10/20/2012 7:00 AM
By Bernadette Logozar Extension Economic Development Specialist
Whether you have an existing business or you are just starting out, you need to understand your market.
In order to fully understand your market, you need to know who will buy your product or use your service, how to sell to buyers, the amount they want to buy and the right price.
Good marketing skills are especially important for new or unusual enterprises.
So how do you conduct market research? There isn’t any magic to market research. Nor does market research predict future sales with certainty. Rather, this research provides information to help you project future trends, develop and plan a marketing strategy.
However, BEFORE you start down the path of market research, you need to clearly define what product or service you intend to provide.
Here are some tips to help you get started:
Product features: Describe your product, its range of size and quality, product mix, varieties or types, and other characteristics. For example: Premium blackberry jam, in pint and half-pint jars, bulk orders (25 plus) only.
Service features: Describe how you handle delivery, processing, packaging, instructions or other services that accompany the product. If you are providing a service, describe the range of services offered.
For example: Glengarry Cheesemaking is offering a floor plan design service to its clients to assist in the development and implementation of a working plan for processing milk on the farm or for artisan cheese production. The floor plan design will respect current processing regulations, equipment requirements and functional working space. This floor plan can be used to obtain pre-inspection approval, then shared with engineering professionals for subsequent building design/retrofit, and provide the required information to set up your implementation budget. Fee: $75 per hour.
Marketing season: Select a time when you will offer your product. For example: Available all year, but heavier demand in winter.
Benefits to the buyer or user: Find the real reason why your product is appealing. And saying, “because they need it” doesn’t cut it here. Be careful not to define your benefits too narrowly, as it can lead to mistakes later in your market research and promotion.
To help you determine the real benefit of your product or service, use these example questions:
When a consumer buys organically grown tomatoes is she buying food or health?
When a restaurant chef buys baby vegetables, is the benefit profit or prestige?
When a suburban family buys pick-your-own strawberries, is the benefit freshness, vitamins or recreation?
When a regular customer buys rhubarb juice from your farm stand, is he buying something to quench his thirst, improve his health or please his taste buds while passing the time of day with you?
Capsule product description or purpose statement: This is a statement that enables you to tell your customer about your business in as few words as possible. Why do you exist? Roll all the characteristics discussed above into 50 words or less!
For example: Bright Farms offers premium black sunflower seeds at bargain prices in three package sizes or in bulk, as well as feeders and information on feeding wild birds, to customers who enjoy watching and helping wildlife year round (36 words).
Once you have your product or service clearly defined, then you need to learn as much as possible about your market. You don’t need a degree to do this (although there are people with degrees who conduct market research for a living).
Good market research distills down to asking the right questions and looking in the right places for the answers.
In part two, we will dig into the basics of market research.
Bernadette Logozar is a rural and ag economic development specialist with Cornell Cooperative Extension of Franklin County.