What does it mean by?
Market research is generally defined as the process of gathering, analysing and interpreting data which could be about the following:
- A particular industry – For an instance, about the trends and patterns which affects a specific industry vertical.
- A specific product market – Research study scoping about the performance of a particular market. This scope of research may focus upon things like forecasted growth of the market and about the number of competitors who are actively playing in the market(s).
- Specific services or products – Research study focusing upon particular product or service. Which could involve various objectives, including estimating the demand for a newly developed or an existing product, or to ascertain whether sales would be improved by re-visiting the appearance, branding or the price of a product or service.
- Clients and customers – By conducting a research study, a business brand could be able to understand the behaviour of their potential target consumers, customers or clients.
A market study would provide insights about branding, product or service uniqueness, differentiation, price points and strategies, marketing communication and campaigns and what not? As a tool for marketers, it not only helps established businesses, also guides small, medium and growing businesses to increase their sales by providing effective insights. More than all, market research tool helps entrepreneurs to understand whether their business model is viable or not, before setting up their new small business. Falling under any category per say, be it a - Multinational conglomerate, Big brand, Small and medium enterprise, freelancer, consultant or an entrepreneur everyone bags up a significant advantage by utilizing market research strategies and services for their businesses.
How does conducting research help a small business?
There are multiple ways market research tool can help a small business which would include-
Identifying and understanding the potential target customers :
Gaining insights would directly fuel the growth of your business, more you understand your customers, more you can craft your product or service offerings to suit their requirements, eventually resulting in your business growth. Information relevant to market segmentation and profile of potential target customers including gender, age, education, socio-economic category by measuring the living standard scale, usage & attitude, purchase behaviour, habits, considerations and all such data would be quite helpful to drive your strategy.
Any size and type of business would require these valuable inputs by conducting market research studies to scientifically and strategically approach the customers, and also to develop an effective fool-proof marketing strategy for their business. Often, these inputs help especially small businesses primarily to understand the feasibility of new product or service before venturing into the market, as they have limited investment, which would help to mitigate the risk significantly, sometimes to level zero.
To obtain adequate information about your customers :
Market research process helps businesses of all types and scale to understand the satisfaction level of customers and to assess the level of brand loyalty, which would result in understanding, retaining and winning the loyalty of customers. Following are some of the valuable inputs a market research study can provide to figure out a business further strategy:
- Understanding which attributes of the product or service existing or customers of competition – potential customers like or dislike.
- Understanding the level of willingness to pay, how much they are willing to pay for the product or service.
- Unearthing the reasons, why customers are choosing a particular brand or service provider over their competitors.
- Understanding how they perceive the brand or service provider, also their attribution and agreement towards the value for money the particular business offers to them.
- Understanding the decision makers and influencing pointers that drives the purchase decision making of the customers.
These are some of the vital inputs which could help the business to filter and strategize their products or services and also to provide an attractive proposition of their offerings.
To design, develop and to evaluate a marketing campaign
The data which is acquired through a market research study would provide a lot of inputs to understand the preferences, considerations, associations and media habits of customers, which would help a business to design and develop an effective marketing campaign and to figure out a viable marketing communication strategy. A business could understand the kind-of promotions and advertisements would trigger among the target customers compelling reasons to persuade and to buy the product or service, and which also helps to understand which media channel would be more effective.
By evaluating the creative and campaign content at various levels – idea evaluation, pre-copy testing, concept testing, copy testing, advertisement test, a business could able predict the success of the campaign and would showcase a highly strategic approach without blinking to wait till the campaign results and also this would help the business to understand whether the market is matured enough to perceive the content or will perceive the content as it meant for.
To plan production and achieve production goals :
Market studies with a specific objective of assessing market sizing would help us to assess the size of obtainable and addressable markets, which would help to take key decisions on scaling up at the right time or to avoid unnecessary expansion and to mitigate the risk. Otherwise, in general, market research data would help to predict the sales of a business more precisely, which would lead to a better production planning as it will help to understand how much pull the new products or services will have in the markets even before it’s launch.
To manage the market operations and obstacles in the business :
Market research as a tool will help a business to identify the apprehensions of the customers, which would reveal in blunt, what’s wrong with the product or service – could be wrong pricing, lack of awareness or low brand equity, poor brand positioning, functional quality, poor value proposition or better offerings by the competition and so on. Not limiting to that, market research tools help to develop an effective distribution strategy by studying distribution channel partners better – including key motivators and influencers of channel partners.
Managing and beating the competition :
Market studies would unearth answers for unanswered questions about your competition. By understanding the perception of the customers of competition about the competitor, a business can re-visit their entire brand or product or service strategy, offerings and proposition to compete better in the market, a general competition analysis would answer many questions – Why are customers preferring the product or service from competitor? Why haven't they considered the product or services offered by the brand? What does it motivate them to choose a specific market player or competitor? What is their perception towards the brand vs competition brand? What improvements do they expect from the brand? – such inputs from a competition study would help the brand to beat the competition.
To develop a new product or service :
Product testing and evaluation is one of the key advantages of market research tools, utilized by all size and scale of businesses currently. Especially for small businesses, due to their limited investments they have compelling reasons to mitigate risk as they are prone to more failures and if failed quite difficult in revival as well. Thus, to mitigate the risk of product failure, to forecast the success and to understand the demand of the product or service, products or service offerings have been always evaluated among the target customers, which would also provide adequate price points and help the small businesses to determine the pricing and brand positioning.
