Market Research

From Canada Business 

Why conduct market research?

The goal of doing market research is to equip yourself with the information you need to make informed business decisions about start-up, innovation, growth and the 4 P’s:

Product — Improve your product or service based on findings about what your customers really want and need. Focus on things like function, appearance and customer service or warranties.

Price — Set a price based on popular profit margins, competitors’ prices, financing options or the price a customer is willing to pay.

Placement — Decide where to set up and how to distribute a product. Compare the characteristics of different locations and the value of points of sale (retail, wholesale, online).

Promotion — Figure out how to best reach particular market segments (teens, families, students, professionals, etc.) in areas of advertising and publicity, social media, and branding.

Part of being prepared with market research is avoiding unpleasant surprises. Intuition and experience can be helpful at times, but research and facts often paint a more accurate picture of your market.

By conducting research on a regular basis, you can keep up with the dynamics of the economy and demography. You can also adjust to new regulations and technological breakthroughs.

Market research can help you:

  • Understand your customers and their preferences (4 P’s)
    • Profile your customers (location, age, gender, income level, etc.)
    • Create more effective marketing campaigns
    • Find the best business location
  • Identify opportunities to grow and increase profits
    • Recognize changes in demand
    • Offer new products or services for the new demand
    • Find new markets within and outside of Canada
  • Recognize and plan for industry and economic shifts
    • Shift inventory, price and staff levels as needed
  • Monitor the competition in your market
    • Identify competitors
    • Get information on how your competitors operate
    • Learn how customers compare you with your competitors
  • Mitigate risk in your business decisions
    • Use information, not just intuition, to drive your business decisions

When to conduct market research?

Market research is widely viewed as a component of the planning stage of a business. Indeed, market research is critical for new start-ups and should be a key element of any entrepreneur’s business plan. Market research data feeds into a number of areas of the business plan, contributing to sections on:

  • Determining the sales potential of your products and services
    • Identifying the demographic characteristics of your customers
    • Selecting the appropriate business location
    • Setting the price for your products and services
  • Attracting customers to your business
    • Establishing your company image
    • Setting prices for your products and services
    • Ensuring advertising is on target
  • Selling to customers and earning repeat business

Business plans and market research are not solely for new businesses. Accurate assessment of the market and development of an effective plan is critical to the success of both new and existing businesses.

Businesses contemplating significant changes, such as business expansion and relocation, are also wise to use market research to support their decisions. Examples of situations that might call for market research include:

  • New advertising campaigns
  • Opening a new location or changing business locations
  • Increasing production levels
  • Introducing new lines of products or services

The kind of information gathered through marketing research during the planning and growth stages of your business can also be very useful in its day-to-day operation. A regular flow of market research information can help you to maximize the potential of your current business activities and help you to create a roadmap for future growth.