Market Knowledge

An investment in knowledge pays the best dividend. - Benjamin Franklin


 
You probably wouldn't drive with your eyes closed.
You shouldn't run a business that way either.
 

Making rational business decisions requires knowledge - which requires information - which requires data.

Data can come from various manners of research and investigation into your company's market, current customers, prospective customers, competitors, new markets and new business opportunities. Data are facts that must be analyzed and understood to yield information and knowledge that can lead to proper action.

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Research needs to be effective and informative. But, it can also be practical and affordable. With use of the internet, surveys of customers and staff, interviews, observations and deductions a sufficiently accurate picture of your company's competitive position can be brought into focus.

 

Four Key Questions You Should Be Able to Answer

Your ability to answer a specific four questions will measure how much you know about your business and determine your ability to manage it. If all you can do is answer four market related questions, these are the four to work on.
 
Who are your customers?
 
Who are your competitors?
 
Who are your customers' competitors?
 
Who are your competitors' customers?
 
The accuracy and depth with which you can answer these questions will help determine your level of customer service, the popularity of your new products, the efficiency of your marketing and promotion, the rate of your sales growth and the success of your new market development.
 
Here are some questions and issues to keep a marketing program active.
 

Who Are Your Existing Customers?

Buying Patterns - What information is in you database of existing customers? What do you know about what your customers are buying? Can you sort your product sales and customer records to determine:
a) trends of increasing or declining business by product,
b) distribution of customers by business type or demographic profile,
c) spectrum of products and/or services being purchased by distinct groups of customers?
 
Business Profile - What do you know about each customer's business and their market? This is important to provide the best products and services and be sure all possible business opportunities have been explored with existing customers. It's also important to be able to develop business with other similar customers.
 
Decision Makers - In a business-to-business setting, who are the customer's key decision makers regarding purchasing from your company? How good is your communication with them? In a consumer setting, what family members make the important decisions regarding your type of product or service? What sensitivities do you need to address to make your product or service appealing?
 
Reputation and Customer Satisfaction - What is your company's standing with each customer? What do you know about their opinion of you? Have there been complaints or problems? How were they handled? What do the decision makers think about your company? How do they think you compare to the competition? What was their criteria when they chose to do business with your company?
 
Potentials for expanded business- What else could you sell to your existing customers? Is each customer buying as broad an array of products as possible? Are they familiar with all your products and/or services? Could customers who are buying a single product or service benefit from other things you sell?
 

Who Are Similar Potential Customers?

Existing Customer Profile - Use the information you have or obtain about your existing customers to find others like them. Look for their competitors or individuals like them. What are some key characteristics of your existing customers? Review the profile of your best customers or demographic groups. What's the structure or organization of their market? Where are their offices or where do they live? What publications do they read? What other products do they buy? Why do they need or want your products?
 
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Who Are Your Competitors?

Compelling Advantage - What will it take to convert a new customer? If a company or individual isn't purchasing from you, they're probably purchasing from one of your competitors. Most often, people don't like to change. Businesses don't like to change. Given the effort and risk associated with trying something new, your prospective customers need to have a compelling reason to do business with you for the first time. Most often that's a reason you present to them, in the context of price, dependability, features, quality, etc. Usually, a small advantage will not be enough to pull business away from a competitor. It has to be a compelling advantage.
 
What are they doing better?- Do you have a current list of your competitors? In what ways is the competition more competitive than you? What are they doing better? Get to know your competition. Remember the old adage about reinventing the wheel. It's usually easier to copy another company's good ideas than to come up with new ones. Copy what you like about your competitors and discard or improve on what you don't.
 
What is your competitive advantage? - You need to know where you stand relative to the competition. This helps avoid wasting time trying to sell against thei