Chapter Three: Understanding Your Market
Market Research and Competitive Analysis
Market evaluation is critical and provides the basic data that will determine if and where you can successfully sell your product or service. This process involves defining your goals, scrutinizing your competition and your customer base, and interviewing potential suppliers. The information collected can help you, if necessary, adapt your product or service to better meet customer needs.
Market research can help you –
- Create primary and alternative sales approaches to a given market,
- Make profit projections from a more accurate database,
- Organize marketing activities,
- Develop critical short and mid-term sales goals and establish the market’s profit boundaries, and
- Identify what makes your business different from similar businesses with similar products.
Research Questions to Ask
- Your research should answer these basic questions:
- Who are your customers?
- Where are they located?
- What are their needs and resources?
- Is the service or product essential in their operations or activities?
- Can the customer afford the services or product?
- Where can you create a demand for the service or product?
- Can you compete effectively in price, quality, and delivery?
- How many competitors provide the same service or product?
- What is the general economy of your service or product area?
- What areas within your market are declining or growing?
Size Up Your Competition
Research on competitors is extremely important. Participate in industry trade shows, job/career fairs and other business-related networking events to find out what your competitors are selling and how they are marketing their products. Similarly, stay current on industry teleconferencing, online resources, magazines, and publications.
Market research is not a one-time activity. Once you establish your business, you should stay in touch with your customers. You may have to adapt your product or service and alter your marketing strategy to keep up with your customers’ changing needs.