- Having a solid market research plan is a critical first step in starting, buying, or growing a successful business.
- When developing a market research plan, it is essential that you do your homework to determine your possible customer base, to gain knowledge about the competition and to have a solid foundation for your marketing strategy.
- A solid market plan includes information about you and your business, including realistic goals, the inspiration for starting the business and a financial plan.
You may think you have the best idea ever for a business or product, but without laying the proper groundwork, it could easily go the way of the Edsel. Not only do you need to size up the competition, you need to identify who will buy your product, how much it will cost, the best approach to selling it and how many people will demand it.
To get answers to these questions, you’ll need a market research plan, which you can create yourself or pay a specialist to create for you. A market research plan should provide a thorough examination of how your product or service will fare in a defined area. It should include the following:
- An examination of the current marketplace and an analysis of the need for your product or service
- An assessment of competition
- Data about customers
- The direction for your marketing in the upcoming year
- Goals to be met
Creating a step-by-step research plan
Market research plans define an existing problem and/or outline an opportunity. From there, the marketing strategy is broken down task by task. Your plan should include objectives and the methods that you’ll use to achieve those objectives, along with a time frame for completing the work. The U.S. Small Business Administration’s useful step-by-step guide to marketing research will help you define your needs, create a budget and timetable, select your techniques, collect your data, and analyze your results.
Find the information you need.
A marketing research plan is only as good as the information on which it’s based. Ohio State University offers several helpful resources you can use to include in your research.
Let someone else do the work.
If the thought of trying to create your own market research plan seems daunting or too time-consuming, there are plenty of other people willing to do the work for you. Market research firms can charge into the thousands of dollars for a market research plan, but there are ways to get help more affordably, including:
- Outline your plans carefully and spell out objectives.
- Examine as many sources as possible.
- Before paying for any information, check with librarians, small business development centers or market research professors to see if they can help you access market research data for free.
- You may think you’ll need to spend a hefty sum to create a market research plan, but there are plenty of free and low-cost sources available, especially through university business schools that will guide you through the process.
What you should include in your market research plan
Doing business without having a marketing plan is like driving without directions. You may eventually reach your destination, but there will be many costly and time-consuming mistakes made along the way.
Many entrepreneurs mistakenly believe there is a big demand for their service or product, but, in reality, there may not be, or your prices may be too high or too low, or you may be going into a business with so many restrictions that it’s almost impossible to be successful. A market research plan will help you uncover significant issues or roadblocks.
Conduct a comprehensive situation analysis.
One of the first steps in creating your marketing plan is to create a SWOT analysis (strengths, weaknesses, opportunities and threats), which is used to identify your competition, to know how they operate, and then to understand their strengths and weaknesses.
- Strengths to include in your plan should encompass competitive advantages. These advantages can include the talent, proficiency and expertise of you and/or your executive team that can help improve the position of your company in the marketplace.
- Weaknesses are factors that reduce the ability of your company to independently achieve its objectives, such as outdated production tools, unreliable delivery and a lack of planning.
- Opportunities are ways that your business can grow and become more profitable.
- Threats would be things that prevent you from entering into a primary market, such as political developments or a labor shortage.
Develop clear marketing objectives.
In this section you will describe the desired outcome for your marketing plan with realistic and attainable objectives, the targets, and a clear and concise time frame. The most common way to approach this is with marketing objectives, which may include the total number of customers and the retention rate, the average volume of purchases, total market share, and the proportion of your potential market that makes purchases.
Make a financial plan.
A financial plan is essential for creating a solid marketing plan. The financial plan answers a range of questions that are critical components of your business, such as how much you intend to sell, what will you charge, how much will it cost to deliver your services or produce your products, how much will it cost for your basic operating expenses and how much financing will you need to operate your business.
In your business plan, be sure to clearly describe who you are, what your business will be about, business goals, and what your inspiration was to buy, begin or grow your business.