Market research for SMEs

The variations in a business environment impact smaller businesses more than larger ones. This is primarily because small businesses do not possess large cash reserves and access to alternate market channels that larger ones have to mitigate the risks.

In an uncertain environment, it is therefore imperative that a small business cover its risks through a more detailed analysis of the macro factors which impact its own immediate market. These macro factors could be as diverse as changing consumer preferences to newer economic policies.

Market research is often considered an esoteric activity to be carried out by big organizations with big budgets. This misconception has been largely perpetuated due to lack of awareness and also due to fixed mindsets. Implemented correctly, market research is a rewarding activity which can deliver rich insights into a business and allow more educated decision making.

Surveys

Surveys are implemented using concise, straightforward questionnaires, on a sample of your target group. Surveys are usually a combination of mostly close-ended questions with a few pen-ended ones. These could be of various types such as one-on-one personal interviews, telephonic, e-mail, postal, computer-assisted personal or telephonic interviews. The findings are usually in the form of charts and tables.

Qualitative depth interviews

These are unstructured one-on-one interviews with open-ended questions. Exploratory in nature, these provide valuable insights into consumer perceptions and expectations about your offerings. The interviews are recorded and transcribed. The findings are then presented in the form of statements.

Focus groups

A focus group is a form of qualitative discussion in which a group of people are asked about their perceptions, opinions, beliefs, and attitudes towards a product, service, concept, advertisement, idea, or packaging. Questions are asked in an interactive group setting where participants are free to talk with other group members.

Consumer observation

Sometimes, an interrogative methodology of research may not provide accurate information where consumers cannot verbalize their thoughts or are unaware of their own usage behaviour. In such cases, they are only observed during usage and the behaviour filmed or noted.

Sample testing

When a new product or concept is being introduced, it may not be practical to question people about their preferences. In such cases, the product sample is handed out to a select group and their feedback taken.

It is important to note that more often than not, a combination of above methodologies may be required to arrive at a logical conclusion. For instance, if you are launching a software solution, you may need to survey your prospective clients to determine market size and requirements. You may then have to carry out sample testing along with observation to determine how effective your design and implementation are.

Practical steps in a research process

The following is a brief outline of a market research process specific to a small enterprise:

Define the scope of research. Be very specific about what you want to explore. One research must specifically target small number of objectives which are closely interrelated.

Budget for time and costs. You may want to explore specific problem areas on case to case basis (called custom research) or carry out a periodic dipstick of market trends. These need to be budgeted for right at the beginning of financial planning.

Agency selection: Interview the agency based on the budgets. Big agencies mean big costs. There is a large number of free lance researchers. These are not only easy to work with but also economical.

Agency briefing: Have a face to face meeting with the researchers and explain the problem. Discuss the methodology and expected outcome i.e. the deliverables in details. These cannot be changed midway through the process.

Process monitoring: It is always advisable to monitor the research from time to time. This is achieved by attending the fieldwork yourself and asking for toplines from the agency.

This helps you to keep things under control and also perform course correction if required. Insist on results which can be acted on i.e. practical outcomes and not vague or theoretical observations.