Before starting your business venture, or launching a new a product or service, you need to determine if there really is a market for your idea. Market research is the process of gathering and analyzing as much information as possible about your customers, the industry, and your competitors.
Market research is an important step in determining:
- if there is potential demand for your product and if any changes need to be made
- your key target customers, including their characteristics and preferences
- the best ways to reach your customers; the marketing and advertising approaches that would be most effective
- what competitors are already in the marketplace, including how they reach their customers and how they price their products
- key industry trends that could affect demand for your product or service
Market research can provide you with data that can enable you to make informed decisions about your business and help put your business in the best position to succeed.
Types of Research
Market research involves conducting both Primary Research and Secondary Research in order to collect meaningful data that can help you make informed decisions about your product or services.
- Primary Research: Information that you gather yourself (or through a consultant) that is obtained directly from the source – your current or potential customers. Examples include customer surveys, observation, focus groups, and website analytics.
- Secondary Research: Involves gathering information from other organizations and sources such as government statistics, trade publications, articles, studies and your local chamber of commerce. The majority of your research will be from secondary sources.
Where do I start?
The best place to start with your research is with your current or potential customers. Their feedback and input into your products and services will be the most beneficial for your business.
When surveying your customers informally or formally, remember to:
- Offer an incentive for their feedback through prizing or discounts
- Make questions / questionnaires easy to understand and as short as possible
- Make sure you as some open-ended questions to obtain more detailed and specific responses than just a “yes” or a “no”
- Let your customers know that you value their feedback
When conducting secondary market research, start with your local library or the internet. Libraries have access to both statistical and trade databases, and many help you navigate these tools so that you can locate the information you are seeking.
Potential online sources of information include:
- Statistics Canada – Canada’s central statistics agency.
- Market Research Handbook – a comprehensive source of socio-economic statistics for all those who study the Canadian consumer market
- Small and Medium-Sized Enterprise Statistics – characteristics and financing activities of small and medium-sized businesses
- Downloadable Statistics Canada Publications – directory of Statistics Canada official publications, organized by subject and catalogue number
- Canada Business Guide to Market Research . Canada Business provides a guide to market research, including a list of potential sources of information. Canada Business also offers a FREE business research service to Canadian businesses. You can access this service by calling the Business Info Line at 1-888-745-8888. Service is available in English and in French. Research requests can take up to five days to complete and results can be returned to you by Canada Post, fax or e-mail.
- United Nations Statistical Database for international vital statistics information and other global data. The US Census Bureau also maintains an International Database for global demographic and economic data.
- www.KnowThis.com. A virtual marketing library with links resources and sources in the “Links” section.
- www.MarketResearch.com. An online source for marketing research reports. There is no fee for subscription, but you will be required to pay for the specific report or section of a report that you need.
- SME Research and Statistics from Industry Canada
- Trade and/or industry websites
Market research is an important component of developing a comprehensive business plan. However, research should also be an integral part of your ongoing business operations. Primary and secondary research will help you keep on top of trends impacting your industry, as well as help you identify new and/or improved products and services that could meet the needs of your customers.