Since the global financial crisis hit, three out of four businesses in the US have reduced their marketing budgets. However, by maintaining your marketing strategies in a depleted economy you can pull ahead of the competition.
When the economy starts to falter, businesses often react by looking for ways to save cash. Unfortunately, the marketing budget is usually the first head on the chopping block – especially for small businesses.
Without market research you will miss valuable opportunities. While it’s tempting to rush to market as your transform your great idea into a reality, a lack of reliable market research can doom your dream. Know your market before you go to market. Whether a company is small or large, market research plays a vital role in decisions about what products or services to offer and how to sell them. A small business owner must make gathering market information an ongoing process and a high priority. He or she then can be more confident in the decisions they make, knowing it is based on solid data rather than guesswork or hunches.
The term “information age” defines our world today. All businesses require accurate and timely information to be successful. Whether your company is large or small, financing, equipment, materials, talent, and experience alone are not enough to succeed without a constant flow of the right business information.
While you probably can’t afford a separate marketing research department to gather and monitor all the information that could possibly help you, all successful business owners must know their markets, competitors, customer wants and needs, and “what it takes to be competitive.” It is not enough to know the answers to what, where, when, and how questions about our businesses. We also need to know why people buy our products and services. You should expect to budget at least a minimal amount of time and money for research, especially if you are starting a new business or branching out into a new direction.
Setting Strategic Direction
To grow a company, a small business owner may decide to offer new products and services, may expand the geographic scope of their marketing efforts and may change the marketing message they deliver to their market or the media they use. The decisions whether to implement any of these changes are supported by market research. For example, if they wish to begin selling their products internationally, they must have information on the number of potential customers and how many entrenched local companies they will have to compete against.
Determining What Customers Really Want
Before bringing a new product to market, large companies do significant test marketing, either selecting consumers to try the product or showing and explaining the product’s benefits to them and soliciting their opinions about it. They seek information about whether these sample groups are enthusiastic enough about the benefits of the product that they would be highly likely to purchase it. A small business owner can do the same thing in a less formal way by talking directly to potential customers on an individual basis and asking them what his business could do to better meet their needs.
Market research also means keeping close watch on your major competitors’ activities, particularly what strategies they have deployed to capture additional customers that are potentially your customers. Small businesses have many ways to monitor competitors’ activity, including studying their advertisements, talking to their customers, visiting their websites, asking business associates about them or even visiting their businesses, in the case of retail enterprises. A small business owner also needs to be aware of new competitors planning to enter the market.
Small businesses that seek to continue growing are always on the lookout for emerging opportunities — new products or services they could offer, new distribution channels they could use or ways of adapting their existing products to meet the needs of different customer groups. For a small business owner, everything he reads, such as trade journals, general business publications, newspapers and stories about consumer trends shown on TV, are rich sources of material for ideas on how to accelerate the company’s growth. This type of market research involves paying close attention to the world around you and then creatively developing these pieces of information into potential opportunities.
Spotting Potential Trouble Ahead
A small business is affected by the performance and direction of the local and national economy. Monitoring the environment helps the business owner identify signs of a potential economic slowdown, for example, and take steps to be ready. Again by talking to his customers, vendors and other businesspeople he is in contact with, the owner can get an idea of whether they are optimistic or apprehensive about the direction the economy is going and can adjust his strategies if necessary. The small business owner might decide to postpone expansion plans if it appears the economic environment is turning negative.
If you’re interested in learning more about our marketing research services, call 614-285-7565. Contact Sigma Creative today!