Negative Effects of Poor Market Research

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.

Problem/Background:

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. Mark...

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...and thus, a marketing decision is made. Although this may seem like a difficult process, it all works for the better of small businesses succeeding in their markets.

Conclusion:

Small business owners, in the U.S. struggle yearly to keep their businesses running effectively and efficiently. These businesses may tend to fail when it comes to conducting market research. A lot of times, businesses are selling products that have already been sold. Starbucks is doing what no other company in their market thought to do; they have begun to sell beer and wine to their customers after 4pm. Due to this implemented marketing strategy, Starbucks is expected to increase sales and profit and welcome a new variety of customers. This is just one example of how small businesses can apply the same changes through market research in the hope of successful operating for years to come.