The Importance of Market Research

Even with the best product in the world, you’ll never be successful if you’re in the wrong market. Whether you are an existing business looking to expand, or you are completely new to the market, hardly any concept can succeed without prior market research.

Market research is the process of collecting and interpreting data about a market, service, or product. It serves to assist you in identifying a market opportunity that you can then turn into profit. It allows you to determine the viability of a product or service before you commit resources into launching it.

Remember, your product needs to solve a consumer problem or provide value for people beyond what they could provide for themselves as well as being resistant to the ebbs and flows of fashion and seasons in order to ensure longevity.

Competitor Analysis

Contrary to popular belief, entering a marketplace where there is already competition puts you at an advantage as there is already solid data available for your market research, which will aid in speeding up your learning curve. The presence of successful competitors is also a solid indication that there is a need in the market for your product or service.

While a decent smattering of competition is an advantage in terms of data gathering, learning and identifying the market presence, it is prudent to check that you are not entering into an already saturated market. It is also important that, in a competitive market, you can ensure your brand has a unique identity and or different product benefits to help you stand out from the competition.

Conception and Development of New Products

Whether you are new to the marketplace or developing a new product or service to add to your existing offering, market research is an essential component towards ensuring the success of your product or service. It is also essential that you are developing a product or service that will succeed in its local market. As an example, Dunkin Donuts promote their Boston Crème to their US market, but in China, they are serving up dry pork and seaweed donuts. In a similar thread, KitKat offers more flavours in some of their Asian markets than anywhere else, whereas in the US, they focus their efforts on producing big or giant products to satisfy the US trend for all things large.

Another example of knowing your market and providing a service to meet the needs of that market is the property maintenance company urban-propertymaintenance.com. They have identified the growing rental market in London and provided a service to landlords that ensures they are in line with their legal obligations pertaining to the safety of the properties they let out. They have then successfully expanded this service into providing owners with conversions which will, in turn, maximise the functionality and value of their existing properties.

Make sure you identify whether your product or service has the potential for repeat custom. Acquiring new customers is much more expensive than marketing to your existing database.

Customer Feedback

Potential or existing clients are the force that must drive all your strategies and plans. Therefore, it is important to identify your target audience and recognise their buying habits. Pay close attention to consumer feedback across social, blogs and other channels not only to improve retention of existing customers but also to learn how to create marketing for new customers.

Collecting data in relation to customer feedback will also help to build a loyal customer base which, in turn, massively reduces your external marketing costs. Look to implement a solid retention strategy by knowing where your customers think you are weakest.

Identification of Trends in The Market

By comparing industry data over a set period, you will be equipped to identify whether the market is new and growing or static and mature. This information can then be used to develop your business strategy in a way that is aligned with the direction of your industry. Market trends tend to be heavily affected by consumer habits and behaviours; therefore, placing yourself in a position where you can determine the direction the trends are taking will have a direct impact on the performance of your business.

Short, intermediate and long-term trends are the three areas to focus your attention on. Once you have identified an uptrend, you will need to then identify when that trend starts to weaken so you can adapt in response. Research reports and solution guides are invaluable resources, but you should also look to read top blogs and publications in your industry daily in order to stay afoot of moving markets. Google, CRM systems and analytics templates will all help you keep track of your customers behaviours, so you can respond accordingly.

Aid Pricing Strategies

Getting the right price for your products is crucial to the success of your business. Your pricing strategy needs to maximise your profits while also considering consumer and market demand. It is important that your competitor price points are taken into consideration here and in particular, the leading brand. When it comes to pricing, poor planning will lead to poor performance and it is very difficult to adjust your price once you have gone to market.

Remember that your price point will help position your brand in your consumers’ minds, so it’s important that you have a solid understanding of where your product or service fits into the market. There are a number of models and methods that can be used to establish the best price for your product or service in order to maximise profits including the Boston Matrix and the Ansoff Grid. These will help you analyse your portfolio and make an educated decision to take your business forward.

Conclusion

Remember that without sufficient market research your business will be in danger of falling by the wayside. Conducting market research doesn’t necessarily require valuable resources in order to identify demographics, needs, and frustrations, but the results will certainly help you optimise and grow your business.