What is not market research?
Although the name “market research” may sound specific to marketing challenges what it really means is collecting information about target markets. Before explaining what market research is I should mention that market research is not the same with marketing research. Being a sequence of business activities, marketing research’s objective is marketing processes like effective advertising whereas market research’s objective is to understand markets.
What is?
Market research is simply “learning more” about markets, their distributions and customers for different purposes. Of course, by learning what I mean is following a systematic process of gathering, analyzing and interpreting information rather than simply questioning with five ws and one h.
This systematic process begins with collecting information. To collect the right and necessary information, first the objectives should be set accordingly to the problem that need to be solved and required research tools should be matched within that problem. After stating the problem, one should gather information by using the selected research tools. Although collecting information is a good beginning to half the battle, it is not the only thing to be considered while making market research. The next step should be “analyzing” the data that you collect. Although both collecting and analyzing techniques differ based on the situation, this methodology of market research remains same and followed by interpretation of the analyzed information or data. Usually the analysis is based on statistical and analytical methods while applied social sciences are being used to ease interpretation of data.
While writing this post I was in dilemma about whether to put this post to strategy or marketing part of the site. The reason for that is market research is used mainly to maintain competitiveness in particular business field which makes it crucial for understanding business strategy. However, it also serves as a marketing tool since it provides insight for understanding customers’ needs and wants. Now by only looking at these two areas of usage, the necessity and usefulness of market research is inevitable, but market research provides even more than these. (By the way I put in both categ)
Why we need market research?
1. Opportunities: When market research is done, you become familiar with your target customers, especially with their demands, behaviors and needs. As you might think, this is a great opportunity to detect new business opportunities or to improve existing position by using market information where your product or service may value.
These opportunities can be identifying a need for new market, improving your product according to customer behavior, withdrawal from activities in which customer demand is low etc.
2. No one likes devastating surprises: The world is rapidly changing more than ever before which means your customers’ behaviors and needs are changing as well. If you can not keep pace with their speed you automatically go out of play and your place is immediately will be taken by another firm. However, if you do your market research periodically and always follow the trend changes, then you have never been surprised at all because your data probably have foreseen it. Hence, knowing the market enables you with lower business risks, especially in times of crisis.
3. More effective marketing and advertising: Knowing the needs, behaviors and wants of your customers may help you to design your marketing campaign in a way that will capture their interest. Moreover, using marketing budget for acquiring target customers would be more cost-effective. Example can be spending money to advertising through social media, if you know that your customers mostly prefer a specific channel then you can focus on that specific channel but not spend a lot of time and money to others.
4. Competitiveness Advantage: We can think this as an opportunity too but I think it requires more explanation. One way to beat your competitors is being one step ahead of them and it is only possible when you have better managing power on the market. To do this, you should be faster and better than your competitors to react market trends, find what is missing in the market that you and your competitors may underestimate, which is easier with the market research.
5. Feedback saves: Market research can be used to test the viability of both new or improved product/service by communicating with potential or existing customer. I call this “Prototyping usage of market research” since by using prototype firms also aim to receive feedbacks and re-design or improve their product.
How to do Market Research?
Primary Research includes the information collected directly by the company or by third-party company mostly specified in market research. Generally done for specific or exploratory purpose.
Secondary Research refers to information that has been collected before and open to access. The most common publicly available sources are the US Census, CIA Fact Book for
country data, Bureau Labor Statistics for occupational data and
the American Community Survey which is conducted by the Census.
The Pew Research Foundation
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