Friday, May 9, 2008

Market Research (Part 1/3)

Dear Wingman,

I’d like to learn more about how I can find or conduct any research to get a better understanding of my customers and my competitors (I own a computer and electronics shop).

-Terry S.

Regardless of the size of your company, successful business owners must know their industry, competitors, and customer needs in order to stay competitive. Marketing research can be one of the more important functions in getting key information about your potential customers’ preferences so as to market your products or services more effectively.

Do you know what U.S. company spends the most money on research and development? You’re probably thinking its Boeing, G.E., or one of the pharmaceutical companies. Well these guys certainly spend a lot. But the company that regularly spends the most on R&D is McDonalds.

I’m not saying its necessary to spend 13 billion dollars on market research, in fact, a separate marketing research department is usually beyond the budget of most small businesses, but you can still gather facts and opinions about your customers in an objective way. Knowledge is power, and having objective information can help focus your business on what people want to buy, not simply what you have to sell to them.

A good place to start your research is to look at the information you already have. Sales records can give you insight to buying trends or cycles if you’ve been in business for a few years. Receipts or other records that can show where customers live or work can give you insight where to focus your advertising and on what products. Employees also can be a good source of information about customer preferences and trends. Be sure to keep open lines of communications with your employees so they can report back to you on customer complaints and attitudes about the business, product, or service.

I’ll touch a bit more on qualitative and quantitative methods of market research next time.

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