For a very long time I had a permanent frowny face when I thought of collecting statistics for market research. Most business and marketing students are taught to collect and analyze raw data, but I have found that there are many sources available for locating the information you need to make good business planning decisions.
Market research often centers on collection and analysis of information about consumers and competitors. Systematic collection and analysis of data detailing attributes of your target market is the key to all business planning. In a series of posts I will describe many sources that collect useful, often vital, economic information. Some have excellent tools for compiling the data. This means that you can focus on analysis and application of the information to your business plan.
Even so, there are some basic steps to finding and using statistics in business planning.
- Problem definition: What is the focus of your research? What do you need to know to build a solid marketing plan? Example: How many new housing units, and of what type, have been built in your county in the last year?
- Data collection method and needs: How will you collect the data that you will need to solve the problem?
- Determine likely sources:Where will you look for this information? Statistical sources range from Major League Baseball to UNICEF. Just searching on Google and looking at likely sources is not efficient and very discouraging. There are literally thousands of sources: for this series of posts I will report on U.S. government-collected datasets.
- Collection and analysis of the data: Collect your statistics from a reliable source and compile it into a chart, map or structured document. Once the data is compiled the hardest part of this process may be to determine what the data reveals. Does it show a growth spurt in population, in businesses in a downtown area, in the number of widgets sold? And if so, what does that mean to your plan?
The analysis of the data is often the most difficult because the results may not reflect what you or your client expected. For example, I once worked for a very large engineering firm that relied for one large segment of their business on the pulp and paper industry. After doing research I found that, at least at that time, it was a cyclical business. Executives refused to believe that and continued to throw significant resources at obtaining more contracts to design and build paper plants. The data was correct and in a few years that segment collapsed—that firm is now totally gone.
In subsequent posts I will cover data search tools like American FactFinder, the U.S. Economic Census, demographic sources such as the U.S. population census, international sources, and industry profiles. The next post will contain information about U.S. government statistical search engines and tools.