Market research is the most important part of the business planning process. The business plan is often used to present a case for financial assistance towards starting or expanding a business. Market research can be used in a business plan to strengthen the case, by showing that the business has thought about potential customers in detail (defined its market), proving that it is capable of planning ahead. Even a well-financed business can only succeed if other people like what it does and will pay for its products or services.
Anyone serious about starting a business should know who the likely customers are, how much they will pay for a product or service, who the competitors are and what they offer, and whether the location of the business is important.
Market research is equally important for internal use in the planning processes of an existing business. Many firms continue to provide the same product or service over the years, as long as it sells, only to find that they have been overtaken by their competitors. Ideally, businesses should regularly revise products or services in order to keep up with customer demands. Market research is a structured way of keeping track of how the customer base is changing, what customers want, what competitors offer, and any changes which may affect the business.
Sources of market intelligence
Commercial data analysis and reports