5 Reasons Why Market Research is important
“Marketing without data is like driving with your eyes closed.”
– Dan Zarrella, Award-winning HubSpot Social Media Scientist
Market Research is central to the success of most brands. Even Fortune 500 companies rely on this crucial process to help their brands grow.
But how important is it?
Let’s find out!
Market Research is literally the first step in creating a brand. It is how you would understand the crucial factors of your target audience. This process is a prerequisite for Brand Positioning.
Without adequate Market Research, you cannot determine your USPs. It also adds context to your products and services.
Market Research allows you to envision how your products and services will benefit your customers!
So, we’ve already established the importance of Market Research, then why do we have to elaborate on it further?
Well, Market Research is more than just a one-time process. In fact, you will probably realise that it is a continuous process. In this article, we will uncover all the benefits of conducting thorough Market Research.
But hey, don’t take our word for it. Apply all the below-mentioned principles and you will find out how Market Research can redefine your business.
Okay, how about we start with the basics and define Market Research?
What is Market Research?
Market Research is the process of gathering facts and evidence about your company, its products, audiences and competitors. It allows you to analyse the key factors necessary for the branding and marketing of your company.
The process involves collecting and recording quantitative and qualitative information to understand the market’s characteristics. A marketer might conduct market research to determine different aspects including Target audience demographics, Customer Satisfaction, Segmentation Research, competitive benchmarking, etc.
The most common ways you would go about conducting Market Research is through Primary and Secondary Market Research.
1. Primary Market Research –
Primary Research involves going to the source to collect information. In this process, you need to directly communicate with the stakeholders or the target audience. It can be either qualitative or quantitative.
The most common methods include Online surveys, Focus groups, and In-depth interviews. There are many benefits of conducting Primary Research. The first advantage comes in the form of data ownership. Your data is accessible to only those who have your consent.
This ensures that the data acquired is relevant and not skewed with irrelevant information. The information acquired is targeted and specific to your requirements including the specific target audience.
To top it off, primary Market Research is usually cost-effective.
Now that we have briefly looked at Primary Market Research, let’s cast our attention towards Secondary Market Research.
2. Secondary Market Research
Secondary Market Research is the data that is already present, i.e, information that has been collected by other sources. Depending on your requirement, you can access it through a private or a public source.
This methodology includes reports and studies conducted by the government, agencies or businesses in a specific industry. In most cases, this type of information is readily available online all it requires is for you to find the right resource.
Another important thing to note is that it saves a lot of time. Often, primary research requires you to collect, evaluate and compare data all by yourself which takes a lot of time. With secondary data, you receive the final findings. However, the more obscure the information, the more one may need to spend to acquire it.
We have effectively gained information about Market Research and its types. Now, let’s take a step further to understand the major benefits!
Benefits: Why Market Research is important to your business?
1) Helps you understand your customers
Market Research is a vast process but perhaps its most important application comes right in the initial stages. You need to understand your target audience to start a business in the right way. If you are unsure about who your target audience is or what their requirements are then you are at a great disadvantage.
Market Research becomes ineluctable for every brand to determine key motivators, pain points and buying behaviours. Another key facet of conducting Market Research in the initial phases is to determine product differentiators. Your USPs are the key to selling your product or service.
2) Facilitates outreach to potential buyers
We’ve understood how Market Research helps you to understand your current customers. The same data can be used to potentially reach out to look-alike audiences. These audiences contain certain characteristics that are similar to your customers. It is extremely useful during customer segmentation.
Market Research helps you reach out to them and expand your customer base.
3) Opportunities for Business Expansion
With the prospect of expanding your customer base comes the opportunity to expand your business. Market Research tells you what’s working and what’s not working for your business.
Based on concrete data, you can either choose to expand a product line or create a completely new portfolio. In some cases, marketers have completely changed the application of a product purely based on Market Research. What’s more, you will have the power to run campaigns and promotions with extensive Market Research.
4) Staying with the trend
In modern times, it isn’t enough for you to just do the bare minimum. Things are constantly changing leading to new trends. Your buyers are evolving every day with different factors that influence them to make the buying decision.
It becomes essential for brands to stay up-to-date with the latest trends. A good way to determine the trend is by understanding your target audience’s interests. Most often, your customers convey their needs. Another way is to study the competition – How are they changing? What are they doing to reinvent their businesses?
A good example of a company which stays up with the trend is Nike. They’re shrewd in reading the market’s pulse and positioning their products for the best result.
A company which suffered due to not staying with the trend is Nokia. A couple of decades ago, it was one of the most used mobile phone brands. However, they were late to the market with their smartphones providing their competitors with a massive advantage over them.
5) Taking important business decisions
Here comes one of the most crucial parts of Market Research. You need to know that Market Research is evidence-based, so certain facts may be hard to digest. Whether it’s related to the performance of a product or the impact of a campaign. You might have to retract a few products or pull back on certain campaigns and reutilise the capital in different areas.
Another aspect that is aided by Market Research is that it helps to solve your biggest marketing problems. Market Research is mostly associated with customers and your marketing challenges often involve the end-user, i.e, customers. Market Research provides important data for you to get out of your marketing fixes.
In essence, Market Research is one of the most crucial processes in your Brand Positioning and almost every facet of the company. At VC, we have a dedicated team of marketers and strategists to create the perfect roadmap for your branding and marketing goals.
Learn more about our Branding services here
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