Question: I've been told that I need to do some market research. My business is young and small, and I really don't know much about this. Can you give me some basics?
Answer: Yes, and unless you have tons of money and can afford to market blindly, your best bet is to do some research and find out about your market base. Let's talk about this.
In today's column we'll look into some central concepts of market research; some terms you should know a bit about; several examples of specific market research techniques; and some helpful information sources.
A main objective of market research is to define and identify your "target market." This means: Who are your likely customers or clients? What specific groups of people might be interested in your goods and services? You will use this information to prepare a marketing strategy, which details how you will reach those customers and encourage them to buy.
One extremely important function of market research is that it compels you to direct your attention to the wants and needs of your customers. You can't be focused just on your products and services themselves. Consider this: say you have a unique product, but no sales yet. If you have a product fixation, you'll conclude that it's time to jump right in to advertising and selling it. But hold on. You're looking through the wrong end of the telescope. If you have a market orientation, you will realize that your effort is better spent on finding out who has a "felt need" for the product.
Market research has multiple applications.
For a new business, it's an essential component - and one of the most important - of your written business plan.
An existing business, when considering adding a new product or service, needs to know how to best launch it successfully.
An active, growing business should always be looking at new markets. This could be a different geographic market, like exporting; or a new demographic market, like selling to a younger age group.
A mature business needs to adapt and refresh its offerings to change with the times.
Data sources are categorized as primary or secondary. Primary data is information you generate. Examples: a customer survey you conduct; a focus group you arrange; a comparative analysis of your competitors' websites. Three big advantages of primary information: it is very current, more specific and can be tailored to your business' particular needs. The main disadvantage is that it costs more than using existing data.
Secondary data is information you get from existing outside sources. Examples: department of revenue sales figures; information from a trade organization about industry trends; business information from one of the library's online databases. Two big advantages of secondary sources are that they are readily available and usually free. The tradeoff is that they may be dated, or too broad geographically to be relevant.
Two data types are: qualitative and quantitative. Qualitative data is easy to generate: just ask someone a question and note their answer. An example would be a retail store surveying customers about their satisfaction or product preferences. Or, a service business might ask customers to comment on its pricing compared to the competition. It's more conversational than statistical.
Quantitative data is expressed in numbers. This type of research can be simple, like a phone survey of your local market. Example: "About how much would you be willing to pay for [describe your product]?" Or it can be very involved, like the rigorous work a retail chain conducts before choosing a new location.
A major asset for your market research is the local library system. Here's the scoop: the Whatcom County library system has unified. This means that you as a library card holder have access to all of the local (public) and also the academic libraries' resources. These include the system's online databases, many of which are subscription-only and have private information not available on the internet or to the general public.
To start, go to bellinghampubliclibrary.org. For a quick overview of the powerful AtoZ database, click on "Research Tools" tab and then "Premium Content". Click on "AtoZ database" and then the "Intro Videos" tab. In person, the reference desk staff at the central Bellingham branch are skilled and ready to help with your business research; just tell them what you're trying to find out.
For more information, Google "market research tips small business." For a good overview of information sources, go to score.org and enter "market research" in the search box. Also check out
To learn more about managing cash flow, and other small business matters, contact SCORE, "Counselors to America's Small Business." SCORE is a nonprofit nationwide organization with more than 13,000 volunteer business counselors who provide free, confidential business counseling and low-cost training workshops to small business owners. Call the local SCORE chapter at 360-685-4259 to schedule an appointment. For details about the organization,visit SCORE.org.
Ask SCORE is prepared for The Bellingham Herald by Bob Dahms, a business counselor with the Bellingham chapter of SCORE. Submit questions for this column to firstname.lastname@example.org.