Market Research has always been a part of the Business World. And, following that logic, customers have been the center of every business.
Companies have always researched their market. This means that businesses have always tried to figure out what the customers want and if they are satisfied with the service and products offered by the brand. They want to know the potential of their product in the target market. They also try to analyze the competition to figure out the best price to charge their product.
Market research involves a systematic and objective collection of data from the Target Market. Following the data collection is the analysis and interpretation of data in order to minimize the risk in marketing decisions.
The aim of conducting Market Research is to uncover the truth about the market potential that may be covered in assumption. Researchers collect data, interpret them into intelligence, and then draw conclusions to help the management make smart decisions regarding business strategies.
Furthermore, market research helps you target the potential customers with customized strategies best suited to attract them.
In this world where cars, mobile phones, cosmetics, etc., all look the same, understanding the customers is more important for commercial success than relying on technological superiority. When launching a new product you anticipate your customer’s reaction to determine the success or failure of the product.
You cannot assume the answers to these questions and launch your product blindly. That could lead to disaster. Wrong marketing decisions can ruin the other functioning part of the business.
Hence, market research can provide you information useful to support the marketing decision. Customer feedback can help fill the gaps in your marketing plan and build a strong business.
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To identify and reach your target market, you need to send out a survey to a general population. Include basic as well as relevant demographic and behavioral questions that line up with the purpose of your survey.
Let’s say you just opened an online-based Customized Cake Delivery. You want to know the potential market for your business, who are most likely to purchase, how much they will pay, or their prime location.
Knowing whom and when to market your products can help you gain higher revenues. So, in the survey questions ask the respondents questions that give you more information regarding your survey goal which is finding your potential customers.
With all data collected, filter the responses to identify the segment of audience from the general population who fit the target market. Segmenting your audience will help you customize products/services, advertisements, etc. to reach and meet the needs of the segmented customers.
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Take a look at the survey templates below to see how Voxco surveys look on any device. See all possible question types on Voxco.
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After identifying your potential customers, the next step is to determine how many people fall under the segment in the entire population. After your survey, let’s say you discovered that the people who are most interested in your Customized Cake Delivery belong to the age group of 20 to 40.
Now you cannot target the entire population so you have to select a sample size that represents the population. You can use an online tool to calculate your sample size. This will help you figure out how many people you need to survey to understand your target market.
For example, if you want 95% confidence level, i.e., the probability that your sample size represents the population, with a +/- 5% margin of error, you would need to survey approx 400 people.
You may also need to survey more people depending on the segment you want to focus on. However, in the practical world, it is not possible to survey 1000s of people because of budget and time constraints. SO, at times you may need to be rational and survey fewer people to make business decisions, in case you own small-scale businesses or start-ups.
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Screening questions can help you reach a specific type of audience. Continuing with our Cake Business, you have determined that your potential customers are from the age group 20 to 40. Now you need to ensure that you are targeting customers who really like buying cakes for every event. SO, you can use screening questions to disqualify any responder who does not fit the category.
Your question can be
You can now screen the answers and respondents who choose “not likely” and “never” will be directed to the page that thanks them for participating in the survey. The other respondents will qualify to continue with the survey. This way you narrow down your target customers.
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The basic types of market segmentations are
A marketing strategy is a process of finding a target market, that is, potential customers who are most likely to buy your company’s products/service. A target market is a business opportunity for a company.
Identifying a target market can help a business to direct their resources to the potential customers who are more likely to become loyal customers and increase sales. You can customize your marketing strategies to target and influence a specific audience to buy from your brand.
Primary Target Market refers to the group of customers whom you want to attract and influence to interact with your business. This group of customers is the potential customers who are most likely to buy from you.
Secondary Target Market refers to the second most important group of customers. This is the next segment of customers you want to target after your primary customer group. The secondary customer base may have less interest in your products and services.