Market research is an extremely important part of a company's activity even before the company comes into existence. When attempting to create a new startup company, market research is imperative to determine whether there is a need for the services or products the entrepreneur plans to provide, and if so, how large the need is. All small businesses need to be aware of their market niche, and the strengths they bring to their market; research helps a startup hone in on their niche and tailor their operations toward the market segment that is the most likely to buy their products and services. Even if a startup creates a superb product, they can easily fail if the market in their area does not care for the type of product offered.
After the startup phase, ongoing market research helps small businesses by continually providing feedback that can be used to improve product and service offerings. Existing customers can often provide valuable information with little cost simply by asking them to fill out a survey, or even asking them questions in person. Oftentimes customers will reveal improvements that can be made with simple adjustments, such as an increase or decrease in the size of a product. Whenever a company plans on introducing a new product, surveys and focus groups can help the company tailor the product to fit the desires of potential customers. A product should never go up on a shelf without the knowledge that some people like the product and would be willing to pay money for it.
Apart from the utility research data provides to a company to improve its products and services, market research is also a form of advertisement. Small companies often have low market penetration and visibility, so it is important for them to use any means possible to make potential clients aware of their company. Handing out free samples or running other public promotions is a way for a small company to conduct research while cementing their product in the minds of customers. Successful small businesses thrive on word-of-mouth advertising; conducting highly visible market research is a way to create buzz while gathering useful information.
