Market Research for Small Businesses

Market Research for Small Businesses

What is Small Business Market Research?

Market Research for Small Businesses

Market research for small businesses is the systematic collection, analysis and interpretation of data and information about consumers, competitors and the effectiveness of marketing initiatives.

Comprehensive market research provides small business owners with an accurate view of the prevailing and future marketing conditions to address in order to solve the marketing challenges facing them. Market research is the key to formulating market segmentation and market differentiation strategies.

Why do Market Research

Market research helps small business owners to:

  • Make well-informed decisions about products and services, set achievable targets and develop effective marketing strategies for business growth.
  • Understand your target market, it’s size, customer profile/needs, usage patterns, market saturation, market opportunities, etc.
  • Evaluate and the viability of your new product/service idea. Who and where your potential customers are, what will they pay and why will they do business with you?
  • Compare you to your competitors and evaluate why people should choose your product/service over competition.
  • Evaluate how customers and prospects view your existing business and monitor the performance effectiveness of your marketing programs.
  • Make decisions on product packaging, promotions and messaging.

Industry and Target market Research and Analysis

What is a target market for small businesses?

A target market, or target audience, is a group of potential customers within your serviceable area that you aim to target your marketing efforts and resources. It is the selected subset of the total market for your product or service. The target market typically consists of consumers who show similar characteristics and are considered most likely to buy your small business’s market offerings. It’s the people/businesses who is a good fit (interested in and satisfied by) the products or services of your small business. They are likely to be the most profitable segments for your business to service. As a small business owner, you need to realize that you cannot satisfy all the needs of everyone, but you should be everything to your most important customers.

Target Market Characteristics to be Researched

The target market characteristics that you need to research depends on your business idea and could include:

  • Target Market Industry including the life cycle (startup, growth, shakeout, maturity and decline), products or services offered, market growth trends/prospects, competition levels and business models.
  • Customer demographics including age, race, gender, marital status, income, education and occupation and lifestyle.
  • Market psychology including that attitudes, beliefs, emotions and values of potential customers.
  • Buying patterns such as how much they buy, preferred suppliers, most popular features and main price points.
  • Market health (size, growing/declining and responsiveness) and the product/service health (introduction, growing, maturity, saturation or declining) of similar offerings in the market.
  • Other considerations, such as geography, sales channels and distribution channels.

Competitor Research and Analysis

Competitor analysis is an assessment of the strengths and weaknesses of current and potential competitors. This analysis helps you to formulate both offensive and defensive strategies to outsmart your competition. Start with finding out who are you top 5 direct and indirect competitors. Visit their website (if they have one) and physical locations. Also keep track of new entrants/competitors.

For you as small business owner to understand your competitors, assess and document the following:

  • Company Information such as location, number of employees, turnover, profitability, etc.
  • Main product/service offerings, market share, pricing and how are they marketing them.
  • Products or services the competitor offer that you don’t and why?
  • Competitors’ strengths and weaknesses the serve as barriers for you to enter the market.
  • How does the competitor attract and treat their customers?
  • What is the window of opportunity for you to enter the market and on what basis can you compete: price, quality or service?
  • How does the image of your small business compare to your competitors?
  • How does your website compare to your competitors’ websites and do they use social media?
  • How does the competitor’s infrastructure, equipment and technology compare to yours?
  • What is the exposure of your competition in printed media, online and networking/public appearances?
  • How does the competitors’ operations and distribution processes compare with yours?

Sources of marketing research information

Public sources which are usually free and offer the small business owner good information. This includes:

  • Government Sponsored Source of Information
    • U.S. Government Printing Office has an abundance wealth of publications on wide-ranging topics – click here.
    • U.S. Census Bureau website contains valuable information relevant to marketing that are useful to small businesses – click here.
    • U.S. Bureau of Economic Analysis  provides a statistical abstract of the United States – click here.
    • Small Business Administration – click here – was created for American entrepreneurs to start, run and grow successful small enterprises. Small Business Development Centers (SBDCs) – click here – provide assistance to small businesses and aspiring entrepreneurs throughout the United States and its territories. SCORE – click here – management assistance programs.
    • Business Data and Statistics from SBA.gov – click here.
  • Local chambers of commerce such as the Wilmington Chamber of Commerce –click here – serving the Cape Fear region.
  • Public, local college or university libraries that are some of the best public sources for small business owners.

Commercial Information Sources usually have some cost involve such as:

  • Research by trade associations and labor unions are usually industry specific.
  • Encyclopedia of Associations (Gale Research), and the Encyclopedia of Business Information Sources (Gale Group) – click here.
  • Dun & Bradstreet source of market research offers an abundance of information – click here.
  • Robert Morris & Associates, banks and other financial institutions

Other useful research resources include:

  • Local newspapers, journals, magazines, and radio and TV stations.
  • Web-searches provides useful information, especially competitors’ website and social media pages.
  • Personal interviews and group sessions/focus groups using brainstorming tools.

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