5 ways to improve your business with market research

Successful entrepreneurs use market research to keep up with trends, make better business decisions and maintain their company’s competitive edge. Regardless of whether you’re starting or expanding your business, research is vital to understanding your target markets and increasing sales.

Here are some specific areas where market research can help you build a stronger business.

1. Improve your branding

Many companies don’t have a good handle on their brand. They ask themselves: How do customers perceive us? How does our brand stack up against our competition?

You can use market research to improve your branding by exploring such subject as:

• Brand awareness—Are customers aware and familiar with your brand?
• Competitive comparisons—How do customers view your company compared to the competition?
• Personification—What characteristics and traits do customers associate with your brand?

You can also survey customers to gather feedback on marketing content such as logos, brochures, websites, etc. Brand research is typically conducted by interviewing customers or organizing focus groups. In this way, you can explore different topics in-depth and get feedback from the participants. The results will help you develop brand positioning and improve your marketing assets.

2. Understand your customers better

Sometimes entrepreneurs need better information on the size of their market, their target customers and how best to reach them. We recently completed a study for a client who had developed a new kitchen product and wanted insights on her target market. Here are some of thing we wanted to find out about typical customers for this new product.

• How old are they?
• Are they male or female?
• What is their marital status?
• Do they have children?
• Where do they live?
• What is their level of education?
• What kind of social media do they use?

We designed a questionnaire to be answered online by 1,000 consumers across Canada. This type of consumer study helps us to understand the profile of the target audience so that we can develop focused brand positioning. By focusing your efforts on the right target market, you can see faster results, improved efficiency and greater overall performance from your marketing campaigns.

3. Measure the effectiveness of your marketing

Lots of entrepreneurs want to do a better job promoting their companies and generating sales. Market research can help by providing information on the effectiveness of your marketing efforts. We can design studies to gather feedback from customers on the look and feel of your marketing messages. We can also measure customer awareness and reaction to specific marketing campaigns and activities.

Gathering this type of data can really help maximize your marketing budget by helping you design marketing that reaches and resonates with your audience.

4. Identify new opportunities

Market research can help you identify new market opportunities that might be available to your company. It can help identify geographic regions for expansion and/or test the market’s readiness for your new products or services.

For example, you could be looking to open a new retail store and need to find the right location. Or you may be planning to change your distribution channel and need to determine how the decision will affect your customer base.

To answer these questions, we could analyze existing data from government publications, Statistics Canada data and/or industry specific reports. These sources provide insights in such areas as:

• Market size
• Demographics
• Market share statistics
• Industry dynamics
• Major industry suppliers
• Key competitors
• General industry data such as number of firms and their geographic distribution

Obtaining this type of market data is a necessary first step to help firmly “size up a new market” to determine the optimal business strategy and operations.

5. Get insights into product features

If you’ve come up with a new product or are improving an existing one, you will want to know whether you have the right features and packaging. Research will provide insights your company can use to refine your products before you commit to expensive production costs.

When we design new product research, we gather consumer feedback on a concept and/or a prototype. We also collect data on consumer reaction to the product and its features, including its look, design, usability, colours, packaging and other variables.

We might also ask how consumers would shop for this product to gather insights for a distribution plan. We can also ask for reactions to the marketing messages, creative content and promotional ideas that are planned for the product launch.

Typically, we’d start with qualitative research (interviews or focus groups) because this conversational format allows us to gather rich, in-depth feedback from consumers. If possible, we would provide a prototype or sample of the product for customers to touch and use.

After that, we would validate the research insights with comprehensive survey with a similar audience but a larger sample set (i.e. more than 100 consumers). By doing this, we will have rich data to make informed decisions on finalizing the product concept and/or design.

Share your comments

Have you tried market research in the past? Did it help you make business decisions? We’d love to know so leave a comment below.

The distinction between the terms benefits and features is an important concept in developing and marketing a product or service. Features are characteristics that your product or service does or has. For example, some ovens include features such as self-cleaning, smooth stovetops, warming bins, or convection capabilities.

Benefits are the reasons customers buy the product or service. For example, the benefits of some ovens to buyers include safety, ease of use, affordability, or—in the case of many ovens that feature stainless steel casings—prestige.

Just like products, services differ from one another in having distinctive features and benefits, though these differences may not always be so obvious to potential customers. One building contractor may use master painters while a second uses laborers to paint. Both will tell you they do painting, but one has master painters (a feature) and produces a better-looking paint job (a definite benefit).

Every product or service has a purpose. For example, the purpose of an oven is to bake raw food, but not all ovens have the same features and benefits.

The uniqueness of a product or service can set it apart from the competition. Features can communicate the capability of a product or service. But features are only valuable if customers see those particular features as valuable. You want products or services with features which customers perceive as valuable benefits. By highlighting benefits in marketing and sales efforts, you’ll increase your sales and profits.

It’s important to remember that customers buy products and services because they want to solve a problem or meet a need. Consciously or unconsciously, your customers will always be asking the question, “What’s in it for me?” Your product and service offerings have to deliver solutions and satisfy needs, or they won’t be successful.

Given that benefits are ultimately more important to your customers than features, it is imperative that you understand the benefits your products and services provide, emphasize these benefits in your sales efforts, and update your products and services when new or additional benefits are desired by your customers.

Think about how automotive manufacturers advertise. To sell minivans, they don’t emphasize the layout of the vehicle or its carrying capacity. They show images of happy families loading their kids, sports equipment, and toys into the vehicle. They emphasize the benefits above and beyond the features.

Here are some other examples emphasizing benefits beyond the features:

• A Web site shopping cart vendor who offers hosted solutions to medium-sized businesses can emphasize the convenience and time-savings of not having to maintain a Web site. It’s selling convenience, not software.
• A carpet company might be more successful if it illustrated how its carpets could help create attractively decorated interiors. Pictures of beautiful rooms could be more beneficial than a stack of carpet samples or a list of fabric features. It’s selling beauty, not carpets.
• A consulting company might focus its marketing efforts by highlighting its end product—improved performance and increased profits—not its consulting methods. It’s selling profitability, not consulting.
• A manufacturer of computer printers might emphasize less hassle or less wasted time rather than emphasizing reliability or quality. It’s selling ease-of-use, not printers, and not quality.
• A salmon fishery might emphasize the health benefits of eating salmon. It’s selling health, not fish.

When Do Features Matter the Most?

Features always matter because they provide your customers with hints about how well your product or service will deliver its benefits. Although benefits are generally more important than features, there are some times when features make all the difference:

• When all the products in a category provide the same basic benefits, a unique feature may provide a competitive advantage. For example, when all boom boxes played tapes and CDs, the one with the bass booster stood out even though the benefit to the consumer was minimal. As another example, when all leadership consultants referred to similar performance improvement outcomes, the ones who developed online diagnostic tools distinguished their work from competitors.
• When products or services can be easily compared with competitors’—as the Internet makes increasingly possible—consumers can choose products and services with the most features. Thus, even though most cell phones will provide its owner with the same general benefits for communication, a person considering which cell phone to buy may not choose a certain model if it is missing a feature not found on a competitor’s phone. For example, if one phone has Bluetooth connectivity and a second one does not, consumers may choose the one with this extra feature even if they don’t even know what Bluetooth connectivity is. It’s not that such connectivity is important, it’s just that it is so easy to compare the feature sets.