Market Research, Do I really Need That?
The main goal of conducting market research is to supply your company with the information you need to make informed decisions. It is especially important when small businesses are trying to determine whether a new business idea is viable, looking to move into a new market, or are launching a new product or service.
Does Every Business Need Market
Research?
Absolutely
YES! Market research is one of the most effective ways to gain insight into
your customer base, competitors, and the overall market.
The
main goal of conducting market research is to supply your company with the
information you need to make informed decisions. It is especially important
when small businesses are trying to determine whether a new business idea is
viable, looking to move into a new market, or are launching a new product or
service.
Market Research Scientific
Definition:
The
process of evaluating the feasibility of a new product or service, through
research done directly with potential consumers. By this method allows
businesses to discover their target market, collect and document opinions and
make informed decisions.
Market
research can be done directly by organizations or companies or can be outsourced
to agencies which have expertise in these operations.
The
process can be done through deploying surveys, interacting with a group of
people also known as sample, conducting interviews and other similar
processes.
Essential
purpose of conducting market research is to understand or check the market
associated with a particular product or service, to know how the audience will
react to a product or service. The information gained from doing market
research can be used to tailor marketing/ advertising activities or to
determine what are the feature priorities/service requirement of consumers.
How Market research can help small
businesses?
Surely
it can help Growing small businesses in many different ways, As:
Competition:
According
to a study 72% of small businesses focus on increasing income. Conducting
research helps them gain insight into competitor behaviour.
By learning about your competitor’s strengths and weaknesses, you can learn how to position your product or offering. In order to be successful, small businesses need to have an understanding of what products and services competitors are offering, and their price point.
Customers:
Many
small businesses sense they have an understanding of their customer, then they
do market research and learn they had the wrong claim. By conducting research,
you can create a profile of information for your potential customer and gain
insight into their buying habits, how much they’re willing to spend, and which
features had their interest. In addition, and maybe more importantly, you can
learn what will make someone use your product or service over your competitors.
Forecast:
Small
business is affected by the performance of the local and national economy, as
are its’ customers. If consumers are worried, then they will be more restrained
with spending money, which affects your business. By doing your research with
consumers, businesses can get an idea of whether they are optimistic or
concerned about the direction of the economy, and make modifications as
necessary. For example, a small business owner may decide to postpone a new
product launch if it appears the economic environment is turning negative.
Opportunities:
Potential
opportunities, whether they are products or services, can be specified by doing
market research. By learning more about your customers, you can gather insights
into complementary products and services. Consumer needs change over time,
influenced by new technology and different experience, This can create new
opportunities for your business.
Types of Market Research:
"Methods and Examples"
Whether
You have an organization or business and wishes to know purchase behavior of
consumers or the probability of consumers paying a certain cost for a product,
market research helps in drawing significant conclusions.
Depending
on the methods and tools required, following are the two main types:
Primary Market Research:
(A
set of both Qualitative and Quantitative Research)
It's
a process, where organizations or businesses get in touch with the end
consumers or employ a third party to carry out relevant studies to collect
data. The data collected can be qualitative data numerical or quantitative
data.
While
conducting primary market research, one can gather two types of information:
Exploratory and Specific.
Exploratory
research is open ended, where a problem is explored by asking open ended
questions in a detailed interview format usually with a small group of people
also known as sample.
Here
the sample size is restricted to 6-10 members. Specific research, on the other
hand, is more pinpointed and is used to solve the problems that are identified
by exploratory research.
Qualitative
market research study involves semi-structured or unstructured data collected
through some of the commonly used qualitative research methods like:
Focus groups:
It's
one of the common use qualitative research methods. Focus group is a small
group of people (6-10) who typically respond to online surveys sent to them.
The best is the information that can be collected remotely, can be done without
personally interacting with the group members. However, this is a more
expensive method as it is used to collect complex information.
One-to-one interview:
This
method involves personal interaction in the form of an interview, where the
researcher asks a series of questions to collect information or data from the
respondents. The questions are especially open ended questions and asked in a
way to facilitate responses. This method is heavily about on the ability and
experience of the interviewer to ask questions that trigger responses.
Ethnographic research:
This
type of deep research is done in the natural settings of the respondents. This
method requires the interviewer to adapt himself/herself to the natural
environment of the respondents which could be a city or a remote village.
Geographical constraints can be an obstruction factor in doing this kind of
research. Ethnographic research can last from a few days to a few years.
Qualitative
research methods are used by organizations to conduct structured market
research by using online surveys, questionnaires and polls to gain statistical
insights to make informed decisions.
This
method was once conducted using pen and paper. This has now evolved to sending
structured online surveys to the respondents to gain actionable insights.
Through a well-structured mechanism, data is easily collected
and reported and necessary action can be taken with all the information that is
made available first hand.
Secondary Market Research:
Secondary
research uses information that is organized by an outside source like
government agencies, media, chambers of commerce, etc. This information is
published in newspapers, magazines, books, company website, free government and
nongovernment agencies and so on. These source makes use of the following:
Public sources:
Such
as, library are an awesome way of gathering free information. Government
libraries usually offer services free of cost and a researcher can document
useful information.
Commercial sources:
Although
Commercial source reliable are expensive. Local newspapers, magazines,
journals, television media are great commercial sources to collect information.
Educational Institutions:
Although
it's not a very popular source of collecting information, most universities are
a rich source of information as many research projects are carried out there
than any business section.
Why it's Important to do Market
Research?
With
the economy being competitive with each day, it’s important for businesses to
know and understand the priority of their consumers. Conducting research is one
of the best ways of achieving customer satisfaction and elevate business.
Reasons why market research is
important and should not be neglected:
●
Provides information and
opportunities about the value of existing and new products, which helps
businesses plan and strategize accordingly.
●
When understanding needs of
customers, businesses can also plan their production and sales. One of the most
difficult sides for a production manager is to keep inventory jammed. What is
the demands and how much should be produced to fulfill the needs of the
customer? Market research helps in determining optimum inventory stock.
●
It helps in locate what the customers
need and want. Marketing is customer-centric and knowing the customers and
their needs will help businesses design products or services that best suit
them.
●
To stay ahead of competitors market
research is an essential tool to carry out relative studies. Companies can
device business strategies that can help them stay ahead of their competitors.
In conclusion Benefits of an
Efficient Market Research
·
Make
well-informed decisions
·
Determine
the market size
·
Collect
accurate information
·
Learn about
customer preferences
·
Choosing
the appropriate sales system
·
Analyse
customer communication pattern
·
Collecting
details about customer understanding about the brand
·
Productive
business development
What type of market
research is convenient for your business?