(Updated: 24 June 2022)
With the advancements in technology making information easily accessible, today’s consumers have more power over the way they shop. Consumers can utilize this information to do research on your business, its products, and services, in order to come to a buying decision without ever having to speak to a sales rep.
By conducting market research, you can gain a clearer understanding of your target market, increase sales, and improve business growth. Whether you’re a new business, or looking at expanding your current range of products, market research is an essential tool to utilize.
Why do market research?
We’ve briefly mentioned how conducting market research can help your business, but let’s take a closer look. Market research can provide your business with insight into a wide variety of things that can impact your bottom line, such as:
- Understanding your target market: Through market research, you can verify your target audiences’ demographics, geolocation, points of interest, challenges or pain points, trends, and gaps in their needs etc.
- Review your marketing strategies: Utilising target audience information, you can make more informed decisions with how you approach marketing. Here you can change your product pricing structures, distribution channels, marketing mediums, to best target your audience both online or in person, in order to improve customer perception of your brand and increase sales.
- Address customer journey challenges: Whilst reviewing your marketing strategies, you should also identify and review potential challenges within your customer journey. You can do this by reviewing your business processes and seeing if there’s any redundancies or difficulties that could cause your business to lose a sale. By reviewing and streamlining this process, it shows your customers that you are actively trying to make their experience with your brand, a positive one.
At the end of the day, market research allows you to collect and analyse information from a larger sample size of your target audience, eliminate any potential bias and assumptions from either within your business, or within your target audience’s mindset, so that you can get to the heart of consumer attitudes. As a result, you can make informed business decisions from knowing the bigger picture.
What types of market research are there?
The ‘type’ of market research you use doesn’t necessarily mean the exact method of how you’re collecting data, it can also mean the procedures and practices that are used to analyse the data collected. The procedures in question here include market segmentation, product testing, advertising testing, key driver analysis for gratification and trustworthiness, usability testing, awareness and usage research, and pricing research among a few others.
Know which type of research to use
There are predominantly 4 different types of market research data collection methods and types of research that can be conducted depending on the problems a business is facing, whether it be financial issues or building awareness of the brand. These four research types are:
- Awareness: making sure the market knows your product or service exists
- Targeting: making sure you reach the target sectors with the maximum profit potential
- Acquisition: adjust and improve the message, the offering, and the price that will ensure the sales
- Retention: produce or create repeat purchases from current customers (this can also be done with a new business but instead of creating one, prepare for one)
If you need to know what type of market research to conduct, you will need to consider the particular problem and use that problem to distinguish the 4 types: Awareness, Targeting, Acquisition or Retention. Consider the relevance to find the approach that will best benefit and assist you with your specific problem. If you choose carefully and correctly, your method of market research can give you an advantage over your competitors.
Market research can be expensive, but there are ways to do it on a budget.
Before getting started on initiating your market research you will need to put together a budget on how much you actually can spare towards research, especially if you are on a tight budget. As a fully operational business, it pays to know your market, but if you are a start-up company or brand, you need to evaluate the level of market demand before releasing a new product or service, choosing the best location, real-world or online in which to sell your said service or product, you simply need to understand what factors will influence customer spending, market research is the only way to truly understand your customers’ needs and expectations.
Market research might seem to you as a very time-consuming and costly investment that is only reserved for larger companies with a massive research and development budget, which is untrue. In recent times, thanks to an increasingly accessible variety of online resources, market research is readily and easily accessible and doesn’t require large sums of funds on a tight budget.
How does market research help your business?
Through well-organised and effective research, businesses can launch a flexible line of communication with customers. One of the biggest benefits of market research is that once you recognise your customer’s needs, you will be able to adapt and alter your business to meet their needs. This will benefit both the company and the customer as they are getting what they need and you will, in turn, get their business.
Market research helps you understand your competition too, what are they bringing to the table that you are not. It allows you to test your business before the launch of the business itself or a new product or service that you started providing and finding out methods for its success. It then ensures your relevancy in the industry. It improves and grows your business; it broadens your reach to have a step ahead among your competitors. Market research is a fantastic tool that will reveal parts of your business that will keep you in the loop with trends and potential markets. It reveals areas due for expansion and once that is out the way you can then draft effective strategies for new planned or unplanned campaigns. The research also allows you to set realistic targets for improving or getting more business, you will beat the current and possible future competition and lastly, you will be able to optimise results for the future, allowing your company to grow by focusing your attention on the important stuff.
There are a few companies in south Africa that are worth the look for your professional Market Research: