If you’re considering launching a new startup business or expanding your existing small business, conducting market research to determine the viability of a new business venture may be an essential first step. However, conducting thorough market research can be time-consuming and costly. Therefore, you have to decide whether to hire the services of a market research firm or conduct market research on your own with in-house resources. There are potential advantages and disadvantages to either path, and a lot depends on your assessment of your particular research needs and your ability to gather necessary market information on your own.
The Importance of Market Research
Good market research can help you tweak product or service offerings to make them more appealing to a broader customer base, and it can also provide you with important clues about the best way to frame your marketing approach. Information obtained from market research can be critically important in building your company’s brand image and your bottom-line profitability. You may want to start by determining the type of research you need for your proposed business venture. Primary market research consists of things such as consumer observation, surveys, or focus groups, and it is usually designed to collect information about a specific product or service to be offered. Secondary market research is gathered from publicly available reports, such as annual trade association reports or government data, and it is usually more industry-focused.
Pros and Cons of Do-It-Yourself Market Research
Doing your own market research usually expedites the process, since you eliminate the need for back-and-forth communication with a marketing research firm. Another benefit is the obvious cost savings, which may be a deciding factor. You can also retain all the research data gathered; depending on the firm and the specific data gathered, a marketing research firm might not allow you ownership of the market research findings. However, you may be putting yourself at a disadvantage in doing your own research. Research marketing firms have experience in doing the work, and they may be able to get at and evaluate truly relevant data more effectively. Other potential drawbacks to conducting market research on your own include the time and resources required to gather adequate information.
Pros and Cons of Outsourcing Market Research
The major benefit to outsourcing market research is gaining the expertise and experience of a professional firm that specializes in conducting and analyzing market research. If you’re seeking general marketplace information on a given industry, a marketing research firm typically has such secondary research information already on hand and can help you pinpoint which reports are most helpful to examine. The major drawback to outsourcing market research to another company is usually the cost. It may also be difficult to locate the best marketing research firm to do research on the particular product, service, or type of business you are launching. You may know important things about your products or potential customer base that may be difficult to communicate to a company unfamiliar with your business. Ultimately, you will make the best decision on whether or not to outsource market research by carefully considering the relative time and expense costs and how to meet the needs of your particular business.