You are probably hearing the words market research for the first time. Maybe not. It’s simply the determinant of the success and failure of your business. There is a thin line between what the market needs and what you think the market needs. Understanding what market research is, how it can make or mar your business is a vital subject in the world of business today. Sometimes, the difference between your product idea and what the market needs could be just a slight adjustment to your product design. This article will teach you what market research is, the importance of market research, why it’s valuable, why every business needs one, and the types.
What is Market Research
Market research is the process of gathering, interpreting, and analyzing information about a particular product, service, or industry. This research is timeless and provides deep insights into customer demographics, spending habits, locations, and competitions. Market research is timeless, as it covers the past, present, and a prediction of the future.
Market Research Importance
Accurate information is the father of all businesses. While many companies jump into the market, skipping what can be classified as the most essential part of starting a business, market research can be carried out anytime. However, if you have already launched your brand before seeing the need to carry out market research, you might have to restructure or close down your business.
While you might have a vague idea of what your customers need, who they are, and how they spend, without factual data to back up your hypothesis, there is every chance your business will fail. This is because customers are the heartbeat of every business. Whoever gets their needs the most, gets their loyalty. This is why market research is essential. It provides you with factual data about your potential customers. What they need, who they are, how they spend, and how to appeal to them.
Why Every Business Needs a Market Research
Terrible ideas often result from guess works, one man’s opinion, and emotional reasoning. I have lost track of the number of incredible business ideas I have had. The thing is, while they may seem incredible in your eyes, it is after you carry out market research that you will discover the truth. Finding out your idea isn’t consumer-worthy after starting your business will cost you much. It is dangerous for you to start a business without adequately researching the market.
Types of Market Research
There are two major types of market research.
Primary: This is the type of research you compile by yourself through surveys and other personal methods or hire someone to gather for you.
Secondary: This type of research is already compiled and organized for you. Examples of secondary information include reports and studies by government agencies, trade associations, or other businesses within your industry.
When using the primary method, there are two basic types of information that can be achieved.
- Exploratory method: Exploratory research is unrestricted. It helps you define a particular problem, and usually involves detailed, unstructured interviews in which lengthy answers are requested from a small group of respondents.
- Specific research: On the other hand, specific research is more precise in scope, and it’s used to solve a problem the exploratory method identifies. Here, interviews are structured and formal in approach. When it comes to cost, carrying out the specific method is more expensive. Not advisable for a business with a small budget.
Some notable practices for conducting primary research includes;
- Choosing the source of questioning such as mail, phone call, or personal interview
- Creating questions that are short and to the point
- Creating a questionnaire of no more than two pages
- Adding incentive to get more feedback
- A well-detailed cover letter that adequately explains why you’re carrying out a survey
- Ask for permission for a follow-up call if necessary.
Secondary research utilizes outside information, which is assembled by agencies such as the industry and trade associations, the government, labor unions, media sources, chambers of commerce, and so on. This information mainly publishes on pamphlets, newsletters, trade publications, magazines, newspapers, and .gov, and .edu websites. These sources include the following:
- Public sources are free, and often offer a lot of useful information, and include government departments, business departments of public libraries, and so on.
- Commercial sources are valuable but often cost fees such as subscription and association fees. These sources include research and trade associations, like Dun & Bradstreet and Robert Morris & Associates, banks and other financial institutions, and publicly traded corporations.
- Educational institutions are frequently overlooked as valuable information sources even though more research is conducted in colleges, universities, and technical institutes than virtually any sector of the business community.