Market research is the study of consumers and the industry in which businesses are conducted.
It’s included in business plans. It’s the reason why so many types of analysis exist. And it’s important because it helps make decisions that benefit the company.
Market research helps strategic decision making
Market research comprises several elements — all of which are necessary for every business to know. Consider the following:
- What makes your competitor so alluring to customers?
- Why do consumers buy competitor products?
- Is your industry blossoming or declining? Why?
- How can you better your products to see more profits?
- How do you decide how to distribute your products?
Questions like these are why market research exists. By answering them, you have the knowledge to make smarter business decisions. And these decisions lead you down the track of success.
Business and surprises don’t mix
Companies who makes impractical decisions are businesses without a plan. They lack the necessary knowledge to make choices that benefit the company.
That’s not to say success is a straight line — mistakes are a part of life. But with proper planning, the impact can be mitigated.
There are two reasons why surprises aren’t welcome in business. First: if it’s a good surprise, you lose the chance to capitalize on it further. Second: if it’s bad, it can leave a negative impression.
Without market research, you’re in a similar boat: prone to surprises you may or may not like.
For example, let’s say you spend months designing a new product. It looks fantastic. It solves a huge customer problem. But when it launches, sales are in the single digits.
What you failed to notice is that two months earlier, your competitor launched a very similar product. It now looks like you’ve copied them and consumers aren’t interested in a “knock-off.” You can attempt damage control — offer coupons, lower the pricing, host a contest — but success has slithered away.
These accidents can be addressed with market research.
Had you studied your competition, and saw they’ve been hinting about a new product designed to solve X, you could’ve pumped the brakes on your launch to give yourself time to research their angle.
Instead, you’re left with the bad surprise aftertaste and a loss of resources.
Don’t forget the customers
Do you really know your customers? Do you know where they hangout offline and online? Have you spoken to them? Asked them what they’re looking for and delivered a product they’re crazy about?
Market research implores you to dig deep into why your customers buy products. Every business needs customers. And they should be kept happy — especially when competitors exist. Otherwise, they’ll leave without a moment’s notice.
Studying who your customer is and how to solve their problems is a must. And by using market research — examining current buyers, competitor’s customers, social norms and buying behaviors — you can do this.
Businesses who neglect this crucial step will have difficulties seeing growth.
Study customers. Study the market. And study competitors.
The importance of market research is finalized into these sections:
By analyzing customers you provide products they actually want — and more importantly, will buy.
By researching the market, you’ll discover advantages and opportunities to increase profits.
And by studying the competition, you’ll learn what works with them. More importantly, you’ll learn about gaps in the market. You can fill in those gaps and turn those customers into happy buyers.
The extensiveness of the research is up to you. But make it your priority to learn enough that you acquire a competitive advantage.