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Knowing your market

Who are your customers? Who is your competition?

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Research your market

Market research is one of the key factors used in maintaining competitiveness over competitors. Market research provides important information to identify and analyse the market need, market size and competition. Market-research techniques encompass both qualitative techniques such as focus groups, in-depth interviews, and ethnography, as well as quantitative techniques such as customer surveys, and analysis of secondary data.

Test your business idea with potential customers to check if there's real demand for what you're planning to sell. This lets you find out about any problems and fix them before you've wasted too much time, effort and money.

Market research, which includes social and opinion research, is the systematic gathering and interpretation of information about individuals or organisations using statistical and analytical methods and techniques of the applied social sciences to gain insight or support decision making. 

The components of market research include: 

  • Market information - knowing commodity prices around the market. 
  • Market trends - the movement of the relevant markets over time. 
  • Market segmentation - segmenting the market you operate within into different subgroups to offer a clearer picture.
  • SWOT analysis - analysing the strengths, weaknesses, opportunities and threats which affect your business.

Designing a Questionnaire 

Market research can be carried out by means of a questionnaire. Surrey County Council have put together the below helpful information about putting together a questionnaire to aid your market research:

Questionnaires can help you research new markets, measure customer satisfaction or even find out more about people's perceptions of your service. In order to get meaningful results here are some tips: 

1. What are you trying to find out? Start by writing down exactly what you want to know and then write the questionnaire around this. 

2. How are you going to use the information? Make sure you know why you are asking each question and how you are going to use the results. There's no point conducting research if the results are not going to be used. 

3. Quantitative or qualitative? Quantitative research provides statistical information for example, how many potential customers there are, or, 75% of respondents thought… Qualitative research is used to gain an in depth understanding of attitudes and behaviours, asking how and why questions. 

4. Telephone, postal or face-to-face? Self-completion postal questionnaires can be a cost-effective way to reach a wide audience. Both closed and open questions can be used. Response rates tend to be lower than other methods. Telephoning can be more costly but often generates a higher response rate, gives a fast turn around, and allows for further questioning. Face to face is usually the most costly and is time-consuming, however, this method can generate the fullest responses and enables you to target specific groups such as parent and toddler groups. 

5. Keep it short and simple. If you are going to ask your customers to answer your questionnaire make sure the questionnaire takes no longer than 10 minutes to complete (for face-to-face this will be about 10 to 15 questions). 

6. Test your questionnaire. This will allow you to time your questionnaire, make any final changes, and get feedback from your colleagues. 

7. Data Protection. You should state that information will be treated confidentially and provide details of how it will be used and stored. Respondents should be given the chance to receive feedback. 

8. Analysis. When you have gathered all the responses you must analyse the information. If the response rate was particularly poor you might need to send out more copies in order to have realistic data on which to base your planning.

Further Reading

Find out more on how to carry this out by reading the advice below:

http://startups.co.uk/market-research/

https://www.entrepreneur.com/article/217345

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