Why Market Research is Important for your business
What is Market Research?
Market Research helps enhance your business planning. It provides information about what your customers think, what are their buying patterns, and their location. Also, by doing market research, you can track the market trend and keep an eye on your competitors.
A successful business should undergo market research regularly so that they can:
- Easily Spot Business Opportunities
- Lower Business Risks
- Create Relevant Promotional Materials
- Identify new potential customers
- Know Where to Advertise
So, firstly you need to
Define your Market Research objectives
Clearly defined objectives will help you to identify the best methods for conducting your market research. It is essential to clearly define the purposes of research to achieve positive results.
Types of Market Research
There are two main methods of market research that your business can conduct.
- Primary Research
- Secondary Research
Primary Research means to gather information from a source such as: -
- Survey
- Questionnaire
- Interview
- Telephonic Interview
- Scheduled Questions
Further Primary research is divided into two types
Exploratory Primary Research: — It deals with the potential problems rather than measurable customer trends. It usually starts as a first step before any specific research has been conducted and may involve open-ended interviews or surveys with small groups.
Specific Primary Research: — This kind of research deals with issues and opportunities going on in the business. In specific research, the company can consider focused groups as their audience and ask questions about solving a suspected problem.
Now 2nd method of market research is secondary research
Secondary Research means collecting information and data that has already been collected and analyzed by other sources such as:
- Internal Secondary Data
- In-house organizational data
- External Secondary Data
- Outside Data
- Consumer Panels (Third Party Collected Data)
In-house organizational data: — This is the market data that your organization already has. Like, average revenue per sale, customer retention rates, and other historical data that helps you conclude what your buyers might want.
Outside Data: — This is the most accessible data when you are doing secondary research. They are often free to find.
Consumer Panels (Third Party Collected Data): — These sources often come in the form of market reports, consisting of industry insight collected by a research agency. Because this info is so portable and distributable, it typically costs money to download and obtain.
The information you collect through these sources may be of two types quantitative or qualitative.
Qualitative information measures the values, attitudes, and opinions of a particular sample. This type of information is helpful if you want to understand why people buy your products, how they react to your advertising or their thoughts on your brand.
Quantitative information is based on statistics and may be used to predict market penetration, future profits, etc.
Research Process
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When you are done with your datasets you need to understand your customers.
How do you understand your customer’s behavior?
So, first of all, you need to answer these questions to yourself
•What Customer will buy?
•Why Customer will buy?
•When Customer will buy it?
•Where Customer buy it?
•How often Customer buy it?
•How do Customers buy it?
•What Customers Want?
•What Customers think?
•How Customer Spend their Money?
When you understand these questions and prepare yourself with the solutions, you will feel that your consumer will be motivated towards your business the more motivated a consumer is, the more likely consumer will get involved with the product, service, or brand.
Development of Consumer Behavior Study
Consumer behavior is externally influenced by the Firm’s marketing efforts and the socio-cultural environment. Firm marketing efforts are the 4P’s that are Price, Promotion, Place, Product. These firm’s marketing efforts attract customers and turn them into your consumers. Another external factor influence by the social-cultural environment includes family, Reference Group, Social class culture, and subculture.
So, a customer gets influenced by all these external factors and consumes them. That is the Input Stage.
In the second stage, the customer tries to process the information that works in a cycle. He has a need, he searches about the product, and evaluates the alternatives. He uses his experience from his psychology that are motivation, perception, learning, personality, and attitude. And based on that he develops his need, purchase search, and evaluate the alternatives. So these are the consumer’s decision-making factors.
In the third stage, he will execute his purchase either in the form of a trial or in the form of a repeat purchase. And after purchasing, he will do the post-purchase evaluation. From that evaluation, he will develop his experience. And that cycle will continue.
That’s why to sell any product or service to your customer, it is very important to understand the behavior of your customer. If you do your customer research properly, it will help you understand how consumers perceive and categorize different brands in the marketplace. This allows you to see how customers view other brands related to our brand and determine whether or not your brand should be repositioned.