Understanding your Market, Part One

Market research for sales people.

John’s Post yesterday on Riverford Organics nudged me into writing this Post, something that has been in the back of my mind for ages.  My topic is understanding your customers or more properly described, understanding your market, because the word ‘market’ feels a better description of the objective: knowing why your present customers bought, what they like and dislike so you have a better idea of the buying intentions of your potential customers.

magnifying-glassThe term ‘Market Research’ is not a difficult or uncommon phrase (a Google search returns 132 million links!) but, in practice, it is one of those terms that is very tough to pin down as to what it means as a set of practical tasks.  Let’s try a few quotations from a Google search (this time only 6.6 million links!).

…. research that gathers and analyzes information about the moving of good or services from producer to consumer …
The systematic collection and evaluation of data regarding customer’s preferences for actual and potential products and services …
A study of consumer groups and business competition used to define a projected market.
The collection and analysis of data obtained from a sample of individuals or businesses relating to their characteristics, behaviour, attitudes …
…the activities undertaken by an organization to determine the nature of its customers and competitors, as well as the demand for its products or services along with the features that customers prefer in similar products or services. …

ad nauseum …

For something that is a critically important component of business strategy, such a wide variation in definitions is totally unacceptable.

Now it’s important that you know where I am coming from.  Since 1966, I have been working as a business-to-business salesman.  Since 1978, I have run my own companies but have still seen my only competence as that of a salesman.  (Technically I ‘retired’ in 2007 but still keep my hand in through mentoring and coaching.)

Cim_logoIn the early 80s, as my first company, Dataview Ltd, was growing rapidly, I became a chartered member of the Chartered Institute of Marketing. I thought that marketing was a skill I needed to know more of. But, to be frank, apart from a nice certificate and a glossy monthly magazine, it’s difficult to recall any life-changing experiences from that relationship.  Marketing seemed to be about medium to large businesses – not correct but that was the impression given.

Back to the theme of this Post.
The one saying that has been with me for more years than I care to recall is this:

Business is about – producing the goods and services your customers want, profitably!

So there is no question that understanding what your customers ‘want’ (product/service/use/acceptable value/etc.) is at the heart of a business.  Without customers there is no business!

There is no question that employing a professional marketing person or company to undertake statistically valid market research is wonderful – if you can afford it.  But for the self-employed person or small enterprise, that cost of professional help may (will) be completely unaffordable.  Plus, and this is an important plus, market research is only valid while all the parameters used as the basis of that research remain unchanged.

Society and business is going through a huge upheaval as a result of this economic crisis.  Technology and the web continue to change at a huge pace.  Just today (Oct. 29th) there was a news item about Google:

Shares in sat-nav device companies have fallen substantially after Google unveiled its free live sat-nav for mobiles on Wednesday.

Whoops if you are Garmin or TomTom!  What value market research undertaken a month ago?

Tomorrow the second of this three-part Post.

By Paul Handover

2 thoughts on “Understanding your Market, Part One

  1. Good points, Paul.

    By the way, in my earlier post, I’ve added a link to the relevant edition of the Riverford newsletter; it describes their initiatives which seem to be well above and behind anything which most businesses of their size normally contemplate!

    As a novice at marketing, my approach to the subject is based on relatively rudimentary information, based on the work of marketing (that’s real marketing, not “promotion”) gurus such as Hugh Davidson and Malcolm McDonald.

    However, I have found it useful to distinguish between “market research” and “consumer research”. In this view, “market research” is the study of: the players in the market; the products and their features; the flows of business between the players; the volumes and values of those flows; etc.. And, “consumer research” is the study of what consumers value, whether or not it is currently being served by the market.

    It seems that this distinction can be helpful in deciding whether a particular venture it is likely to be worthwhile. I love questions like: “there might be a gap in the market, but is there a market in the gap?!”

    John

    Like

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