Collecting Market Research
Understanding everything you can about your target market is one of the most critical components of business ownership. And it’s not just one of those things that can be done when you’re in startup mode and never looked at again. Since the marketplace and consumer needs/tastes/desires are constantly changing, so too is what your audience wants and needs from you. A business that doesn’t spend time doing market research is one that runs the risk of being quickly left behind as consumers move on to the next thing.
Doing market research is something large consumer product goods companies spend thousands, if not millions, on every year. They have internal teams working on this fulltime or they outsource this task to market research experts. That, unfortunately, is not a reality to most small and medium-sized food companies. So how do smaller companies conduct market research when their budgets are already stretched thin? Here are a few ideas:
- If you can afford it and have specific questions you want answered about what consumers know/don’t know about your brand or how they interact with your products, hiring a market research firm to do a one-time focus group (either in person or online) can be a good use of resources. The caveat is that this can cost upwards of $10,000 or more depending on your needs and the complexity of the research.
- Try asking your customers yourself. You may not be able to hire a market research firm but you can still ask your customers what they like/don’t like/need/want/etc. Unless you have a background in market research, your results may not be as scientific as those that you can get by hiring a market research firm. But asking customers as you interact with them in-person or online, or even by sending out a short survey for them to answer (adding in the chance that survey recipients can win a great reward can help spur responses), can give you insight into who your customers are and how your product and brand are a part of their life.
- There is a tremendous amount of research available online for free or low cost if you know where to look. Industry publications like the Specialty Food Association and my site, Small Food Business, publish food industry-specific statistics as those are made available. Your local library can also be an excellent research source as many libraries offer to their patrons free access to industry databases/statistics that would cost an individual thousands of dollars to subscribe to. Talk with your local research librarian to see what may be available through your library system.
- For information about demographics, the US Census Bureau (www.census.gov) maintains an online census report that can be drilled down to a zip code level for insight about median age, income, children in the home, etc. within that local area.
- Ethnographic research – the study of someone in their natural space – can give you real insight into why consumers make the buying choices that they do. When you ask someone why they made the choice they did to purchase Brand A over Brand B, they will likely give you a lot of rational answers for their purchase. But when you spend time watching how customers shop they may tell a different story. Do consumers seem to price point comparison shop when it comes to products like yours? Are they reading the ingredients labels and/or the nutrition facts? Do they seem to be driven by particular packaging designs? You’ll be amazed with what you can learn when you watch customers.
- Lastly, especially if you’re looking to grow your customer base, it can be helpful to talk to people who aren’t currently your customers to get a sense of what they think about your products and what your brand offers to them. One of the best examples of doing this on a small budget that I’ve heard of was a small food company who sent their goodies with friends to those friends’ workplaces. Along with the goodies (and who in office settings doesn’t love free food!), the company also sent along an anonymous survey with key questions they wanted answers to. The feedback they received from that survey, they later said, was more beneficial than anything their friends and family had ever told them – in part because the coworkers felt more comfortable being totally honest. Critical feedback like that can really help propel your business strategy forward.
Jennifer Lewis is the founder of Small Food Business, a website focused on providing resources and information to food entrepreneurs. The site includes hundreds of articles specific to the food industry, a podcast series which includes interviews with industry experts, white papers, and a community forum amongst other things. In addition to being a professionally trained pastry chef and having worked in the food industry from more than 20 years, Jennifer also holds an MBA from Northwestern University’s Kellogg School of Management.