Market Research and Its Benefits

April 21, 2024, by Cathy Meso

Market Research and Its Benefits by Cathy Meso

Marketing research is the systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing products and services. The goal is to identify and assess how changing elements of the marketing mix impact customer behaviour.

The importance of market research

1. Maintain a Customer-Centric Approach
Market research is all about understanding your consumer base better, and that is an essential step to creating a customer-centric business. Customer-centric companies keep the customer experience at the forefront of all they do. Research has shown that customer-centric businesses are 60% more profitable. It’s easy to see why prioritizing the customer’s needs and desires is a recipe for success.

Market research is how you come to understand those needs and desires in the first place, along with other important aspects of your target customers. You can’t effectively build a customer-centric business unless you understand your customers. Conducting market research allows you to appeal more specifically to your customers’ pain points and preferences. It’s a win-win for your customers and your business.

2. Connect with Your Audience More Effectively
When you understand your target customers better, that means you’ll be able to more effectively reach them. When it comes to your marketing campaign, you don’t want to waste time and money on trial and error — you want to have an informed marketing strategy. There are two main elements of effectively connecting with your audience: the marketing channels you use and the content you share.

Choosing the right marketing channels is an important first step to reaching your audience, but to truly connect with them, you also need to tailor the content of your marketing materials. Everything from the features of your product you advertise to the tone and visuals you use should be crafted to speak to your target audience. When customers feel you’re “speaking their language,” they’re more likely to pay attention to what you have to say.

3. Identify Opportunities for Growth
Market research isn’t just an important step for new companies or companies launching new products. Conducting market research periodically can help you discover new opportunities to improve and grow. For example, you may discover:

Product improvements: Market research can reveal possible shortcomings in your product or services that, if remedied, would allow you to appeal to more customers and improve customer satisfaction. You may also discover opportunities for add-ons, product bundles, or other upsells that appeal to customers’ preferences and help you increase profits.

4. Reduce Risks by Testing Concepts
Risk is a necessary part of any business venture. If businesses didn’t take on risks, they would also limit the potential for reward. However, successful businesses tend to mitigate their risks in strategic ways. The way to avoid risk is not to avoid doing anything. Instead, businesses should use market research to minimize risks and maximize rewards.

A major way you can minimize risks is by ensuring there’s demand for a product. The reality is that many products fail. Some experts place the failure rate as high as 95%. While that estimate is likely too high, it remains true that many new products fail to connect with consumers and end up in clearance bins.

5. Make More Informed Decisions
Market research empowers companies to make more informed decisions that are backed by data. Gut feelings are not a reliable means of making decisions. For instance, you may think releasing a luxury version of your product at a higher price point is a great business idea, but consumers willing to pay that price may associate your brand with budget-friendly products and opt for luxury products from luxury brands instead. The only way to know for sure is to conduct market research.

6. Compete More Effectively
Solid market research can be the difference that gives you a competitive edge in the marketplace. For one, by understanding your customers better, you may be able to engage them more effectively than your competitor is doing. Additionally, competitor research can give you direct insight into your competitors so you can understand how you fit into the marketplace.

7. Stay on Top of Trends
Market research isn’t just important for new businesses. As consumers evolve, companies must also evolve to optimize the way they connect with customers. Market research is a valuable means of staying up on relevant trends. Researching trends can often be done through secondary research. Industry reports or research from your competitors, for example, can reveal what new product features consumers are interested in.

Today’s culture changes rapidly, and market research is essential if you want to keep up. You need to stay aware of trends regarding your consumers’ purchasing behaviour, the most popular advertising channels, packaging preferences, product features, relevant messaging, and much more.

Market research is a very important tool that each and every business person must conduct in order to make the business more profitable and productive.

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