Why Should You Do Market Research?
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Market research allows you to grow and develop your business by making the most informed decisions based on actual market conditions. No matter how innovative your new product idea or marketing campaign may be, you need to know if there’s a customer base out there for it, and how you can serve their needs better.
When tackled the right way, market research will help reduce your business costs and improve your return on investment (ROI). But first, you need to understand the specific purposes of market research and how these fit into your business goals.
What Market Research Tells You
Marketing research will tell you, most simply, who your target customer base is and how many competitors are already out there. Importantly, marketing research allows you to understand:
- Your target demographic
- What they’re willing to pay for similar products, and the size of the current market for these products
- What makes your product stand out from others on the market
- Branding, and what makes it effective–why are customers loyal to some brands over others
- How this prospective customer base generally responds to marketing, so you can reach them effectively
- The risks in bringing your product to market and any obstacles your business will face
- Short and long-term costs forecasts.
With this information, you can make the right decisions for your product and your business from the outset.
The Cycle of Marketing Research
Even if you know why you should conduct research, you need to go about it the right way and at regular intervals. Market conditions change frequently, and your business must be prepared to respond to these changes if it’s to survive.
This is the first stage of your market research process. At this point, you need to understand the market, develop your product prototype and establish your go-to market.
What must you do at the outset?
- Once you understand who your target market is, you can research how to reach them
- Ascertain consumer behaviour–what they want from products and brands
- Identify the best marketing channels–for example, social media
- Price your product competitively and assess production costs based on sales forecasting
- Tweak your concept, physical product, and packaging as required.
Once you’ve launched your product and start seeing profits, you need to review your position again. You must establish how your brand is faring in the marketplace, how consumers feel about your business and any problems you’re facing which must be resolved.
- Identify if there are any new competitors, and how existing competitors are doing. Look at similar products emerging on the market to see how your own product compares
- Take note of trends in customer concerns, such as product quality, pricing, and brand values.
- Look at where your brand is performing best and how to expand on this.
- Check your marketing tools, packaging, and positioning are still effective.
Every product or brand reaches a plateau eventually. Successful businesses, however, make the right decisions which allow their business to expand and attract a wider customer base. But how do you make sure your business succeeds at this critical point?
- Assess whether there’s scope for attracting customers from competitors. Competitor research is more important now than ever
- Identify ways to maximise profits based on pricing
- Evaluate consumer loyalty and brand profiling
- Focus your attention on expansion or development opportunities.
At this stage, your focus should be on keeping profits steady and freshening your product to retain your position.
- Reduce production costs, if possible, to keep pricing consistent
- Look for expansion opportunities in new sectors
- Redevelop your product to attract a wider customer base
Most importantly, your business needs a plan, based on actual market conditions and customer behaviour, in order to succeed. By properly focusing your marketing team on the right issues, market research can boost your profits and bring your business new opportunities.
Ready to gain insights on your audience? Let our Market Research Team help you.