The year 2020 was a catastrophic year for most industries, except the pharmaceutical sector. The COVID-19 pandemic left the world economy with deep scars. Though the global economy is recovering, it will still be below the pre-pandemic level for a prolonged phase. Despite all the happenings, market research is considered valuable within many industries such as pharmaceuticals, healthcare, infrastructure, technology, and many more.
Need for Data
The need for data, information, insights has become a crucial part of businesses and companies for their planning and growth. The market research industry has seen a massive growth of over $80 billion worldwide, with a growth rate of about 5% annually. In this article, you will come across various topics related to market research.
What is Market Research?
Market research is a method of gathering information about customer preferences and needs. As explained by Investopedia, "Market research is the process of determining the viability of a new service or product through research conducted directly with potential customers. Market research allows a company to discover the target market and get opinions and other feedback from consumers about their interest in the product or service."
Also, by getting to know your customer's problems, what they expect, and figure them out, you can build your product, service and get a broader strategy to assist them in a better way. The market research gives ideas for advertisements and social media campaigns.
Questions in Market Research for Business
- Who are my consumers, how should I segment or prioritize them?
- What are they looking for?
- Is my brand healthy?
- How much are they buying, and what are their purchasing triggers, barriers, and habits?
- What features are to be added to the product?
- How to reach the audience?
- Is the pricing of the product fine?
- How to measure their responses?
These are the questions that brands want to be answered by market research professionals. The task is time-consuming, expensive, and demoralizing.
Why Market Research?
Investing in a business without getting to know your customers is one of the biggest mistakes that usually happen. And, without knowing the customers, you cannot solve their problems.
Even the most successful of brands rely on data and analytics to create a strategy and make decisions. Modern tools help in this work and take minimal time. But, many business decisions are taken by taking a look at past consumer behaviour and gut feeling.
The main aim of market research is to remove biased opinions while making business decisions. Take, for example – if one of your products is hit in the market, what are the chances that the other one that you might launch is going to be a market stealer? It might be a total failure. So, it is important to do market research to get real-time answers to all the questions above, which is in your mind. And, acting accordingly with the market atmosphere makes a much better chance of pushing yourself towards success.
How is it conducted?
There are many ways through which market research can be conducted; some of them are listed here:
- Conducting customer surveys Earlier, it was a big challenge to connect with people due to a lack of response from the public. But, people, nowadays are much interested in giving their opinion. They have realized that their views bring about a change in products.
Customer surveys can be conducted online through:
- customer satisfaction surveys
- Net Promoter Score
- Customer Effort Score
- Milestone surveys
- Market segmentation The process of dividing the target market into smaller categories makes audiences into groups, sharing similar characteristics—for example - demographics, interests, needs, or location.
Benefits of market segmentation are:
- Create stronger marketing messages
- Identify most efficient marketing tactics
- Design hyper-targeted advertisements
- Reveals areas to expand
- Improves business focus
- Checking Market Potential Getting to know if the market is big enough for your business to sustain is critical. When you are done identifying your target audience, you need to check if there are enough potential customers or not. If not, consider changing your product; otherwise, be ready to bear the loss.
For example – Having low potential customers in your target market will affect your business badly. You might have to sell them frequently or at high prices to thrive in the market.
Perhaps, industry research is the best you can do because it is established with competitors. You just have to know about potential market size through real-time publications for your industry.
- Presenting your findings The easiest of all steps is to document your findings. Putting your research in a presentable manner might not impress your partner, but it will give you an upper hand in front of investors.
Methods of Market Research
There are many types of market research available, but research can be classified into two categories respectively:
- Primary Research
- Secondary Research
Primary research involves the collection of data directly from your customers within your market. There is no mediator between you and the customers. It costs more than secondary research, but it is reliable and gives convincing results.
Similarly, secondary research is when data is gathered, compiled, organized and published by other sources. It can be from government agencies, trade associations or anywhere. Low budget businesses prefer secondary research.
Both of them are equally important. You have to get a nice mix of data from both the researches and use them accordingly to grow your market.
If you are new to the market, try to collect more primary data to get valid information. Compare them with the secondary research to check that those facts are true or not. Primary research should be preferred before taking any planned decisions.
Where to find data?
Best places to find data are:
- U.S Census
- Consumer Expenditure Survey
- Bureau of Labor statistics
Market research should be done consistently to avoid any mistakes that might affect your business growth. It should be made a part of the business strategy to make healthy decisions to grip the market and for growth.