Grow Your Business

A market study starts with an objective or a set of objectives that guides the selection of a methodology and research respondents, who in turn may be identified by segments according to the information re­quired. When the respondents have been iden­tified, recruited, exposed to the product, and questioned about their preferences and opin­ions, analysis follows. The results are then eval­uated, interpreted, and used to create the best strategy for a marketing plan.

Some market research firms would have their own methods for doing a market study. BrandLab, for example, enlists the services of anthropolo­gists to conduct ethnographic studies on people in places where they live to get a first-hand feel of their behavior and thinking patterns. Satis­find, on the other hand, specializes in customer satisfaction measurement - popularly known as mystery shopping - while its sister company, Con­sumer Vibe, focuses on other types of research.

Brad Geiser of Geiser-Maclang Communica­tions believes neophyte entrepreneurs may need market research companies only when they really don't have the time to do it themselves. "I strongly recommend for new entrepreneurs that they make the time. Market research is an incredibly powerful tool for listening and real­ly understanding who your customers are, what your customers aren't, and why?"

BrandLab's Ortega says the best way for new entrepreneurs to study their market is by interviewing the people closest to them: "Talk around and discuss whether [the busi­ness is viable] or not. [Over] lunch and coffee is the cheapest way of doing research. You talk to people in [a certain] category and be sur­prised that a lot of them are willing to share information," he says. "These are practical things [new entrepreneurs] could do. When you have formed your opinion, that's when you bring in the researchers to help validate or ad­vance the idea."

 

SIZING UP AND SEGMENTING YOUR MARKET

How much are you willing to pay some­one who can tell you off hand - and ac­curately so - how big your market is and its earning potential for your business? Having a clear idea of your market, how big it is, its needs and preferenc­es, and how you can serve them, are stakes that can fasten your enterprise firmly in the business arena.

You can go about the business of segmenta­tion by taking a large market and breaking it down into several target sectors. Here are sev­eral ways to do it:

By demographics. You look into your mar­ket's profile with regard to their age, gender, income, educational attainment, status, reli­gion, total household income, family size, so­cial class, occupation, and other indicators.

By behavior. Dividing the market based on their knowledge of, as well as their atti­tude, use, and response to the product. This may be segmented further to benefit, occa­sion, and usage.

 

By psychographics. Segmenting the market based on lifestyle, personality, and values.

 

By geography. Partitioning the market into regions, localities, provinces, cities, or municipalities.

By choosing a particular segment, you are more or less defining your target market. You can refine your search further by focusing on niches - "narrowly defined segments where there are few competitors and there's a small but profitable seg­ment that you can serve," according to Lao. For example, if you are in the business of selling foot­wear, you may decide to focus on casual slippers to cater to a niche market of flip-flop lovers.

In any case, you will need to define your potential buyers and assign monetary values (which can be based on existing competitive prices) on the product or service you will of­fer based on your observation of customer be­havior, buying patterns, the frequency of use or purchase, and a specified time period to mea­sure market potential.

The market size may be defined either by value (the price at which the product or service is sold) or by volume (the number of units people consume). Remember though that getting your target mar­ket's profile will depend not only on demograph­ics, but also on the combination of behavior, psy­chography, and geography.

A person has many di­mensions and may not behave the same way you would expect someone belonging to a particular demography would. At times, behaviour and mind­set have more weight than demographics.