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How to conduct good market research
Why do market research?
Just because friends and family have bought your work from degree shows does not mean that you have suitable products to start up in business.
You need to talk to potential customers, who will ask specific questions about the quality and prices of your work and – hopefully - will buy your work all year round. You, like every other start-up business, must carry out market research so as to identify the following basic market information:
- To know whether your business is feasible.
- To know how and where you are going to trade.
- To understand the size and the potential of your market.
- To identify your customers.
- To determine the most appropriate promotion and marketing methods.
- To identify your competition.
- To create a pricing strategy.
- To estimate sales income.
- How to do your market research
- Think how you could sell your work. If that involves dealing with retailers or galleries, speak to the buyers and value their opinions.
- When presenting your work, try to take actual samples that are relevant to your current work.
- If you get a positive response from a number of contacts, then you can have the confidence to start selling. It is important to take note of all comments, including the criticisms; the fact that a business is taking interest in your work is a really positive part of your market research.
- Observe other designers’ and competitors' activities to see how they operate. Monitor current trends in fashion and lifestyles, and keep an eye out for predicted trends by regularly visiting a range of trade fairs and exhibitions.
The following are some sources of market information. Select a few that are the most relevant to your business idea, and start to collect market information:
- Designers who have set up their own businesses.
- Established businesspeople; could someone in your family help?
- Trade organisations and directories.
- Professional bodies and associations.
- Department of Trade and Industry (DTI).
- Libraries, both local and central.
- Newspapers and trade magazines.
- Market reports.
- The internet.
- Universities and colleges.
- Trade shows.
Is there a market for your business?
- Your potential customers…
- Who are they? There could be several identifiable groups, depending on your services or products. List them all.
- Where and how (e.g. trade magazines, trade shows, directories, agents) will you identify potential customers?
What are your customers’ needs ?
- How much will they spend?
- How often will they purchase?
- Where do they purchase?
- Where do they go to purchase their existing services/products?
- How do they find out about new services/products?
- How do they choose? What criteria do they use to select the work or service that they require?
- Are their decisions based on price or on quality?
- Use your market research results to make a customer profile. If you have already completed sales or work for customers, include your existing customer data in the profile.
- What are the likely types of customer for your business?
- Are the customers wholesalers, retailers or end-users (e.g. individuals, other businesses, institutions)?
- Where are the customers (local, regional, national or overseas)?
- How do you get access to the customers (directly through a personal visit, or through an agent, trade shows, shops, galleries, etc.)?
- How do your customers trade (through trade shows, buying trips, annually or seasonally; where and when, or other)?
Your unique selling point (USP)
- What is unique about your product or service that gives it a competitive advantage?
- Ask yourself why would a customer what to purchase your products over a competitors.
- When you have identified your USP, it should be promoted in your sales and marketing material.
- How will you sell your work?
- How much will it cost you to sell?
- Who are your competitors?
- How established are they?
- What do they sell?
- Where do they sell?
- How do they market their products/services?
- How do they present themselves? Create a competitors dossier of, e.g., advertising material, direct mail, PR materials.
- How are they positioned, and what is their philosophy?
- How do they operate - do they compete directly?
- Where are they based?
- Who are their customers?
- What do they want? Try to identify their likely long-term strategies and business philosophies / mission statements.
- What is the size of their market?
- Why is your product/service better than theirs?
- What are their strengths?
- What are their weaknesses?
- What are their opportunities?
- What are the threats to their businesses?
- What are your projected sales?
- How will you get new business?
- How much time each week / month will you allocate to sales and marketing?
- How much time will you allocate to administration and sales follow-up?
- What are the most appropriate marketing activities for your business?
- What future is there in the market that you have chosen? Is it growing or declining?
After completing your market research, you should know the market for your business.
- Write a statement about what the market is - where it is and how you will reach it; include the benefits of your product, your unique selling point, and why people will buy your work or services rather than those of your competitors.
- Start to consider the most effective promotional methods and how much it will cost you to promote and market your business.
- Attend a one-day training course for an introduction to market research. Contact The Prince’s Trust (for England and Wales) or The Prince’s Scottish Business Trust (for Scotland) for start-up information and advice. Phone: 0800 842842 or www.princes-trust.org
- Speak to professionals about your product and service, and get feedback.
- Visit the shops and see what sells.
- Observe how products are produced, this will help you develop ideas for your brand.
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