Demonstrating that you know the situation of the market and have a clear idea of what to do is essential when running a business. You need to have a pretty good blueprint of the unusual exceptions for running a business. If you are lucky enough to not make mistakes, the better for you. Conducting market research is very important when it comes down to the management of a business because it helps you understand who your customers are and whether your offering is likely to generate demand. Gathering information about consumers’ needs and preferences is vital no matter if you are on the verge of launching a product or you are striving to improve your existing service. If you are on the fence about doing market research, continue reading to learn about its significance.
The Definition of Market Research
Market research can be defined as the process of collecting data about people, or companies and using it to better understand what they want. The terms market research and marketing research are used interchangeably, even though they do not mean the same thing. According to the experts, market research is concerned with markets, while marketing research is all about marketing processes. Getting back on topic, the results of the investigation are summarised in a report which helps the business owner make informed decisions concerning operations, strategies, not to mention the potential customer base.
There are several types of market research methods which you can pursue, as follows:
- Market Segmentation – It is easier to personalise your marketing campaign when you split up prospective buyers into groups or segments with common needs. This allows you to target specific audiences effectively. When carrying out market segmentation studies, you ask survey questions to learn more about people’s needs, values, behaviours, and attitudes.
- Product Testing – You come up with a great product idea, test it, and get your prototype built. Now what? You do market research. You need to know whether or not your product meets customers’ needs before you pass onto development and marketing. Make the audience use the product and get their feedback.
- Brand Research – Brand research comes in handy when you are trying to build a solid company image. People do not act the way you expect them to, so you need all the information you can get. Make sure to base your branding decisions on thorough research.
Reasons Why Effective Market Research Is So Important
Sapio Research, a global team of experts on the changing expectations of market research, says that gathering information about the target market, competitors, and the industry is a necessary activity and can be used for various purposes. This is why you need to spend more money on market research.
1. Making Sure You Will Not Go Out of Business
So, you are not going out of business, but you may have a hard time saving your business from bankruptcy. In the corporate world, the most intelligent entrepreneurs do not survive. But who does? Those who can adapt to change. Responsibilities are changing, which is why you need to be prepared for what lied ahead. Companies like Apple and McDonald’s changed suing market research, literally propelling their brands. Apple took advantage of the gaps in mobile phone segments to take its business to the next level. Thanks to online surveys, the company was able to gather data that enabled it to design Apple products.
2. Identifying Hidden Challenges
You would be tempted to think that big problems are easy to spot due to their importance. Not quite so. It is hard to identify challenges and build a competitive advantage. You must take into consideration the strengths and weaknesses of the organisation. What is more, you must conduct market research, as it will give you insight into the market share, competitors, customer dissatisfaction levels, and so. This activity can help to uncover challenges and identify problems. Basically, you will know if something is wrong and you can adapt your strategy accordingly.
3. Knowing Where to Advertise
It is imperative to select the right marketing channels for your brand. Market research can help you understand what channels give the best possible returns, so you will be spending your time and money on the most impactful ones. You can put the discovered information to work. After you establish your marketing purpose and budget, you can launch your new marketing campaigns. These are the ways in which market research can help:
- Running A Social Media Ads Campaign – If you would like to take advantage of the power of social media, get your facts straight. Find out where the target audience spends the most time, whether it is Twitter or Instagram.
- Hanging Out Flyers – You need to know where people spend most of their waking hours – in other words, the physical spaces where they spend their time. These are the places where flyers work and get you clients.
Market Research Tips You Will Want to Know
If you have no experience whatsoever conducting market research, you could really use the following tips. They really make the difference.
Keep in Mind That Market Research Is an Ongoing Process
Most business owners fail to understand that market research is an ongoing process. This means that it does not have an end. In this rapidly changing world, people’s needs do not remain the same. If you want to keep up, you have to constantly monitor trends and patterns. Market research is an activity that does not cease to exist.
Match the Methodology to The Culture
Does the chosen methodology match the company culture? If the answer is no, do not be surprised if you do not get the best results. The methods you use should be in harmony with the local business culture and environment. For instance, you cannot do online surveys in a country like Brazil that features a weak infrastructure.
Context Is Everything
Nowadays, you can find data everywhere. Maybe so, but not all information is useful. Take into account the context when doing market research. To be more precise, comprehend the limitations and harness the right knowledge base.
If you feel that this is too much for you, hire a professional market research firm. The pros are likely to get better results and you can focus your attention on meaningful tasks.