There are advantages and disadvantages of hiring a marketing research firm rather than conducting the market research yourself. An obvious disadvantage is that it costs more; however these firms usually have the experience, knowledge and expertise to gather information that is more detailed and accurate.
Before hiring a marketing research firm there are some things you should know. There are three types of marketing research firms. They are categorized by the type of services they offer. While some marketing research firms concentrate on just one segment of market research such as surveys, others will offer full market research.
Types of Market Research Firms
Market research firms can be categorized by the following:
- Limited Service Research Supplier– A market research firm that specializes in one aspect of market research such as questionnaires or surveys. Limited service firms may also help in developing advertising strategies based on the data they collected.
- Syndicated Services– A market research firm that provides all clients with a standardized set of information. They provide standardized data that can be use by a wide variety of businesses. This type of firm can also be considered a Limited Service firm.
- Full Service Service Supplier– A market research firm that completes the entire market research project for the client. They offer client both quantitative and qualitative market research. Services they offer may include: telephone interviews, surveys, focus groups and more.
Where to find Market Research Firms
First thing you should do is make a list of potential candidates. You can find marketing research firms by searching in search engines for market research firms in your location. There are sites such as www.greenbook.org where you can also find firms in your location. Other sources include trade magazines, trade books, directories and referrals.
Once you have a list of potential market research firms, now you need to do some research to learn more about these firms. Uncover the following information:
- Have they worked with businesses in the same industry as you? -If the marketing research firm already has experience working with businesses in the same industry, their knowledge and expertise in the field can be helpful.
- Does the marketing research firm have a good reputation? -Try to speak with past customers to learn about their experiences. Try to find information and reviews about the marketing firm online.
- Do they offer high quality service? – Good market research can make all the difference to your business. Market research can help uncover the data you need to start and grow a successful business. Therefore you must ensure that you are hiring a research firm that will live up to your expectations.
- Do they complete projects on time? – Discover the anticipated time range for the firm to complete a project. Find out if they were able to meet their deadline expectations in the past.
- Do they offer reasonable rates compared to others in the area? – Although budget is important especially for small businesses, sometimes you get what you pay for. However their prices should be reasonable compared to surrounding marketing research firms. Be sure to get different quotes. When comparing pay close attention to quality. It may make more sense to pay a little more for a market research firm with a better reputation and dependability.
What is a SWOT Analysis?
A SWOT Analysis is a system that is used to evaluate the Strengths, Weaknesses, Opportunities and Threats of your business.
Strengths– What are the strengths of your business? What are the strengths of your product or service? Do you offer lower prices, faster service, better quality? Identify what are the advantages you have over your competition.
Weaknesses– What are the weaknesses of your business? What are the weaknesses of your product or service? It could be that your product is more expensive or you are located in an area hidden from your target market. Identify what disadvantages you have from your competition.
Opportunities– What opportunities are available for your business? What are opportunities available for your product or service? An example of this is an opportunity to form a strategic alliance or to market to a new group of people.
Threats– What are threats facing your business? What are the threats for your products or service? It could anything from new competition to higher taxes.
Market Research Statistics can provide you with valuable information that can greatly influence your small business. By understanding your market and the demographics of your business area you are better prepared to determine your target market and develop a strategic marketing strategy to attract them by fulfilling their wants or needs. Below are various websites you can use to determine information such as demographics.
Census.gov The Census website offers statistics on population, businesses, economy and more.
RealEstate.Yahoo.com– Get a profile and statistics on your neighborhood.
BestPlaces.net– discover interesting information and statistics about your city. Offers information on population, cost of living, education, housing and more.
FedStats.gov– This website offers information on a wide range of topics.
Small Business Statistics
On this website on the lower right side you will find the small business survival index for the last 5 years. Basically this index shows which states they think are the best to start a small business in and which are the worst. You can also see how they rated tax systems for small businesses for each state. In 2008 South Dakota was the best and the District of Columbia was the worst.
State Profiles for Small Businesses– The SBA offers research on each state’s ” number of firms, demographics of business ownership, small business income, banking, business turnover, industry composition, and employment gains and losses by size of business.”
Entrepreneur.com Business Statistics– This website has very interesting information about small businesses and their growth. It contains statistics on how small businesses advertise as well as statistics on minority and women owned businesses.
SBA Frequently Asked Questions– General information and statistics about small businesses.
Conducting Market Research Interviews provides you with the opportunity to meet individually with your target market. Instead of conducting a group interview such as a focus group you can also conduct individual interviews. In an individual interview the researcher asks the targeted buyer questions similar to those in a focus group. The researcher asks about the interviewees likes, dislikes, problems and opinions of a product or service. You can choose to conduct the individual interview in person or over the phone. One disadvantage of individual interviews over focus groups is that the interviewees don’t get to interact with one another. For example in a focus group, one person may say something that causes a reaction in another and suddenly bursts of ideas start sprouting. In individual interviews there isn’t that same kind of interaction. However an advantage of individual interviews is that you get to talk to your target buyer one-on-one and get more information about that individual and their specific thoughts and opinions.
What is Small Business Market Research?….and why do you need it?
Small Business Market Research is the gathering of information and tests about the market for your small business. Market Research can help you determine if there is enough demand for your product and service. Market Research is used to discover the needs and wants of your potential and current customers. It can also be used to perform a SWOT analysis and to analyze your 4 P’s of marketing.
There are two types of market research; primary market research and secondary market research. Primary market research is more useful since you get to ask specific questions where in secondary market research you get more general information. Before conducting small business market research you need to determine what specific information you want to find out.
Conducting Small Business Market Research
Primary market research– Primary Market Research is first hand information from customers and potential customers. Primary market research is more expensive and time consuming to perform than secondary market research, however the information it offers can be much more specific and valuable.
- Market Research Surveys– Surveys by phone, mail or in person are used to assess the potential success of a product or service. Surveys are a highly used method of small business market research.
- Market Research Focus Groups– A Focus Group is a group of people (usually 6-10) who gather around to talk about a particular product, service, problems they have and more. A focus group can help you gain valuable insight about potential customers, by discovering their likes, dislikes and problems.
- Market Research Individual Interviews– Instead of conducting a group interview (focus group) you can also conduct individual interviews.
Secondary market research– Information someone else has gathered.
- Reports/ Studies(University studies)
- Local Newspapers and business magazines -many local newspapers and business related magazines offer demographic data.
- Library– In the reference section of the library you will find financial data and statistics. Ask your local librarian for help, they will be happy to assist you in finding the information you need. In the library among the references you will find studies by the U.S Department of Commerce and the U.S. Census Bureau.
- Government Agencies– Your local Bureau of Census publishes the “County and City Data Book” with offers local demographic information. Many state and local offices provide demographic information of the local area.
- Market Research Statistics– There are many websites online that offer statistics for small business market research. Statistics such as Demographics can help you get a sense of population characteristics of your location.
- Trade associations– there is a trade association for just about any industry. There is usually a fee to join but it is an opportunity to network with other professionals in the industry. You will also have access to market research they conducted.
Market Research while Running your Business
Don’t think that once you start your small business, you don’t have to conduct any more market research. Your small business should always be evolving and adapting to the changing markets. Here are some market research techniques to use while running your small business.
- Keep a sales report– Find out what products are hot and what products are not. Certain products may sell more in certain months. Inventory tracking software can help you notice trends.
- Competition– Pay attention to your competition. See what changes they are making. Have they made any changes in recent months or years? Have their products changed? Did they start offering new services? Your competitors may be making changes as a result of the changing market needs.
- Customer Survey– Perform customer surveys to discover what are the customer’s likes and dislikes and how you can improve your business. Be sure not to force customers to fill out a survey. Be sure they know it is optional. You can have a customer suggestion box where customers write their suggestions and put it in the box. You can also find out where your customers are coming from by asking for their zip code when they are about to pay. You may discover that a large percentage of your customers come from a certain area.
- Keep a Caller ID– Find out where your customers are calling from. You may discover that a large concentration of your customers are in a certain area and it may not necessarily be in your area of business. You can then experiment with advertising in those areas.
Small Business Market Research can be an expensive and time consuming task depending on the methods of market research you choose however the information you obtain from it can be very valuable to your business. You can decide to hire a market research firm or do your own market research. If you decide to do it your self you can consider taking a Market Research Class in a local college. This class will help you attain some knowledge of using different market research techniques to effectively collect data.