Marketing research is a crucial management tool for helping businesses to discover whether or not the product or service that they are providing is actually desired by their customer base. An example of a market research strategy is convening a focus group to determine how a demographic experiences interactions with a company. Market research should be conducted constantly to ensure that the business is still meeting the needs of a changing market.
Significance of Market Research
Market research can be broad or narrow in scope. It can encompass determining trends in an entire industry or be as specific as finding out how much people enjoyed a particular product during a short period of time five years previous. Different kinds of market research need to be conducted during different periods in the life cycle of a company and those of a product. During the initial stages of a star- up company, for example, managers will need to discover whether there is an unmet demand for what their company produces and how they will sell it profitably.
Function of Market Research
Conducting high level market research is more involved than putting in a few search terms through Google and asking family members what they think would make it on the market. It often involves either contracting out to another firm that specializes in research or putting in the time and effort in a business library or using an informational service or database to come up with information relevant to an upcoming project. Companies like Standard and Poor's will conduct business research for a hefty fee depending on how much information is necessary.
Considerations of Market Research
Small companies or those with only a limited budget for research will benefit more from conducting research themselves. Potential researchers will first need to figure out how they want to go about it, and then must develop questionnaires, figure out a research budget, figure out how to conduct focus groups and surveys and determine the status of relationships with suppliers and other business partners. The type of company that the research is being conducted for along with the status of the target market all affect how the research should be conducted.
Benefits of Market Research
Market research isn't just for taking a magnifying glass to consumers – it's quite beneficial to conduct it for every product and service along the supply chain of any particular company. It is a great way to optimize costs for every task that a business performs. Finding out more about the pricing of all the companies that a particular business is involved with can serve as excellent leverage in negotiations for reducing costs.
Understanding Your Business
Another example of a market research tool is the case study. A case study is typically ordered when something goes wrong with a job or a client relationship. As much data as possible is recorded surrounding the incident, and researchers attempt to discover exactly what went wrong during that exchange. If anything can be performed better, the case study will recommend changes in how the company does business.