Market research is can be defined as the systematic collection and analysis of data relevant specifically to a business marketing situation. It has always been a major factor in business success. In launching a new business, it is important to perform extensive market research. This research will be included in the business plan. The benefits of having extensive market research can be a major contributor to business success. Here are some of the values to research.
– Help you estimate your business potential. Market research provides first-hand information regarding your business opportunity. It creates an overview with regards to your target customers. this can include;their buying habits, brand loyalty, consumer trends; your business environment, competition, market saturation, macroeconomic and political perspectives, and legal issues. In addition, the research can cover such areas as taxes, inflation and government Regulations. An effective market research effort will reasonably predict the profitability of the proposed business.
– Help you gain investors. Investors generally want value and security for their investments. Investors know the risks, but are willing to invest once they are satisfied that these risks are minimized. Having an effective market research program makes investors feel that their investments are secure. It also says you have done your homework and you are competent to handle their investment in your business.
– Help you design marketing strategies. An effective market research process provides you with information about the demographic/population distribution, behavior, preferences, and insights of your target customers. This information is the lifeline of your business and will enable you to create a marketing strategy fit to the situation.
Market research is very crucial to the success of any business. In collecting information, always consider the most important ones.
1. Market Size
The degree of research may depend on market size. Also, the target market must be as specific as possible. Larger markets tend to be very variable but highly competitive. Consumer differences must be detailed by your research as much as possible.
2. Market Demands and Preferences are more than just needs and wants. It is defined to be the “want/need” for a specific product, backed by purchasing ability. An effective market research effort should review not only the consumer needs and wants but also define an estimation of the market demand.
Market demand estimation, however, is difficult to access. Competition provides consumers with alternatives and with this their preference over a certain brand may be defined by many factors. The market research should uncover and document these factors. In addition, the research must also tackle the competitor’s product offering, and possibly find a flaw that can be exploited to create an opportunity for your business.
3. Market Positioning and Segmentation are defined as having the right retail/distribution location for the business. The most important factor here is customer access. An effective market research should cover possible locations that can be supported by the data gathered.
Positioning is also difficult to research. Market segmentation is the key to effective positioning. This can be defined as the allocation of target customers to unique groups with each having same characteristics or trends. Different market segments may have different demands and may need different marketing strategies. Thus, knowing which market segment to target in positioning your business is crucial.