Why is Market Research so Important.

Firstly, we should clarify “What is Market Research?” It can be described as the action of gathering, analysing and interpreting information to help solve marketing challenges. We use market research for a variety of reasons, it helps us make educated decisions for example determining the feasibility of launching a new product before dedicating time and budget into the new venture.  Market research is a vital element when developing your marketing strategy. When done correctly it can help to enlighten your marketing activities – such as understanding the requirements of your target audience, helping to understand what key messages you should convey and how to convey them.

 

It should be treated as an ongoing activity – you should always be learning about your business environment, your customers and their needs and preferences. The environment is constantly changing so it’s important to make sure you are researching it and understand what factors are changing that could impact on your marketing plans.

 

Without market research we are reliant on instinct and anecdotal information to make key business decisions, this is not always accurate.

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What types of Market Research can you do?

Ultimately, you want to gain deep insights through market research, there are multiple types of research you can do to get the best insights, depending on what you want to know.  Some of the most common types of market research activities include:

 

  1. Brand Research
  2. Campaign Effectiveness
  3. Competitor Research
  4. Consumer Research
  5. Customer Segmentation research
  6. Product Development
  7. Usability testing

 

Market research involves two central types of research:

Primary Research – this can often be referred to as “field” research and involves gathering new data, first-hand, that has not been collected before.

 

Secondary Research – is sometimes referred to as “desk” research and involves gathering data that has already been compiled and organised for you. It includes reports, government funded studies, textbooks, historical records and statistical databases.

 

Within these types of research methods there are a few different types of data collection methodologies that can be used, such as:

  • Qualitative research, which is an exploratory approach and uses activities such as focus groups, in-depth interviews and Ethnographic research – which involves participant observation as part of field research.
  • Quantitative research uses objective measurements and numerical analysis of data that is collected through research methods such as surveys, polls and questionnaires.

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How to conduct Market Research:

You should always ensure the end goals and objectives are clear. Your target audience, business objectives, challenges and end customer should be at the heart of it.

  1. Set out clear objectives and goals before beginning the research.
  2. Identify your target audience and market size.
  3. Make sure your sample size is representative of the audience you are targeting. This means there should be enough respondents in the research sample that reflect, as accurately as possible, the larger target audience population.
  4. Choose the most suitable market research and data collection methodologies based on objectives.
  5. Create your research questions – this is applicable regardless of which data collection method you choose.
  6. Ensure the questionnaire is neutral and is not leading. Remain impartial throughout the process.
  7. Build in questions that validate other parts of the questionnaire.
  8. In a qualitative focus group setting include open ended questions and allow for flexibility for respondents to freely speak on a topic that might not have been covered in the questionnaire.
  9. Once data have been gathered employ robust analysis skills to interrogate and decode the findings.
  10. When research findings are determined, make sure to not take these in isolation. Examine the macro environment also (such as language, cultural, economic, political situations) to validate the findings.

 

Does Market Research work?

In short yes, absolutely. There are enough examples out there of product and business failures simply because enough market research was not done from the outset. Planning to launch a new product, or export to a new market without adequate research is a recipe for disaster. You need to really understand your customers and your competitors before making such a leap.

 

With more and more companies exporting to many global locations it’s important to be aware of the cultural and language differences in those markets. So, while research in one geographic location will yield certain results this may not be replicated in another location.  The famous KFC case, where their company slogan “Finger Lickin’ Good” translated as “Eat Your Fingers Off” in Chinese is a great example of this.

 

However as per point 10 above, while market research will help determine our marketing strategy and focus where our marketing efforts should lie, they should not be taken in isolation. Take the famous “New Coke” example from the 1980s. While research and focus groups were extremely favourable of the new coke flavour, it failed to understand the significance of the brand affinity and nostalgia that consumers had with the original taste of Coke. In this instance the wider environment and brand impact should have been taken into consideration before making the final business decision.

 

Used correctly, market research is a powerful tool to help minimise the risks involved when making key business decisions.

 

How Market research can help your marketing strategy:

Market Research can significantly help your marketing strategy as it helps to provide key insights and information to the business. It can provide a deeper understanding on your customer and competitors. Research will help to understand who is buying your product or service, who is not buying your product or service, what motivates them, and whether they are loyal to your brand – ultimately leading to increased sales over time.

 

Similarly understanding the wider market environment can help identify new opportunities for your business. As the market changes its important to continue to research and understand ways you can improve on your offering based on the changing consumer preferences or market dynamics.

 

While there were many factors involved in why Nokia had such a spectacular fall from grace within the electronics market, ultimately, they failed to research and understand the changing market trends. They were late to the market with new innovations, while their competitors, customer preferences and technology were advancing so fast. Others such as Samsung, Sony and Apple iPhone moved in and quickly became some of the leading electronics brands in the world.

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Conclusion:

It is clear that market research is vital when developing your marketing strategy. It provides great insights to your business and on the wider marketplace. Market research can identify how customers and potential customers might view your business and identify gaps in customer expectations. This is powerful information to have when completing your marketing strategy. Having good market intelligence helps to minimise risks when making key business decisions.

 

There are too many benefits to conducting good market research for it to be ignored as part of your marketing strategy.

 

To learn more about market research, don’t hesitate to contact me at [email protected]

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