Market Research is the process which helps in identifying the customers and how the potential customers view your business and also identifies gaps in customer expectations. Market research consists of two types of research, which include primary and secondary and every business requires market research in order to be successful.
Primary research includes of interviews on an ongoing basis with industry participants and commentators in order to validate data and analysis. A typical research interview fulfills the following functions.
- It id the first-hand information on the market trends, market size, growth trends, future outlook, competitive landscape, etc.
- Helps in strengthening and validating the secondary research findings.
- Further advances the analysis team’s expertise and market understanding.
- Primary research includes telephonic interviews, E-mail interactions, face-to-face interviews for each market according to the product or service, category, segment and sub-segment across regions
The secondary research sources include, but not limited to:
- Company websites, financial reports, annual reports, broker reports, SEC filings, and reports investor presentations.
- Internal and external proprietary databases, regulatory databases, and relevant patent.
- National government documents, market reports, and statistical databases.
- News articles, press releases and web-casts specific to the company operating in the market.
- The sources for secondary research include but are not limited to: Factiva, OneSource, Hoovers, Statista, Owler, Zauba Corporation, and Bloomberg among others
All the new and existing businesses perform market research projects, with different objectives. A new businesses perform research to understand the market better before starting any operations. Existing businesses value the research as it benefits them to assume the right position that will allow them to harness opportunities while avoiding risks.
In this blog, some of the basic marketing research concepts will be discussed. And also elaborate why market research is important.
Seven reasons why market research is important to any businesses:
- Establishing the soundness of a venture: Entrepreneurs start businesses with the aim of making profits. They need to establish the venture that they are starting will provide returns to support the business growth. Things to consider first is whether the product or service offered is in demand in the market and will it be attractive to the customers. Businesses can conduct in house research with expert researchers or can also purchase reports of the particular product from market research companies.
- Developing a growth strategy: For developing the business it requires planning to take full advantage of the opportunities in the market and evade threats. Businesses need to plan in order to achieve set objectives and survive in highly competitive markets with key players. The plans are developed from data collected and details gathered through market research
- Determining market needs: Different consumers have different needs and potentials, and it is important to understand the requirements, and design products accordingly to meet them. Businesses lead the development of new products with research among potential customers.
- Monitoring competitors: Markets have different competitors according to the product competing for the same customers. For a business to run properly and get successful, they must strive to keep its market share. Therefore, a small business conducts market research to establish the moves key players are making and to counter them accordingly.
- Finding market opportunities: The small business wishes to exploit the market with opportunities. Business needs some of the research in which they collect data and analysis the futuristic opportunities. Additionally, businesses also conduct research to find out the strategies to use in the market. A simple discussion with friends and colleagues, watching TV or reading the newspaper can provide new business ideas to pursue. Identifying opportunities for business need not be formal. Paying attention to the happenings round you can deliver ideas to consider further.
- Identifying potential problems: The probability of a small business to grow are hindered by many problems. The problems can even result to its closure if they are not addressed in time. By conducting market research, possible problems are recognized and addressed before they get out of control. Advanced knowledge and information of market trends allows the business to adjust the strategies and reduce the consequences of the possible problem.
- Financing solutions: Affordable finance is significant for the survival of a small business. The funds are needed for different purposes such as development and expansion of new products. Though there are many financiers or investors in the market, most of them are not appropriate for small businesses attributed to the conditions attached to the financing and the interest charged. High-interest rates upsurge the cost of running the business. Conducting market research recognizes financiers who are ready for the investments in small businesses at friendly rates.
Market research plays a significant role for a small as well as large scale businesses. But with proper research, owners of the business can make better decisions concerning their operations. All the activities of a business are preceded by sufficient research so that errors are avoided.