construct patterns that will boost his business effectively.
The findings are not always generally applied to all populations but it will give an account with contextual explanation and direct references from the customers.
Your findings from the market research are very germane because they’ll assist you to make better business decisions that will skyrocket your business. Not only will your research determine whether or not there’s a viable market for your product, it’ll also help you to narrow your product to fit consumer’s needs.
It will also improve your ability to make better business decisions, which can mean the difference between your business profit and failure. This information is very necessary to undertake before you proceed to make your next decision.