Market Research on a Budget

By: Candice Edye, www.themarketingcoach.com.au

Many small business owners put off doing market research because they just don't have the money for it. This can be a very expensive mistake. Developing products that people don't want will cost you much more than the suggestions below.

Is your idea feasible?

- A good way to determine whether your idea has any staying power is to look at advertisements in your local paper or the Yellow Pages. Look in back issues to determine whether the businesses advertising today were there a few years back. This should give you an indication as to whether they were making enough sales to stay in business

- Using secondary data from places like your local library or the Australian Bureau of Statistics will give you information about trends and demographics. This will be useful in terms of deciding whether there is a long term future for your product. It can also tell you whether there are enough people in your target demographic to be profitable

- Make use of a field trial by putting your product in store to test the response to real-life selling conditions

Competitive intelligence

It's important to find out what your competitors are doing so that you can work out how to differentiate your products and services in the marketplace. If all your competitors position themselves at the low-price, mass-produced end of the spectrum then you can find a niche in the higher-priced, boutique end. Some ideas for gathering information about competitors include:
- Look at their brochures and advertisements
- Visit their websites and corporate documents eg annual reports
- Ask potential customers how they perceive your competitors' products

Fine-tune your product, price and packaging

There are a few ways you can get information about your product features that will cost you next to nothing.

- Although anthropological or observational research is best done by professionals, it is better to do it yourself than not at all. Observational research involves watching the actual process that someone goes through when they purchase your product. For example, if you sold frozen baby food you might watch mothers as they shopped in your local shopping centre. You could learn through your observations that your product needed to be located on a different shelf or that your packaging needed to be more eye-catching

- Focus group needn't cost a lot of money. Its best not to use family and friends as they might be inclined to tell you what they thought you wanted to hear. However, get a friend to host a product playgroup for you instead of a Tupperware party. You can use this to get feedback on various aspects of your product, such as its features, pricing, packaging and most likely place of purchase

- Feedback forms: Send one out with each delivery. Include links to them in your navigation bar on your website. Periodically survey your regular customers

It's always best to repeatedly go back to your target market to ensure you are producing what they want, how they want it, when they want it and where they would like to buy it.