Wednesday, April 11, 2012

The Importance of Market Research and How You Can Use It To Grow Your Online Business

As you progress in your online business, you will start to notice that you spend a lot of time on Google or Yahoo researching. It is something that you cannot avoid as research is a, if not the, most vital tool in order to effectively market your products.  However, if you are not careful, or if you are not experienced in marketing, you can spend all your time researching.

To avoid this common trap and to begin learning how to better manage your business productivity, it will be necessary to take a brief crash course on marketing.  These tools are necessary to help your business grow so settle in and let's begin.

Marketing and market research defined
The concept of marketing as a business philosophy defines marketing as a process that is intended to find, satisfy and retain customers while businesses make a profit. But central to all this definition is the role of the customer and their relationship to the product (i.e. whether they consider the product or service to meet a need or want).

Market research consists of a plan that charts how relevant data is to be collected and analyzed so that the results are useful and relevant for making marketing decisions. Once the research and the related analysis are complete, the results are used to make better decisions regarding the marketing of your products.

Therefore, market research is imperative for you as a business owner to know what type of products would be profitable to sell online. In the case of selling jewelry, you need to know what is in demand, what is collectible, what the current fashion trends and colors are, etc.  Also with respect to what you are currently selling, good market research enables you to know if you have been able to satisfy customer needs and whether any changes need to be made in areas such as the packaging or shipping of your pieces. In short, research enables you to make a viable marketing plan or measure the success of your current marketing efforts.

Types Of Market Research
Essentially there are two types of research, primary and secondary.  Primary research is information collected through monitoring sales levels and measuring the effectiveness of your business practices such as customer service, your availability to your customer base through email, instant messaging, telephone, etc.

Secondary research is the gathering of already published data to create a 'database' of sorts that serves to provide a benchmark for where you need to be.  Secondary research helps you to identify your competition, perform a strategy for benchmarking and to determine what areas you should target in light of contributing factors such as demographics, population, sales and usage rates, lifestyle and behavior patterns.  Both primary and secondary research are essential to fulfill your business goals and promote growth.

Data Collection Methods
Data collection methods for marketing research are divided into quantitative and qualitative methods. Quantitative studies use mathematical analysis, which can disclose differences that are statistically significant. The sample size used is quite large.  In our cases, we won't have to focus on quantitative methods of research.

Qualitative methods are used to provide a base for quantitative research and help in quantitative research design development. They target problem defining, generating hypotheses and identifying determinants. They consist of one-on-one interviews to probe for personal opinions, beliefs and values and serve to uncover hidden issues. The sample size in this method is small.  The emergence of social media has made it easier to collect data qualitatively by engaging followers through blog posts, YouTube videos, and Facebook likes. The use of social media makes it easy to get a feel for what your potential or current customers want and expect from you as a business and what would keep them loyal to you.

In summary, you can't have a successful business without having the right data about customers, products and the market in general. Market research is an essential management tool for a viable business plan enabling you to survive and thrive in today's fiercely competitive market conditions.

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