What is Market Research?
Market research involves collection of valuable information to determine if a party has a market for their proposed product or service. This information is mostly used by entrepreneurs and established businesses in making profitable decisions.
Need for Market Research
The key to succeeding with a business is to clearly understand the needs of customers and meeting their needs in a way that is profitable for the company. A significant percentage of entrepreneurs and established companies make the mistake of conjecturing what their potential customers need without asking them. This is the reason for failure of many startups and new product/service launches by companies.
Process of Market Research
The availability of market research data can help businesses to develop their Target Audience. “Target Audience” is a group of prospective customers who have demonstrated the need or desire for the products or services of the company. Research helps a company in determining how often their target audience buys a specific item, the amount they are ready to pay, and the existing level of satisfaction. Analysis of this information helps manufacturers and service providers to make decisions for focusing their resources for the best possible returns.
As an example, gray hair products are mostly likely to be hit among middle-aged adults. The promotional strategies for such products will be focused on adults, especially those above 30. The company cannot focus on teens; else it will be wastage of their advertising money.
On the other hand, market research will also be required for reasons beyond finding the target audience. If a product is usable for different demographics but doesn’t sell to the desired level or sells only to one or two groups, market research can help in such a situation to help find the reason behind the limited sales. The collected data can provide valuable information to the company to decide how to make their product/service more appealing to the larger audience. The information can also provide helpful information on ways to advertise better.
Information for New Product Launch
Market research is also helpful in collecting and developing information about new products/services and the degree to which they will be received in a specific market. It will also help the company learn about the level of public satisfaction to the competitive products already available on the market.
Thus, market research can help a company remain well informed about the needs and wants of their prospective customers. The company can also carry out market research about their existing products/services in the market. This can help them take appropriate actions to eliminate any losses and increase profits.
Market research involves the process of testing the collection of potential consumers to learn about their interest in the specific product or service. It will usually involve establishing the part of the population that buys or will buy a product on the basis of a number of variables including age, gender, income and location among others. With all these benefits, market research has come to become an essential tool for both startups and existing companies to plan their products and marketing strategies.