So you just know that your product/service is unique and that folk will fall over themselves to buy it from you. How do you know that? Is it a gut feeling or have you done your research?
Doing the Research
Secondary research already exists and is usually collected before Primary research which has not yet taken place. Seems odd? Why re-invent the wheel when some of the answers may already be there? It's cheaper to collect, because it's already there, and therefore will take less time and resource.
Sources for secondary data include: newspapers, magazines, academic papers, censuses, the Internet, the local library, official Government statistics, local Councils, support organisations such as Business Link, trade association publications, Chambers of Commerce, professional institutes, such as the Institute of Marketing, the Institute of Management, financial institutions and the 'pink' press, and other businesses.
Once you have collected your secondary data, check all of it to make sure that it answers all the questions you have about the problem and that it confirms your profile about the people who you think may become your customers. If the secondary research doesn't give you all the answers that you need (an information gap) then you will need to do some Primary Research.
Primary research is more expensive, simply because it hasn't been done before. Generally, it is not to be undertaken lightly for another reason: it usually relies on the use of questionnaires, depending on which methods are chosen. Creating a questionnaire requires some skill and can be time consuming. If you do not have the skills in-house, then a market research company should be used. (This of course is more expensive).
One of the most economical methods is a postal survey, and should be carefully targeted to avoid wasting money on postage, or being seen as junk mail. The survey also needs to be simple, as respondents will not have access to any help or explanations. A telephone survey is more personal, assistance and explanations can be given and the response is instantaneous. Care must be taken to target respondents carefully again and the Telephone Preference Service list be taken into account as it is unlawful to make unsolicited direct marketing calls. Face to face surveys are useful if you have sensitive questions to ask, but they are time consuming and expensive. In-depth interviews can be very useful as both specific questions and more open-ended questions can be asked. Other methods include focus groups and case studies.
Once you have collected your primary data you should analyse it again to make sure that there is no information gap. If there is you may wish to do more research. You should get to the stage where most of your questions have answers and this will be dependent on the time and money that you have available.
Checking your Data
Now analyse your data very carefully. It is pointless carrying out market research and then ignoring the findings. If it has been done well then it should give you some very useful pointers, such as:
Even if the outcome to your analysis is negative you have not failed! What you have done is to save yourself a great deal of time and money producing something that no one will buy. Now, is that good for your business? Good market research will cost you money, but it may save you some as well and when it confirms that your new idea will work and make you money it will all have been worth it.