How To Do Marketing Research

In order to conduct a marketing research study, access to demographic and sales data is important. Although many proprietary sources are used for these types of studies, a great deal of public information is available that can compete with or replace the "membership only" databases. Local property appraiser sites, state agencies, county tax collectors, census data and planning departments are a few of the possible sources for market data that can become the building blocks for conducting marketing research. These sources help the marketing researcher to isolate supply and demand in a designated sub-market, then make appropriate recommendations based on the data.

Starting with an example in the category of commercial real estate, a marketing analysis or marketing research study is one of the first steps in trying to sell a particular property. The marketing staff for a realtor first maps the property on a vicinity map, which can be assembled from the local property appraiser's geographic data, usually available online. Street names and parcel lines are the main features of this map. Surrounding properties for sale in a one to five-mile radius are often listed and shown on the map. Comparable sales over the past year can also be shown on this map. Alternatively, sales information for comparable properties may be listed in a table format.

Local taxing authorities, such as counties and cities, keep a database of DOR or Department of Revenue Use Codes, which lists all the licensed and tax-paying businesses by address and owner name. Marketing researchers often use these DOR use lists to assess which businesses and what type of businesses are leasing space in a particular building, or even in a particular neighborhood or zip code. From an analysis of leasing rates per square foot, compared with average vacancy rates in that area, the future income of a building can be projected. Other sources, such as "for lease" advertising, help to determine the going rate for monthly leases, on a square foot basis.

Census data at the zip code and block level can also be useful in marketing research. Local planning departments extrapolate their own growth projections using such data, together with their local records of building permit activity. To isolate the future need for a particular land use in a particular area, local block-level and zip code level projections of population and jobs may be pertinent for the subject property. State governments and state universities also produce economic projections for the purpose of financial planning, and this data is highly regarded by marketing researchers, when there is a need for demographic formulas. A demographic formula that would be useful to a marketing researcher, for example, would be "number of pediatric doctors per thousand population." If the subject property to be sold is a doctor's office, you can then isolate the ratio between population growth by age group, and a future need for doctor's offices, based in part on this demographic formula.

With a careful examination of the above-listed data sources, your marketing research can begin to draw conclusions about supply and demand in your sub-market. Perhaps you found that doctor's offices are leasing space at a high rate, making the purchase of the subject property a relative bargain, when comparing a logical mortgage payment with the local leasing cost of a similar-sized space. Perhaps you found significant projected population or job growth that is focused near the site. Perhaps you found too many, or not enough doctors already in the vicinity of the site, compared with the projected population that would drive the need for those doctors.

Conversely, a market study may find very competitive leases and high vacancy rates in the vicinity. In this case, a large supply of competing properties may indicate that potential buyers need a unique inducement, such as lowering the sales price or offering creative financing. In a tough market situation, the seller may need to upgrade the property and make it more attractive or competitive. These conclusions are natural outgrowths of the data collected by a marketing researcher, after detailed analysis of the trends indicated in the research materials. An effective marketing research study discusses conclusions and strategies drawn mainly from the sales and demographic data, and secondly, from the marketer's past experience of how to induce action on the part of buyers.


Share this article!

Follow us!

Find more helpful articles: