How to Do Market Research for a Business Plan by Matthew Schieltz - Updated September 26, Starting a new business or developing an invention requires drawing up detailed business plans in order to predict your success or to show venture capitalists, investors and banks for start-up capital and loans.
This guide is intended to help you better understand market research and its importance. It provides information on how to conduct a market research project, specifying several options that are available to you regardless of your market research budget.
Table of Contents What is market research? Successful businesses have extensive knowledge of their customers and their competitors. Market research is the process of gathering information which will make you more aware of how the people you hope to sell to will react to your current or potential products and services.
Whether you are aware of it or not, as a business owner you conduct market research all the time. When you talk to customers about your business or check out the prices of your competitors you are conducting market research.
Formalizing the process can produce a wealth of information about your products and services, your customers and the marketplace you operate in.
The level of complexity used in your market research campaign is up to you, as market research can cover a broad spectrum of activities.
You can undertake simple activities that can be done on your own, such as creating a short customer satisfaction questionnaire or studying demographic data for your area, or undertake complex ones that require assistance from a professional market research firm. Regardless of the size of your market research budget, the time you have available or your level of experience, some form of market research is possible and it can help you to improve your business decisions.
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.
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. How to conduct market research? First, it is important to establish clear goals for the market research activity you will undertake.
You need to make sure you have defined what you need to know and why. Once you have established your goals, it is important develop a strategy and select techniques you will use to gather data. The two broad types of research you can use are primary and secondary research.
Primary research Primary research is original information gathered through your own efforts or on your behalf by a hired research firm to respond to a specific question or set of questions. This information is normally gathered through surveys, observation, or experimentation. The following are examples of questions that can be addressed through primary research:Business Plan Research.
For a successful market research and analysis business plan, you will need answers to many critical market research schwenkreis.com demographic is your product or service most likely to appeal to? What is the forecast for the industry you are in? How to Write a Market Research Plan.
by Ivana Taylor. I find myself recommending a market research plan over and over to small businesses and that means that I had better start explaining what a market research plan looks like.
Business Crowdsourcing market research plan marketing plan micropoll online survey Top Bottom CTA. Sep 27, · The market analysis isn’t just one part of a successful business plan—it’s one of the best reasons to write one.
If you do need banks to lend you money or investors to jump on board, a market analysis section is required, as savvy lenders or investors will need to know that the business you’re pitching has viable market appeal/5(93). Do-It-Yourself Market Research gives a more comprehensive explanation of the basics of market research as well as providing tips for sampling and accessing your target market.
Market research is time-consuming but is an important step in affording your business plan validity. This business plan, market, you'll get accurate and using well timed market research centers business strategy. How to learn how profound can provide a business builder was developed to begin developing 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: Canada Business Network centres.