A little market research can go a long way when you are starting a new business. Market research is any activity that helps you gather information about potential customers and markets. It can help you identify opportunities, develop products, and plan your sales approach. At its best, market research is an organized process for gathering information that will assist you in making good business decisions.
Online research, short surveys, store visits, interviews with consumers or other companies are all good ways to gain valuable market information. Informal methods such as asking your friends and family what they think, or asking suppliers and prospective customers to give you feedback can all be helpful when you are first getting started.
For example, you might find what consumers want from a product can depend on where they buy it. The breakfast burrito a consumer buys at a Farmer’s Market might be quite different than the burrito the same consumer would buy from the frozen food section of their local retailer. Price point, ingredients, size and packaging may all be different. You will find you need to tailor the products you produce to the channel in which you intend to sell them, and the consumer that shops there.
In the same way that understanding your target consumer is important, understanding your competition is also very important. Make a practice of looking at products and businesses that are similar to yours and comparing them to what you are doing. You can learn a lot about reasonable price points, and what consumers want simply by studying the competition.
A wealth of marketing and other knowledge resources specific to the specialty foods industry and the natural and organic foods industry can be found online from industry associations or various publications such as Natural Foods Merchandiser. The SBA Learning Center also has useful online classes on Market Research and Marketing 101.
In addition, the Business Concierge service presented by IASourceLink offers assistance with obtaining market research and gathering business intelligence information. They can provide industry trends, competitive analysis, demographic reports, consumer spending data, targeted prospects, financial benchmarking and other customized research. For a food business they could help determine pricing for a product, and also assist with a competitive analysis of similar products and their pricing. All services are free to Iowa entrepreneurs and business owners.