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Market research is the art of testing the market to determine how a particular product or service will be received. Companies use market research to measure which demographic their product appeals to the most so that they can design a campaign that is best suited to a particular age, gender, income level or location. This research allows companies to develop a “target audience” so that they can focus their resources more effectively.

Market research is essential to the success of your business, but unfortunately many start-ups get it wrong and cause themselves problems. If you aren’t capitalizing on the results of marketing research, you are wasting your time and resources and probably missing out on sales and profits. You might spend a lot of time and money advertising in the wrong way before realizing that your market research mistakes led you down the wrong path.

Here are a few of the top market research mistakes that many start-ups make and how you can avoid them.

Using Secondary Research Only

Some start-ups think that they can get the full picture just by looking at the published works of others. However, although this secondary research is a great place to start in order to get a general idea, there is always the chance that the information could be outdated or not relevant to your business. Don’t rely only on secondary sources. If you want the most accurate market research done so that you can improve your chances of success, you need to do the research first hand.

The same goes for using only web resources. Just because you found something online doesn’t mean that it is accurate. You need to do a more in-depth investigation in order to fully understand the market. Sometimes information on the internet can be dated or biased.

Forgetting to Research the Competition

In addition to determining your target audience, it is also important to research anyone who is in competition with you. You should aim to gather as much information about them as you can, because if you are aware of their business strategy, pricing, strengths and weaknesses, you will be better able to establish a competitive advantage.

Using an Ineffective Research Instrument

Perhaps you have been sending out a questionnaire in order to find out more information about the target audience for your product. However, if the questionnaire doesn’t ask the right questions then it will not provide you with the answers that you need to know. Think very carefully about the research tools that you use and craft them until they can help you extract exactly the information you want.

One of the best ways to go about conducting research is to invest in market research software. This is a financially sound solution for any business looking to cater to customers and build a solid reputation. Using market research software is simple and takes far less time than some of the other methods of garnering customer feedback and demographic information.

Not Researching Price Information

Your market research should be able to tell you what your average customer would expect to pay and what their maximum budget would be for your product. This information is very valuable and will help you to find an ideal price point that is competitive and yet still brings you a healthy profit.

Ignoring Your Results

What is the point of spending money and time on market research if you fail to act in response to the results? Unfortunately, many businesses will perform market research and then ignore the results because they don’t fit with what the business had planned. Keep in mind that numbers don’t lie; if your market research is telling you something you should be paying attention.

These are just a few of the common mistakes that many start-ups make when they are conducting market research. Be sure to avoid them in your own business so that your market research efforts are as effective as possible.

About the Author: Heather Michaels is a small-business owner who put a great deal of time and effort into market research when she started her own company. She has found that whatever she puts comes back again at least double in the success of her business.

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