Market research is a broad term used to describe the complex and precise process of research done in order to understand and target the desired market. To put it in simple terms, market research is collecting valuable information in order to find out if there is a market for your proposed product or service. The key to any successful business is its ability to understand and provide the customers with exactly what they want.
Most of the entrepreneurs often end up making a huge mistake – thinking they know what the consumer wants. Acting on this strategy can at times lead to costly mistakes down the line. The information gathered in the market research will not only help you in understanding your market better, but will also ensure that the decisions you take are wise and profitable. Market research also helps you in discovering consumer behaviour.
One of the main purposes of market research is to determine how the product will be received by the targeted audience. The information gathered using market research facilitates in product differentiation and market segmentation. This can help in creating tailored advertising efforts and also promoting the features that the consumer regards as priority.
There are several reasons why pre-entry market research should top the list for anyone entering a new or changed market. Some of them are :
1 – Insight into Culture :
Thanks to globalisation, everyone is connected to everyone. People to people connection has taken centre stage and is crucial now. This new reality of communication while a boon, can be a curse as well. Often organizations are overconfident in their use of digitalization to open up a market. They also make the mistake of assuming one can simply learn about cultures online.
Cultural introspection must be done on-ground and with locally available resources to understand how one economy is distinct from the other.
2 – Developing the Right Ideas :
Buying and selling of a product is the tail end of marketplace interaction; it all starts with an idea, an initial step that sees its culmination in the aforementioned transaction. Merely creating a product is not enough, businesses need to develop the right idea. Why is this product being created? Do people require the product we are creating? Why hasn’t anybody created it yet?, If they have, what was the outcome of it? Why would one want to buy it?
Above are just few of the many questions that go into the idea of a product. Market research helps outsource some of this creativity to professionals, who can come up with the right ideas for the right product.
3 – Pinpoint Focus on Target Audience :
Having a target audience is very important, people who have the means, ability and the wherewithal to purchase what you wish to sell. Focus groups are needed to adequately understand what the economy demands, and this is where market research comes in. Questionnaires are made and ads need to be created. Careful study of the group and the data recorded must be interpreted precisely to draw the right conclusions. Hit and miss may work a number of times, but for clear and consistent results, using professional research is a must.
4 – Developing Contacts with Right People :
Companies rarely sell a product directly to the consumer. Dealers, distributors, retailers etc. each play a crucial role in the system in place to finally reach the said consumer. While consumer interaction is important, so is the interaction with these other links in the chain. A reliable network can help Improve the supply chain and streamline logistics to ensure that products hits the shelf on time. Good market research can provide organizations with precise information they seek and the right insights, that can bolster the prospects of success.
5 – Realistic Targets :
One mistake that any entrepreneur or organization can make is setting unrealistic targets. These can not only be big let downs but also hamper the morale of everyone involved. It is therefore important to always have realistic approach when setting targets.Setting logical targets and constantly monitoring results in real time can help to evolve a dynamic and comprehensive model for sales. Good market research will use data analytics and measured forecasts to provide organizations with the right insight to avoid the rude shocks that markets generally hand out to new companies.
Success, at the end of the day would depend on the product or service that the organization wishes to market. But market research can help you dispel the veil of uncertainty that occurs whenever you dive into a market that is either new or has changed. It can not only help you create but also alter your already chosen course to your path to success.