In order to succeed and correctly identify your target market, your product or service, you need to do careful market research. This is an organized study of the facts important to your business. These facts can be gathered from primary or secondary data.
You could hire a market research firm to gather the primary data you need, or you could gather the information yourself. Primary data can be collected by observation, survey and experimentation.
OBSERVATION - People in the market place are observed, or watched, either directly or using hidden camera.
SURVEY - Survey is a list of questions that is prepared to find specific information. A survey can be conducted in person, by telephone or by mail.
EXPERIMENTATION - Experimentation involves testing the interest in a product or service by trying it out in a particular area. For example, a local flea market or craft show could help you determine the possible interest in a particular product. This type of research can be very costly because you have to develop your product or service before you can test it.
Information collected by other people for some other purpose is known as secondary data. Secondary data is available from various government agencies, professional and trade associations, universities, libraries, and other businesses. Keep in mind that effective marketing needs up-to date market research. Sometimes the material you collect from secondary data is useful, but you may need to invest in primary data to ensure you have the most current information in your field.
It is very important to examine your product or service as it is to understand your target market. You need to learn all you can about your potential clientele and competition by acquiring as much accurate and specific information about them as possible. That, basically, is what market research is all about. In order to properly identify the market for your business, you need to consider a number of issues and questions, but market research basically breaks into three categories: