How to Research About Local Markets?

Market research is pivotal for any business. Whether you are a new venture or an established enterprise, the only way to grow is to cater to the market’s dynamic demands. Researching local markets requires you to understand some simple techniques that will make the data collection process more effective and productive.

Here is a complete guide to help you find your target audience, understand changing trends, and stay ahead of other brands competing for the same market.

What Does Market Research Mean?

Market research helps you gather information about the right target audience, the buyers’ persona and how successful your venture will be in a given area. Local market research is targeted to a given perimeter within which, you need to get the following information:

• Where do the consumers in the given locality or area get information about the products and services that they want?
• What are the competing brands that are targeting the same demographic?
• What are the current trends in your industry?
• What are the challenges faced by your industry in the given area?
• What influences the purchase decisions made by the target audience in the location that you are studying?

Types of Market Research

Even when you are looking at a small demographic, there are two types of market research that you should conduct, namely primary research and secondary research.  

1. Primary Research

This is when you look for any first-hand information about your business. It is very useful in creating very specific market segments and understanding the buyer persona. Under primary research as well, there are two categories.

First, let us understand exploratory primary research. This type of research does not delve into measurable trends. At this stage, the goal is to find the potential problem areas that you may have to cater to. This is the first step which includes surveys and casual interviews with a select group of people.

Then, primary research digs deeper with the specific primary research stage. This type of research is used to understand any opportunities or issues that have been identified and established as important. During this phase, you should look for responses from a very specific or more precise group from your audience. Find a group that can best help you solve the issues you have discovered in the first stage of your research.

2. Secondary research

This is when you will actually look into public records or data that are available at your disposal. This includes industry content, market statistics, trend reports and any sales data. This phase is most useful in analysing potential competitors. When conducting your secondary research, the best resources available to you are:

• Public Resources: These include published statistics or study that are available for public use. These documents are already well researched and give you a lot of data about the industry in a given locality, state or even a country. The best and most reliable public resources are statistics published by the government.
• Commercial resources: Market reports that are published by well-known agencies fall into this category. This type of information is often available at a premium cost. However, they conduct very detailed surveys and studies. Therefore, it may be worth the investment, especially when you are looking at starting an absolutely new venture.
• Internal resources: This consists of data that you have already collected as an organisation. Of course, for a business that is starting from scratch, this information is usually not available. However, for those who have some experience or are looking at expanding a given business, historical data about your accounts, customer retention rate and the average revenue generated per sale and other information is very useful. The advantage of using internal data is that it is completely specific to your business. It also allows you to look at any trends or mistakes that have repeated themselves in the past so that you can strategise accordingly.

Different Tools for Local Market Research

This is the most important section of this article because it explores exactly how you can go about collecting your data. There are various tools that you can make use of, including:

1. Interviews

Face to face discussions with a select group of people helps you get a lot of insight about your product and services. You can also make use of subtle changes in body language or tone to understand how a customer feels about your product or service.

2. Focus groups

When you start a business, you have a fairly good idea about the type of people you wish to target. Create focus groups based on this and allow them to test your product and provide you with feedback. You can even handout questionnaires that will help you get important information for your venture.

3. Reviews about products and services

The best data comes from customers who have already used your product or service. This could be a part of the focus group or from existing customers. You get a good idea about specific features that work and those that need some improvement.

4. Research by Observation

This is when you watch your target group or focus group use a product or avail any service. Watch their reactions, understand any roadblocks they hit and what you can do to make their experience better.

5. Buyer personal research

This allows you to get a realistic understanding of your target group. This includes studying factors that influence purchases and why they prefer your product or a competitor’s product and other information about buyer behaviour.

6. Market segmentation

This is a very useful way of defining your target audience. Categorise your target group based on certain characteristics like age, lifestyle, etc. Then understand how your product or service caters to each of them. This lets you make adjustments to suit a bigger audience or make it more niche, if that is your aim.

7. Price research

You need to provide market rates for all your products and services to thrive in a competitive market. Of course, premium products demand a higher price. But you can offer reasonable prices that will attract the right kinds of customers.

8. Analysis of competitors

Make sure you understand your competitors in depth. This helps you learn about what they are doing right and where you can add value to provide better services or products to your customers. This also helps you separate yourself from competitors to get as many customers as possible.

9. Loyalty research

This comes a little later, probably after you are a few months into your new business. Check customer retention rates to understand if your customers are loyal to your brand. How long do they continue to use your product and service? What makes them choose another brand or product? These are questions that will help you constantly improve your brand and upgrade your business.

10. Marketing campaign research

This is important to change marketing strategies. You need to understand what appeals to a certain target audience, what kind of campaigns do they respond to and which area gave you the best response. You have several analytics tools on social media and your website that give you the best insights in this aspect, considering how most of our marketing happens online.

Additional Tips

• Focus groups should have at least 10 people.
• Use your network or run contests on social media to call people to participate in these focus groups.
• Online polls are a great way of getting the data that you need.

Summarise your findings by listing your goals for each research project. Then note down the response and take your decisions only after careful consideration. When you have facts and data before you, you will notice many new and interesting things that you may have missed out on, helping you build your business better.

Also read:

1) Which city has the best electronics market in India?
2) Price it Right! Best strategies to market your product.
3) How Effective are Posted Flyers for Early Small Business Marketing?
4) Business Tips: How to Identify A Local Customer?