Market research is a systematic, objective collection and analysis of data from a particular target market, competition, and/or environment. It incorporates some form of data collection about the characteristics of population groups within your business's geographic area of operation. You can hire a company to conduct your market survey, but doing the leg-work yourself will give you a much better idea of the characteristics of your target audience and provide you with insights you might not otherwise glean. There are abundant resources available to conduct your market
Use these sources for objective data about your target market:
- Newspapers and periodicals: Financial Post, The Globe and Mail, Report on Business, Consumer Reports
- Government catalogues: Statistics Canada and provincial and territorial statistics offices
- Directories: Telephone and city directories
- Websites: City websites and Chamber of Commerce websites
Consumers act according to a set of criteria. This means that consumers make purchase decisions that reflect a variety of personal characteristics and values, including:
- cultural values.
- social factors like family, social roles, and social status.
- personal factors like age and life stage, occupation, economic circumstances, and lifestyle.
- psychological factors like motivation, perception, learning ability, and personal beliefs.
Service Quality Model
This diagram illustrates how word of mouth, personal needs, and past experiences combine to influence a consumer's expectations of a service. It also demonstrates that management makes service decisions based on its perceptions of consumer expectations.
Word of Mouth→Personal Needs←Past Experience
Service Delivery (pre- and post-contact)
Service Quality Specifications
Management Perception of Consumer Expectations
A business owner's goal is to provide a service that is better than the consumer's expectations. The main determinants of service quality are access, communication, competency, and courtesy.
Interpretation of Market Data
To interpret your data, determine:
- target population characteristics like age, sex, family status, culture, income, and educational levels.
- whether there is a sufficient market population to support your business vision.
- how many competitors have a similar business model, and how many have a different business model.
- appropriate mathematical assessments. For example, the total population is 100,000, and the target population is 50,000. There are 10 competitors. Therefore, the ratio of competitors to the target population is: 1:5,000.
Typical steps consumers follow when purchasing services:
- Needs recognition
- Evaluation of options and alternatives
- The decision to purchase
- Post-purchase behaviours