Market research enables organizations to analyze supply and demand for a given market to implement a business strategy or marketing action plan.
What's in this article:
Market studies are widely used when evaluating the viability of a project and making a business plan. Organizations collect consumer information through online surveys or other research methods such as a more qualitative analysis: meeting with consumers, telephone interviews, visits to points of sale, etc.
Benefits of conducting market research
Among the main benefits of conducting market research are:
- First, it enables organizations to craft an offering that is best suited to the target market.
- It helps to create an effective business plan and gives continuity to the processes.
- Organizations can establish a business strategy, that is, design a method to sell their products or services.
- It helps determine a communication strategy, that is, the best way to inform the target audience about the organization’s products or services.
Objectives of market research
The main objectives of organizations to conduct market research are the following:
Know the profile of consumers and their expectations
To effectively target its consumers, the company must determine their demographic characteristics as precisely as possible (age, average income, etc. for B2C; the number of employees, billing, etc. for B2B), their consumption habits, and their expectations about the products and services marketed to ensure customer satisfaction.
This allows you to tailor products to customer expectations and know exactly where to communicate and in what way.
Estimate the size of the market
Market research tries to estimate the size of each of the market segments both in volume and value. Although this exercise includes a part of randomness, it is necessary to allow the company and the people who decide to evaluate the business opportunity or its growth potential in the market.
From the supply point of view, the market study will attempt to analyze the commercial positioning of competing companies in the market and quantify their market shares.
This is intended to allow the company to adjust its business strategy to be competitive. It must reveal the strengths and weaknesses of each of the competitors to identify differentiation opportunities in terms of the products or services offered, their price, or the choice of distribution networks.
Quantify Market Shares
When possible, market research strives to quantify market shares to allow organizations to evaluate the effectiveness of their business strategy.
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Market research best practices
To do market research, it is necessary to carry out a series of steps to ensure that the information collected is valuable and allows you to make the best decisions.
Here are the best practices for doing market research:
1. Establish the objective of your research
Among the best practices of market research is that, before starting the research process, you must define the framework of the objective of the market study. For that, you need to answer the following questions:
- In which geographical area to open your business?
- What is the best way to adapt your new product or service to customers?
- What types of clients should you target?
- Who are your competitors?
- Do your strategies impact the public?
Discover more about the advantages of knowing your customers well.
2. Define the target market
Another of the best market research practices is to define the target market for your future business or the new product you want to market. For this, it is necessary to analyze the following elements:
- Competition: Find out about your competitors, that is, those who offer the same type of products as you, about their characteristics and commercial activity (turnover, margin, etc.). This will allow you to know if the market is new or if there are many offers of the same type, in which case you will have to create strategies to stand out.
- Customers: This is the analysis of the existing demand for the product you want to offer. Focus on the size of the target audience, that is, indicate the volume of the market you could reach and its characteristics (age, habits, etc.).
- Suppliers: Find out about the different possible suppliers, your products, and the prices they charge.
- Distribution: It consists of analyzing the different distribution methods of the products or services offered to find the best option for your business.
3. Run the data collection process
Another of the best market research practices is choosing a suitable research method. This can be a quantitative or qualitative study. After setting it, you need to perform the following steps:
- Find a platform to create surveys: There are many options to send and distribute surveys in the market. However, you must have one that suits your needs and budget.
- Design your survey: Choose the right questions to collect the information you need. For example, some platforms have many question types: multiple-choice, open, matrix type, Net Promoter Score, MaxDiff, image selection, conjoint, etc.
- Define the study sample size: The objective is to have a representative segment of your market and ensure the viability of the data collected.
- Distribute your survey: Choose a platform that allows you to distribute the surveys through different channels, such as email, social networks, SMS messages, insert them on your website, and even share it by QR code. In addition, some tools have an application for surveys, which allows you to apply the questionnaire online even without having an Internet connection.
- Analyze the collected data: Choose a survey software that allows you to perform effective data analysis since it has tools such as Conjoint Analysis, TURF Analysis, crosstabulations, and many more.
But that’s not all; if you choose correctly, you will be able to view the information in real-time, which allows you to start the process early and make the necessary adjustments to the process immediately.
4. Make a report of the results
Reporting the information collected is another of the best market research practices, as this allows decision-makers to analyze them and draw the best conclusions to execute an action plan.
Hire an effective market research software. You can create professional reports and distribute them with your entire team through a dashboard or download and share it in different ways, accompanied by tables, graphs, and the tools you think are necessary to make an effective plan.
Why should you do market research?
Market research can be a vital tool in creating growth strategies and developing new products in a world where the Internet provides access to global commercialization and rapidly changing technology.
By conducting research, organizations can obtain accurate information on many current realities, allowing them to influence profitability and positioning.
In addition, market research can often identify the current or future directions of consumers. Knowing their tastes and practices helps develop products that meet their needs and ensure the brand’s growth.
While instinctive decisions have their place in any business strategy, it is different when it comes time to make critical decisions for the future of the business. In this sense, serious investigations can confirm or refute the validity of anticipated strategic action.
We hope that these best market research practices will help you ensure the success of the results of your next project.