10 Key Benefits Of Market Research For All Business Types
Updated: Dec 22, 2022
Discover the 10 key benefits of market research that help all types of businesses and organisations whether they are large or small from minimising risks to identifying opportunities in the market.
So for those of you who don’t already know what market research is, it is collection of data and information that is analysed and interpreted to provide insights to address goals that were set out, whether that be resolving a problem or promoting a product, the research will help guide decisions of the main decision makers. This is explained in more detail below with an outline of the top 10 benefits of market research to help you understand it’s importance.
1. Helps steer business communication
The most effective communication can be formulated for both current and new customers, once the market research results have been evaluated. You will be fully aware of what they like to do, hear and see. Plus you will be able to target them better through classification of these customers into different groups via market segmentation.
2. Limits risk
From all the data and information gathered through market research will enable you to decide, whether to take action or not rather than relying on just a hunch. For example, you may find a market for a particular product line or service may be fully saturated in certain areas.
3. Identify opportunities in the marketplace
It may become obvious from the research that the new product which you are looking to launch may not suitable for the market in terms of customer wants and needs. Therefore, this will allow you to make modifications to the product or service offering that is more suitable for the marketplace.
4. Discover and identify potential issues
Whilst new products or services are being developed, you can get consumers thoughts and reactions. This will further develop what is needed in the marketplace.
5. Estimating sales and maximise advertising expenditure
In preparing for the future, market research can forecast sales of a new product or service, so you can ensure the right advertising budget is allocated to attain and maximise profits.
6. Determining brand reputation and customer needs
In knowing how your brand compares to your competitors through brand research, will then enable you to take action if needed.
7. Establishing customer trends
If market research is treated as an on-going process periodically then you will be able to establish key trends over time and analyse your customers from all the data that has been collected. This can be on a monthly, quarterly and yearly basis in establishing customer trends.
8. Benchmark and monitor market position over time
Through market research, your market position can be determined by monitoring and benchmarking your brand’s progress. This will all help you in deciding whether to take action at specific moments in time.
9. Compromise between gut feeling and the actual results
There will always be gut feelings and personal perceptions towards your product or service, which obviously cannot be ignored. However, market research will give you a new angle and proven justification of your thoughts or not by directly researching your target audience for their opinions and thoughts of the subject. This will allow you to come to a compromise between your personal feelings towards the brand and the results presented.
10. Help to define a brand promise
A promise is defined by every brand from large well-known brands to small independents, which could be assurances of the high quality of a product like computers or cars, speed and efficiency of service such as food orders. These brand promises are wide ranging dependent on the product or service in promising to customers, how they will be delivered. The brand promise has to be straight forward and research can help to define your brand promise and emphasis, which is the most persuasive.
Advantages of market research agencies in providing insights
Obviously, you can do market research in-house to some extent but that requires a lot of your time, knowledge of where to look, who to speak to and what questions to ask and not to mention the analysis and insights.
This is where market research agencies come in, allowing you to focus on other essential business tasks. These research agencies such as Ipsos Mori or Nielsen can take up the goals and objectives you have set to address an issue or opportunity and start building the required solutions from audience sample, questionnaire material to fieldwork, analysis, conclusions and recommendation to the subject at hand.
The market research agencies have the experience and expertise to manage the whole research process or in part like fieldwork and tabulations or building digital dashboards. This is all dependent on your needs and how comfortable you are with research data.
Limitations of market research
There are many things, which have already been mentioned that are good about market research but as with all things there are some limitations.
The following are 3 disadvantages of market research:
1. Time consuming during the research process
It can be time consuming from proposal to delivery of results if using face to face or telephone methods. However, alternative methods can be used such as online research for much faster delivery times. It’s best to talk to a research professional for the best approach for obtaining quality insights in the shortest time possible.
2. Cost of using market research can be expensive
The cost of using market research can be expensive but that is dependent on what is required and what methods are being used to achieve this. For example, a large multi-country tracking survey can be costly that tends to be used by larger brands but a small one-off survey is relatively inexpensive. Also face to face methods tend to be dearer, while online is a much cheaper · option. Basically, all this comes down to what is needed and one method maybe far more suitable than another even if it’s cheaper – value for money.
3. Subjective with human response
It can be subjective with human response in knowing they are taking part in research but there are market research professionals who use methods to minimise this and statistically factor this in the results.
Key take outs
Market research is an essential tool to support the decision-making process for not only new product launches but on an on-going basis throughout the cycle of the product or service in addressing problems, market trends, identifying opportunities, current state of play and producing effective communications. In researching and analysing your particular market, you will be ahead of the game and have an advantage over your competition.
The insights gained from the research will help guide your most valuable strategic business decisions and providing this is done properly, taking cost and time considerations into account, the value of using market research to your business is invaluable.
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