Due to an overlooking on market research, many small business owners lack key components when it comes to a successfully operated business. Many people tend to view market research as a “necessarily complex business made up of computers, models, and statistical gymnastics” (D’Amico 41). Small businesses are prone to lose revenue/profit as a result of poor market research. The ability to provide apply such research to a small business can improve upon many key components that make up a healthy business. Practicing market research in small businesses can help business owners develop products that differ from their competitors, create an understanding of the marketplace, and practice target marketing techniques. This will also help provide top quality services to customers and keep the business in operation for years to come.
According to the U.S. Small Business Administration, “seven out of 10 new employer firms survive at least 2 years, half at least 5 years, a third at least 10 years, and a quarter stay in business 15 years or more”(1). In between 2005 and 2009, there were more closures than births when it came to small businesses. Small firms employ nearly half of private sector employees in the U.S. The private sector plays an important role in the economy when it comes to growth and development.
Michael D’Amico defines market research as a “broad range of activities that encompasses the gathering and analyzing of facts relevant to problems arising during the transfer and sale of goods and services “(41). Business owners tend to avoid any sort of effort that might involve marketing research. Many think that marketing research is too expensive, or that it is not worth the trouble, when in fact it is. Marketing your business/brand is important to your company’s success. You need to know which market you want to become a part of, and how to maintain your position in that market.
Starbucks Coffee is has now incorporated beer and wine into their menus in over 1000 locations across the U.S. They noticed that after 4pm, less and less traffic would flow in and out throughout stores; according to ABC News, this is “part of Starbucks' push to boost sales after the morning rush hour” (1). When it came to research, the chain first offered beer and wine after 4 p.m. at one of its Seattle cafes in 2010 (ABCNews 1). After 4pm, they plan get rid of the coffees and teas, and baristas will become bartenders serving beer and wine to those of age by nearly 40 locations at the end of 2014 hoping to spread to over 1000 in the next couple years. Although Starbucks is one of the top companies in the world, they are a great example of using market research to attract customers to their stores when they seen a decline in sales around a certain time of the day.
The underlying problem in small businesses is not necessarily the lack of market research; the problem stems from the ignorance of market research. Many business owners think that the...