Skill level: Intermediate
Market research is obtaining information related to price, customers, competition, the regulatory environment, and just about any other topic that would affect a company’s ability to operate within a specific market.
From a service perspective, market research is usually focused on three major areas:
- Market pricing—A company needs to find out what the market price is for a particular service. The market price can be determined from benchmarking competitors and surveying potential customers.
- Customer expectations (wants and needs)—Customer expectations are best assessed from current customer feedback and surveying potential customers.
- Competitors—There are many types of competitive information a company might be interested in, including geographical areas where competitors operate, size and scope of competitor offerings, financial strength of the competitors, and strengths and weaknesses.
- Helps a company focus its strengths to meet the specific market demands
- Helps a company sell against competition
- Can reveal areas of a market not being serviced
- Helps develop pricing models
How to Use
- Step 1. Determine the type of information required.
- Step 2. Evaluate the specific methods and tools to best obtain this information.
- Step 3. Develop an implementation team, or contract to obtain the information.
- Step 4. Collect information.
- Step 5. Analyze the information.
- Step 6. Apply the information to the tactical or strategic initiatives in the business.
- Step 7. Review, on a periodic basis, for changes or other information required.
Joe is considering opening a painting business. Since this is largely a local service business, he decides to collect some market information about the number and size of existing painting services in his local area.
He contacts the local chamber of commerce to obtain the names and locations of the other painting services. He also checks the local directory services to assess the quantity of painting services available.
From this information, he is able to see that there are only 10 painting companies in his local county. Most appear to be dedicated to external painting and his specialty is interior painting. He decides to open his business and target his marketing communications around internal painting.