Small companies are often discouraged about product development because of the perceived difficulty, time, and expense ("...only really big companies can afford to do it!"). Sometimes it is as easy as:

Once you've created your company mission statement (or have explicitly recognized the mission you've been pursuing), you can begin considering how to accomplish that mission by developing and refining your product or service offerings.

Today's accelerated rate of change and information growth means small companies will inevitably face increased competition in their market niches. Small companies need to embrace and seek out change, rather than avoid it or wait until change is forced upon them by competitors.

A small company should consciously decide on its position within its category of products as a:

A company mission statement can be a powerful force to clearly define your company's purpose for existence. In the beginning, your company was formed to accomplish something that did not exist in the marketplace, or to do a better job than existing companies. What was that special purpose? Small companies seldom take the time to discuss or write out their company mission, but they should. It will pay measurable financial dividends over time.

As an example of how a company mission statement can serve as a focus for improvement in your business's performance, consider the case of Fred's Grocery, a small one-store business, which suffered sales declines when a large chain supermarket opened a store in the neighborhood.

New businesses are always in a rush to get new products to market. But how many new products or new businesses fail because the concept is never quite executed correctly for the intended target buyer? When a company doesn't take the time to do it right in the first place, it somehow always has to find the time to correct it later, often at great cost in unnecessary spending, lost time, lost sales, and lost market share.

When doing quantitative market research, there are two ways to select test respondents:

The design of a good quantitative questionnaire depends upon careful consideration of:

If you're doing quantitative market research, in most cases, the sample size for the number of respondents you'll test is determined by your available budget and by the confidence levels that you desire or can accept.

Quantitative research is a type of non-experimental market research that provides numerical measurement and reliable statistical predictability of the results to the total target population. Like qualitative research, this is original company research ("primary") on a subject in the normal course of company business ("non-experimental").

Qualitative research is original company research ("primary") on a subject in the normal course of company business ("non-experimental"). It is primarily concerned with getting a subjective "feel" for the research topic, not a numerical, statistically predictable measure.

City and regional test markets may provide the most reliable real-world feedback on new product success. However, small companies generally do not conduct formal market research field studies in a controlled group of stores, where panels of stores are matched and distribution, in-store merchandising, and advertising is done for you by the market research company for tens of thousands of dollars per test group of stores.

To get an accurate handle on the what the market's reaction will be, at least 25 qualified people should be interviewed for each significant product difference or formula. This will provide the basis for directional evaluation and changes in the prototype, or product positioning.

Laboratory studies are a type of primary marketing research that are often used by larger consumer products companies. The downside, for small businesses, is that they cost from $50,000 to over $100,000 per test leg. On the other hand, these tests have a high degree of reliability and correlation with actual market performance when the test product, pricing, and advertising are similar to those actually used in the real market. They can save companies many millions of dollars in potentially wasted marketing spending by showing weaknesses in product, advertising, pricing, or other variables prior to real-world marketing.

Controlled store test-marketing, if affordable, can provide test results that reliably simulate real-market conditions and buyers. These methods can reduce risk and test-market costs as well as save time.

Field studies are a type of experimental, primary market research that is more accessible to small businesses. They are generally real-world tests in a controlled group of stores or in a single city.

Primary research is concerned with the design and implementation of original research; that is, data collected from the source. The advantage of doing primary research is that you can get information on the specific question or problem you need answered, not information that merely applies to your industry or type of business in general.

All businesses, large or small, need to know key information about their marketing environment, competitors, and target buyer/users. Smaller businesses may not be able to afford to purchase ACNielsen data for their industries at a cost of thousands of dollars per month. However, total market size, major competitors by category, and target buyer/user profile information is often available free from industry publications and trade associations.

Secondary research involving the study of information generated by your own company is "internal" research. Here we're talking about information that was gathered for purposes other than marketing — for example, it may have been gathered for financial or management purposes. (If it was gathered for strictly marketing purposes, it would be considered primary research, not secondary.) The most commonly available internal company information includes:

How big is your market? Is it large enough to sustain your business and competition? What is the growth trend for the next five years? Once a market has been identified, what is the size of the actual market that you can compete in? The actual market segment that you can sell to may be a small fraction of the total market. Each total market must be examined in light of:

Today the world is defined by the term "information age." All businesses require accurate and timely information to be successful. Whether your company is large or small, the right amount of financing, equipment, materials, talent, and experience alone are not enough to succeed without a constant flow of the right business information.

Secondary research is something every student has completed at one time or another, usually by doing library research with books and periodicals for a school report. This is usually the cheapest and easiest type of research for small businesses to conduct. However, it may be less reliable than primary research because the information you obtain was not developed with your particular problem or situation in mind.

If your customers are primarily the ultimate consumers or end users of your product or service, identification is generally done in terms of demographic and lifestyle factors.

If you sell to other businesses, who turn around and resell your products and services, your buyers are predominantly channel buyers. Examples of channel buyers from the grocery and drug industry are: