Suppose you are going on a trip. As adventurous as it might feel, you won’t just get into the car and start travelling to a place you have no idea about. A business without market research is just like travelling and having no idea of where you are going.
Launching your business without understanding your target market, competitors, or current trends can be a fool’s errand. Consequently, proper market research is as essential as the plan you make for your business and the investment you make in it. Moreover, through adequate market research, you can find out and fill up the knowledge gap you have about your business.
Therefore, you will be able to increase customer satisfaction.
As the economy is growing, so is your competition and also the preferences of your target audience. You can keep this on track and make your business successful with the help of market research. This article will guide you with why market research and its importance.
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What is Market Research?
To take your business to the list of success, you must know your customer’s needs. Then, you have to offer them that so that it brings profit to you. Many new business people or entrepreneurs make the mistake of assuming that they know their customers. These assumptions can be a costly mistake without any detailed research. Therefore, to know your customer, you must carry out market research.
To define market research, it’s the process of determining how well a new product or service will work by conducting research. Market research is a systematic way of gathering, recording, and analysing qualitative and quantitative data about relevant market products and services. You can discover your target market and receive feedback and opinion from customers and potential customer through this.
To do market research, you can have an in-house position in your company, or you can do it through a third-party agency expert in market research. Market research plays an important part in the research and development of new products. The research can be done by taking surveys, interacting with a group of people (samples), and conducting interviews and other similar processes.
Market research is gathering industry information and utilizing it to your company’s benefit. It can be done in two ways: primary research and secondary research.
Primary Market Research:
Primary market research is used to collect all the raw information straight from the sources. Typically, it is done for a specific project and done through conducting surveys, interviews and focus groups targeting a specific purpose. Thus, primary research can be lengthy and costly. But online surveys are an efficient way of doing primary research.
You can gather two types of information from primary market research: Specific and Exploratory. Specific research is targeted and helps to solve problems that are found using exploratory research. So exploratory research is discovering problems through asking open-ended questions while conducting a detailed interview. It uses a small group of people, around 6-10 people.
Secondary Market Research:
Secondary market research is gaining existing information on relevant markets from different sources. Also, secondary research is interpreting data that is already recorded in reliable sources. These sources can be media, chamber of commerce, or government agencies and so on. Newspapers, magazines, websites, books are also a great source for secondary research.
Both the research have two kinds of results or data, quantitative and qualitative. Qualitative data are descriptive information that doesn’t include numbers. Instead, observations, one-on-one interviews, focus groups, and other approaches are used to gather this type of information.
In contrast, Quantitative data are numbers and statistics based on relevant findings. And obtaining quantitative data makes the research more reliable.
Why is Market Research Important to a Business?
Doing market research can bring you more profit and help you build strategies to market your product.
Indirectly, it also helps you to build your brand reputation. Here are 7 reasons why market research is important for your business.
1. Market Research Helps to Identify Target Customers.
You have an excellent business idea. You also estimated how much you are going to invest in it and how you will develop it. Everything can become futile if you launch your business and find that no one is giving heed to your business. Often it happens because you launched your business without even identifying or understanding your customers. The audience who are getting your business ads might not be interested in your product.
Doing market research can solve this problem and help you find your target customers. Through market research, identify your target customers and their demography. First, you need to see who are already buying products that are similar to yours. Then gradually find out what is their age group, where they belong and so on. In short, you have to collect the following data about your customers:
- Location or Time Zone
- Spending Patterns
Through this, you need to form a picture of your ideal customers or a buyer persona. It will be easier to grow your customer base once you have a firm grasp of your customer base and its distinguishing characteristics. Therefore, you will be able to make a better and more targeted marketing approach for your business.
2. Market Research Helps to Identify and Understand Your Competitors.
Many businesses do not stand a chance because they underestimate their competitors. They have little to no idea what their competitors are up to, or at least functions. Even if you have the most amazing products to offer if your competitor does it better your product will not be able to survive. Wholesome market research helps you to understand your competitors and how to stay ahead of them. Knowing your competitor and viewing them from your customer’s eye can be important for making successful marketing campaigns.
By doing market research, you can identify the key players and the one who are rising. To do so, you can check for the following things:
- The threat of new entrants
- The threat of substitute products or services
- Bargaining power of customers
- Bargaining power of suppliers
- Competitive rivalry
Your competitors can be a great source of the resource. While doing market research, watch out for the ups and downs of your competitors and find the reason behind it. Try to avoid the mistakes they made and try to develop ideas better than theirs, which became successful.
You can also check what kind of reviews your target audiences are leaving for your competitors. Utilizing them in your product can help to gain the attention of your target audience.
3. Market Research Finds New Business Opportunities
When you are regularly doing market research, you can find many scopes and opportunities for your business. Market research helps you to broaden ideas on your business market and become more creative. You can also identify customer problems and market gaps that fulfil them.
As a result, you can find loopholes in the market which can be utilised to grab the high-level and accessible opportunity. Hence, it is the best way to find new kinds of platforms to advertise and reach your customers.
Moreover, market research also identifies new opportunities for your business, just like finding a new geographical region where your business can be profitable. You can expand your business as a result. You can also test the market readiness of your new products through market research. To identify new opportunities, you can do market research on:
- Market size
- Market share statistics
- Industry dynamics
- Major industry suppliers
- Key competitors
- General industry data such as the number of firms and their geographic distribution
4. Market Research Minimizes Business Risk and Loss.
Making continuous market research helps to obtain factual data. These data will help you focus on real opportunities and avoid risky situations. If you understand your customer through market research, you can use these to reach them more effectively. There will be less chance of rejection, wasting time, money, and effort in your marketing. The market research also makes low risk and high reward areas clear and where your business can expand.
According to the Bureau of Labor Statistics data, close to half of the business cannot survive more than the fifth year. The way to minimise loss and stay in the industry is by doing market research. Through regular research, you can check on your customers and see if you are meeting their needs.
Moreover, when you plan on a product, you can do a test in a small audience group. Market research will give you insight into how well your product will do. It will find out potential problems. You can check why your customers do not come back by conducting surveys. The market research also helps you find out your problem areas and why there are drop-in sales. Therefore, you can utilise these findings to make better business proposal and strategies.
5. Market Research Helps To Understand Customer Requirement.
Ideally, businesses succeed when they can provide the right people with the right product or service. Market research then gives guidance for businesses, identifying consumer needs and any gaps in market offerings. It can also assist them in determining the price point at which the majority of people will purchase a product or service and the lengths to which those people will go to obtain it. Eventually, market research can assist businesses in anticipating market trends, allowing them to plan for changing market conditions rather than being caught off guard by their consequences.
Market research keeps you updated about what your customers want and the change in their needs. Keeping up with current trends will give you ideas to develop your business and meet customers’ needs. To find out what exactly your customers want, you can use online survey tools. Ask current customers and also potential customers about their requirements and expectations of the product or service. But you have to ask the right and exact question.
If you don’t get to know your customers, you’ll lose them and have to keep looking for new ones. Don’t just go with your gut, as many businesses do. Use market research reports, focus groups, and market surveys to your advantage. Take the time to get to know them thoroughly. Ask the right questions, get the truth, and figure out how to keep the customers motivated.
Why is market research important for every business?
6. Market Research Boosts Marketing Strategies
One of the crucial benefits of market research is it enhances your marketing strategies. It will guide to make better marketing strategies. First, market research can be a great way to find mediums and channels that work as an advantage of advertising your product. If you can locate the medium where your customer base frequently visits, you can focus your marketing there. That way, you can capture the interest of your potential customer and gain sales.
All the finding of market research is to plan a market strategy that pays off and brings success. By analysing market research, you can form realistic goals for your business which you can easily obtain. An assessment of customers, trends, media and competition will help you frame market strategies.
Many business owners want to do a better job of marketing and selling their products. Market research will assist you by presenting data on the efficacy of your marketing activities. You can create surveys to get customer feedback on the look and sound of your marketing messages. Businesses can also measure customer perception and response to particular marketing strategies and events. They can also formulate effective sales tactics and apply them.
7. Market Research Helps to Meet Demands and Keep You Future Focused.
Market research helps you to estimate your product demands. As a result, you can figure out the plan, production and supply of the product accordingly. It can include information on new services and products, new distribution channels, business model changes, new market segments, positioning, and pricing principles. Both of these segments will benefit from thorough market research.
When these segments are fully incorporated into the company, they can help with tactical go-to-market strategies, product or service growth, and overall business development.
By identifying and understanding patterns, attitudes, and expectations that affect your customers, marketing research will help you stay ahead of the curve. Therefore, you can foresee your customers’ subsequent demand and when exactly they want it to fulfil.
Big or small business, everyone needs to do market research to survive in this fast-paced business world. Market research can be highly beneficial to marketing strategies because it provides insights and knowledge to the company. It will help you learn more about your customers and rivals. Marketing research will help you figure out who is buying your product and who isn’t. You can also find what motivates you and whether or not they are loyal to your brand, all of which will lead to increased sales over time.
Exploring the business market will similarly help you find new business opportunities. You need to keep up with the change in the market, and efficient market research will help you with that.
To increase your marketing and market research knowledge, you can take our Diploma in Multi-Level Marketing (MLM). Become a marketing expert, thrive in your workplace or establish your own business with the help of this course.