Market Research is the process of gathering, analyzing and interpreting information about a market, about a product or service to be offered for sale in that market, and about the past, present and potential customers for the product or service; research into the characteristics, spending habits, location and needs of your business’s target market, the industry as a whole, and the particular competitors you face.
Market research is one of the main factors used in maintaining competitiveness over competitors. Market research provides important information which helps to identify and analyze the needs of the market, the market size and the competition. Market-research techniques encompass both qualitative techniques such as focus groups, in-depth interviews, and ethnography, as well as quantitative techniques such as customer surveys, and analysis of secondary data.
Market research involves two types of data:
- Primary information. This is research you compile yourself or hire someone to gather for you.Primary research is a type of research design in which the researcher is directly involved in the data collection process. In other words, the researcher gathers relevant data samples directly instead of depending on already existing data with regards to the research context.
- Secondary information. This type of research is already compiled and organized for you. Examples of secondary information include reports and studies by government agencies, trade associations or other businesses within your industry. Most of the research you gather will most likely be secondary.
Marketing research is needed on a continual basis, if you want to keep up with the latest market trends and gain a competitive edge in the business market. Understanding market research and using it to your advantage is vital in reaching out to your target audience and increasing your sales.
Here is why your company should conduct business market research:
- Identify the problem areas in your business
- Understand the needs of existing customers and why they chose your service over competitors
- Identify new business opportunities and changing market trends
- Recognize new areas for expansion, and increase your customer base
- Discover potential customers and their needs, which can be incorporated into your services
- Set achievable targets for business growth, sales, and latest product developments
- Make well-informed market decisions about your services and develop effective strategies
Successful entrepreneurs use market research to keep up with trends, make better business decisions and maintain their company’s competitive edge. Regardless of whether you’re starting or expanding your business, research is vital to understanding your target markets and increasing sales.
Fortunately, market research can help minimize risk and improve your business strategy from the bottom up. Here’s a look at four ways market research can benefit your business.
- Market research can identify what your customers need and want.
In order to identify potential new customers, you first must understand who your customers are as well as key demographics.
When looking at your product or service, it’s important to consider questions, such as:
- Who will use your product or service?
- What is the age range of your customers?
- Are they predominantly male or female?
- What is their income level, marital status, and geographical location?
Similar to the above point, businesses should also take the time to understand who their existing customers are.
Here are some questions to ask:
- Why do your customers choose your products over your competition?
- How do your customers use your products?
- How do your products solve a challenge?
- Who or what influences their purchase decisions?
- What do your customers enjoy doing, watching, and reading?
Understanding how your existing customers use your products as well as what challenges your products solve will help businesses improve their products as well as identify upsell opportunities with existing customers.
Market research can help answer these questions and give you an in-depth understanding of your customers’ needs.
By reading market research reports on your industry, you can learn demographic information such as your target customers’ gender, age, occupation, and economic status. You can also find out what products and services they are currently using and what they like and dislike about them.
- Market research can help you understand the market.
Through market research, you can identify key metrics such as market size and growth. Market research can help you assess whether the market is already saturated, or if there are regulatory hurdles or technological changes underway. These factors can have a powerful effect on your business and your future prospects. Keeping up to date on industry publications and market research reports will keep you alert to these kinds of shifts.
These results will also help you to make more informed decisions about your existing operations and activities.
- Should you expand or reduce?
- Is there room in your current operations to diversify?
- Are you targeting the right audience with your marketing activities?
- Market research can help you develop products that customers want to buy.
Market research can help you know whether or not your product idea will appeal to your customer base. You can also gather competitive intelligence to find out how to differentiate yourself from other companies with similar products and services. By identifying the strengths and weakness of your competitors, you can develop unique offerings and create a strong value proposition.
- Solve your business challenges
If you have already identified a problem in your business, conducting market research will help you determine the source of the issue. For example, by conducting market research, you can determine if a new competitor has entered the market or if brand awareness has fallen short, causing a decrease in sales.
Market research helps you identify areas for possible business expansion. Given that it offers the opportunity to test the market to determine if there is room for a new product or service. You can also conduct market research to find the best location to open a new store.
- Identify new business opportunities by identifying gaps in the offer
Conducting market research may help you discover new markets that are under-serviced or demand service. You may also identify changing market trends due to new housing construction, increased levels of education, or other changes that will bring new opportunities for your business.
All in all, market research isn’t just for new startup businesses. By all means businesses of all shapes, sizes, scope, industry and experience levels can benefit from market research. Market research can help businesses learn about new and existing customers, identify issues and solve problems, and even help explore new opportunities that pave the way for business growth.
- Market research can help you market your business effectively
Market research can help you know who your audience is and what they care about.
It can also help you understand which advertising vehicles are most likely to catch their attention. To optimize your marketing efforts, take the time to investigate your target audience and strategize your messaging accordingly.
There are plenty of compelling reasons to conduct market research. To begin, consider joining a trade association and reading industry publications. Review your competitors’ marketing materials to see how they are positioning themselves. Ask your customers for feedback and listen in on what they are saying about your company on social media and the web.
Market Research is your best tool for any type of product development, launch, or business expansion. Solid metrics can help:
- Keep track of trends and future markets
- Identify areas for expansion
- Draft effective strategies for campaigns
- Set realistic targets for business
- Beat competition
- Optimize results
By anticipating the evolving nature of the market, effective research enables business expansion and growth.