In common terms, when we say the market, what we mean is the place of business. A market can be a virtual location or a geographical area where business deals are made, goods are sold, or services are supplied, and the business can be expanded.
Whenever we start anything new, be it a new job or even buying a new mobile phone or laptop, we do some research, right? We check the features, the requirements, the amount of money to be spent, the location of the college or decide whether we will purchase the mobile phone online or offline. In the same way, whenever a business starts or an existing business decides to launch any new product or service, market research is done to have a better understanding.
Meaning of Market Research
Market research is a process of understanding the market of our business. It involves gathering information about the industry. It includes various tasks such as identifying the marketplace, identifying the target audience, knowing the customers’ needs, and getting an understanding of who can be potential customers in the future and how to achieve them.
It also involves studying the competitors’ businesses to know how you can improve your product or services and have a competitive advantage in the market.
Types of Market Research
Market Research can be of two types –
1. Primary Market Research
2. Secondary Market Research
Primary Market Research
Primary market research is when the information required for the market research is collected raw. It can be qualitative information or quantitative information, or both. In primary market research, tasks are carried out by gathering information first-hand rather than relying on other sources. It includes surveys, interviews, taking a poll amongst a group of people, etc.
Sources of a Primary Market Research
Primary Market Research can be carried out by way of the following sources –
One of the ways to conduct market research is to conduct surveys. A survey can be conducted in person or through phone, email or any digital medium.
2. Focus Groups
A focus group involves grouping up to six to eight people who are similar in behaviours such as colour preference, taste preference or spending habits. Their discussion on a pre-decided topic is noted or recorded for analysing. It is comparatively an expensive way of research.
In interviews, you can have one-to-one conversations with individuals, generally a customer, about your product and how their experience with your product or services has been. An interview can be conducted face-to-face or through a telephonic conversation.
Observations often go unnoticed or are an underrated part of any research. It requires patiently just watching and absorbing how things react. To see how consumers behave when they see your product, giving attention to minute details.
Secondary Market Research
Secondary market research is when research is carried out using existing available information.
Sources of a Secondary Market Research
1. Government Reports and Studies
The government publishes reports and information regarding various sectors. It also publishes information on various industry-specific schemes such as small sectors, pharma etc. One can use that information to make an analysis.
2. Industry Specific Websites, Journals, Newsletters etc.
Some organisations publish various reports and studies conducted on them. They also put this information on their websites, their blogs or publish it in magazines or newsletters. One can use them to enhance the research.
Often customers leave their reviews about products and services about their experience the same. This information can be processed to make researched data.
4. Case Studies
Case studies are published by many educational institutes such as universities or other institutes. These can be used to understand consumer behaviour and other things.
Online Market Research
In this age of digitalisation, when one can do buying and selling online, market research can take place online too. In online research, market research is done through the internet or using online platforms.
How to Conduct a Market Research?
Whenever a task is to be accomplished, it is always better to divide it into steps to make the procedure easy. Market Research can be conducted by going through the following steps.
1. Define Purpose
Whenever you want to do market research, you should have clarity on the purpose of conducting it. What is the reason for conducting the market research? Your answer to this question should be well-defined, and you should be clear about the goals you want to achieve by doing market research.
2. Choose Sample
Sampling is a technique used to do research. Define the sample that you want to research. A sample can be a bunch of people, products etc. Choose a sample as per your requirements.
3. Data Collection
After your problem is defined and research has started by sampling methods, it is essential to collect data for analysing. Both primary and secondary data collected should be sorted and grouped for further processing.
4. Data Analysis
Data Analysis is to conduct a study on the data collected using tools, demographics, statistics to get results. Digital applications can make the task of analysing the data easier. Various apps require you to input the information needed, and then it provides you with analytics done.
Once all the above steps are done, the research should be compiled into a conclusion. It should state observations from the data and what preferable actions can be taken from the conclusion derived.
Benefits of a Market Research
Market Research is a necessary practice, whether it is conducted by an existing business or a new business, whether a small business or a larger one. Conducting market research can help a business organisation with the following benefits.
1. Understanding Customers
Market research helps businesses understand their customers and their behaviour towards the products or services. It helps a business know how the consumers perceive their products and services and helps identify what can be best done to have customer satisfaction.
2. Understanding the Scope of the Market
Market research can help you understand the markets you can cater to, whether you have the technology to run your business online or not, whether it is feasible to expand your business to other geographical locations etc.
3. Potential of a New Business or Product
Market research can be helpful when a person is starting a new business or launching a product. Suppose a person opens a shop selling antique pieces in a town where there are hardly any such shops; there will be less competition in running the business. However, if one opens such a shop in a rural region, the business may go in vain as such antiques are generally unaffordable for rural inhabitants.
Well-done market research can play an important role in a product or service becoming a brand. A product or service becomes a brand by providing value. If the business developers and executives know what the customers want and efficiency is maintained in providing the same, it creates a brand positioning on a larger scale.
5. Risk Minimisation
Market Research provides you with a lot of information to make decisions, and one can optimise that information to avoid risks. For example, if, according to the research, your product has shown certain errors, it is feasible to act upon them and rectify them before making the launch.
To sum up, market research is an important aspect of any business. It helps understand the market behaviour for your business, the segments of your industry, to understand your competitors’ business and how to gain competitive advantages over the same.
It can help a company create a valuable name in the market by providing information that can push businesses to deliver better quality and consumer satisfaction, thus creating a good brand name.