What is Market Research and How to Conduct it?
Market research is a valuable tool that could help your business launch, expand, or solve its problems. Find out more.
You are about to open your first clothing store. You are thinking about what type of clothes you will sell, the location you will operate in and what the shop will look like. It is probably time to do some market research, find out the type of customers your business can expect, and let this guide your business’s decision making.
If you are in need of legal guidance regarding your business, you should connect with a business lawyer
What is ‘Market Research’?
Market research is the process of collecting information about your potential customers: who they are, what they want and where they come from. You can also conduct market research to find out about market trends, and what is happening in the industry you are operating in.
This information is gathered and analysed and can be used to make informed and strategic business decisions. For your clothing store, this may help you decide where to locate the store, how to stay in contact with customers, or how to distribute the clothes.
Why is it important?
Market research is one of the most valuable tools for your business because it will allow you to understand your market, customers, and competitors. When dealing with marketing and business, the saying ‘knowledge is power’ is very relevant. This is because this knowledge of your market and customers will help you focus your marketing efforts, make guided business decisions and take up opportunities.
Through market research your business may help you:
- Identify potential customers.
- Understand why customers choose your product over competitors.
- Set realistic goals about growth and sales.
- Help you devise a price for your product.
- Understand your business problems, i.e. if your sales are falling, market research may help you discover that brand awareness is also falling.
- Prepare for expansion.
Steps to conduct market research.
1. Understand different types of research.
Before you conduct your market research you should understand the difference between primary market research and secondary market research. Primary research is information collected firsthand. This will mean you conduct a survey, an interview, talk to potential customers, or talk to neighbouring or similar businesses. Secondary research, however, involves you using information that has already been collected. For you this may be government statistics, or census data.
2. Set your research objectives
Think about what you would like to get from your research process. Successful market research is always guided by some mission. If you are looking to expand, and are looking into new distribution methods, set the market research objective of researching all possible distribution options in your location.
3. Gather information that already exists
Conduct secondary research, and see if the information available can help you to achieve your research objectives. The Australian Bureau of Statistics is useful for gathering information social trends and census data. You should also consult online resources, written publications, trade associations and publications from market research companies.
4. Conduct your primary research
This is probably the most strenuous of the steps. It involves going out and conducting a survey, interview or observation. For your clothing business, you may have discovered that your target market is women aged between 20-40. So… you can now seek out a group of women who are in this age bracket, and lead a group discussion about your product.
5. Analyse and respond
Now you have gathered the information, it is time to understand what it means. Remember that you must be impartial. Even if you are desperate for your store to open and your manikins to be suited up, you should not ignore research that shows your potential business has a high probability of failure.
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Anthony is a Paralegal working in our content team, which writes free legal guides aimed at improving public awareness of legal and business issues. Anthony has an interest in simplifying complex legal problems in order to allow people to understand their legal dilemmas.