There are a few key times in the lifeline of a business that an entrepreneur must take stock market-wise, and undertake some serious market research analysis. Some entrepreneurs may only have to do this once, but most will have to take on some form or another of marketing industry research once or twice a year to get a good grasp on what the market can bear, and how one’s business will fare. So with that in mind, here are the three situations that, when faced, every entrepreneur should embrace with regards to collecting market data, courtesy of Brabble CEO and Founder Patrick Mackaronis.
Perform Market Research to Analyze the Market
The most important question any potential entrepreneur can ask themselves is, “Will anyone buy my product or service?” More important than what the product is, whether it works or what benefits and features it possesses, if there is no one to buy, there will be no business to start.
Therefore, every new business owner needs to be able to answer the following questions in a business plan before setting up shop:
- Is there demand for the product or service?
- Who would be most likely to buy this product or service?
- How many people in the defined market area of the proposed business fall into the category of potential buyers?
- How can these people be contacted, and how will they know the business exists?
- Are there any competitors already meeting these people’s needs?
- If the answer to #5 is yes, what can this proposed business offer that the competitors cannot?
- How much can the people buying pay for this product or service? What value do they place on this product or service?
- What is the profit margin, if any?
Perform Market Research to Analyze Market Response
Most business owners add products or services to their lineup at some point or another as the business grows. Marketing research helps growing businesses to determine if this idea is a solid one by ensuring:
- Entrepreneurs don’t end up with too much unsellable inventory;
- Staff aren’t constantly turned away by potential customers because of lack of interest, want or need;
- Products or services that the entrepreneur was unaware of don’t end up costing the business;
- The new product or service doesn’t become a money pit; and/or
- The company’s reputation stays solid throughout the introduction of the product or service.
Think of a major brand whose product or service was poorly researched that caused upheaval with the general public. Coca Cola’s removal of the original Coke from their product line in the 80s comes to mind, where long standing customers revolted and refused to buy the new product. Mackaronis states that eventually the company recovered from the faux pas, but its unlikely a smaller business would recoup their losses quickly or easily if such a mistake were made on their watch.
Perform Market Research to Check Advertising or PR Effectiveness
As time flows, so do customer wants and needs – and thus a business who isn’t able to change as well is one that cannot stay afloat. Veteran business owners need to review their marketing research and analysis just as much as the new kids on the block, to see if they are able to move with the flow of the economy and times, or if they’ll get swept up and destroyed because of lack of initiative. Therefore, Patrick Mackaronis suggests to think about the following questions to stay ahead of the game:
- What do customers think of the product or service being sold?
- How has that perception changed over time, and why?
- Is the current customer base in need of a new product or service that would compliment what is already being offered?
- Are there new customers to be attracted to the business, and what are their needs?
- Are prices the same as they’ve always been, or have they also adapted?
- What are competitors doing to meet the needs of similar customers?
- How has aging or the economy affected customers?
Patrick Mackaronis is the CEO and Founder of social network Brabble. He can best be reached on Brabble, or on Twitter at @patty__mack.