Why Market Research is Important?

Market Research; An introduction

When engrossed in an ongoing business, indulging in presuppositions about your clients, counterparts, contenders, market or systems can cost you your valuable time, money, and effort. In order to make effective decisions that will help your business expand and leverage its resources in a smarter way, you will need to devote some of your resources to market research.

Conducting your own market research on a constant basis is essential for staying current with industry trends and sustaining a competitive advantage. Conducting market research is critical whether you are starting a new venture, advancing, or creating new products. It assists you in having a clearer grasp of your target market, boosting revenue, and driving business expansion.

What is Market Research?

It is defined as the action of gathering, assessing, and comprehending information to assist in the resolution of marketing problems. We use market research for a variety of reasons, including making informed decisions, such as evaluating the reliability of introducing a new product before devoting time and resources to the new project.

Market research is essential while planning a marketing strategy. When done correctly, it can help to illuminate your marketing activities, such as understanding the needs of your target audience and determining what key messages to convey and by which means you should convey them.

You must understand the choices and preferences of your target audience in order for your products and services to be well-accepted by consumers. The market research gives you vital information about your competitors and existing products. The outcomes provide insight into what is essential to succeed in the market. As a result, decisions related to business that are taken by organizations, such as decisions about sales and marketing strategies, are greatly dependent on good market research.

With the economy becoming more and more cutthroat by the day, having a thorough understanding of your customers’ concerns and interests have become crucial for any company. Market research is the most effective way to increase customer satisfaction, understand the factors affecting your business, and improve performance.

Importance of Market Research

There are numerous examples of product and market lapses that occurred as a result of insufficient market research at the start. Without proper research work, planning to introduce a new product or export to a new market is not at all a good idea.

Before taking such a risk, you must thoroughly understand your customers and competitors, as by not doing so one can face dire consequences. This makes Market Research hold an important place in your start-up endeavor. Let’s have a look at some of the important reasons why Market Research is given so much importance.

Recognizing new clients:

To find potential new customers, you must first understand who your current customers are. You will also need to be familiar with key demographics. While doing a close introspection of your product or service, it is important to ask some questions to yourself such as, who is going to use your product or service? What age is your customer? What is their income level, marital status, or geographical location? Once you understand those factors it would be a cakewalk to target customers successfully.

Update your knowledge about the needs of your existing customers:

Take a substantial time to know your existing customers. Again ask some questions to yourself such as, why should your existing customers keep redundantly choosing your product over other potential products? How do your customers use your products? How do your products address a problem? Who or what influences their buying decisions? Also, what do your customers enjoy the most?

Understanding how your existing customers use your products and what problems they solve will help businesses improve their products and identify effective sales possibilities with existing clients.

Setting attainable goals for your company:

Now that you have information about your potential and current customers, you can use it to set attainable and realistic goals for consistent improvement and business expansion.

Creating fresh and beneficial strategies:

Market research data will assist you in making more educated choices. Pricing, distribution channels, marketing mediums, or identifying prospects to integrate a new product or service are just a few examples. These findings will also assist you in making more smart judgments about your current operations and functioning.

Resolve your greatest and stubborn business issues:

If you’ve already recognized an issue in your company, conducting market research will assist you in determining the source of the problem. You can, for example, determine whether a new competitor has entered the market or whether brand awareness has started to fall short, resulting in a reduction in revenues.

Looks into possibilities of expansions:

Market research can assist you in identifying potential areas for business growth. Given that it allows you to test markets to see if there is demand for a new item or brand. You can also conduct market research to determine the ideal place for a new store to introduce.

Determine how to broaden your offering:

Market research can assist you in identifying new markets that are underserved or in limited supply. You can, for instance, recognize varying market trends as a result of new construction activity, enhanced standards of education, or other variations that will bring great possibilities to your corporation.

Overall, market research isn’t just for new businesses.

Market research can prove beneficial for businesses of all forms, dimensions, scopes, industries, and skill levels.

Market research can assist you in learning about new and existing customers, recognizing issues and problems, and even exploring new opportunities that can lead to business expansion.

Types of Market Research

There are mainly two types of market research, i.e. qualitative and quantitative research.

Quantitative research is concerned with generating numbers, such as the percentage of the population that purchases a particular item. It is carried out through the use of surveys and questionnaires. You can conduct simple quantitative research on your own by speaking with customers. While launching a new product, more thorough quantitative research is preferably used to identify markets and understand customer profiles.

Qualitative research employs facts and figures to discover what people think and feel about products, as well as what factors influence their purchasing decisions. Surveys and focus groups are used by researchers to collect this information, and interpreting the results is a job that needs specific skills.

Planning and Conducting Market Research

• It should be made sure that you are having a thorough idea of the end goals and objectives. Your target audience, business objectives, challenges, and most importantly, customers should be central to the process.
• Before beginning the research, establish clear objectives and goals.
• You can hire a virtual research assistant to perform online research before starting your business
• Determine your target market and audience size.
• Make certain that your sample size is representative of the audience you are attempting to reach. This means that the research sample should have a sufficient number of respondents to accurately reflect the larger target market demographic.
• Based on your objectives, select the best market research and data collection methodologies.
• Create your research questions – this applies irrespective of the process of data collection you employ.
• Ascertain that the questionnaire is impartial and does not contain any biases.
• Maintain your objectivity throughout the process.
• Include questions that affirm the other sections of the questionnaire.
• Include open-ended questions in a qualitative focus group setting and allow respondents to openly express a topic that may not have been included in the questionnaire.
• Once the data has been collected, use strong analytical abilities to interrogate and decipher the observations.
• When study results are calculated, keep in mind that they should not be interpreted in isolation.
• To validate the observations, the macro-environment such as language, cultural, economic, and political situations needs to be scrutinized.

Why do companies need Market Research?

Organizations start businesses with the aim of growing and making profits. To achieve this they need to establish that the venture they are running will provide enough returns to support the growth of the business. In this effort, the first thing to consider is whether the service or product they offer is needed in the market and to what extent. The success of that effort will depend on whether it will attract customers in a big way.

This is where businesses need to conduct thorough research of the market for the product they are dealing with. They have to do it either on their own or hire expert researchers if they don’t have the means. In whatever way it is done, the research is imperative to succeed and flourish in the modern-day cut-throat competitive environment.

Successful business organizations use market research to keep up with the ongoing trends. Keeping eyes on the findings of the research, they make better business decisions to maintain their company’s competitive edge. However, regardless of whether it is a start-up or an expanding business, research is vital to comprehending your target markets and thereby boosting sales.

How to Conduct Market Research for a Business?

Following are a few specific areas where market research can help to build a strong business set up:

Understand the target customers

Entrepreneurs need accurate information on their target customers including how best to reach them and the size of their market. To achieve this, exercises like designing a questionnaire to be answered online by a large number of consumers across an area the business would operate can be adopted.

This type of consumer study helps the researchers to understand the profile of the target customers so that they can develop a focused brand value. By directing the efforts to the precise target markets, quicker and more effective results in marketing campaigns can be achieved.

Right posturing of the brand being sold

Companies must have a good hold on the brand of the product they want to place in the market. They should have a fair idea about how do customers feel about their products and how does their marketed brand stack up against the competition? Here market research play a vital role to improve the brand image by exploring issues like brand visibility or customer awareness and how familiar consumers are with their brand vis-a-vis the competitors?

Identifying improvement areas and new opportunities

Market research can help in identifying new market opportunities available to the company. It can also help identify geographic areas for expansion and examine the market’s acceptance for any new products or services.

The market research also includes activities of competitors in respect of their brand values, and consumers’ popularity of their products. Also with regard to personification what characteristics and traits do their customers associate with their brand? This would enable improvements necessary to have a cutting edge and established or increased market share.

Likewise, there are plenty of other aspects of conducting market research.

With umpteen numbers of businesses offering a wide range of products and services, market research is a critical component for businesses to succeed and grow. In a vigorously competitive marketplace, research can help businesses to stand out in the crowd by providing valuable insight about their ideal customer base. This will increase brand awareness and also provide much better ideas needed for successful marketing campaigns.

The bottom-line

Market research has become an essential and integral part of a modern business organization. It is also becoming more and more advanced in its scope and utility with an increasingly methodical, scientific, and analytical approach. It has been using data, statistics, and computer simulations extensively to understand customer behavioral patterns, business threats, weaknesses, opportunities, and strengths.

In the present-day scenario, the customer is the king and no one can flourish without satisfying the king’s demands because his choices and options are many. Hence the success of a business entirely depends on customer satisfaction and to achieve this goal an accurate knowledge of the market needs of customers is of paramount importance. Well-crafted market research only can provide access to the much-needed information and knowledge that produces a powerful marketing strategy in the making of a superior business enterprise.