Market research is critically important for every business, and should be a strategic on-going activity.
Why you may ask? Successful businesses conduct research on a continual basis to keep up with market trends, to discover opportunities, to provide solutions and to maintain a competitive edge. Regardless of whether you’re starting or expanding a business, market research is vital to understanding your target market, developing customer satisfaction and loyalty and increasing sales and profits.
Businesses conduct research for many reasons:
Identify potential customers:
Who is going to use your product/service? How old are they? Are they male or female? What is their marital status? What is the size of their household? Where do they live? What is their level of education? What activities are they involved in? What is their socio-economic level and so on.
Understanding your customers:
Why do or don’t consumers choose your product/service over competitors? What do they value? Is it service, product quality, convenience, prestige…? Who influences their buying decision? What do they read? What websites do they visit? What do they enjoy doing? What part does social media play in their lives?
Set realistic targets:
From the information you collect you’ll be able to set realistic targets for areas such as growth, sales, diversification and the introduction of new products/services.
Develop effective strategies:
From your research you’ll be able to make informed marketing decisions about how to price your product/service, how to distribute your product/service, which combination of media channels to use (newspaper, radio, tv, digital marketing) or whether to modify or develop a new product/service.
It will also help you make an informed decision about starting, diversifying, expanding, consolidating or reducing any particular aspect of your business activity.
Examine and solve business problems:
If you’ve identified a business problem, research will help you to see what is happening. For example, if your sales have fallen you might discover that brand awareness has also fallen, or that a new competitor has entered the market or a substitute product has become available or customer tastes/needs have changed, etc.
Identify business opportunities:
Your research could identify new business opportunities. You may find an un-serviced or under-serviced market or you could identify changing market trends which bring new opportunities.