What is Market Research ?
, including social surveys and opinion research, is the organized gathering and understanding of information through interpretation about individuals or organizations; often using statistical and analytical methods and techniques to support decision making and gain valuable insight about market activity. It refers to any organized effort to gather information about target markets or customers. It is a very important component of business strategy.
Market research should be done for start-ups as well as for existing business for their business expansion or before new product/service launch.
Why is Market Research important?
Here is the three vital reasons why market research cannot be ignored:
1. Market research can gauge the success of your marketing campaigns, which can positively affect your sales—through giving an insight on what your customer really wants.
2. Market research can help you keep a tab on your competitors—by giving you information on new entrants in the industry and how well your competitors are doing.
3. Market research can help you minimize loss in your business—by giving you advance data on how your business is perceived by the customers and competitors alike.
Market research is important for every business and should be done carefully to avoid wastage of money. Strategic investment is the key. Successful businesses invest in market research on a continuous basis to keep up with the ever changing market trends and to be a cut above the rest. Regardless of whether you are a start-up or expanding your business, market research is vital to understanding your target customer base and increasing sales.
Business owners regularly conduct research for many reasons—Identify potential customers, understand their target audience etc.
The following questions will be answered when you conduct a market research:
Target audience: Who is going to use your product/service?
Age group: How old are they?
Gender specific: Are they male or female?
Social: Are they married, single or divorced? Do they have children? What kind of society do they live in? What is their level of education?
...and so on.
Understanding your customers helps in creating and/or expanding your current product/service in a much better and informed way. Following are some of the additional questions that an informed market research attempts to answer:
Why do customers choose your product over competitors?
What do your customers value most? Is it the service, product quality or the brand associated with consuming your product/service?
What influences their buying decision? Which websites do they visit?
...and so on.
Set sensible goals
From the data gathered from the research, you will be able to set realistic goals for growth, sales anddiversification strategies. That is where an effective market research comes into play.
Develop effective strategies
From the results of your research, you will be able to make important decisions regarding diversification strategies, creating a new product/service, pricing your service and so on. You will be able to fine tune your pricing strategies as well. This gives you an edge over competitors offering the same service as you. It teaches you how to create a niche market for yourself. It will also help you make informed decisions regarding reducing business activity in terms of advertising or promotional activities.
Examine and solve business issues
Market research helps you identify business problems and solve them. For example, if there is a drop in your sales, through market research, you might discover there is a new entrant in the market, or you might discover that your brand awareness has fallen. Research will help you analyse and fix those issues.
Prepare to diversify or expand
Research will help you identify areas for expansion and diversification. You can do a test run of your product to gauge the market’s readiness for your new product/service.
New tidings—Identify business opportunities
Your research could identify potential new business opportunities for expansion or diversification. During the course of your research, you may find an untouched or unexplored upon market. Market research brings with it, an awareness of newer trends. This could help your business in avoiding potential stagnation.