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Knowing your market is absolutely critical in making informed business decisions. This course takes a closer look at the significance of knowing your target customers, the basics of market research as well as the ways on how to keep your findings relevant and up-to-date.
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Importance of Knowing Your Target Market
Kodak’s story teaches us the consequences of ignoring market trends.
In its prime, Kodak took over 90% of the US film market and was even considered one of the world’s most valuable brands.
However, with the advent of digital photography, the company ignored its market research of this growing trend for fear that this will not help boost film sales and lose their big investment on its raw materials, such as paper and other chemicals.
Lower Risks The information you will gather about your customers will help you avoid unnecessary effort and investment risk. Investigating which market is low-risk but high-reward will steer you away from marketing initiatives that won’t work, helping you concentrate your effort on offering better products/services.
Microsoft’s Zune in 2006 is a case in point.
Designed to compete against iPod, Zune’s advertisements only appealed to a narrow group of people rather than capturing a broad population of music listeners.
Fundamentals of Market Research
Gather information Once you have a clear picture of your target customers, you need to gather more information from them. There are two types of Market Research:
Primary Market Research is the type of research you do yourself to get specific insights about your business. This could be surveys, interviews or even direct observations that can give you data on what your customers like or dislike or even how they feel about your product.
Secondary Market Research is the type of research done by other people. Examples are statistical information you can glean from Google or market-research companies.
Simply put, Primary Market Research is research you do on your own, while Secondary Market Research is the existing research done by others that you can purchase or use for free.
Market research often involves a combination of the two. Getting a good grasp of your market from secondary sources will give you valuable insights on doing your own primary research.
Analyse Your Findings What do the results tell you about your target market? What trends emerged based on your research? What do they mean for your business, product, location and planned promotions?
Your business plan should go whatever your market research data tells you, even if some of them might be unexpected.
Just make sure to update your market analysis every now and then to see where you should make necessary adjustments for your product offers.
Remember, the more you know about your market, the more likely you are to succeed at closing more sales.
Keeping your Market Research Relevant
Now that you are done with research, how do you make sure that your findings stay relevant?
Our conditions and technology are always in state of flux. What your target market wanted a month ago may not be the same thing they will want next month.
This means that staying connected and up-to-date with your market is a necessary step you must take to stay ahead of the game.
Use effective market segmentation strategies
Separate your customers in groups based on what they share in common.
This way, you can easily see specific customer pain points and gain useful and accurate information about the things that best appeal to them.
Keep track of your competitors
Identify what your prospects are buying from your competitors, the reasons that drive those purchases, and the price they charge.
Monitoring your competitors can help you spot emerging trends and study how people are responding to it.