IBM Chief in 1943 is famously (or should we say infamously?) quoted for saying ”I think there is a world market for maybe five computers. Nokia- a global leader in manufacturing mobile phones and who is responsible for getting all of us hooked to these barely 8” big more or less rectangular boxes is no longer there in business anymore. What could have gone wrong for these companies? They were unable to read the sentiments of the people and gauge their needs in time. Need we say more about the importance of Market research and the dire consequences of not conducting effective market research on the business? Perhaps not.
In simple words market research stands for understanding the unknown facts about the market of one’s business. Market may be denoted by current customers, targeted or potential customers, products/ services that the business is offering, competitors and potential business opportunities. Making an attempt to understand all these factors and how they impact the current and/ or future opportunities in business.
Importance of market research cannot be over emphasised in a business. Some of the ways that conducting a market research can impact business are outlined below:
Target Customers: Understanding what the customer of today as well as the customer of future wants is extremely important. It becomes all the more critical in today’s world since the consumer today is fast changing and their preferences are influenced by a variety of factors globally. Easy access to internet has globalised almost the whole world and it is extremely difficult to predict who is the target customer for a product or service.
Product/ Service: Another attribute of business impacted by effective market research or lack of it is the product or service that is offered by the business. Market research allows the business to collate a lot of information about what new or enhanced features in the product are desired by the customers. They may also be able to share the current gaps in product or service that exist and the need for new products to be developed to bridge that gap.
Competition Analysis: It is also important to keep a tab on the strategies that are being employed by our competitors. This includes their product features, advertising strategies, customers whom they are trying to target and the response of the customers to their products. All this is valuable information for your own business strategies to counter the attack from your competitors.
Promotion and Pricing: Market Research on the response of customers to our promotion strategies and pricing of our products is another vital information that can be collated. Which promotion strategy is working is critical to understand while preparing the promotion budget. Pricing is another sensitive matter- you would not want your product to be overpriced or underpriced in the market.
External Factors: Research on the industry sentiments, legal environment and the clauses that are being considered to be introduced in recent future is also quite critical. For example, launching a business of ATM machines which accept all the debit cards just before the government announced that all bank ATMs will accept debit cards of all the banks proved to be fatal for the organisation.
There are various ways in which market research can be done. You can invest in a primary market research where custom made campaigns can be run for you who will accumulate data from your end customers. Secondary data research can also be done where relevant information can be gathered from off the shelf industry reports, published reports of the market research companies as well as government data. You may commission a formal market research to an external agency or rely on internal teams and processes to gather this data. However, a few factors need to be considered while designing and executing an effective market research:
Identify the purpose of the Market Research. A market research campaign can achieve a lot and collect a huge amount of data. In case we do not define the scope of the campaign and identify the purpose, it will be extremely difficult to process the data collated and reach meaningful conclusion
Ask the right questions. Market Research campaigns need to ensure that they ask the right question to the relevant people to get the accurate data. In case the questions are not worded carefully, they may be open to interpretations by the audience and each one may answer them from their own understanding of the query, rendering your efforts fruitless
We also need to identify what data are we trying to capture. Is it related to the customer preferences, effectiveness of ad campaigns or something else. A very open ended market research campaign will not give desired results.
Market research is extremely important for any business success. So much so, that it is recommended that it becomes an integral part of your business process. Any employee who is the touch point with your customers become the gateway of information for your market research. You need not alway fall back on formal market research. However, a formal process to channelize the information gathered by the customer facing executives needs to be put in place to ensure this information reaches the team that is responsible for strategic decision making, The customer facing team also needs to be trained to consciously capture this information.
About the Author
Vaishnavi Agrawal loves pursuing excellence through writing and have a passion for technology. She has successfully managed and run personal technology magazines and websites. She currently writes for intellipaat.in, a global training company that provides e-learning and professional certification training.
The courses offered by Intellipaat address the unique needs of working professionals. She is based out of Bangalore and has an experience of 5 years in the field of content writing and blogging. Her work has been published on various sites related to Big Data, Business Intelligence, Project Management, Cloud Computing, IT, SAP, Project Management and more.