If you ask yourself “Why should I do market research?” or “How can I benefit from it?” keep reading, you’ve come to the right place. We all know that we live in an era of information. Each of us is bombarded with hundreds of notifications and messages every day, but how much is the information worth? The answer is much more than we think. Imagine that you have your own company and plan to launch a new product on the market, and the selected sector is characterized by strong competition. How valuable would the information be that would make consumers choose your product from among the many others available? I think everyone can answer this question by himself.
What is market research?
You already know that the right information can be very valuable, now you will learn why it is worth getting to know how to do market research and your competition better.
Take your memories back to your youth for a moment. You are the best athlete, one day you decide to represent the school at competitions without even asking about discipline because you will win anyway. However, when you step off the school bus, you quickly realize that you don’t know how to play tennis, you don’t know who you’re going to play with, much less which end of the racket to catch.
This short story shows how a situation can end when you decide to operate in a market that you have too little information about. Why is market research important? Prior, well-planned market and competition research can reduce the risk of failure and identify the best solutions in a given situation. What questions should a competition investigation answer? According to Philip Kohler, the American economist, the analysis should be considered under four aspects of competition, i.e.:
Brand — all enterprises producing similar products at a similar price
Branch — all enterprises that produce similar products at different prices
Product form — all enterprises producing similar products
Overall — all companies targeting their product to a similar group of customers
Then, based on the collected data, the strategy of other companies present on the market is analyzed, their goals and strengths and weaknesses are analyzed to verify the previously adopted assumptions regarding competition and prepare an action plan that will increase the chance of success.
Why is market research important for small businesses?
We often hear about startups (such as Webvan) that collect large start-up capital, have well-trained staff, and are destined to change the course of history. Most fail. This also applies to small companies that, after a long period of preparation, writing hypotheses, creating test versions, completely miss the needs of consumers and lose all their money. Why is market research important?
One of the reasons is undoubtedly the outdated scheme of introducing a new product to the market. In this model, the first contact with the customer and verification of the assumptions made takes place after a long period of product development. One may think, “Isn’t this the way it should be?” Let’s look at it from this site, a small company that employs 5 people plan to launch a new product on the market. Without prior market research, all product hypotheses are the assumptions of these five people, which may not necessarily be reflected in customer needs. That is why the Customer Development model is becoming more and more popular, which assumes that market recognition and verification should take place before the stage of building the company. For this purpose, various types of business market analyzes are used, which indicate the direction of the company’s development and confirm customer needs.
How to conduct market research?
What steps are involved in market research? We deal with market research every day, interviewers on the streets or call center callers to survey with us are some many ways to collect information. A very important element in this process is the right choice of data collection technique so that the obtained results reflect the studied group as much as possible. In addition to survey research, we distinguish other methods, i.e.
- Panel studies — carried out on one group of people at intervals
- Motivational research — checking why consumers choose certain products
- Experimental methods — changing individual factors and assessing the effects
- Observation methods — observing and categorizing phenomena and dependencies on the market
The above-described techniques are only the most important techniques used to obtain information. Data collected in this way allows for the creation of consumption patterns, determination of price flexibility, brand strength, and customer satisfaction.
Why is market research important? As you can see, conducting market research gives tangible benefits and helps to choose the right direction for the company’s development. Therefore, take action as soon as possible and check that you are on the right track!