Why You Should Take Market Research Seriously

According to Globenewswire.com, the global market research services market is expected to grow from $76.42 billion in 2021 to $82.62 billion in 2022 at a compound annual growth rate (CAGR) of 8.1%. For anyone in business, this information should get them excited!

What is Market Research?

This is the process of collecting and analysing information systematically to know whether it meets your consumers’ needs and preferences. The data collected is eventually used to make marketing decisions. The main purpose of market research is to gauge whether the new product or service they are introducing will be viable or not and whether it will be successful with the targeted audience.

Why do market research?

It helps the company in the following ways:

  • Test the acceptability of a new product or service before the actual launch.
  • Know the current trends thus adopt strategies that will work in their favour.
  • Proper product placement.
  • Know whether a new product or service is feasible or not.
  • Identifying and developing new sectors.

Market research is generally classified under two categories namely:

  • Primary market research.

This involves going directly to the source to get the information or data, hence also referred to as “field” research. Examples include:

  • Surveys
  • Focus groups
  • Use of questionnaires
  • In-depth interview
  • Secondary market research.

This involves the use of data that had been previously collected by others, hence referred to as “desk” research. This type is mainly used by companies with a limited budget and the examples include:

  • Public sources e.g. Kenya Bureau of Statistics or reference libraries
  • Internal sources like data previously gathered on the same product or service
  • Reading journals in the same field

The data collection methodologies used in the above can be either Qualitative research or Quantitative research.

Marketing research processes involve:

  • Recognizing what problem you want to solve
  • Generating hypothesis. Deciding which direction to take.
  • Having clear objectives.
  • Selecting the appropriate research design. This can be qualitative, i.e. insight into how customers think or feel, or quantitative, i.e. using data and statistics.
  • Research methodology.
  • Data analysis. Interrogate the collected data to come up with an informed decision.
  • Presentation. This can be through the use of bar graphs, pie charts, e.t.c.

Merits of market research

  • Easily identify market problems and opportunities.
  • Helps in the formulation of marketing strategies.
  • Helps in understanding the customers’ needs.
  • Improves revenue.
  • Helps in launching new products or services.
  • Ability to know the different cultures’ needs and preferences.
  • Supports decision-making.

Demerits of market research

  • Information gathered may be inaccurate.
  • The research process is expensive.
  • Doing market research takes time.

Call to action

Any serious organisation must have a Research and Development (R&D) department that embraces doing Marketing Research, a critical component for any new product or service. The R&D department must take into consideration the diverse target audience thus avoiding scenarios like the famous KFC case, where their company slogan “Finger-Lickin’ Good” translated as “Eat Your Fingers Off” in Chinese!

Sources: Indeed, globe news wire, imsmarketing

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