Updated: May 30, 2018
If you’re planning to put up, expand or improve your business, then you need a good market analysis to guide your actions and decisions.
Conducting market research allows you to learn about the feasibility of your business and the marketability of your product or service. It will give you a comprehensive understanding of your target market which in return, can help you position your business in the correct niche.
As previously discussed in Market Research 101, there are mainly two types of data: quantitative and qualitative. Furthermore, we have identified three areas of primary consideration when doing research, these are customers, competition and environment.
As you prepare your tools to gather and consolidate your findings, you must also qualify them according to their sources — primary and secondary.
Primary information are data which you gathered directly from the three areas mentioned. An example would be findings from customer surveys and focus group discussions or feedback from mystery shoppers which you hired to check the competition.
Secondary information, however, are data which came from research done by other institutions or marketing firms. Although primary information gives you a more accurate view of your market, secondary information are usually readily available and can easily be gathered at no or low cost.
So how do you conduct your own market research for your business?
The first step is always to define your objectives why you want to conduct a market study. Once you know your research objectives, then you can easily design and layout your plan of action.
Below are just a few of the things you can do to be able to conduct your own market research and find out if the business you’re planning to put up will be feasible or not.
How To Get Primary Information
- Design a brief questionnaire that asks the most essential information for your study and survey suppliers and potential customers. Brave enough? Get a local telephone directory and call random households. Make sure that you’re courteous and don’t take it personally if they react negatively to your requests.
- Organize a focus group discussion of your target market and encourage them to give their thoughts and expectations from your business. It’s usually best to start with the people you know and eventually encourage them to refer others that have the time to participate in the next FGD schedule.
- Employ mystery shoppers and ask them to check out your competition. Feel free to do this yourself if you’re on a tight budget. I remember Mr. Tony Tan Caktiong, founder of Jollibee Foods Corp., sharing at a speech that they used to count the garbage bags of competitors to estimate their sales and found that it was pretty accurate.
- Give out samples of your products to your target market and ask for honest feedback. If you can, conduct product sampling in a commercial establishment, just be sure to ask permission from the mall administrator before you set up your booth.
- Observe the foot traffic and the demographics of planned business locations. This will give you a good estimate on how much walk-in clients your establishment can potentially have. Try to study on different days and times to make your data more comprehensive.
Where To Get Secondary Information
- The internet is a vast source of information you can use to learn about business trends. You could start looking in community forums and perhaps join in the discussions. For Pinoys, you can check out the business boards of PinoyMoneyTalk, Entrepreneur, and PinoyExchange.
- Syndicated reports are available from research firm websites such as ACNielsen. Sometimes available for a fee, these information will provide you with comprehensive industry performance reports and market volumes.
- Government agencies have public libraries which you can visit to do background research on businesses and industries. Their websites can likewise provide valuable information on overviews and statistics for various economic sectors. In the Philippines, you can visit the office of the Department of Trade and Industry (DTI) to get leads. Or perhaps visit the Philippine government portal to get data from the National Statistics Office (NSO), National Economic Development Authority (NEDA), and many others.
- Academic papers done by undergraduate and graduate students are usually available in college and university libraries. Check your alma mater if you can acquire special privileges to access them.
- Publicly listed companies release annual reports and financial statements which you can use to study industry perfomance and operations. In the Philippines, these reports are available at the office of the Securities and Exchange Commission (SEC).
- Lastly, you can read books, magazines and other publications to get information. Look for special industry reports and articles as well as current business trends.
What about you? Any tips you can add? Share them below in the comments section.