How to Conduct Market Research

Market research is the process of gathering as much information as possible about your customers and how they view your company and products. With enough information, you can determine the best marketing strategy for your business.

Difficulty: Moderately challenging

Instructions

Things You'll Need:

• Telephones
• American Demographics Magazine
• Trade Publications
• Internet Access
• Library Cards
• Postage Stamps
• Bonded Paper
• Calendars
• Envelopes
• Computers

1. Determine the goal of your research. Do you need to improve customer service or increase sales? Are you looking for the right market for a new product?

2. Use trade journals, marketing magazines, government reports and chamber of commerce market profiles to determine the demographics of your market. These publications also provide data on purchasing trends that will clue you in on the buying habits of your target market.

3. Conduct mail and telephone surveys using randomly selected addresses and telephone numbers in your local area.

4. Collect information from existing customers. Use questionnaires, personal interviews and focus groups to get feedback on your products and services. If you have a Web site, start a chat room or message board and encourage customers to participate.

5. Observe customers at various points of contact in your business, including reception, sales, and customer service. Watch for glitches in your operation and how your employees interact with the customers.

6. Analyze your sales records. Knowing your best customers and most profitable products can help you to better focus your marketing efforts.

7. Organize the research data you've collected and determine - or reevaluate - your marketing strategy based on the results.

Tips & Warnings

• Give your customers an incentive to fill out a questionnaire. Reward them with coupons or turn their completed questionnaires into entries for a prize drawing.
• Make questionnaires easily understood and as short as possible. Go for open-ended questions that require a more detailed response than just "yes" or "no".
• Interview your employees. They're in constant contact with customers and can provide useful insight.
• When conducting interviews or leading focus groups, make sure every answer is recorded exactly; this will give you the most accurate research results possible.
• Assemble focus groups made up of 10 to 12 people. Create a friendly environment and encourage group members to discuss your product's strengths and weaknesses.
• Consider buying a computer program that produces random address and telephone number samplings. This will help you to achieve more valid results.
• Hire a market research firm if you don't have the time or desire to do it yourself. Professional research services are expensive, so make sure the company you choose has a good reputation in the industry and is familiar with your type of business.
• No research can predict the future with 100 percent accuracy. Once you've developed an action plan based on your research, implement it on a small scale first to see if your research results are steering you in the right direction.