Market research is fundamental for any business to stay afloat in this competitive business world. One of the primary goals of any company is to increase in size. However, there are risks that a company could fail due to its expansion. Hence, making market-savvy judgments can help any company tap into growth.
Any good market research takes into its purview the feedback of both existing and potential customers. Through surveys and interviews, these customers informed the researcher of the demand for a specific product type.
Not only for the launch of new products, companies consider doing market research when they want to launch a new business in areas they have yet to work on.
Why is Market Research Important?
The knowledge of target customers, consumer interest, market demand, and competition is essential for any business to succeed. This kind of research helps a company to roll out new products, or expand the operational business base into more unique domains.
Business houses either conduct market research themselves or hire freelance analysts or companies to run it on their behalf. The third option is the most preferred among the largest pool of businesses as it saves both time and cost. Market research firms exclusively deal with market research parameters. They offer high-class expertise.
The market researchers then fetch out a detailed product differentiation and market segment study to allow these researchers to devise an effective market strategy.
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Benefits of Market Research
- Market research helps businesses to understand the demands of the target market. Based on the needs, companies can launch new products, or improve the quality of the already existing ones.
- The research ensures that the pipeline product or service launch categories meet market demands or consumer requirements.
- Market research helps firms to narrow down customer segments. In this way, they can become more customer-centric.
- Market research helps businesses to study specific product performances against a brand’s rivals.
- It helps to understand the effectiveness of sales. The same metric determines any production’s profitability!
Types of Market Research
Market research can be divided into two major categories:
Quantitative Research
Quantitative research is very number focused. An example of Quantitative analysis would be— What percentage of the population would buy a specific product?
Generally, quantitative research for the market survey is done with the help of questionnaires and survey reports.
To effectively conduct quantitative market research— researchers send detailed quantitative research questionnaires to customers. The customers fill them up. The information the general people put in helps businesses understand a market’s majority share of customer profiles before launching a new product.
Quantitative research used for market research has the following subcategories:
- Question
The quantitative research method uses surveys and polls to gather information on a given subject. Depending on the research study, several types of questions can be used.
For example, suppose somebody is conducting quantitative customer satisfaction research. In that case, the Net Promoter Score is a critically acclaimed survey question.
- Distribution
Quantitative Surveys rely much on email surveys as a primary mode to jot down different responses. More to it, with technological advancement, market researchers can now send questionnaires to remote locations using offline mobile data capture apps. Social media is another highly used platform for social sciences and psychological research.
- Statistical Analysis
Quantitative researchers use several standardized methods to conduct statistical analysis used in quantitative research. Conjoint Analysis, Cross Tabulation, and Trend Analysis are reliable tools for performing quantitative analysis.
Qualitative Research
Qualitative research is more of a fact and figure-oriented research tool. More elaborately, Qualitative research investigates the purchasing decision of customers. It takes into consideration what people think and feel about products. It also analyses the factors that affect them to buy a certain brand or a product.
The qualitative research method has two methods involved in it:
- Conversation
Sometimes qualitative conversation happens between a researcher and a respondent. This can occur through a focus group, and in-depth interviews using telephonic/ video/ and face-to-face conversations.
In the wake of so many online platforms, a bulk of quantitative research takes place via several online community portals. Research conducted in these portals is more quantifiable and measurable.
- Conclusion
Any Qualitative research method is subjective. Qualitative research can derive conclusions based on in-depth analysis of respondents’ attitudes, reasoning capacity, response sharpness, and understanding of psychological motivations.
How is a Market Research Conducted?
Market research involves gathering data from different data points. A properly analyzed data set can reveal market behavior trends and market trends.
Market researches, through properly analyzing and interpreting the collected data help companies to yield innovative products and unique services. Market research is a complex process yet essential to derive business strategy and propel decision-making.
It usually consists of the following steps:
Defining the Problem Statement
Problem Statements identify the issues consumers face with their existing products or services. These identifications help as the basis of research and development teams to set the questionnaire.
Choosing an Approach
Every business must have a defined guideline to study consumer behavior. It can include anything, from analytical models for a research design to defining research objectives and hypotheses.
Preparing a Research Design
The business should work following the implemented process’s outline/research design. This outline must ultimately connect to a goal.
The research design might cohesively connect two endpoints data collection and data analysis.
Collecting Data
The most crucial step of market research is collecting data. The better remains the data collection, the better the yielded result.
A business can use online surveys, emails with questions, one-on-one interviews, and certain other means to derive customer feedback.
Analyzing Data
For a soon-to-be-released product, gathered data must be analyzed to determine how consumers will behave.
Drafting Reports
The business needs to draft the final research report for presentation based on data collection and analysis. It acts as a blueprint for investors and management to create business continuity plans for enterprises.
Examples of Few Marker Research Questions
- Quantitative Question:
- What is the current market share of your competitors?
- Insights Derived: Gathering knowledge about industry market share and key components.
- Qualitative Question:
- What stops you from buying <the name of your product/service> from our brand?
- Insights Derived: Customer demands product specifications
- Quantitative Question:
- When did you last purchase < insert your product’s name/service’s name> from our brand?
- Insight Derived: Brand Popularity or impact.
- Qualitative Question:
- Which products/services do you purchase at least once a month from your brand?
- Insight Derived: Information regarding brand popularity or brand impact is gauged.
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