Market research is a systematic process of collecting, analyzing and interpreting information about target markets, consumers, competitors and the industry. It is a very important component of business strategy and forms the foundation of any successful business ventures. The wealth of information collected from the research can serve many purposes – from identifying a new market to launching a new business.
Market research helps businesses make well-informed decisions. It can remove the guesswork out of innovation, and channel resources into ideas and projects that hold the most potential. Businesses at different stages of growth carry out market research for different reasons.
Market research also provides relevant data to help solve marketing challenges that a business will most likely face - an integral part of the business planning process. In fact, strategies such as market segmentation (identifying specific groups within a market) and product differentiation (creating an identity for a product or service that separates it from those of the competitors) are impossible to develop without market research.
Below are some of the ways businesses can use market research:
Identify Opportunities and Threats in the Market
Both primary research (fieldwork) and secondary research (desk research) can be utilized as an insurance policy against obvious dangers on the road ahead. Coupling this with some qualitative research for deeper probing can highlight certain opportunities or warning signs that may otherwise have been missed.
Research might make it obvious that a new product you have planned may not be what your market wants or needs. You may then decide to make modifications on what you are going to offer to suit your audience.
Minimize Any Investment Risk
This is a simple but vitally important and often business critical consideration. Spending what is often only a small proportion of your investment on researching and testing the market, product, concept or idea makes sound business sense.
Strengthen Position & Stay Ahead of Competition
Knowledge is power. Using market research allows businesses to gain a better perspective and understanding of their market or target audience, ensuring the company stays ahead of the competition.
Being the best demands a relentlessness to keep getting the basics right combined with a curiosity and willingness to innovate. Knowing how to leverage the findings and insights you extract from market research, audience research and data research are the keys to both getting ahead and staying ahead.
Better Understanding of Your Customers
Market research will help you map out the full profile of your ideal customer. Knowledge of your customers will help you determine the market size and what triggers them to buy. You’ll gain valuable insights like their age, location, gender & income, which will help you in creating effectively tailored marketing and pricing campaigns.
“Marketing without market research is like driving with your eyes closed”
Market research helps you comprehend the demands of your customers, detect more business opportunities, plan the perfect marketing campaign, minimize losses, and keep track of the competition. It allows organizations to classify their objectives while following the current trends and take advantage by reaching out to their target audience.
Identifying problems before they happen is crucial if you want to grow. Effective market research will not only help you predict some of the pitfalls that can occur but also it will save you a lot of money too. Your solution may look like a proper market fit, but if it’s not the case, you’re in big trouble.The process of market research itself is designed to reduce the risk and to make the marketing strategy cost-effective for your business.