Five Ways Marketing Research Can Increase Business Profits and Sales!
One important factor of having a successful business is that you must know your market, your industry, and your targeted customers. The best way to know your market, your industry, and your targeted customers is by conducting research on each one. This is done under the concept of “marketing research” which is the recording, gathering, analyzing of data and information about the market, the industry, and targeted customers you plan to offer your products and services to. Marketing research helps one to determine what is your ideal customer and the best methods to use to meet the needs of your customers. Marketing research “encompasses many other aspects of marketing, including new product introduction, pricing, advertising, and consumer behavior.” Source: The Entrepreneur & Small Business Problem Solver by William A. Cohen 3rd Ed. (2006, John Wiley & Sons, Inc.)
Here are some of the questions that marketing research will answer for you (before you decide on what products or services to offer your ideal customers):
- Who are your ideal customers?
- What type of people are your customers? (Demographics and psychographics of customers).
- Where do these customers reside or live?
- What motivates your customers to buy certain products or services?
- Can your customers afford your products or services?
- Are your products or services what the customers want to buy?
- Are your products or services being offered at the correct time, the correct amount, and at the correct place?
- Does the prices for your products or services match the value that the customers place on the products or services being sold?
- Are the promotional programs, you have chosen, working?
- What does your customers think about or feel about your business and the business image?
- How do you compare to your competitors regarding your business and the procedures of the business?
- Marketing Research can assist with increasing your business profits and ensuring that the business has a great advantage over the competition.
If you use the marketing research, obtained for your business, correctly you may see increasing profits for the business and your business will have great advantage over the competition. Here is a prime example of how to use marketing research to your business’ advantage: “Ford might simply have concluded that American small cars were not wanted. Instead, Ford did marketing research to find out more about the falling off of Falcon sales. During this research, Ford discovered an interesting and important fact: While sales of the Falcon were declining, sales of sporty options… were increasing. This was due primarily to the greater numbers of young adults who were purchasing the vehicle. Ford’s careful study of the market research findings led the company to put out the Ford Mustang, which was introduced in 1965. This sports car-like vehicle demolished all previous records for sales and developed a new market that competitors followed as best they could.” Source: page 154 of The Entrepreneur & Small Business Problem Solver.
- Marketing Research can ensure that your business reaches huge portions of its respective customers.
Many small businesses and entrepreneurs have used marketing research to determine where their potential customers are located, how to market to them, and how to sell their products or services to these potential customers. Prime examples of small businesses using marketing research to carve out huge portions of their potential customers. “An optical firm totally turned its company around and doubled sales within a year by identifying its customers. A mail order entrepreneur sold $10 million worth of a single product through marketing research techniques. A small computer firm successfully took on IBM for a segment of the total computer market and won through the correct application of marketing research.” Source: page 154 of The Entrepreneur & Small Business Problem Solver.
- Know where and how to gather information and data when doing marketing research for your business.
There are three major categories of information obtained during the marketing research process. The first category of information is internal information that is useful because it is close by, easy to get, and does not cost much to obtain. When it comes to internal information, it is the information that is found in your business files and business records. Types of internal information are as follows: sales receipts, sales records, complaints, and other record keeping items. Internal information will have the following information on your customers: name, address, income, and lifestyle. This type of information will assist you with knowing what products or services customers want to buy.
The next category of information gathered during the marketing research process is secondary research information. This type of information is available outside of the business. Secondary research information can be found in secondary sources like journals, books, newspapers, and other sources. With secondary research information it will not cost you that much to obtain and the internet is a good place to get such information. Secondary research information will provide you with information on the local community concerning certain demographic traits like race, age, income level, and educational level. This information can assist your business with determining the best marketing tools to use to reach new customers.
The final category of information comes from primary research sources. Information from primary research sources will be harder to obtain and you will need to hire a professional to gather such information. With primary research sources, it will cost you a great amount of money to get such information. Should only use primary research sources, if you are unable to get enough data from the internal information or the secondary research information.
- Marketing research helps you to identify why your products or services are not selling.
“You cannot have a good definition of what your problem is: for example, a new product introduction, or identification of customer’s for a certain market.” Source: page 157 of The Entrepreneur & Small Business Problem Solver. With marketing research you can answer the following questions: Why are sales down? Why aren’t profits up? Are your customers changing? Who is the new competition? If yes to any of the questions, with marketing research, you can determine the main reasons for the problems. You can determine what problems can be measured and what ones cannot be measured. The problems that are not measurable should not be selected for marketing research. Only do research on the problems that are measurable and can be resolved easily.
- Marketing research will provide you with solutions to increase the sales of your products or services.
Once the problems have been identified, as to why products or services are not selling, it is time to come up with solutions to the problems. It is time to figure out ways to increase your sales and profits of the business. With marketing research, you can determine what products or services to offer to customers, how to sale the products or services, and if you need to create new ways to sale your products or services. The marketing research data gives you the methods you need to implement to improve the profits and sales for the business.
These are five ways that marketing research can assist with the growth of your business’ profits and sales.
All marketing research information will then be placed into the Marketing Plan Section of the Business Plan.
Donya Zimmerman is a business consultant, mediator, and legal professional with over ten years of experience. Donya is also a public speaker and aspiring author. She has a few books in the works that will be published and released in the latter part of 2015. The books will focus on entrepreneurship, small business, and daily devotionals. She is owner of Family & Community Mediation and Business Consulting (FACMBC) based in Baltimore, Maryland and has been in business since 2013. Services provided by FACMBC: Mediation and Conflict Resolution Services; Business Registration Assistance (Limited Liability Company, Corporation, S-Corp, Limited Liability Partnership, etc.); Business Plan Drafting Assistance; Business Certification Assistance (MBE, WOSB, 8A, 501(c) (3), Hub Zone, etc.); and Business Organization Assistance. She is also a contributing writer to the Maryland Daily Examiner Newspaper. Donya Zimmerman has made article contributions to the Simply Inspirational Women in Business Journal for 2014 published by Dr. Cheryl Cottle. Contact information: firstname.lastname@example.org; www.facebook.com/FACMBC; www.twitter.com/FACMBC; https://dzimmerman36.wordpress.com; http://www.linkedin.com/in/dzbusconsultantandmediator
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