By Heidi Dietzsch
If you’re buying a house, chances are you’ll look at the a variety of properties for sale, compare prices in different areas, try to get a feel of how much its value will appreciate over time, and of course visit the house, check for damp and generally try go find out if there are any hidden risks.
Not doing so could jeopardise not only your investment but also your peace of mind.
It would be about as crazy as making business decisions without the appropriate market research. Strangely, many business owners neglect this vital aspect of managing a business.
Businesses need to understand their markets to ensure that the right products and services are provided. Market research is essential for a brand’s long-term success and will keep a business afloat while businesses that fail to make research a priority, drown.
The results can be dramatic. Here’s a case study of how a world leader in industrial packaging products and services increased sales by $3m as a direct result of customer satisfaction research.
The concept of market research can be daunting, and many business managers unfortunately perceive it as being just a lot of extra work. Some might not want to conduct market research because they are simply too afraid of hearing negative feedback. They believe that their products and services need no improvement and they do not want to risk changing their ways.
Many businesses are also not familiar with the benefits of market research, nor are they aware of the distinction between market research and marketing research. These two terms are often used interchangeably, but they have differentiating qualities.
Market research deals specifically with the gathering of information about a market’s size, trends and preferences. This information is then processed and analysed and presented to businesses. The goal of market research is generate data on which to base your business decisions.
Marketing research is much broader and aimed at gathering information on all aspects of marketing. It also refers to the process of gathering, processing and analysing information for the purpose of marketing a product.
The European Society for Opinion and Market Research (Esomar) defines market research as the “systematic gathering and interpretation of information about individuals or organisations using the statistical and analytical methods and techniques of the applied social sciences to gain insight or support decision making”.
The American Marketing Association defines marketing research as “the systematic and objective identification, collection, analysis and dissemination of information for the purpose of improving decision making related to the identification and solution of problems and opportunities in marketing ”.
Market research is not an activity conducted only once. To benefit fully, it should be an ongoing cycle for businesses. It gives businesses a competitive advantage.
There are hundreds of ways accurate market research can help a business, and that’s why every business should conduct beneficial research. Imagine two banks similar in size – but only one conducts market research.
The bank that doesn’t conduct research might not know that its products and services do not meet client expectations. It will be oblivious to the fact that staff in its branches are perceived to be unfriendly and unprofessional, that its ATMs are often not functioning and are perceived to be unsafe, while its website is considered to be difficult to navigate so more users bank offline.
In contrast, the bank that conducts market research can deal with the above issues before they become problematic. Furthermore, this bank is likely to take the lead in mobile banking, for example, because its research showed that this is an important customer need.
Market research is important for any type of business. In planning to start a new business, for example, any institution approached for finance will ask for your market research. Starting a business always involves some degree of risk and good market research will decrease that risk. For a new business to succeed, it needs to understand its customers and competitors and find a unique position that attracts customers and is well distanced from competitors.
Fledgling and well-established businesses will benefit from good market research. In fact, businesses should think of market research as an investment. Not only could it increase profits and improve a businesses’ performance, it could also increase the businesses’ recognition and help to maintain a good reputation.
It is always crucial to ensure that the most accurate, insightful information is generated in order for businesses to reach their research objectives.