The power of marketing is not necessarily in what marketing experts do. The secret is in the quality of research that backs their decisions. Isn’t it amazing how two companies could use the same methods and have very contrasting results? It is not about wrong or right decision but the motivation behind the decisions that marketers make. Those decisions are passed through a market research process that gives them validity and relevance. The information that backs decisions made by the marketing department come from research. There are several reasons why research is important to marketing and as such different ways that it impacts the whole marketing process. Every marketing department should invest much in research and here are some reasons why.
Increase customer satisfaction
One of the first reasons for market research is its importance in increasing customer satisfaction. Conducting market research is the only way you can know your customers better and acquaint yourself with their needs. Marketers are motivated by the need to get more customers but unless the business is meeting customers needs, they can hardly succeed in accomplishing their objectives. Marketing research is usually the business’ most valuable asset to meeting customer satisfaction. From the results of marketing research the business gets to find out;
- Who their customers are. The people who buy the products and services of the business and the factors that are common to them. These would include things like age, sex and other such factors that help the business target the right people more accurately.
- What customer needs are. Since the business can only succeed to the extent to which it meets the needs of customers, it is expedient that those needs are clearly known. Assumptions cannot be made regarding the needs of customers. Their needs have to be clearly defined so that they can be successfully met.
- Where Customers are located. The location of customers helps the company to serve them better. This information helps marketers to know exactly what kind of advertisement strategies will work and how to use them such that impact is maximized.
- Customer preferences. Until research is done, marketers cannot successfully tailor their adverts and the information they send out in a way that captivates customers and make them want to be part of the business. This is one of the reasons for conducting market research before launching an advertisement campaign. The fact that customers are still loyal to the business may just be because they have no alternative that suits their preferences. If the business remains ignorant of those preferences, it cannot make necessary changes and as long as those changes are not made, it will be hard for customers to be satisfied. Consequently, if any other competitor comes along promising a better alternative, the business will loose a large number of customers. All these are things that clearly spell out the importance of market research especially with regards to properly identifying and relating with your customers.
Know the factors that affect your business
The need to know the factors that affect a business is one of the reasons for market research. Every business man should have this in mind when conducting market research. There are certain factors that affect a business and the market research process helps businesses to identify these factors and take advantage of them. Some of these factors are easy to identify but sometimes it takes research to figure out and take advantage of them.
- New business opportunities. Usually a business will have opportunities in the form of market areas that are yet untouched but they can only be discovered when conducting market research. Opportunities to expand and take the business to the next level. These opportunities can only be taken advantage of when they are known. And the best way to know them is to carry out market research. It is possible for a business to remain at a particular level of growth for years when all the while there have been tremendous potentials for growth and expansion. Sometimes it takes the appearance of a competitor to know how much had been left untouched and how many opportunities were left unattended.
- Changing market trends. With technological advancements and high levels of competition, market trends are always changing. This is one of the reasons for market research. It takes proper market research to understand the trends that sway the market at every given point in time and to understand how the business can employ the right strategies and make the right changes to stay in line with the winning trend. As the business goes through the market research processes it has chosen to carry out, it begins to get information on the trend and how it influences business success. Whenever a business is out of trend, things that should work out just fine begin to fall apart. The market trend is the prevalent demands or desires of customers.
A business can be a pacesetter or even be the one that introduces a new and successful trend in the market but in order for that to happen, the business has to be smart and invest in market research. There are, as you should know, pacesetter and lagers in every respect of life. The same thing applies in business. Those who set the pace and lead market trends are the businesses that take the issue of business market research seriously enough to make it one of their priorities. Those who do not give it the attention it deserves will find their businesses forced to follow behind, getting just what is left over by pace setters.
A large part of business performance as far as success in the market is concerned is based on the foundation of quality market research. There is no such thing as the highest level of performance. There are always ways to perform better and get successful results but you need to break into new dimension by concise knowledge. You cannot try to increase performance by making assumptions. You must take steps that are backed by an assurance that things are going to work out just fine. That assurance can only be based on findings gathered from proper market research.
Keeps the company focused
With marketing research processes in place, the company is focused. It has the ability to set apart things that matter from those that do not. In the midst of challenges and opposing ideas, marketing research will help the business stay focused. There are so many things that could come along to sway the focus of every business or company. Sometimes these things look like opportunities or advantages but they are nothing but distractions. If the business does not have a system that takes advantage of marketing research, it will be difficult to identify and deal with these challenges. Between making plans and realizing them is action. However, if plans did not come from a place of research, distractions will make them hard to attain because there would be little or no focus.
Guarantees success of marketing campaigns
The success of marketing campaigns is very closely related to the success of every company or business. Marketing campaigns in themselves are decisions that are being implemented. Whatever marketing strategies constitute a marketing campaign determine how successful the entire campaign and by extension the whole business will be. The main reason why marketing campaigns are developed is to be as specific as possible in targeting the interest of potential customers so that the business can register an increase in sales. The information provided by marketing research is very vital to making the right moves as far as evaluating the potentials of certain market segments is concerned. The closer you are to rightly assessing the market area you are interested in, the more effective you will be in making decisions that actually increase sales by taking advantage of the potentials that are yet untouched.
Gives you an advantage over your competitors
In the midst of so many vicious competitors, there is one sure thing that could give you an upper hand over them and that is market research. This is one vital reason for conducting market research. Knowledge is what rules in every aspect life and business is not an exemption. The more you know about the market you serve, the better or more effective you will be at satisfying your customers. Customers on their part only have favorite dealers because those businesses meet their needs and solve their problems best. If you employ market research, you will serve your customers better and as you solve their problems and meet their needs better, you will soon begin to witness an increase in the number of customers who not only come to you but also pledge their loyalty to the business’ goods and services. That is one advantage that market research gives you over competitors.
The next advantage you have from market research over competitors is innovation. You become a pacesetter in the industry when you put efforts and resources into into market research processes. When other companies are looking for where to turn next, market research would have given the direction and they will have no choice but to follow your lead. That means taking the lead in sales too. You can see the importance of market research when you look at the two biggest phone manufacturing giants SAMSUNG and APPLE .
If you follow any of these companies, you will realize that they are both always in the place of innovation. That innovation is a product of meticulous research and development. Every time you see one of these two companies launch a new product, you know that they have about two others already in development. When one product goes into the market, they take time to study and research the trend of the market. Find out what more customers want in order to make their experiences better or solve their problems in an easier way. For this very reason, backed by the power of market research and innovation, these two companies have led the world market trend in mobile phones for years now.
Helps you minimize losses
Doing business without proper understanding of the market you are dealing with is a proper recipe to maximize loses. One of the reasons for market research is to help you avoid uncalled for expenses and minimize losses. There are several expenses to be made and sometimes after incurring all necessary cost, a company is not even able to break even, ending up with tremendous losses. The painful part of considering such things in retrospect is knowing that they could have been avoided if you payed more attention to market research. Since market research helps you know who your target customers are and narrows your focus to a particular people, it becomes easier to avoid unnecessary expenses. This also means that all other activities the business carries out to meet its goals are done from research that ensures their success.
Discover potential customers and their needs
Sometimes, when a business struggles to get customers from a particular market or location and cannot exceed its present sales level, it is a sign that the business has to switch and reach out to new levels. But until the market that has those potentials are known, the business will be limited to its present levels. It takes market research to discover new markets and the availability of potential customers in those markets. As you realize who your customers are and discover the factors common to them, you begin to know where you can find more of them and that is how new markets are discovered. There are people who use substitute good because they are not exposed to yours. The moment you are able to identify and direct your advertisements to them, you begin to gain their attention and loyalty to your product. However, the whole thing cannot be an issue of trial. Adverts alone are very expensive. A single advertisement campaign alone could cost millions. If the company does not put in the necessary efforts in research to target the right people, millions will spent with the company realizing little or no improvements or response from customers.
When you discover new markets and potential customers, the results of the research you carried out will also help you realize their specific needs. That’s why conducting market research is important. Customers may need the same product you are offering but maybe because of some differences with regards to their personality and geographical location, some changes will have to be made to suit their specific needs. If the company just decides to come in and supply to them the same product sold in other markets, the attempt may be a failure. But when market research is done, you realize that a customizable product can be made for them which specifically suits their needs. Lets say a company that makes fast food decides to expand its market to a certain community that is predominantly vegetarian. They may not be able to tell that most people there are vegetarian until they carry out research. Then the results of the research will help them understand that changes have to be made in their meals to accommodate the desires of these potential customers. You can always see the importance of market research in the way it helps businesses locate potential customers and their needs.
Helps in setting and analyzing realistic goals
Goals have to be attainable or else the business is only going to struggle and waste a lot of resources in trying achieve them. But before goals are attained, they have to be set. The market research process is one thing that helps the business to decide what goals to set. Setting goals is not something that should come from ambition or simple desire. For goals to be realistic, it means they can be attained by following a definite plan that serves as a road map. Before a company sets goals which it desires to attain, it must have done a proper check and analysis of the market to know how well the plans to accomplish those goals can be effected.
The process of running that check is called market research. Since goals are for getting to certain levels of accomplishments, the business must find out if it has the capacity to accomplish those goals or if the market it is trying to accomplish its goals in is able to bear it. For example, without market research, a business could make the mistake of trying to increase sales in a market that is already over saturated. Time, money and other resources will definitely be wasted, whereas, if the business took out the time to research, it would have realized that setting such a goal is not beneficial at all since it is not even attainable.
Secondly, when goals are set, it takes research to analyze how well they are being attained. The measurement of goal attainment cannot be a matter of observation only. To properly assess the levels to which goals have been attained, one needs to assess the market and study what changes and impacts have been made by employing and taking advantage of the importance of market research.
Different types of marketing research exist and not all of them will be effective for every business. These are descriptions of how data collected during market research are examined to come forth with meaningful and useful findings.
One type of market research method is market segmentation. This process involves assessing data related to needs, demographic information, behaviors and attitudes of existing and potential customers. This helps companies to be more specific in their approach so that results gotten are as close as they can be to what actually happens in the market place.
The next type or method of market research is product Testing. This is what gives you clear information on how well your products meet the needs of your customers and helps you determine areas where product development is necessary. Product testing is one of those market research types that should be carried out regularly throughout the life of a product. As you develop new features for existing product and even new products, the product testing research method helps you determine which of them should be sent out to the market and when that should happen. Ultimately, this helps the business to save resources which should have otherwise been misappropriated. So here are a few things that product testing will help the business achieve;
- Discover threats from substitute products or services from competitors
- The business after product testing will be able to know the product that holds the highest revenue potential
- Examine customer willingness to embrace new products before their launch
- Identify the product features that are most important to your customers
- Help the business develop messages aimed at changing wrong customer perceptions about products and services or enhances what they already know.
Besides Market Segmentation and Product Testing, there is Advertisement Testing which is about testing your marketing campaigns before actually implementing them. Just like product testing, this will help you save a lot of time and resources. As you launch test advertising campaigns and study the response of customers and potential customers, you are able to tell where changes need to be made and invariably create advertisement campaigns that will work better. These are all reasons for market research and they will help you evaluate how effectively it is done.
The last market Research method we will consider is Analysis of satisfaction and Loyalty. There is a difference between those who just buy your products and those who are loyal to the company. One of the greatest achievement of every business is to go beyond having customers just buy because of their satisfaction to having customers who are actually loyal to the business. The goal of satisfaction and loyalty analysis is to determine what drives customer satisfaction and loyalty in other to forecast the possibility that customers are going to be satisfied with or loyal to a particular product or feature about to be introduced.
Knowing the importance of market research and the strategies through which they are implemented is just what you need to make impact and shift your business the next level.