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Doing Market Research

What's market research? According to the American Marketing Association, marketing research is the systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services.

Before you decide how to sell, you need to know if anyone wants to buy the product. The art of finding the answer to that question and as much additional valuable information as possible is known as market research.

Not surprisingly, the U.S. Small Business Administration has a slightly more formal way of explaining market research and what it includes. They state:

"Successful marketing requires timely and relevant market information. An inexpensive research program, based on questionnaires given to current or prospective customers, can often uncover dissatisfaction or possible new products or services.

Market research will also identify trends that affect sales and profitability. Population shifts, legal developments, and the local economic situation should be monitored to quickly identify problems and opportunities. It is also important to keep up with competitors' market strategies."

In other words, you need to figure out who wants your product, where to find them, how much they'd be willing to pay, and what you need to do to make your product or service as attractive to them as possible.

Oh, and at the same time you need to keep your eyes on bigger forces that might influence opinions or an ability to make the purchases.

That sounds like a lot of work, doesn't it? Well, it can be. It's the kind of number crunching project that might be better suited for a larger company on some levels. But as the SBA explains, small business owners do have some advantages:

'It is impossible to sell products or services that customers do not want. Learning what customers want, and how to present it attractively, drives the need for marketing research. Small business has an edge over larger concerns in this regard. Large businesses must hire experts to study the mass market, while small-scale entrepreneurs are close to their customers and can learn much more quickly about their buying habits. Small business owners have a sense their customers' needs from years of experience, but this informal information may not be timely or relevant to the current market."

So, take advantage of your smaller size. Pay close attention to your customers and tailor your marketing, service and product to meet their needs.