Importance of Market Research for Success of a Company
Market research is a crucial component and has a vital role to play when it comes to business development and expansion. Changing economies has brought a significant turn on the industrial level and each industrial sector is experiencing a boom that drives the market potential. Market research not only provides insights on the current market scenario, but also provides a better view of the future prospects of the industry and competitive set-up. Market research provides detailed insights about the competitors, consumer buying patterns, latest market trends, economic shifts, customer’s pain points & preferences, and demographics. That’s the reason smart business always prefer leveraging market research services to develop creative growth strategies.
Market research can be carried out at different stages of the business cycle, right form idea generation, pre-launch activities to business expansion and beyond. It provides details on potential business opportunities, helps plan the perfect marketing campaign, reduces losses and lowers risks, and keep track of the competition. Major benefits incurred by a company or a business with the help of market research includes:
- Understanding of customer needs and improved communication between the company and its target customers
- Identify customer demands and develop a product that meets the customer demand. This not only fulfils customer needs, but also minimises risks of failure for the company.
- Keeping track of own business progress, analysing competitors activities, and evaluating market growth
Below mentioned are the major reasons stating the importance of market research for success of a company/ business:
Understanding the needs of existing and potential customer:
While developing and launching a product, it is important to understand the mind-set and requirements of the potential customer. Basic questions that can be considered while keeping the customer perspective in mind include:
- Why would a customer select your product?
- Is it something that would influence a customers buying nature?
- What value does your product provide to a customer?
- Based on your product idea, who can be your potential customer?
- What is their age group, gender, and location?
These and many such questions can be answered by conducting a market research study before developing and launching a product. Market research not only collects valid data, but also helps you map out the full profile of your ideal customer. Furthermore, market research gives one the ability to understand how the target customers think and help adapt to their needs in order to turn them into regular customers and brand advocates. Getting exhaustive information about existing and potential customer helps companies to determine the market size and the reasons that triggers them to buy. Moreover, a company can collect demographic information that can help them create marketing and pricing strategies.
Information on competitors and their market presence
An effective market research study not only guides a company with product and customer placements, but also provides important information about the competitors in the market. A company can get detailed information about its competitors, their products and services offered, their market position and recent activities that help the companies maintain their market share. Information regarding the growth strategies of the competitive players, their product portfolio, pipeline products, and innovations in line can also be of use when entering into a growing market.
Self-evaluation in a competitive industry
Along with studying the market competitors, market research can help a company to analyse its own SWOT (strength, weaknesses, opportunities, threats) compared to the other companies in the industry. It can not only provide details on stability of the company, but also can offer solutions to some of the weaknesses of the company. Restructuring, remodelling, profile changes and financial investments can be scrutinized and streamlined to make the organization more efficient and well-organized.
Solving Business Problems, and Identifying Business Opportunities
For a company looking to make changes in its current business line, market research helps identify gaps in the existing structure and provides insights on new business opportunities. A market research survey can be conducted to identify the cause of your business problems, if any, and suggest promising remedies. For instance, reasons for decreased sales could be due to the entry of a new competitor, or a substitute product, unwanted effects of the product, reduced brand awareness, or negative brand image. A market research company can study all these problems and suggest a promising strategic move to help resolve the issues. Moreover, it can provide a company with insights on potential growth opportunities such as untapped or undiscovered markets based on product demand, geographic reach, and competitive advantage. Market research also helps understand market influencing factors such as changing demographic and market trends such as population shifts, higher education levels, economic condition, increased leisure spends, and many more.
Taking Accurate Decisions and Developing and Implementing Business Strategies
Market research studies allows the organizations to classify their objectives while following the current market trends and take fruitful advantage by reaching out to their target audience. Information collected by a market research survey helps a company to set realistic goals and keep genuine expectations from its products and potential customers. This happens only when a market research company makes appropriate estimations about current market scenario, sales forecasting, market share, growth rate and other such critical factors. Furthermore, research data can help a company in developing pricing strategies, marketing strategies, distribution and logistics management, advertising media usage, making decisions for new or upgraded products and services, sales tactics and timing the market. It can guide a company towards making better decisions related to starting, consolidating, diversifying or reducing business activity.
Reduces losses and lowers risks
A business always hold a risk of failure or loss based on various factors that are beyond your control. This may include some errors or mistake that help you learn along the way. Though the insights provided by a market research company are not 100% accurate, they might prove to be effective at reducing such risks that a business incurs or the losses a business may suffer, as long as it has solid sources and findings to back it. It helps minimise the marketers risk and help take sane decisions, helps in avoiding some mistakes such as poor pricing strategies and poor marketing tactics, so that a business can survive and thrive in the future.
Making a business successful in such an intense competitive world is a difficult task, and that is what market research is for. It enables to understand weaknesses and helps act on them so that the business could flourish. Hence, investing in a dependable and proper research is important to achieve great benefits.