There are many reasons to conduct market research. It is mainly completed on the basis of services and products that the company is offering. Although the number of reasons are literally limitless from broad position projects to determining the best version of a logo, there are five main reasons:
- Introduction of New Product or Service: Any new business, or introduction of a new product or service that the company is thinking of offering, needs market research. By developing a good understanding of of the product by developing a good business plan based on market research helps provide a solid foundation for your offering.
- Customer Development: Next to understanding the product or service you are offering, understanding the customer who will be buying it is paramount. In a consumer based business, understanding the demographics and psychographics of a target market can be determined by looking at previous purchase behavior or through a needs analysis. In a business which sells to other businesses, understanding their needs can be a little more difficult. However, this can be understood by doing surveys or focus groups.
- Competition Analysis: You need to understand your competition. For most small businesses, getting a general idea of your competition is usually sufficient. However, larger companies, larger market potentials, or more costly the product, the more detailed the analysis needs to be done.
- Marketing/Advertising Development: Doing “marketing” research to make sure the look and feel of marketing and messaging is also another good reason for doing market research. By reviewing with your buyers on how, for example, a product package or a logo looks, you can make sure the visual image of your offering is attractive and that your customer is getting the right messaging.
- Customer Satisfaction: After your customers have purchased your product or service, following up with them to understand their satisfaction of that purchase is key. By understanding why they liked or disliked your offering and the reasons why the customer purchased your product or service over the competition can provide a basis of what could be your competitive advantage.
–J. Nolfo helps companies understand their market and customers though a variety of market research strategies. He has over ten years of experience of market research for strategic planning purposes. He is the Director of Research at Rhino Market Research. He shares his thoughts about market research and business concepts with his blog “Pensare…Understanding Market Research in Business“. If you would like to discuss this blog or how J. can help you understand your market and customer needs, email him at firstname.lastname@example.org.