Market Research

Course Instructor: Dr Noor Muhammad

Learning Outcomes
1. Define what is market research?
2. How to conduct market research?
3. Where to find useful information?

What is Market Research?

The collection of organised information on
customers
and markets.
The gathering and analysis of data relating to
market
places or customers; any research which leads to
more market knowledge and better informed
decisionmaking.
www.cim.co.uk
This is an important part of small business strategy.

What does market research do?

1. It identifies your potential customers and the
nature of the market
2. This is vital knowledge, without it you are
shooting in the dark!

What Does Market Research Do?

1.

Who will purchase my products/services?

2.

What are my potential customers looking for?

3.

Does my products/services meet customer needs?

4.

How are my products/services different from those of competitors?

5.

How will customers perceive my business versus competitors?

6.

What are competitors doing?

7.

What is the number, size and nature of competitors?

8.

What kind of people are my customers?

9.

How old are they?

10.

Are they male or female?

What Does Market Research Do?

11. What are my customers occupation?
12. What is their household income?
13. Where do they live?
14. How often will they buy my products/services?
15. What are their hobbies and interests?
16. Why should they buy from my business?
17. What hours will they prefer to shop?
18. Which advertising media are likely to reach them?

So?
Market research enables you to:
identify likely customers
who they are (segmentation)
their spending or consumption patterns where
they are
The market (the sum of the customers)
extent and volume of possible sales

Importance For Funding

Market research is not only essential for your
products/services success in the market but will also
prepare you for meeting the investors criteria.
Before offering any investments in your business, they
will be keen and insist that you carefully research your
products/services markets.
Lack of careful market research is one of the main reason
for new business failure.
It is therefore a vital part of planning for you

Why Do You Need Market

Research?
1.
2.

To build credibility for your business idea

To develop realistic market entry strategy

To achieve these objectives, market research will carefully

examine the
following:
3.
4.
5.
6.
7.
8.

Your
Your
Your
Your
Your
Your

customers
competitors
product or service
price
promotional material
location

Methods to Collect Information

How can entrepreneurs collect valuable
market and
customer information? There are two
methods:
1. Primary research
2. Secondary research

1. Primary Research
Following techniques can be used to collect primary data:
1.

Customer surveys and questionnaires

2.

Focus groups

3.

Face-to-face interviewing

4.

Observation methods

5.

Web based research

6.

Any other method

Your Target Market

Many new businesses fail simply not knowing enough about
their target
customers. Therefore, it is very important to research:
1.
2.
3.
4.
5.
6.
7.

Who are your target customers?

What characteristics describe them (location;
demographics; behavioural factors)?
How large is your target market?
How fast is your target market growing?
Is there room for you in that market?
Can the market expand to include you?
Why will customers in your target market purchase your
product or service?

Your Value Proposition

If customers choose to buy your products/services, what
unique benefits will they get from your offerings. For
example ask yourself:
1.

What are your solutions to customer problems?

2.

What customer pain will your product or service ease?

3.

What are the benefits of your offering for those buyers?

4.

How will customers differentiate your product/service from

your competitors offerings?

Your Competitors
Competitor is any organisation that offers the same, a similar, or a
substitute
product or service in the field of endeavour in which a company
operates.
http://www.quantum3.co.za/CI%20Glossary.htm
The market research exercise should aim to answer the following
questions
with regards to your competitors:
1.
2.
3.
4.
5.

Who are your competitors?

What are the strengths and weaknesses of your competitors?
How much market share does each competitor control?
What are their marketing strategies?
What are their key success factors?

Your Competitors
6.

What differentiates your product/service from competitors

offerings?

7.

How much of a threat are your competitors to your

venture?

8.

Do they enjoy strong brand recognition of their products?

9.

Will they aggressively block the entrance of a new rival?

10. Will they recognise your differentiating attributes and

appropriate them for their own products or services?
Your market research activities should quantify (realistic and
justifiable
figures) your claims about your target market and competitors.

2. Secondary Research
This method is less expensive as the data already exists in some formats.
Secondary data can be collected in the following ways:

1.
2.
3.
4.
5.
6.

Business directories
Direct mail lists
Demographic data
Census data
Consumer surveys and reports
Libraries (Also see
Entrepreneurship Resource Centre
and COBRA)

7. Articles
8. Local data
9. World Wide Web
10.ONS (Office for National Statistics)
11.Keynote
12.Other government publications

How to Become an Effective One-to-One Marketer?

Identify your best customers,
never passing up the opportunity
to get their names

Collect information on these customers,

linking their identities to their
transactions

Calculate the long-term value of

customers, so you know which ones
are most desirable and
most profitable

Enhance your products and services

by giving customers information about
them and how to use them

Successful
One-to-One
Marketing

See customer complaints for what they

are a chance to improve your service and
quality. Encourage complaints and then
fix them!

Make sure your companys product and

service quality will astonish your customers

Know what your customers buying cycle is

and time your marketing efforts to coincide
with it - just-in-time marketing