Skip to main content
We're here with practical information for your business. Learn about business planning, running a business and more.

Search

For a successful business, you need a viable business idea, the skills to make it work and the funding. Discover whether your idea has what it takes.

Forming your business correctly is essential to ensure you are protected and you comply with the rules. Learn how to set up your business.

It is likely you will need funding to start your business unless you have your own money. Discover some of the main sources of start up funding.

Businesses and individuals must account for and pay various taxes. Understand your tax obligations and how to file, account and pay any taxes you owe.

Businesses are required to comply with a wide range of business laws. We introduce the main rules and regulations you must comply with.

Learn why business planning is an essential exercise if your business is to start and grow successfully, attract funding or target new markets.

Marketing matters. It drives sales and helps promote your brand and products. Discover how to market your business and reach your target customers.

Some businesses need a high street location whilst others can be run from home. Understand the key factors from cost to location, size to security.

Your employees can your biggest asset. They can also be your biggest challenge. We explain how to recruitment and manage staff successfully.

It is likely your business could not function without some form of IT. Learn how to specify, buy, maintain and secure your business IT.

Few businesses manage the leap from start up to high-growth business. Learn what it takes to scale up and take your business to the next level.

Market research

Market research helps you understand your business' competitive position, spot opportunities, reduce risks and make better business decisions.

Existing sources of data, your own research and, if necessary, expert input can help you find the market information you need.

Market research - what you need to know

Qualitative vs quantitative information

Desk research - finding existing market research

Field research - doing your own market research

Can you do market research yourself?

Using a market research agency

1. Market research - what you need to know

Be clear what decisions you want to make before you undertake any market research. Identify the crucial data that you will be able to act on.

Who your customers and potential customers are

  • If you sell to individuals, you need to know their sex, age, marital status, occupation, income, aspirations, wants, needs, lifestyle habits, etc.
  • If you sell to businesses, you need to know their size, sector, buying patterns and service requirements. Which individuals make or influence the buying decision?
  • How large is the overall market? What are the main market segments of similar customers?

What their purchasing behaviour is

  • What products do they buy, in what quantities, how often?
  • When do they buy? For example, any variations at different times of day or seasonal trends.
  • Where and how do they buy? For example, do they buy online or at outlets? Do they buy direct or through intermediaries such as retailers?

What influences customer behaviour

  • What are the key factors that make them choose one product or service rather than another?
  • How much are they prepared to pay? How price-sensitive are they?
  • Which media and online information reach them?
  • Where else do they get product information and recommendations?
  • How effective are your current marketing and sales campaigns? What is your brand image?
  • How satisfied are potential customers with their existing suppliers and what would it take to get them to change? How satisfied are your customers?

What your competitors offer

  • Who are your competitors?
  • What products and services do they sell? How do they market them? How do their pricing and positioning compare?
  • What are their strengths and weaknesses? What is the unique selling proposition (USP) that makes customers choose you?

How the market might change and evolve

  • What are the key market trends? What changes can you expect in external factors such as new regulations or technologies?
  • How is the competition likely to change? For example, improvements in existing products, new technology, or the emergence of new competitors altogether.
  • Watch for product or service breakthroughs that solve the same problem as your offering, but in an innovative way.

2. Qualitative vs quantitative information

Use quantitative research to find hard facts

  • For example, how many people or businesses you can target and how they spend their money.
  • If you are carrying out your own market research (or employing a market research agency), you need to use a large enough sample to give statistically reliable data.

Use qualitative research to assess attitudes

  • This focuses on how potential customers think and behave. The aim is generally to cover a few issues in depth.
  • Participants are encouraged to give detailed answers and discuss their opinions, rather than just replying to specific questions. Qualitative research is often done in small groups, known as focus groups.
  • Allow plenty of time for qualitative work. It always takes longer than you expect.
  • Qualitative research is harder to analyse than quantitative research.
  • Talking to customers and keeping your ear to the ground are familiar, low-key forms of qualitative research.

Decide how in-depth you need the research to be

  • Exploratory research can provide quick clues to aid real-time decision-making.
  • More detailed research can put flesh on the bones, helping to inform your planning.
  • Knowing what you hope to achieve helps you decide how much it is worth investing in the research.

Identify the most reliable and cost-effective ways to obtain the information

  • Desk research, using information that is already available, is the cheapest and quickest. It can be very useful for broad-brush sector research.
  • You may need your own field research to get detailed information relevant to your business.

You may already have valuable information in your business

  • Key sources are account records, sales reports, customer records and records of queries and complaints. These can yield valuable data about sales volumes, buying patterns, customer size and location and causes of dissatisfaction.
  • Do not ignore informal feedback from your employees but beware of personal bias.
  • Your internal sources may not be set up to make access to this kind of data easy. You may need to consider using a customer relationship management (CRM) system.

Two quick questions

Micro-businesses often cannot afford extensive marketing research. But they can carry out some quick and useful DIY research. Half a day on the phone to your customers can make a big difference to your chances of success.

Identify 20 top customers and ask them two questions

  • "Who do you see as my competitors?"
  • "What makes you use us, rather than the others?"

See what you discover

  • The answers to these simple questions may indicate new possible target markets.
  • They may also lead you to shift the emphasis of your marketing to promote the benefits perceived by your existing customers that you hadn't previously considered.

3. Desk research - finding existing market research

A lot of information is available at little or no cost from public sources.

Check with relevant trade associations

  • Trade associations often collect data from their members, which could give you a good insight into your industry.

Use libraries and universities

  • Some libraries and universities have industry statistics.
  • Experts in your field may have data they can provide free of charge (or at low cost).

Find official figures

Search online

  • You can find a wealth of freely available information online. Make sure the data is recent and from a reliable source.

Use trade publications and websites

  • Many specialist trade publications offer free subscriptions or unrestricted access to their websites.
  • Check business magazines and the business pages of national newspapers.

Consider buying existing research

  • You can purchase market reports and research on your industry or potential customers from specialist research companies. For example, GlobalData, the Economist Intelligence Unit, Euromonitor or Mintel.
  • A wide range of data is available, with detailed, highly specialised reports costing a few hundred pounds each. Always check survey dates, though, as old data can be dangerously misleading.

4. Field research - doing your own market research

Field research is more expensive and difficult to organise than desk research. The usefulness of field research depends on the sample, the researcher's skill and the interpretation of the data that is collected.

Use questions to reveal what people think

  • The best form of questioning is usually face-to-face (one-to-one or in groups).
  • Interviewing by phone is cheaper, but demands good technique. People may resent the call, or you may not have their full attention.
  • Postal questionnaires are cheap and can be included in existing mailings. Email is even cheaper. Make questionnaires easy to respond to.
  • All postal and online surveys produce low response rates, and those who reply will be a self-selecting group, which may be untypical.

Use observation to reveal what people do, rather than what they say or think they do

  • Use experiments to see what people will do in a particular, controlled situation. For example, will people choose your cakes in blind tasting tests?

5. Can you do market research yourself?

Non-specialist desk research can be handled in house. DIY field research will only work if it is set up properly, right from the start.

You must be clear what data you require

You will need the right skills

  • For example, in designing questionnaires and running focus group discussions about new products or advertising.
  • If you and your employees do not have relevant experience, it may be a false economy to complete the research in-house.
  • You need to be aware of data protection rules and other legislation relating to research. Street interviewers need local authority licences and identity cards.

You must allow enough time to do research properly

There must be a realistic budget to cover the costs involved

  • You may have to pay for the design, printing and mailing of questionnaires.
  • You may have to pay to hire a hall or even a research lab, where you can video the discussion and observe people's reactions through one-way mirrors.
  • You may have to pay focus group participants' travel expenses. Participants are often paid a small incentive.
  • Input and analysis of the data you collect takes time and skill and may need to be outsourced.

Plan your questions carefully

  • Avoid leading questions and questions that people can answer without any real commitment. For example, people may well say that they would be interested in a new product - but that doesn't mean they would actually become customers.
  • Questions that require more thought may be more revealing. For example, asking potential customers how often they would buy, rather than whether they would be interested.
  • Open-ended questions that cannot be answered with a simple yes or no are likely to get a more detailed response.
  • For face-to-face or phone interviews, use a script so that all the participants in the study are asked the same questions.

Use research fairly and accurately

  • Choose a realistic sample for your research. Do not base market research on the opinions of your friends and family. You risk hearing what they think you want to hear - rather than their honest opinions.
  • Don't take negative responses personally. You can often learn more from criticism and improve your business because of it.
  • If possible, ask someone you trust who isn't connected to your business to analyse the data.
  • Be ready to act on what you learn. If your research delivers a clear negative signal, don't ignore it. Change your plans to take into account what you have learned.

Common market research mistakes

  • Failing to do any market research.
  • Carrying out market research once - and never looking into how things changed afterwards.
  • Being unclear about what you are trying to find out, or asking questions in the wrong way - and getting the wrong information.
  • Cutting costs by using small samples or just asking a couple of friends - and getting misleading results.
  • Interpreting statistical information wrongly and failing to see when one or two opinions distort the overall picture.
  • Analysing information too optimistically - and then kidding yourself that it supports your preconceptions.

6. Using a market research agency

Consider using a specialist, especially for surveys

  • Market research specialists, such as market research companies or consultants, have the time and the expertise to do a thorough job.
  • Customers sometimes find it difficult to voice concerns or complaints directly to a business. Some might also suspect that you're trying to sell them something.
  • You may find it difficult to be impartial if you do the research yourself.

Find an agency

  • Ask for recommendations, or find a market research agency through the Research Buyer's Guide published by the Market Research Society.
  • Find out what kind of reputation the agency you are considering has, both in general and for the kind of research you want. What do previous clients say?
  • Decide how comfortable you would feel about working with the research agency. Do you trust the people you have met? What relevant experience and qualifications do its employees have?

Be realistic about the likely scale of fees

  • Using an agency may only be a realistic option if your budget is at least £3,000 to £5,000.
  • A freelance researcher may be a more affordable option.

Signpost

Join Launchpad