Are you thinking about what market opportunities lay outside your current area of focus? Especially during our current economic recession, there are opportunities being uncovered all around us. The question, though, is which ones should you capitalize on, and where do they exist? In order to find them, you may want to engage in market research- but where to begin?
Good market research ensures that you don’t spend a lot of money on marketing campaigns that customers don’t jibe with or new products that they won’t pay for. To be effective, organizations need good information about their customers’ needs, wants, and characteristics. Generally, if the result of your decision impacts the customer, you should ask the customer for input into your decision before you make it.
Market research is an entire discipline, and we’re not even uncovering the tip of the iceberg, but our hope here is to help point you in the right direction to conduct some practical common sense research for the purpose of making strategic decisions about which target markets to enter. Those markets result in actions within your strategic plan.
Identifying your information needs
Before beginning any research effort, clearly state your information needs. Undoubtedly there may be some holes and unknowns about new markets you want to pursue, but you also want to have a better idea of how attractive the potential target market is and if it identifies with the need you’re trying to solve.
Ask yourself the following questions about each market you’re considering:
- What market am I trying to serve? How big is my market in terms of number of customers, units sold, or dollar volume?
- Are there obvious segments in my market?
- What are the overall trends and developments in my industry?
- What is the rate of market growth or shrinkage over time? Are there any differences in market growth by time of year?
- How big are my competitors? What companies have what portions of the market?
- What products or services do my competitors offer? How do they differ from mine?
- How does competitors’ pricing compare with mine?
- What marketing strategies and tactics does the competition use and to what degree of success?
- What are the key factors for success in the market I’m trying to serve? Are there any specific media outlets that reach this market directly?
- How do customers perceive the problem the offering is intended to solve? How serious do they believe the problem is? What benefits of the proposed offering would be of most importance to them? How do customers solve the problem today?What costs do customers incur now to solve the problem?
It’s a pretty long list, we know. But don’t feel overwhelmed. You don’t need to answer all these questions. Just focus on these key steps in processing your answers:
- Use the questions listed above to help identify what specific information you need about potential new markets.
- Then clearly state these needs in one or two objectives.
- Use these objectives to guide your research efforts.
- If the information you locate doesn’t achieve the stated objectives, file that info somewhere else or delete it.
Now that you’ve determined where to begin, you can choose sources to gather your data from, as well as what you’re going to do with it. For more information, please dig around in our resources archives at www.onstrategyhq.com.