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Understanding customer preferences and the competitive landscape of an industry are initial steps to successfully operating a business. Market research provides insight into customers likes and dislikes, their expectations, industry trends, and the competitive environment. Here are a few benefits of conducting market research for small business to help gain a competitive edge.
Most of the time, if a customer is not happy with a service or product, the customer looks elsewhere. Furthermore, the customer tells friends and family about his or her experience but the business rarely gets feedback unless prompted. Conducting market research addresses the issue and provides a forum for customers to discuss dissatisfaction and make suggestions to the business for improvement. In addition, market research helps small businesses know what they are doing right.
Market research helps to determine if marketing communications are directed at the right customers. Information gathered can inform a business where potential customers reside, their shopping habits, and how customers prefer to do business. This information helps in creating a strategic marketing campaign directed at the right customer.
Discover Opportunities or Risks
Market research allows a business to identify opportunities or risks in the marketplace. For example, if someone is thinking about opening a bakery in a particular zip code, and there are few competitors in the area, it would be wise to establish a presence in that local market. On the flipside, if the same zip code has several bakeries, it may not be a wise business decision to open in that area.
Types of Market Research
Primary research involves direct communication with customers for collecting data, typically in the form of focus groups and surveys. Focus groups are a good way for potential and current customers to try products and provide feedback immediately. Surveys are another great way to collect data either online, by mail, or telephone. For small businesses, the Internet provides a cost-efficient way to survey consumers for feedback.
Secondary research involves analyzing and reading statistics and data compiled by others. Good sources of secondary information are government agencies, media sources, trade and industry associations, etc. Collecting market information is a beneficial tool for business and market research helps determine potential next steps of a business strategy.