Importance Of Market Research: 7 Top Reasons
Updated: Dec 22, 2022
The importance of market research is covered by the various needs that market research can be applied to, whether it’s for opinion polls, researching consumers or business to business market research. Market research is a key element within the broad area of marketing that helps to understand the market through a systematic gathering of information of customers or businesses, which is then analysed and interpreted to help identify opportunities and problems with product(s) or service(s). This enables the improvement of actions taken to be more effective.
There are 7 reasons for conducting market research below that outline the different uses that market research can be applied to.
1. Measure likelihood of adoption of new products
Research undertaken can show the likelihood of adoption of new products or even highlight unmet needs and provide an understanding of unfamiliar markets. Qualitative research can be used for this such as focus groups or hall tests with a follow-up survey after the initial results have been digested and may have already been acted upon in terms of design.
This will all help to measure the following:
Likelihood of buying a variety of products.
Attitudes towards products.
Highlighting unmet needs.
2. Help to build a brand and achieve a competitive edge
In knowing how to build a brand and achieve a competitive edge, market research can be used to measure customer satisfaction or find new territories for products or services. Main methods used for this are likely to be online surveys but also telephone surveys for hard to reach audiences and face to face interviews for more of in-depth insights.
This will help to track and monitor the following:
Awareness of the brand including competitors brands.
The values associated with the brands.
Establishing the influence of brands in the purchasing decision.
3. Test attitudes towards products
Attitudes towards brands can be tested via different methods whether that's descriptions, hall tests, focus groups or placement in homes and workplaces. Consumer attitudes towards brands can then be assessed from what is shown to people through these different exercises.
This will help assess the following:
Find out the likelihood of buying different products.
Attitudes to products.
Attitudes to new concepts.
Identify unmet need.
4. Measure how products are valued and find an optimal price
Research can illustrate how much products are valued by people at various levels. This will all help to find the optimal price for the offering that is acceptable to potential buyers.
This can be done by market research in test markets by carrying out special technique like trade off analysis using conjoint techniques.
Below is the type of insights that can be gained from this research:
Highlighting the optimum prices.
Finding out the price values associated to features of the offer.
5. Helps to plan an effective route to market
In terms of distribution market research can be used to plan the most effective route to market with the use of secondary and primary research. This can be for insights into the following:
Assess the overall market.
Evaluate the competition.
Define and segment your target audience as they may have slightly different needs especially for different regions and other demographics.
Where best to reach customers over different media channels like TV, online or social media.
Best places or locations for selling your product offering to your target audience.
Forecast the number of units that can be sold at different price levels.
6. Support all aspects of product promotion
Market research can support all aspects of promotion for a product or service from the concept development stage of adverts through to testing which of the adverts were most effective. Research methods used to cover each of the aspects are focus groups, face to face interviews, online surveys and pre and post quantitative surveys.
Insights gained from this type of research are the following:
Measure the success level of key messages for campaigns.
Monitor and track the effectiveness of adverts and promotions from pre to post campaign.
7. Helps to rejuvenate a product or service
To rejuvenate a product or service, market research can show different ways of doing this, whether this is incorporating extra features or finding new markets. Along with the use of qualitative research methods like focus groups or in-depth interviews combined with quantitative methods such as online surveys the following can be achieved:
Highlighting any needs that have not been fully met.
Identify the main dislikes with the current offering.
Establish whether or not the updated designs outperform the original offering.
Find out what features appeal most to people.
Improve appeal of packaging designs.
Eventually improving a brand's image.
Learn more about market research and how it can be applied by checking out this article - Discover All The Best Methods Of Market Research
Overall research will help to reduce uncertainty for businesses particularly in a situations where things can change overnight like a pandemic. The knock-on effect is the change in needs, wants and behaviour of customers in managing a unique situation such as resources for home schooling, work, home improvements, hand gels/sanitisers, face masks and a rise in online shopping and communications. Research will enable businesses to see what is occurring and how they can move forward.
RELATED POSTS BELOW ABOUT MARKET RESEARCH
Monadic Testing: All You Need To Know
10 Key Benefits Of Market Research For All Business Types
Causal Research: Definition | Advantages | Examples | Components
Examples of Market Research Projects
TOP 4 Types Of Market Segmentation
Benefit Of Market Segmentation: 11 Advantages And 4 Types
Market Research Examples For Businesses To Succeed
5 Best Survey Maker Platforms To Consider Using
How To Do A Survey: Top 10 Tips
How To Design A Good Questionnaire