Researching your Market

• Where to find information
• Observe Your Competition
• Talk to your Suppliers
• Talk to your Customers
• Surveys and Focus Groups
• Hire Students to do a Survey

Research will help you with a wide variety of business decisions. You will likely have to make decisions involving:

• A good location
• Sales projections
• Your product line
• Your pricing strategy
• Where you advertise
• Offering credit
• How much capital you require
• How much floor space you need
• How much inventory you order
• How much equipment and supplies you require
• How many employees you hire
• Etc.

Business information is required to make sound decisions and to prepare a credible business plan and cash flow forecast.

Where to find information

In most cases business information can be gathered at no charge. The following are sources of information on your industry.

• Competitors
• Neighbouring businesses
• Sales representatives
• Trade suppliers
• Business friends and associates
• Chamber of Commerce/Board of Trade
• City or Municipal Hall
• Local Government Agent's office
• Downtown business associations
• Trade associations
• Shopping centre developers
• Newspapers, radio and T.V.
• Various directories
• Bookstores
• Canada Business 
• Statistics Canada
• Trade publications
• Similar businesses in another city
• University or community college
• business schools
• Advertising agencies
• Post Office
• Business section of library
• Phone book, Yellow Pages

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Observe Your Competition

Get out on the street and study your competitors. Visit their stores or the locations where their products are offered. Analyze the location, customer volumes, traffic patterns, hours of operation, busy periods, prices, quality of their goods and services, product lines carried, promotional techniques, positioning, product catalogues and other handouts. If feasible, talk to customers and sales staff.

Consider how well your competition satisfies the needs of potential customers in your trading area. Determine how you fit in to this picture and what niche you plan to fill. Will you offer a better location, convenience, a better price, later hours, better quality, better service?

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Talk to your Suppliers

Conversation with your suppliers can tell you a great deal about how your industry works and what trends are taking place in your market. They may be able to tell you valuable information about pricing techniques and mark ups, about the fastest moving lines and why they are selling, and why some competitors are successful. (They can also provide you with information about credit terms.)

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Talk to your Customers

Conversation with your customers or potential customers can give you insight into what their needs are. They can indicate what they look for in your industry, what they think of your competition, what price they might pay and what level of service they like.

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Surveys and Focus Groups

Surveys and Focus Groups represent more formal ways of getting insight from your customers.

If you have a specific information requirement and a definable audience, it is likely that you can undertake a useful survey. Designing a non biased questionnaire requires attention to detail. There are many good books available on questionnaire design and initiating a survey. If you are depending on the survey to assist with a costly decision, you may want to consider hiring a professional marketing research firm.

A focus group involves getting feedback from a specially picked group using controlled interview techniques. The process usually allows the participants to provide their opinions, come up with new ideas and brainstorm.

This is valuable for generating new concepts, getting feedback on proposed advertising or gaining insight into attitudes and opinions about a new product. Focus groups require a skilled interviewer and hand picked participants. Professional firms can be hired to tackle the project for you.

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Hire Students to do a Survey

Community colleges have marketing management programs where students can be hired on a confidential consulting basis as part of their curriculum. The students do not have the experience of professional firms, but will often do a reasonable job at little cost.

You will probably have to cover expenses incurred by the students and course objectives and timing may compromise your requirements.

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For further information on market research and analysis, see the following Canada Business Service Centre Fact Sheets.

Market Analysis
Guide to Market Research and Analysis
Store Location - "Little Things" Mean a Lot