Guide to Conducting Market Research: The most important step of your business or marketing plan?

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?

If you’re starting up in business this is really important, but even if you’re already trading, keeping an eye on what’s happening in the marketplace is good practice as it can help you to spot opportunities.

We sometimes get asked about market research because we advise that you explore the market that you intend to trade in and there are sections in your plans that request some of this background information, especially Steps 5 & 6 in BusinessPlanWiz and Steps 3 & 4 in MarketingPlanWiz.  Specifically, where do you find information on areas such as size of market and whether it’s growing or declining?  You can pay for bespoke research and for good quality research that has already been completed but there are also places to look for free information, which will often be sufficient for your needs.

Getting Organised

  • First, what is the problem?
  • Describe what you are researching in as much detail as possible.
  • Establish who the report is for - will it be used within your company or is it intended for someone else, or for publication?
  • What regional area do you need to research - local, national or global?
  • Is the product/service new, or is it an existing one that you believe could benefit customers more if it was improved in some way?
  • What resources do you have available to solve your problem?
  • How many people will be needed?
  • How much money will you need to allocate?
  • What is the timescale?


Doing the Research
Secondary research is research that 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?  Secondary research is usually cheaper to collect, because it''s already there, and therefore will take less time and resources.

Free market research
Happily, we can report that if you have the time there are quite a few places to find good data and statistics to help you form a picture of your market place.   One of the reasons this is the case if because there is now so much available online.  Here are some that we would recommend along with what to do:

  • Local councils for regional targeting as they often provide business statistics, data and sometimes business directories.
  • Yellow Pages: - as you can search by area and type of business you can narrow down some really useful information.   It’s very do it yourself but well worth doing to get a feel for who else is in the marketplace.  Yell is good because it’s not just for “paid-for” entries that appear, but free ones too as every business is entitled to a free one-line entry.  This means that your results can be quite representative.
  • If you’re trying to work out how many people are searching for your products or services online, the Google keyword tool is very useful.   It’s designed to be used to work out targeting if you’re advertising with them, but you can still use it to estimate search volumes for keywords using Google data.  By keywords we mean the search term that your potential customers are likely to enter into the Google search box.   You can narrow down results to global (worldwide Google searches) or local (UK for example) searches by month.
  • Local libraries and university libraries often hold market research reports in their reference only sections.  If you have one near you it’s worth asking if you can join so you get access to these.
  • The Trade Association Forum is also worth a look as some of the trade associations in their directories have statistics and market information.
  • There are other business directories held by organisations such as the FSB (Federation of small businesses) for example.

Once you have collected your secondary data, check all of it to make sure that it answers 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 (an information gap) that you need, then you will need to do some Primary Research.

Paying for market research
If you can afford to spend some money on getting detailed research for the specific niche you wish to target, then expect to pay a few hundred pounds for existing reports or more to commission your own.  Here are some websites where you can source paid for reports and help:

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 skill and can be time-consuming. If you do not have the skills in-house, then a market research company should be used and, of course, that is more expensive.

One of the most economical methods is a postal survey, though it should be carefully targeted to avoid wasting money on postage, or it 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.  As before, care must be taken to target respondents carefully and any 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’ll eventually get to the stage where most of your questions have answers, though 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:

  • Does it confirm what you thought, or has it thrown up more questions than answers?
  • Can you proceed with your new product/service, or would that become money down the drain?
  • Do you need to change the product/service as a result of your findings?

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.


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