Market Research and its Benefits

By its definition, market research is the process, action or activity that a company uses to gather information on its consumer base. This information is critical for business operations, as data such as customer behaviour, spending patterns, product preferences, and more can be extracted from the results of market research. This valuable data can then inform business decisions in areas like product development, marketing, strategies, and pricing.

How is market research different from marketing?

The market research process is different to marketing, which aims to promote and sell products or services to customers. The primary focus of marketing efforts is to create and implement strategies designed to reach and persuade potential customers.

It is recommended that businesses conduct market research before developing and implementing their marketing strategy. Why? Because companies can harness the information from their market research plan and utilise it to create a more robust and effective marketing strategy.

When should a business conduct market research?

There are various circumstances where it is recommended that a business conducts market research. These include:

1. Before launching a new product or service
   It is always wise for a business to investigate the needs of its customer base before launching a new product or service. This will enable the company to better market its products to the right audience, sustaining the product and service it aims to establish.
   
   
   
2. Before entering a new market
   A common mistake that businesses make, especially smaller-sized companies—is to enter a new market without checking the competition, cultural differences and preferences.
   
   
   
3. Before improving an existing product or service
   Sometimes, businesses may attempt to improve a product or service that customers are actually highly content with. This is why it is essential to have the right insights from market research so businesses can work on improvements or upgrade services according to their customers' needs and preferences.
   
   
   
4. Before creating marketing strategies
   For a business to succeed, it is essential that its marketing strategy proves effective. Market research serves as a platform to provide insights into the most effective marketing channels that would help a business reach and keep its potential customers.
   
   
   
5. To remain informed about industry trends
   Market research functions as an information tool for businesses to stay knowledgeable about market trends, changes or competition so that they can stay one step ahead of their competitors. By understanding customer behaviour, businesses can also make more informed decisions for the company's future.
   
   

What are the benefits of market research?

As mentioned, market research can provide businesses with a wealth of data, which includes a better understanding of the market, better pricing decisions, more effective marketing campaigns and improved product development. These benefits can translate into better sales (and profit) for a business.

What are some market research methodologies?

There are several methodologies that a company can apply to conduct market research, including surveys, focus groups and observational studies. While each of these methodologies has advantages and disadvantages, a business should choose a method that suits its research objectives and budgets. Companies can also work with external vendors to conduct their market research endeavours, which can sometimes be more cost-effective.

What is a panel survey, and how can you use it?

A panel survey is a piece of market research that gathers data from individuals or respondents who have agreed to participate in a study over time. This can be beneficial in tracking changes in customer preferences or behaviour, mainly if a company is interested in understanding customer loyalty patterns or gathering feedback. However, it is also important to ensure accuracy and reliability by choosing the right panel that is representative of the target market.

Trusting reliable survey panel companies, such as Engagement Lab, will help you generate the required data.
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