Market Research

market-research

Dear M & M:

What should I research about the market I am entering before I start my business?

– Bill

Dear Bill:

Market research will help you better identify sales opportunities and will enable you to mitigate risks of entering new markets or introducing new products or services in markets you might already be operating in. In order to introduce new product lines, run an existing business or start a successful business, you need to learn about as much as you can about your customers, competing products or services, your competitors and your industry. Conducting research on your targeted market is the only way you will be able to recognize which products and services are in demand. Understanding who is doing what and how competitive is it in the market you are about to enter needs to be clearly understood. There could be a huge potential or lots of demand but, if you can’t compete with existing businesses operating in that market for your bite of the pie you might want to stay out. I would recommend you concentrate on two areas geographic selling area and customer profile. To begin I would define the geographic region you will be operating in. What are the physical boundaries you will operate in? Many times we have segmented our selling area in to primary and secondary markets. Identify both. With Internet sales most companies can compete globally. However, your primary market could be Cochise County. Online sales might be to a specific country, neighboring state or a geographic region like the Southeastern United States. Identify geographically your selling area. The second step is to find out as much as you can about your customer. Age, income, home ownership, employment are some of the categories you might use to identify characteristics of who your potential customers is.  The more you know about a potential customer (what radio stations they listen to, what magazines or newspaper they read, what clubs or organizations do they belong to) the better you will be able send your marketing messages to them through a medium they are already listening to. Once we have identified the selling area and identified who would most likely to buy our product or service we can determine how many people are in that selling area to enable us to get a number of potential customers available.  From there we have to look at competing products or services as well as who are the companies in this designated region competing with us for market share. We need to answer questions like; how many people in this area will most  likely buy from you, how many purchases will they make in a year, how much will they spend on each purchase? From there you can make reasonable assumptions on sales expectations. Knowing this information is crucial to the success of your business. It will guide you in finding potential for customer demands or needs, to help you make decisions on whether entering any market with new ideas for products or services is feasible.

-M&M

To ask your questions: Call the Small Business Development Center(SBDC) at Cochise College (520)-515-5478 or email schmittm@cochise.edu or contact the Sierra Vista Economic Development Foundation (EDF) at 520-458-6948 or email  hollism@svedf.org .

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