You have a great product or service, but who are your customers and how can you reach them? This course will give you an overview of how to identify your customer and how to market to them.
Duration of the course: 00:30:00
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1.3 Course Topics
You need information about your customers, the market, and your competitors in order to succeed. To get the information you require, you need to conduct market research. This course will cover the following topics:
• What is market research?
• What are the benefits of market research?
• How is market research different from marketing research?
• What is the purpose of market research questions?
• What are the two main types of market research?
• How do you collect the required data in market research?
• What are the different methods of data analysis?
• What are the common mistakes to avoid in market research?
1.4 What is Market Research?
Market research is the process of collecting and analyzing data or information on a product or service. The results serve as an input to identify which products or services are in demand in the market, how big the market is for those products or services, and who is buying them. It will also tell you who the current competitors are in that market.
Thus, market research helps identify your target market, set realistic expectations about that market, and consequently can reduce business risks.
1.5 Benefits of Market Research
Market research is generally performed when a business intends to introduce or enhance a product or service. It can also be used when a business intends to expand geographically or when trying to identify a new or different target market.
Market research is beneficial to:
• Existing and new business owners,
• Corporate executives,
• Senior managers, and
Market research helps to:
• Recognize and understand the target market (potential customers) for a product,
• Identify the best place for the product,
• Analyze competitors,
• Identify existing and future threats and opportunities in the market,
• Set realistic targets and expectations for sales and growth, and
• Identify the methods to reduce business risks.
1.6 Question 1
Knowledge Review. It’s time for a quick review. For the following questions, select all that apply, and then click Submit.
Generally speaking, when should you perform market research?
A. When you are introducing or enhancing a product or service
B. When you are trying to identify a new or different target market
C. When you are experiencing a decline in sales
D. When you intend to expand geographically
Generally, you should conduct market research when introducing a new or enhance product or service; identifying a new or different target market; or expanding geographically.
1.7 Marketing Research vs Market Research
In the following table, the two-columns compare Marketing Research and Market Research.
• Marketing Research focuses on a broader level; whereas, Market Research focuses on a specific market
• In addition, Marketing Research seeks information about specific marketing aspects of your product or service, such as price and promotion. It will also use market research to inform this decision. Market Research, on the other hand, will collect information about customers, competition, and the industry in general.
• Finally, Marketing Research will influence your day-to-day operations; whereas, Market
Research will be included in your business plan.
Though the two processes have different purposes, both involve gathering the required information by asking questions.
1.8 Market Research Questions
The purpose of market research is to find information you need to inform your decisions to reach a goal or address a problem. To guide your research, identify your research objective (i.e., achieve a goal or address a problem) in the form of a research question.
Some examples of market research questions for a beauty salon would be, "How much money does my target customer spend on beauty related products each year?" or "What makes my target customer want to buy my product?"
Do not confuse research questions with questions posed on a survey instrument such as a questionnaire or interview. The research question is what drives the research. Put another way, it's the foundation for the research. The survey questions are used to solicit the information needed to answer the research questions. Writing questionnaires is covered later in this lesson.
After you've developed your research questions, you're ready to conduct primary and/or secondary market research to find the answers to your research questions.
1.9 Types of Market Research
There are two main types of market research:
• Primary research, and
• Secondary research
Select each tab to learn more.
Primary research involves the collection of original data. Data are collected in different ways:
• Using questionnaire responses. For example, questionnaire sent via mail or telephone
• Through customer interviews. For example, face-to-face interview with a specific group
• Through customer observations. For example, determining the popular brand by observing sales in a store, and
• Analyzing your own business and sales data. If you are already in business and looking to expand in some way, your own business and sales data can be used to analyze the
viability of the expansion.
Secondary research involves collecting data from existing data, which have been researched and shared by other sources. The researcher just collects the data from these outside sources and collates the required information.
A few sources of secondary data are:
• The Consumer Expenditure Survey
• U.S. Industry and Trade Outlook
• U.S. Census Bureau website
• U.S. Small Business Administration (SBA)
• Trade Associations and Trade Journals
• International Institutions (such as the World Bank, International Monetary Fund, and
International Labor Organization)
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