MARKETING TIP: MARKET RESEARCH

There are around 300,000 SME's in Hong Kong that account for something in the region of 70% of the city's total employment. These firms span both manufacturing and service industries (including professional services). There is little doubt that Hong Kong is an entrepreneurial society.

For these types of firms, as with any others, knowledge and understanding of the market is crucial in order to develop effective strategies and plans. However, market research in the traditional sense is often perceived to be an expensive proposition, particularly if using an outside vendor.

For SME's, cost effective research is often a major issue and challenge, but there are many ways to conduct research that is both cost effective and time efficient.

Not all market research needs to be of a primary data gathering type (primary data is data that you gather for a specific research issue at hand). There is a substantial amount of data that can be collected from existing sources (known as secondary data). If you are interested in trends in the market place, spending patterns of potential target markets, or information about competitive practices and customer perceptions, there are several useful secondary data sources. For example:

•  Government departments

•  Trade and industry magazines

•  Trade associations

•  Market research firms

•  University research

•  Academic journals

•  Knowledgeable persons in the industry

•  Internal firm records

By drawing on a number of these sources, an organization can create a very good profile of their market and indeed, it is strongly recommended that one begins by searching existing data to determine what has been done before and see whether you really need to conduct your own study and to what extent. There is little point in repeating what has been done before.

A few considerations are in order when using secondary data. Often it is very difficult to identify who conducted the research and hence the quality (reliability and validity) may be suspect. Moreover, one must ensure that the data collected fits the needs of the organization and is not being taken at face value just because it is free. Finally, make sure the data is current.

Secondary data collection and market research should not be a one off event, rather all organizations should be consistently scanning the environment in order to be aware of the trends affecting their industry.