Agnes Gaillard
Small Business Management - Internet Report
Marketing research for Small Businesses

A recent survey carried out by Don III Bradley, University of Central Arkansas, showed an evident correlation between lack of marketing skills and marketing research and small businesses failures.
Indeed, small businesses often lack the motivation and resources to carry out market research. Many business owners overlook it and think it is only a tool for Fortune 500 corporations, or for highly experienced, educated senior executives.
Indeed, another study, from the Mankato State University, finds that small businesses' reluctance to implement marketing analysis is caused by 5 myths : "exclusively for big decisions", "survey myopia", "big bucks", "sophisticated researcher" and "most research is not read". This study also shows that only 40% of small businesses have carried out any kind of marketing research activities, and that 75.6% of these didn't use the results of their market analysis !

This report aims at explaining to business owners what marketing research is, and how they could benefit from it. The report also provides a practical method for implementing it, and list useful and practical tools and resources.

What is marketing research ?

Market research is a systematic, objective collection and analysis of data about your target market,
competition, and/or environment with the goal being increased understanding.  Through the research process you access data from a variety of sources (organizations, government, customers..) that will be used to guide your business actions. Marketing research is not an activity conducted only once, it is a continuous process that will enhance your competitiveness.

How would your business benefit from marketing research ?

The data acquired is solid information that you can use to support your business decisions. Market research, like any business investment is effective when the value of findings or conclusions outweighs your initial investment. If you spend $500 for a survey that uncovers an unmet customer need, you'll have the opportunity to offer a new product or service and gain additional revenue.
 

Market research helps you identify opportunities in the marketplace.

For instance, if you wish to launch a new service in a specific geographic area, and discover that no such service presently exists, you have unveiled an opportunity.
You might also increase your chances of success by identifying and analyzing specific market segments within your customer base. This would enable you to formulate more efficient marketing campaigns that directly reach the type of customer you want to target, in a way that interests them.

Market research also uncovers and identifies potential problems.

Instead of  identifying opportunities, your marketing research results may indicate that you shall not pursue  a planned course of action. In that case, the return on investment of the research is equal to the estimated cost of the course of action it has avoided.
Suppose you want to open a  new retail outlet in a suburban shopping center. Through marketing research, you learn that in 18 months the city is planning to build a new expressway and thus would be closing the shopping center. You have identified a potential problem and avoided huge investments. These investments (here, the retail outlet cost) constitute the return of your market research.

Market research creates benchmarks and evaluates your progress

You might find it important to know the position of your business at particular moments in time. Ongoing market research allows you to compare your benchmark measurements against your competitors' and to chart your progress between research intervals (such as successive annual surveys).

The research method

There exist hundreds of marketing research methods, but the most common one (and the easiest) follows these 7 steps.

1)  Determine the identity and needs of your customers (customer analysis).
2)  Identify and develop your competitive advantages (market strategy).
3)  Select specific market segments to serve (market segmentation).
4)  Determine how to satisfy the needs of these market segments, considering internal and external constraints (marketing mix).
5)  Determine who your competitors are and what their own marketing mix is.
6)  Analyze how well they are serving their clients' needs, and how your company compares.
7)  Analyze how well you have reached your objectives, and then return to step 1 (marketing performance).

Tools and resources from small businesses

There are many sources of information which you can search for valuable market information and marketing research services.

Here are a sample of your possibilities :
1) Check out the information and services offered by professional associations. These organizations can be industry-specific, or target the small business community at large, like the Small Business Association, or the Small Business Benefit Association.
2) Make a trip to the local universities and take a look at their internship or apprenticeship programs. These are often run by highly educated students, who would provide consulting or marketing services for a low cost, or no cost at all.
3) Share your experiences with other business owners, by subscribing to professional organizations such as the American Marketing Association. You can also do that through the internet using newsgroups, message boards, chat rooms and mailing lists dedicated to small business marketing
4) Read papers, articles and books related to marketing research.

But this list is far from being exhaustive !
 

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