What is Market Research? Why Do Businesses Need It?

What is Market Research?

Market research is a crucial activity that most businesses prioritize when launching new products, services, or ventures. This process brings multiple benefits, such as reducing risks, generating ideas, narrowing the scope of focus, and avoiding distractions, ultimately enhancing business efficiency.

Market research involves collecting information and data related to the business domain, including products, services, customers, competitors, and target markets. Through this, businesses can establish accurate directions and develop appropriate strategies aimed at sustainable and long-term growth.

Each business and research goal may apply different market research methods. However, in all cases, it is an essential task to ensure sufficient and accurate information for planning effective business strategies.

Objectives and Role of Market Research in Marketing

Objectives of Market Research

The primary purpose of market research is to find accurate answers to issues arising in the business process. Correctly identifying the root causes helps businesses resolve problems effectively and implement strategies to reach target markets efficiently.

Role of Market Research:

• Data Collection: Helps businesses gather critical data to identify opportunities and seize new business ventures.
• Optimal Resource Utilization: Ensures businesses utilize their resources effectively and develop in the right direction.
• Risk Mitigation: Minimizes risks by anticipating market fluctuations that could impact operations.
• Strategic Planning: The collected information helps formulate business strategies, marketing plans, and advertising campaigns.
• Customer Satisfaction: Assists in adjusting strategies to better satisfy customers and consumers.

Why Do Companies Need Market Research?

Failing to conduct thorough market research can lead to high-risk decisions, resulting in unforeseen consequences like failed campaigns, wasted time, money, and resources. Conversely, detailed and accurate market research offers several advantages:

• Risk Reduction: Minimizes the risks associated with marketing strategies and new product launches.
• Customer Insight: Enhances understanding of target customers and market dynamics, enabling effective market penetration and strategy execution.

Effective Market Research Methods

1. Observing Customer Behavior: Provides real-world insights and data on customer reactions.
2. Direct Interviews: Conducted in high-traffic areas to gather customer feedback and promote products.
3. Group and In-depth Interviews: Facilitates idea generation through focused group discussions.
4. Telephone Surveys: Cost-effective but often faces low response rates.
5. Email Surveys: Useful for small businesses due to low cost and broad reach.
6. Online Surveys: Easy and cost-effective, but responses can vary in reliability.
7. Social Media Monitoring: Collects customer opinions through forums and social platforms.
8. Experimental Methods: Qualitative research in controlled environments to gather both verbal and non-verbal customer feedback.

Six Common Steps in Market Research for Businesses:

1. Define Objectives: Clearly establish the goals for research to ensure effective and accurate outcomes.
2. Choose Suitable Methods: Select from surveys, interviews, experiments, and more, based on the research level.
3. Design Survey Questions: Prepare questions for surveys or interviews, either online or in person.
4. Collect Information: Gather data through various tools and methods.
5. Analyze Data: Use specialized software to process and analyze collected data.
6. Present and Evaluate Results: Ensure the research findings are easy to understand and actionable.