NEW VENTURE GUIDE
by the UALR Arkansas Small Business Development Center
The Basics of Marketing Research
There are four components to studying a market:
Personal knowledge Knowledge of competition Knowledge of customers Research at the library
Personal knowledge of the industry develops from
having contacts in the business, personal experience and a
general feel for the business. Understanding the industry is
vital to assessing the market for a product or service.
Competition. A survey of the competition may be
needed to determine if there is a niche or room in the market
for another business. This can be done by observing
competitors' businesses. How busy are they? What problems do
the businesses seem to have? What type of customers do they
have? Observation helps to determine the size of the market
and problems businesses have in serving that market.
Customers. Another useful tool in planning a
business is interviewing owners of similar businesses outside
your planned market area. If your business will draw
customers from a 25-mile radius, similar businesses in towns
60 miles away generally will not be competing for your
customers. Business owners may be quite willing to discuss
their businesses and to share advice. Often, they have
insight and experience that can be invaluable to a new
business owner. Also, after developing a profile of a typical
customer, talking with a few people fitting that description
will help identify needs of customers.
Secondary research, or research at the library, is
necessary to quantify the market and to verify your findings
from the above three steps. The following tools are designed
to help with research at the library. Library research should
not be neglected nor should it be the sole source of
information used in developing a business or marketing plan.
Research at the Library
Local and university libraries contain publications which
can provide much of the information entrepreneurs need.
Materials that are not in your local library may be obtained
through interlibrary loans. Check with the reference
librarians.
Use the following list as your guide to doing secondary
research on a specific business or industry.
Identify the appropriate
North American Industry Classification
System (NAICS) and
Standard Industrial Classification (SIC) code
for your business. The
SIC system is gradually being replaced by the NAICS
system. These classification systems are assigned by
the U.S. government to specific lines of business.
Since most government and industrial statistics are
gathered and reported by the NAICS or SIC code,
identification of the correct codes for your business
will enable you to locate important data. Both the
NAICS and SIC code manuals are available at the ASBDC
Research Center and most public libraries. Check for the current periodical literature on the
subject. Check the Small Business Sourcebook or the
Encyclopedia of Business Information Sources to
identify major books, trade journals, and
organizations for specific business categories. Explore the rest of the ASBDC website on the
Internet. We provide links to useful sites containing
small business-related information. Write or call the appropriate industry trade
associations. Write or call for a media kit from trade journals. Write or call franchisors for information on their
franchised businesses. Obtain the financial ratios for the business category.
Trade association financial studies, if available, usually provide the most
detailed information. Two other popular sources include Risk Management
Association Annual Statement Studies and Dun & Bradstreet's Business
and Financial Ratios. Examine census material for income, age, family size
and more of populations in areas as small in size as
zip codes the Census of Population and Housing,
Census of Retail Trade, Census of Service Industries,
Census of Wholesale Trade, and Census of
Manufacturers.
The UALR Arkansas Small Business Development Center's
(ASBDC) lead center in Little Rock includes a reference
library for public use. The Research Center, as we call it,
contains many publications dealing with small business. Work
space is available for your use, and photocopying is
available.
The ASBDC Research Center is located at 2801 South University
Avenue, Little Rock. It is open Monday through Friday from 8:00 a.m. to 5:00 p.m.
We suggest you call our office at 324-9043 or 1-800-862-2040 to ensure that the
library materials you need are available.
ASBDC Industry and Topic Files.
As a given subject or business is researched, the ASBDC staff creates files on
various industries and
business topics.
They are available for your use.
CD-ROM Databases. The ASBDC Research Center has
three CD-ROM stations and several CD-ROM titles. These
include phone directories, international business databases,
census data, tax references, and some frequently used
directories such as the Encyclopedia of Associations. Through
our relationship with the UALR library, we are also able to
provide access to research databases like Lexis-Nexis and ABI
Inform.
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