Today I am presenting before a group of new entrepreneurs the importance of Market Research and Analysis in growing their businesses. It is fascinating how many individuals jump into the world of entrepreneurship without truly knowing who their IDEAL customers are, where they are located and how to reach them. In an environment that is highly dependent on attracting customers willing to pay for services rendered, one would think that this would be priority #1. However, this is not the case. Most new business owners tend to go with their gut and build their business around that. Unfortunately what ends up happening more often than not is that they run out of money long before they realize their dream.
We have all heard the saying “Knowledge is POWER!” This is never more evident than when trying to launch a new business or even run an existing one. The fact of the matter is that market research and its analysis should be an ongoing effort revisited many times during the life cycle of the business. The market is constantly evolving. Remaining ahead and in a favorable position for growth is a science. Consider your biology classes in grade school. You know…one where you were presented a theory, developed a hypothesis, and preceded to prove that hypothesis. Market research and the analysis of such are approached along the same logical lines.
Deductive vs. Inductive
With that being said HOW you approach market research could mean the difference between forcing the end result to reveal what you want to happen and guiding the results to what the potential could be (predictive). It is the difference between Deductive reasoning and Inductive reasoning. Here’s an example:
Do you see the pattern here? In one case you are letting your preconceived theories drive the market research and allowing the data to validate your findings…whereas in the other case you are allowing the market to dictate the results thus proving your hypothesis. Induction will help you create a theory, and deduction will help you validate the theory.
Qualitative vs. Quantitative
Another component of market research and its ability to reveal the “holy grail” is the type of research being conducted “Qualitative” vs “Quantitative.” Qualitative research gets behind the facts and figures to find out how people feel about your particular product or service and what would prompt them to spend. This information is generally gathered using questionnaires and focus groups. Quantitative research focuses on coming up with numbers like what percentage of the population buys your particular product. It is generally gathered using surveys and questionnaires. You could do this yourself by talking to your existing customers. In-depth quantitative research can be used to identify markets and understand customer profiles – vital if you’re launching a new product.
Primary vs. Secondary
There is yet another research qualifier that is pertinent to uncovering the necessary data needed to make critical decisions for your company. That is primary vs. secondary research.
Primary market research is tailored to a company’s particular needs and is conducted first hand. Focus groups, surveys, field tests, interviews, and observation are examples of primary market research. Primary research lets you investigate issues of specific interest to your business, get feedback about your website, assess demand for a proposed service, gauge response to various packaging options, find out how much consumers will pay for a new product, and more.
Secondary research is based on information gathered from studies previously performed by government agencies, chambers of commerce, trade associations, and other organizations. For example, U.S. Census Bureau information and Nielsen ratings are secondary market research. Secondary market research is easy to find, and much of it is free or low-cost.
Unfortunately the downside of secondary market research is that it is not customized to your specific needs, so it may not be as useful as primary market research. Too many new entrepreneurs rely heavily on secondary research believing that this research is a “green light” to moving forward. The fact of the matter is that both primary and secondary research is needed to effectively develop a marketing strategy that is based in solid data that supports your efforts.
With everything presented here is there any doubt the importance the market research is critical to the success of your business? DAVNA Enterprises and our team of professionals are equipped to assist in gathering and analyzing the market data needed to support your strategic marketing efforts. We work closely with our clients to ensure that they are “on the same page” and understand the reasoning behind the efforts put forth. Additionally we introduce training and coaching through our educational division called Entrepreneur Prosperity Enrichment Program EPEP www.epepsuccess.com in which we equip new and existing business entrepreneurs with the skills needed to effectively launch and growth their businesses.
DAVNA Enterprises, LLC is a Florida based firm specializing in the development and implementation of strategic operational, marketing and business development programs locally and internationally. Whether a new business starting out or an existing firm seeking increased market exposure, rebranding or repositioning, DAVNA brings more than 35 years of experience and the expertise needed to successfully develop and execute strategies designed to achieve your ultimate goals. For more information visit www.davna.com or email firstname.lastname@example.org