1/12/14

Market Research for the Entrepreneur

Primary and Secondary market research are the two basic types of market research.  Secondary market research is available, often at little to no cost through Trade Associations, Public and Government resources.  This type of research is often performed first because it gives you a general sense of viability and feasibility within a particular market sector or geographic location.  Detailed census data, for instance, can tell you about the consumer's attitude and tendencies. Primary market research's purpose is to provide specific feedback on consumer interest in an offering.  It is important to be careful to use a method that is appropriate for your target market. As mentioned by Karen Plesner in Part II of her video, using online surveys are only useful if people are willing or able to fill out a survey.

It is often difficult to determine how valuable a particular research activity will be to your bottom line.  However, it is often the assumption that market research is worth its weight in Gold.  Most will determine a marketing budget, then spend as smartly as possible, creating a diversified plan that addresses the highest priority marketing activities first. As a start-up, it is a good idea for the entrepreneur to start by focusing on secondary market research in order to determine market saturation and identify competitors.  This research, in particular, should help to determine your initial offering, to include the four P's: Product, Price, Promotion & Place. If these estimates warrant further research, an entrepreneur should follow up with primary research activities in order to solidify these assumptions. Primary research activities should start before launch and continue as part of their iterative innovations in order to gain momentum and become sustainable in the chosen market sector.  The entrepreneur should think of secondary research as a way to discover and verify which target market with which you need to focus your primary research activities.

Market research is often perceived too expensive or difficult for the entrepreneur to perform on their own.  Due to this, there is a market for Market Research!  If you are fortunate enough to have venture capital before research activities are performed, you could subscribe or contract with a market research firm.  However, keep in mind, there are many free resources available to the entrepreneur.  There is no set dollar amount that represents a successful marketing strategy.  A start-up should be prepared to invest most, if not all of its available funds, after expenses, into market research activities during the initial phases. Every minute the entrepreneur uses on performing their own research also increases the company’s knowledge, which will tie directly into the attractiveness of the start-up to potential investors and clients.

Ultimately, the entrepreneur should perform marketing research prior to any direct advertising.  It is not only a waste of resources, but also very frustrating when you find out that your advertising efforts have fallen on deaf ears.

The above excerpt was an initial response to Week 1's Discussion Question in the Market Research for Entrepreneurs course at Full Sail University by Shannon "Norah" Medlin.