Marketing research involves gathering and analyzing facts about a given business environment.
Both new and existing businesses conduct marketing research projects, but with different objectives. A new business may conduct research to better understand the market before starting operations. Existing businesses value research because it helps them assume the right position that will enable them to harness available opportunities while avoiding risks.
Gathering and analyzing facts about a market are vital to the decision-making process. Let's dive into the question of why is marketing research important?
#1: Establishing the soundness of a venture
Entrepreneurs start businesses with the aim of making profits. Therefore, they need to establish that the venture they are about to start will provide enough returns to support the growth of the business. The first thing to consider is whether the service or product offered is needed in the market and whether it will attract customers. Businesses can conduct research on their own if they don’t have the means to hire expert researchers.
#2: Developing a growth strategy
Success is not easy to achieve. It requires thorough planning to take full advantage of the opportunities available in the market and avoid threats. Businesses need to have plans in order to attain set objectives and survive in highly competitive markets. The plans are developed from information and details gathered through marketing research.
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#3: Determining market needs
Different consumers have unique needs and expectations, and it is crucial to understand what those requirements are, and design products or services to meet them. Businesses precede the development of new products or services with research among prospective customers to ensure they get it right. Customer needs keep changing, making it hard to make a blind plunge into the market.
#4: Monitoring competitors
Markets have different competitors vying for the same customers. For a business to be successful, it must strive to keep its market share. To do this, a small business conducts market research to establish the moves competitors are making and to counter those moves accordingly.
#5: Finding market opportunities
The market always has opportunities that a small business wishes to exploit. Some of the openings are not too obvious, and one needs to conduct some research to identify them. Regarding the opportunities, businesses also conduct research to find out the best strategies to use in the market. Identifying opportunities for business need not be formal. A simple discussion with friends, watching TV or reading the local newspaper daily can provide new business ideas to pursue. Paying attention to the happenings around you can provide ideas to consider further.
#6: Identifying potential problems
The chances of a small business to grow are hampered by many problems along the way. The problems can even lead to its closure if they are not addressed early. Through market research, possible problems are identified and addressed before they get out of control. Advanced knowledge of market trends allows the business owners to adjust their strategies accordingly and reduce the effect of the possible problem.
#7: Financing solutions
Affordable finance is crucial for the survival of a small business. The funds are required for different purposes such as expansion and development of new products. Although there are many financiers in the market, most of them are not suitable for small businesses because of the conditions attached to the financing and the interest charged. High-interest rates increase the cost of running the business. Conducting research identifies financiers who finance small businesses at friendly rates.
#8: Developing an online presence & eCommerce sales channel
With increased access to the web, more businesses are using it for marketing. A small business new to online marketing needs to find the best way to enjoy the benefits associated with the web. The strategies used in offline marketing may not work online. Therefore, the business has to conduct research to find the most appropriate strategies to use.
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Market research plays a crucial role for a small business as it does for a large enterprise. But with proper research, business owners can make better decisions regarding their operations. All the activities of a business should be preceded by sufficient research so that mistakes are avoided.
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