Market Research - Alliance Small Business Development Center

What is Market Research?
Market research comes in many different shapes and sizes. Researching your market helps you understand your
customers, your competitors, and the industry in which you operate. It's an ongoing process that involves using
data to drive decisions related to running your business. Conducting market research involves collecting data to
be analyzed. Data can be collected through various processes, and the method you choose depends on what you
are hoping to discover or better understand about your market. Once your data is collected, it takes careful
analysis to come to accurate and useful conclusions or understanding. If done right, the results of good
research will make most of your future business decisions smart ones.
Why use it?
Market research has definite value. It gives you information needed to make smart decisions about your
business ultimately so you can grow your business revenues. In fact, “Return On Investment” on market
research often exceeds the cost of conducting the research.
Proper market research helps you
identify appropriate and potential customer groups and their specific needs
identify revenue opportunities in the marketplace
determine how to correctly reach customer groups with your marketing strategies
determine what you are doing wrong as well as what you are doing right
evaluate your success with measurable data
uncover problems with your business that may not have surfaced otherwise
Secondary research
Even though its name may imply otherwise, secondary research is where market research usually begins.
Secondary research is conducted by consulting published reports from trusted sources in order to find out
 who makes up your target market
 what the needs of your market are
 the size of the potential market
Secondary research is less expensive than primary research. It's often free, in fact. It's also more readily
available than you may think. Secondary research can be internal, like sales reports or internal market analyses.
But most of it will be external, including
web-based directories and resources
nonprofit agencies
government agencies (try for access to 70 government sites with valid stats
and information. One of the most important is the U.S. Census Bureau)
back issues of magazines and newspapers at your public library
Alliance Business Resource Center where you can get free assistance on business research. 567-4636
Primary research
You can think of primary research as getting down to the nitty-gritty. Primary research is conducted to get
really intimate with your market, to answer specific questions you might have or address specific areas of focus.
It costs more and often takes longer to conduct than secondary research, but it gives conclusive results.
© Alliance SBDC 20092011
Primary research can be broken down into two subcategories: Qualitative and Quantitative.
Qualitative research
Qualitative research includes studies done on smaller groups of people, like one-on-one consumer interviews or
focus groups. It's meant to give you direction, to get an answer to a particular concern or question--not to make
Quantitative research
Quantitative research includes studies done that result in a large amount of data-like surveys. This type of
research is statistically valid and can be used to make predictions.
About surveys
Surveys are a type of quantitative primary research that aim to collect specific data from a sample audience.
Surveys can be administered via email, snail mail, phone, and usually target customers or potential customers.
There are four steps to attacking a survey: identifying your audience, writing the survey, conducting the survey,
and analyzing the data collected.
When you write the survey, keep the questions simple, but be very specific. Also, including a "reward" for
completing the survey - a promotional product or coupon of some sort - is a good way to increase participation.
Although it is possible to conduct a survey completely in-house, your best bet would be to outsource the survey
conducting and data analyzing to a research firm that conducts surveys as part of their business.
About focus groups
Are you developing a new product? Embarking on an advertising campaign? Interested in assessing your
customers' needs beyond simple questions and answers? Here's where focus groups - a type of qualitative
primary research -- can help.
Focus groups are typically composed of about 10 pre-screened people that meet criteria you specify. They are
assembled in one room - either on your site or offsite - to discuss and react to a specific topic relevant to your
Meeting offsite has its advantages. Facilities designed for focus groups usually have access to cameras to tape
the session. Some also have one-way mirrors to the participants can be observed.
The discussion is guided by a moderator. You can either hire an outside moderator or assign the role to someone
in your organization-but keep in mind that he or she can't participate beyond moderating.
Focus groups are helpful because the participants can be probed for the reasoning behind their opinions, and
conversations can be generated around a particular topic - giving you what's known as "rich data" as opposed to,
for example, the finite answers you get from survey questions.
It's best to hold at least two sessions in order to arrive at any sound conclusions.
The Alliance SBDC offers this information without warranty and is not responsible for its use.
Decisions based upon this information are solely the responsibility of the reader.
© Alliance SBDC 20092011