Why it's Essential for Businesses to do Market Research

by Aditya

The economy and the markets are becoming more and more competitive each day, integration of having apt knowledge about the concerns and preferences of your customers has become inclusive for almost every business. Thus, making market research is the best option available to increase customer satisfaction. How market research does so is that it allows you to understand the factors that affect your business. In return, taking that understanding and converting it in ways to aid and elevate the performance of one's business.

However, in order to keep up with the latest market trends and gain a competitive edge in the business market, continuous market research is required. By applying your knowledge and understanding of market research to properly assess your advantages will it only benefit you and your business, providing positive outcomes such as successfully reaching out your target audience and achieving an increase in your sales.

If you still have not grasped a vast idea of how beneficial and crucial market research in terms of aiding business growth, here are a few pointers to further your understanding:

1. It identifies the problem areas in your business

Identifying where you went wrong is extremely helpful as it shows room for improvement, which is always a good start for a business.

2. It allows you to understand the needs of existing customers and why they chose your service over competitors

By going over your customer's reasons for choosing your business will it help you understand your demand and how to handle them.

3. It identifies new business opportunities and changes in market trends

New business opportunities will help you generate the growth of your business and by keeping track of changes in market trends can you assess your business accordingly.

4. It recognizes new areas for expansion, allowing you to increase your customer base

Expansion of business will create a larger customer base, which can help with the growth of your business.

5. It helps discover potential customers and their needs, which can be incorporated into your services

By attending to the needs of new or potential customers will you increase the likeliness of them choosing your business over the other competitors.

6. It sets achievable targets for business growth, sales, and latest product developments

Analysation of your problem areas and strengths gives you and understanding of your business and its potential.

7. Allows well-informed market decisions to be made about your services and the developing of effective strategies

When you understand the potentials of your business, you understand what can and cannot be done, minimising chances of loss.

These are only the few of the many examples as to why market research is a powerful and extremely efficient tool for business leverage. It doesn't require you to invest in something that may not necessarily be profitable that could lead to you offering something that does not fit the preferences of your consumers.

And within the studies of market research comes different types, one of which called tracking study. There are four types of tracking studies you can look after:

  1. Product Tracking

  2. Image Tracking

  3. Advertisement / Activation Tracking

  4. Customer Experience / Loyalty Tracking

So, what is tracking study?

In a nutshell, tracking study is a method to measure important business metrics in a selected period of time. It collects information over time, allowing you to identify trends and comparisons, spikes and dips (versus competitors, versus last month, last year etc..). Tracking study lets you be in touch with what's important in your business, it can provide an early warning system, a ranking tool, a measure of short-term impact and a decision-making fact generator.

In order to design a tracking study, clarification of needed consumer information is required. This in return, precisely reveals the data you're after. Suppose you want to measure the effectiveness of an upcoming marketing campaign. The first step would be to find a sizable sample of the right target group. After the marketing campaign is complete, the same volunteers would then be asked to answer the same questions again.

How does tracking study work?

Tracking studies are quantitative by nature, requiring you to ask enough respondents to create statistically significant results. As a rule of thumb, you need a minimum of 500 respondents per wave is required for the study.

This enables you to examine the results accurately, not only as a whole, but also by such categories as gender, age, socio-demographic and geographical location. It is key to ensure you get reliable and valid results that you can trust and defend when challenged internally.

The process itself may not literally be continuous as they are able to run on a monthly/quarterly basis, also linking to key business activities. For example, this includes TV advertising campaigns. However, continuity is needed for comparisons to be made over time.

How can your business benefit from tracking studies?

When you run a tracking study, you can manipulate your questions based on your business needs. Whether you'd like to know more about a specific market topic or much vastly broader topics, you are able to do so in your ongoing tracking study.

It will also provide you a substantial amount of information on whether your campaign was successful, through monitoring the differences in customer's sentiment before and after your campaign. If there are no differences before and after the campaign, then it is not up to par. But despite either a failure or a success of a campaign, by spotting the differences in your customer's sentiment before and after a campaign will you know what to improve on in your future projects.