Market Research is an important function in marketing. However, most research is costly. Small business operators find it difficult to invest large sums solely to gather information which may not be 100% accurate.
You've read about large corporations spending millions on research only to fail at accurately predicting consumer preferences. Throwing money into research has not always bought a guarantee. There are too many factors influencing consumer behavior.
Your small business can:
With market research your expenditure of time, effort and money yields information only. With test marketing there's a probability your intuition or theories will yield enough revenue to recover all or part of your costs. If there is a profit, it can be applied to researching the market for additional promotions.
When the introduction of a new product or service requires huge amounts of initial investment, it may not be a proper place for your small enterprise to be taking risks. Are there some affordable alternatives or variations for market testing?
Take note of the large franchise operations that tend to allow one franchisee to experiment with a new concept before launching it to the others. In that way, large investments in equipment and promotions are deferred until the idea is proven with sales in one small market. Can you break your new product idea into small units that are within your risk-taking budget? Is the investment small enough to write off without harming the whole enterprise?
Large corporations test in communities that have proven to be fairly accurate bellwethers. These work well for corporations operating over large geographical areas. Are there small pockets of consumers in your market area where you can do test marketing?
It's often possible to do some inexpensive secondary research where you apply information gathered and collated by others (governments, economic development agencies or associations) to your own situation.
Something is better than nothing or a SWAG (Scientific Wild Ass Guess.)
Stories from members will add great value to these maxims
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