Why Is Market Research Important to a Business?

12/2/2021   By: Natan Saffer

Market research and a new business should always go together; however, many companies might not realize that market research should be performed continually. This article will detail some of the main market research methods and explain why they should be used by businesses, no matter their stage.

10 Essential Market Research Methods and Topic Areas

Market research methods and topic areas (using those methods) help take the stress off figuring out exactly how to go about obtaining the information that you need. Here is a list of 10 of the most effective and essential market research methods, with a short description of each.

  1. Surveys – Surveys are typically done online, but can also be done in-person, by mail or phone. They are a common way to obtain a large amount of information with a statistically reliable audience. These are often compiled into graphs, charts, and visuals which can be understood at a glance.
  2. Online discussions/Interviews/focus groups – These can give deeper information than a survey and use a smaller number of people. Sometimes people can express themselves better in person, in long-form text, via a video or while they are using a product than in a more restrictive survey. They are great for exploration or understanding the emotions behind a topic.
  3. Observations – Customers often give plenty of information through facial expressions, movement paths, body language, and other non-verbal communication that is not expressed well through surveys or online discussion/interviews/focus groups.
  4. Product/Service Use – This type of research details why people actually want (or think they need) something. How will it improve their quality of life? What are the most motivating features or benefits?
  5. Buyer Persona – Who is your customer? How old are they, where do they live, and what types of things are important to them? Creating a whole picture of your target audience is important for knowing how to market to them.
  6. Market Segmentation – The target audience, however, can often be subcategorized into smaller groups. You should know details about each of these as well – not just demographics but defined by attitudes, lifestyle and behaviors.
  7. Pricing – Where should you set your price point so that the customer feels they are getting value without spending their money on something ‘cheap’ and undesirable? How do you optimize your pricing strategy?
  8. Competitive Analysis – Who are you trying to succeed against? Your competitors might give valuable information to your target market by telling them that they need a specific item or service, but how are you going to stand out so that they come to you instead of the next guy?
  9. Customer Satisfaction/Loyalty – What keeps someone coming back? What is the ‘experience’ they are looking for that will create loyalty and have them spread the good word?
  10. Brand Positioning – A business should have a solid focus on who they are, and their the customer should be able to articulate or identify that focus as well. For example, if a business is selling ‘easy,’ then customers should experience ease and think of things being easy when they recall the brand.
  11. Campaign – How well did past marketing campaigns fare? Did they successfully bring in more business or did they hinder it? Or, looking ahead, how will a proposed campaign or creative concept test with the target audience?

Why Market Research Is Important for New Business Ideas

Why is marketing research important for new business ideas?

Market research and a new business or product are especially important because when you are bringing something brand new to the table, there is not a lot of primary or secondary research available for your specific market.

This means that product and/or service testing as a way of performing market research is especially important.

When you try out your product before you actually release it, or offer your services to trial customers before launching, you will be able to see how your business works outside of theory. You will be able to solve problems and avoid mistakes early on before those mistakes become costly.

Reasons Why a Company Would Need to Do Market Research

There are many reasons why market research and a new business should always be combined, along with new market research with an established company.

You have to perform market research to understand your customers. Who will be interested in purchasing what you have? Who needs your services? What are their pain points and expectations? What will keep them become brand-loyal?

Obtaining the answers to all these questions (and more!) helps you to get a full, clear picture of who your customer is. This will help you target your marketing and commercial strategies to easily make them feel that they need what you have.

You might have excellent offerings, but if your competitors are offering the same thing at a better price, easier accessibility, or with extra flair, you’ll be on the losing edge. Outpacing what your competition is doing is essential.

Why You Should Hire an Expert to Perform Market Research

You might be an expert on your product or service, but there are people out there who are experts on performing research so that it is done effectively, scientifically, and that it is presented to you in a way you can act on it long term.

Always give an expert researcher the parameters for the information you need and the questions that you want to be answered. Then trust them to do the rest.