February 11, 2021
Why Every Business Needs to Conduct Market Research
Before we dive into why market research is important, let’s start by clarifying what market research is. Research in itself is a vital step that every successful business is required to undertake to understand their audience and cater to their requirements. So, what is market research? To put it simply, it’s the process of collecting, studying, and translating relevant information to overcome, resolve, and avoid any marketing obstacles that may arise. The research itself could be based around a product, a consumer, a competitor, or a particular field. However, regardless of what it may be, for any company to succeed, there needs to be an undoubtful amount of marketing research.
So, is market research important?
The obvious answer is, yes. Market research is vital. To maintain a successful business or company and remain afloat, regular market research is a must. To excel the business’s best potential, there needs to be a clear understanding of the targeted markets as well as their competitors.
Remaining relevant is key to success. As the times change and trends come and go, the targeted markets change. Therefore, to keep hold of customer bases, a business must adapt to the current trends. The only way this can be achieved is through constantly conducting market research.
Some may assume that market research is the least of their issues when starting a business, however, there have been multiple once-upon-a-time successful companies that took market trends and consumer preferences for granted, and are now considered bankrupt. One thing we’ve all learned is that a business is never too popular or too successful to fail, a clear example would be the likes of Blockbuster and Nokia.
These two companies for instance, were extremely successful at one point, but what they both had in common was their lack of market research which led them to their current state – forgotten by consumers.
How can market research help a business?
Now that we’ve covered the ‘why’, let’s dive into the ‘how’.
So, How can market research help a business? For a business to progress, there needs to be marketing and promotional activities at some point. In order to effectively target the right audience and successfully deliver positive outcomes, managers must have a clear understanding of the consumers wants and needs. This will also ensure that the correct form of marketing is used, because a well-prepared marketing campaign can benefit a business in multiple ways:
- Brings clarity in regards to what the consumers want.
- Recognises any competitors.
- Identifies any possible business opportunities which weren’t previously recognised.
- Minimises the chances of any marketing obstacles.
By undertaking the correct marketing research, the business is more likely able to have a clear view of their objectives as well as a better grasp on current trends that will benefit the business’s capability of satisfying their consumers and targeted markets.
How to Do Market Research for A New Business or New Product?
Now that we’ve gone over the importance of market research for a successful business, one of the question that new business owners might raise is, how to go about doing market research for a new business or new product/service. One way to get started is to answer the following:
- Who are my consumers?
- What do my consumers want?
- Why do my consumers want it?
- Why will consumers buy from me and not my competitors?
- Where are my consumers from?
- What kind of influences are my consumers surrounded by?
Answers to the aforementioned research questions might be acquired from two sources: primary and secondary research.
What is primary research?
It’s the direct approach businesses take to know more about their consumers, for example, through polls presented to the public, direct contact with consumers via phone calls or surveys.
What is secondary research?
This kind of research can be found through website reports and other legitimate written reviews from within the industry.
Although there are two main forms of research and the choice is entirely up to you as for which one you choose to use for your business, depending on the available time, cost and resources. Using a combination of both will allow an adequate collection of information to tackle all and any marketing difficulties your business may face due to the lack of it.
When you’re starting up a new business, you must have a clear idea of what is already out there so that you’re aware of what your competitors are offering to your target audience. By simply knowing what is out there, you can figure out what niche you’d like your business to be focus on and which approaches, strategies and tactics to employ in order to win your customer base.
Market research for a new business will usually consist of five main steps:
- Understanding and categorising your consumers
- Identifying consumer categories and engaging in market research
- Present the consumers with market research-based questions
- Distinguish who your relevant competitors are
- Recap, summarise and apply your research
1- Understanding and categorising your consumers:
Optimise your marketing efforts by reaching the targeted consumers effectively.
To identify which category each consumer falls into during the grouping process of participants, research about the consumers’ age, gender, geography, and occupation should be identified.
Although these categories are useful, you are not limited to them, so feel free to group your consumers as specifically as you see fit for your market research.
2- Identifying consumer categories and engaging in market research:
You should aim for a minimum of 10 active consumers per category. These active consumers should be a mix of people who have made purchases from your business (or made similar purchase from a competitor), and people who have placed your product in their basket, but not yet have decided to purchase.
The idea of pestering people for feedback may seem irritable, however, there are now many convenient ways to gather consumer feedback through multiple platforms, such as using social media for a call-out post to gather participants.
The use of incentives is proven to be successful for many businesses, as people’s time is precious, therefore, you must think outside the box of what you can offer these participants in return for their time. Your incentive can be anything depending on type of business you are in and what you’re willing to offer, for example, a fragrance business may offer their participants a free perfume sample for completing their feedback.
3- Present the consumers with market research-based questions:
Once you’ve gathered participants, you should have a prepared set of market research-based questions. These questions should be a combination of closed and open-ended, as using ‘yes’ and ‘no’ questions at all times, might be limiting your research based on your assumptions rather than allowing your participants to express their feedback freely without any limitations.
4- Know who your relevant competitors are:
A common mistake many new businesses make is assuming that an entire company is their competitor, rather than identifying the division within the company that could be considered as a competitor. So, avoid generalising multiple divisions of a company and try to focus on a division that is considered as a primary competitor.
When you find your real competitors, you then analyse the differences between your business and theirs, and examine why their product/service performs better. Once you’ve gathered adequate research on those competitors, the next step will be to look at integrating their success factors into your business.
5- Recap, summarise and apply your research:
The final step is to make sure your research doesn’t go to waste. Recap everything you’ve explored and searched and created a clear summary of your findings.
Think about sorting your research out into categories as it brings clarity when trying to identify and view what has been gathered. When you feel that you’ve summarised and understood the market research you’ve undertaken that is when you should apply that newly uncovered knowledge of the current targeted market into your business.
A carefully conduced market research for a new product can determine the likelihood of a successful market entry and penetration.
Your research should be able to identify whether any competitors have the same product on the market, and if so, what are their tactics and approaches when it comes to selling? and how would your business stand out?
To recap, questions you should think about before your business releases a new product on the market are:
- What are your competitors doing that is attracting consumers?
- How can your product be just as successful if not more successful than what’s already out there?
- What will take your product to the top of the market?
- How can you use the marketing techniques and tactics to successfully launch your product?
How much does market research cost UK?
So, how much does market research cost? Depending on whether you’re in the UK or abroad, the cost of market research can vary for multiple different factors.
When reaching out to a marketing agency many aspects must be taken into consideration. To avoid complications, you should be prepared to answer questions like the following:
- What industry does your business fall into, and what outcome and goals are you hoping to achieve from the market research being collected?
- What method of research does your business require? (This can be demonstrated through primary and secondary research as mentioned above).
- How many participants does your business require? (This is usually based on the size of the business as well as your preference for how vast or specific you’d prefer the market research to be).
Many successful businesses outsource their market research activities as they’re more comfortable with leaving that side of the business in the hands of trained market researchers and analysts. However, there are also exist affordable alternatives depending the industry and field. Various free-market research reports can be found online that provide free insights and summaries.
How to Download Market Research Reports for Free?
Websites such as Marketresearch provide market research reports for free on public domains. Some companies also provide free reviewed information that the public can browse through e.g. Deloitte Industry Outlooks, Bloomberg Intelligence and EY reporting and Megatrends. Other free market research reports can also be accessed through governmental agencies portals such The Office of The National Statistics and National Archives etc.
There are also search engines such as Google, that have provided their users with report analysis programs such as Google Trends, where it is applicable to download market research reports for free.
It’s very clear that market research is an important factor within every industry, especially when businesses are aiming to further develop their brands. The power behind market research is key when planning a strategy to push any business forward. It is too important and too beneficial to be an ignored or underrated aspect for any business.
Until next time.
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