The Meaning Of Market Research (Importance and sources)
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When starting a new business it is highly recommended to go for serious market research. This market research will give you a better understanding of how to structure your business to win over your competitors. It will as well help you know if to go for such business or not, if the business is profitable or not, or as well if that particular business is worth your time.
What is Market Research?
Market research is the strategy of collecting, analyzing, and interpreting demand information. The result could be about a target market, clients, competitors, and other vital information about the industry. This is the basis of any successful company. The research is great. Every Entrepreneur must conduct market research before launching their business.
Market research helps entrepreneurs make well-informed decisions. It helps them know what customers will invest in so that they will do their best to get or provide it. At different stages, Businesses carry out market research for different reasons. And this research will help them update their ideas to survive in their present challenges. More clearer, as time goes on things usually change that is why businesses must do market research from time to time to avoid the business from crashing.
How do businesses use market research?
The research will depend on the type of business or its nature. Below is a list of ways businesses can use market research:
Determine the feasibility of a new business.
If market research indicates there’s little or no demand for the product or service, the business is unlikely to succeed. Identify and develop potential new markets.
Develop strategies on how to stay ahead
To be better than others you must have something unique. You must do your best to adapt to changing market conditions and run faster than your competitors.
Test the demand for new products or features.
Ensure optimal product placement
Know-how, when, and where should a product enter the market.
Improve and innovate their business
You can identify problems with specific business conditions such as customer service early. This can help companies overcome costly disruptions later.
Boost the success of their promotional campaigns
By measuring customer feelings and appreciating the vision of their brand, businesses can better shape their branding and marketing strategies.
How To Do Market Research?
However, there are two types of market research data:
- Primary information
- Secondary information
A piece of primary information is first-hand data gathered from sources. You either collect the data yourself or hire someone to do it for you. The bottom line is that you control the process from A to Z.
Secondary information is the data gathered by others. This data is publicly available either online or offline and could be published in newspapers, reports, journals, and so on, or information freely available online. The problem is that everyone has access to this information and you can’t control the collection methods.
The types of information gathered through primary and secondary sources can be either qualitative or quantitative.
Qualitative information and proof help you gain a better insight into how people feel about certain topics or products. You can ask them what they think and how/why they make the choices that they do. The best sources to collect qualitative information include in-depth interviews, focus groups, and direct observations. It provides a valid database or reliable information.
Quantitative information is statistical data and tends to be more structured. Closed question Questionnaires and surveys fall under this type of information.
Sources of Primary Market Research:
To talk about the primary research, we must tell you that it might take time for it to get positive results. A new business usually starts with mistakes so you have to be ready for insults.
Primary research is often more expensive and time-consuming because it is the most effective. But it is also the best way to get the information that your business needs.
The most popular primary research tools;
Surveys conducted via phone, in person, on paper, or using an online survey software like SurveyMonkey, Swagbucks are hugely informative. It’s a list of questions crafted in a way that gives you the best possible insight into how a customer feels about your product or service, your brand, and the experience you provide. It can be as broad or as specific as you want.
Carried out either by phone or face-to-face, in-depth interviews allow you to ask more probing questions. You can also follow up with an interviewee wherever necessary to obtain satisfactory answers.
A focus group is an organized session with a group of 6-8 people that share some common characteristics. These characteristics include age, location, buying habits, etc. They will participate in a discussion of a predefined topic led by a moderator. It’s an expensive but effective method of getting feedback on bigger-scale upgrades, product features, or new products.
It involves watching or video-recording how consumers interact with a product or service in a natural setting. Although a time-consuming method, it has the advantage of providing unbiased research. This is because consumers are not under any pressure and will behave naturally.
Sources of Secondary Market Research
Secondary market research is best suited for collecting broad insights into market trends. This helps to predict and analyze the current situation in terms of competition.
The most popular secondary research sources are:
- Government reports
- Literature reviews
- Television and radio
- StudiesTrade or industry-specific journals, magazines, newspapers
- Academic papers and educational resources
- Online articles and case studies.
Market Research is the most important step in launching a business. We can all even conclude that it is almost impossible for a business to succeed without sufficient research.