Tag: customers

Which form of primary market research is the best?

primary-market-research-surveyMarket research is a good way to understand the viability of your product or service idea by assessing factors like market size, demand, and pricing. There are two types of market research: primary and secondary.

Primary market research

Primary market research is research that you do yourself, or hire someone to do on behalf of the company. You go right to the source of the information or opinion. This differs from secondary market research, which involves using research that’s already been done by an outside party unconnected to your company.

There are four main types of primary market research: focus groups, interviews, observation, and surveys.

Which form of primary market research is the best?

Deciding on the best form of primary market research for you depends on what you’re looking for and who you’re speaking to. Of course, you can combine different forms of primary market research, but keep the following in mind:

  • Focus groups: Can be fairly time-consuming and expensive (and participants are often compensated), but are good for delving into in-depth issues such as a future product launch or a brand rehaul. Keep the focus group on the small side if you plan on having a very deep discussion.
  • Interviews: Similar to focus groups, but one-on-one. Interviews are a good way to get information that people might not feel comfortable sharing in a group situation. Here, too, interviews may be time-consuming and involve a financial cost to you. Participants are often compensated.
  • Observation: Whether you’re observing the buying habits of customers with your competition or reading reviews of your product online, observation can be a good, inexpensive way to get real-time information. However, it’s best to use observation as a starting point for future research – since observation is done without interacting with the customers, you can’t get reliable information about why they do what they do.
  • Surveys: Whether you use telephone, emailed, or in-person questionnaires depends on what your customers expect from your business. In any case, make sure your surveys are as short as possible, easy to understand, and to-the-point. Don’t get fancy here! And make sure you conduct or send your surveys to a wide enough amount of people – some won’t respond, so it’s important that you get enough info from the people who do.

Learn more about surveys in our Ask a GoForth Expert section, and read more about the four types of primary market research.

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How understanding Porter’s 5 Forces Model can help your small business

industry-analysisIndustries don’t stay the same for long. So how do you analyze your industry when it’s constantly changing? It helps to have a framework.

According to Harvard University professor Dr. Michael Porter, there are five main forces that determine competitive intensity and overall industry profitability. Here’s Porter’s 5 Forces Model. Apply it to your small business’ industry and you should gain a clearer picture of what’s going on.

1) Intensity of Competitive Rivalry

This refers to direct competition between companies in the same industry, and degree of aggressiveness of rivals.

2) Threat of Entry of New Competitors

New companies often enter the market that compete with existing companies. How do they change or impact the industry?

3) Threat of Substitutes

This is the existence of companies offering products or services that may be substituted for your product or service. This can also include the customer’s ability to switch to alternatives.

4) Bargaining Power of Suppliers

Suppliers of raw materials, components, labour and services can hold significant power if the resources they provide are unique or scarce, or if there are only a few suppliers.

5) Bargaining Power of Customers

This includes the power that customers hold — including the ability to put a business under pressure — and the effect of customer sensitivity to price changes.

 

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