Business Article - Market Research
If you have a product to sell, who do you plan to sell it to? You know that the consumer can use it but how can you ensure that people will buy it? What type of person would buy this product? How much of this product can they afford? There are so many questions that need to be asked when determining marketing strategy for a product. You need market research to aid you in the process. This helps you in finding out who is buying what product and why. Market research and the result of it is basically the representation of the customer’s wants and needs for a product. Every good company should research this subject deeply before attempting to market or create a product. Research should include market information, risk analysis, market trends, consumer analysis, product research, competitor analysis, and advertising research. With these seven key factors, a business can grow very strong in a short period of time.
Think about market research as basic supply and demand. If you have a product to sell you need to figure out who you are going to sell it to. Market information helps determine who the best target consumers are for your product. It helps you to determine where these consumers are and when the best time may be to sell to them. It can even give you contact information for these consumers if need be. What the customer wants, how much they typically want to buy, the quality of the product, historical pricing information, and expected production are all a part of the tiny pieces of the puzzle.
When attempting to determine the type of person who will typically buy a certain product, it is best to think first of why one would want to buy the product in the first place. Is it used to clean something? Does it make a person’s job easier, quicker, or more efficient? Is it safe to use around pets or children? These are typical questions that a housewife would ask. Therefore, the housewife or thirty something female would probably be your main focus. If your questions and answers start to lead you towards a certain type of person then you are probably going in the right direction. This is more than likely the largest group of consumers who would be interested in purchasing your product. Focus on that group and use the information that market research can give you to develop your product around them.
If you can give the consumer something that is useful, easy to use, and appealing to them why wouldn’t they buy it? There is a whole other set of questions. Is the product safe? Is there a certain active chemical that can aggravate sinuses or cause headaches while the product is being used? How much does it cost? These are some of the more common questions that someone inquiring about a new product would ask. The question of price is similar to a reflex. It sits quietly on the tongue-tips of consumers daily. It is also one of the largest determining factors for the sale of a product.
This brings us to the factor of price and historical pricing information. If the price is too high, no one will buy. If the price is too low, down your business goes. A business owner trying to sell a product needs to meet two standards when setting product prices; make sure that it covers all of the expenses incurred and make a profit. Researching the suggested retail price of an item is tedious at times but well worth the time spent when your product starts moving faster than you can stock the shelves! Of course, you are more than welcome to skip that part and just put whatever price you want on a product and see what happens. Why take that risk?
Here we are at risk analysis. What are the risks of using the product, if any? Is there any side effect or possible unexpected outcome that could result in injury or fatality? This requires company testing to obtain the list of possible risks that a certain product may have. You want to weigh those risks heavily as these risks can enable you to build or develop your product much more safely and successfully. The consumer does not like a defective or unsafe product and if they purchase one that happens to have some unsafe potential, they should be made aware of it first. Risk analysis information can provide very valuable data to the business owner that can potentially save them from a law suit or at least minimize the damage that could potentially occur from one. If it is found that a certain product could have possible harmful side effects or malfunctions, it is wise to make the consumer and other business owners aware because if it is disclosed the consumer can make an educated decision. It takes the majority of fault away from the producer or business and places more of the fault upon the consumer. This also helps to inform the business or product manufacturer that there are possibilities that the product may not sell as successfully as previously planned.
How is this product moving? The determining factor in this is, again, supply and demand. Market trends dictate the supply and demand of a product on the market. If the supply is high, demand is low. If demand is high, the supply is low. This is true for almost anything that is produced and sold. There are times when the consumer spending habits for a certain product are through the roof and other times when business owners want to discontinue the product. Do the research to see when the most beneficial times to sell your product exist. Save your marketing strategies for those times in between the high and low points or even just for use during the low points to try to average out the sales.
Consumer analysis is an important tool when attempting to sell your product. The most important information that this gives us is the reasons, or motivators, that the consumer has for buying the product. Think about Christmas. Holidays are a major motivator as are other certain times of the year. Consumer spending is at its all time high, traditionally, on the day after Thanksgiving. This is the day that is called ‘Black Friday’ because this day enables most business owners to pull out of the red and get back into the black. In this sense, consumers are purchasing products for gift giving at Christmas time. What other motivators are there? Well, there is sickness in the winter, allergies in the spring and fall, there is swimming and camping in the summer, etc.
If you think about the reasons a customer buys a product the list can go on and on. If you think about the decisions they use when actually purchasing certain products, the list is much shorter. Price, need, want, and habit form the majority of reasons that a customer purchases a product. Necessity is the major reason and is followed closely by want. Many consumers are now purchasing items that they want instead of the items that they need due to society’s standards and the way that others look upon them if they do not have a certain product. It is also more common for consumers to purchase items that they want because it is easier for them to do so since we are living in a revolving credit world. Items that used to be only attainable by the high income household are now being purchased on credit by the lower income household.
Competitor analysis allows a business owner to research competitors’ strategies, prices, advertising, and products. This information is helpful when trying to determine what kinds of specials to run and what price a product should be sold at. If the competitor is selling a 46 inch plasma screen television for $1246.00 and the same one in your store is marked at $1399.00 which store do you think the consumer will rush to? The competitor’s cheap prices will surely spread quickly and draw more attention than your store. It is reasons such as this that competitor analysis must be conducted and continued.
Product research enables a business owner to find out special information about a product or possible future product. Technology advances so rapidly that product research can prove to be very beneficial if it is kept current, allowing product developers to find out what products could potentially be created or fine tuned. Product research should also be able to provide information on the product’s projected life cycle or the ability to stay popular despite advances in other similar products.
Finally, advertising research helps the business owner create a marketing plan for their product. Ads, articles, radio and television commercials, flyers, mail, the internet, and plugs are all ways to advertise a product. Many find success in ads while others still swear by commercials. The most successful products are evenly distributed throughout the advertising world. This costs exorbitant amounts of money and it is best to find the one way that you can get the most viewers of your ad and go with it. Finding a marketing strategy that works well for you is trial and error. Once you find it, everything else will click into place.