Market research is the process of gathering, analysing, and interpreting information about the market, products and services, consumers, and competitors in order to gain a bird’s-eye view and make better decisions. It is regarded as essential for successful business planning.
Businesses conduct market research for a variety of reasons, including the search for new markets and prospects, the testing of new products and services, business innovation, product placement, and the overall health of the industry.
Key objectives of Market Research:
A market research project will typically have three types of objectives.
Administrative: Aid in the development of a company or business through proper planning, organisation, and control of both human and material resources, thereby satisfying all specific market needs at the right time.
Social: Meet the specific needs of customers by providing a required product or service. When consumed, the product or service should meet the needs and preferences of the customer.
Economical: Determine the economic degree of success or failure a company can have while entering a new market or introducing new products or services, providing certainty to all actions to be taken.
Market Research Types: Market Research Methods and Examples
Market research assists organisations and businesses in drawing meaningful conclusions about consumer purchasing behavior or the likelihood of consumers paying a certain price for a product.
The following are the types, depending on the methods and tools required:
1. Primary market research (a mix of qualitative and quantitative data):
Primary market research is a process in which organisations or businesses contact end users or hire a third party to conduct relevant studies to collect data. The information gathered can be qualitative (non-numerical) or quantitative (numerical) (numerical or statistical data).
A qualitative market research study collects semi-structured or unstructured data using some of the most commonly used qualitative research methods, such as:
Focus groups: One of the most common qualitative research methods is the focus group. A focus group is a small group of people (6-10) who usually respond to online surveys.
One-on-one interview: As the name implies, this method involves personal interaction in the form of an interview, in which the researcher asks a series of questions to the respondents in order to collect information or data. The questions are mostly open-ended and asked in a way that encourages responses.
Ethnographic research: This type of in-depth research is conducted in the respondents’ natural settings. This method requires the interviewer to adapt to the respondents’ natural environment, which could be a city or a remote village.
2. Secondary market research:
Secondary research makes use of information organised by outside sources such as government agencies, media, chambers of commerce, and so on. This information is disseminated through newspapers, magazines, books, corporate websites, free government, and non-government organisations, and so on. The secondary source employs the following:
– Public sources, such as libraries, are fantastic places to get free information. Government libraries typically provide free services, and a researcher can document available information.
– Commercial sources include: Commercial sources, while reliable, are costly. Local newspapers, magazines, journals, and television are excellent commercial sources of information.
– Educational Institutions: Although not a popular source of information, most universities and educational institutions are rich sources of information because they conduct more research projects than any other business sector.
Why Is Market Research Necessary for Every Business?
Market research is one of the most effective ways to learn about your customers, competitors, and the market as a whole. The goal of market research is to provide your company with the information it needs to make sound decisions.
It is especially important for small businesses attempting to determine the viability of a new business idea, entering a new market, or launching a new product or service. Continue reading for a more in-depth look at how market research can benefit small businesses.
COMPETITION: According to a Business Insider survey, 72% of small businesses prioritise revenue growth. Conducting research allows businesses to gain insight into the behavior of their competitors.
CUSTOMERS: Many small businesses believe they understand their customers, only to conduct market research and discover they were wrong. By conducting research, you can develop a profile of your typical customer and gain insight into their purchasing habits, how much they’re willing to spend, and which features appeal to them.
OPPORTUNITIES: Market research can help identify potential opportunities, whether they are products or services. You can gain insights into complementary products and services by learning more about your customers.
FORECAST: Customers and small businesses are both affected by the performance of the local and national economies. When customers are concerned, they are less likely to spend money, which has an impact on the business.
Author – Deeksha Khanna