Contents
- What is market research?
- Why is market research necessary?
- Types of market research
- How to conduct market research?
- When should market research be conducted?
What is market research?
Market research is a systematic process of collecting and analyzing data related to the current market situation. In the course of such research, various data is collected, including information on prices, competition, and preferences of the target audience. Professionally conducted research allows companies to build effective business strategies and achieve maximum returns from their projects.
Many companies prefer not to conduct market research themselves but to turn to specialized agencies, such as the agency "White Square," which offers services for analyzing and interpreting market information.
Why is market research necessary?
Market research helps to understand why certain events occur in the market. They can be used for:
- Assessing the target audience's attitude towards a brand or company;
- Identifying the needs of both current and potential customers;
- Analyzing demand prospects for products or services;
- Studying the strengths and weaknesses of competitors to adopt successful practices;
- Determining the most popular products in a specific market segment;
- Adjusting business strategies according to market trends.
For instance, if the revenue of the "Sakura" restaurant has dropped by 18% over three months, market research may reveal that some customers have switched to a new café that opened nearby, where prices are similar, but service quality is noticeably better. This clearly illustrates the importance of considering consumer opinions and responding promptly to changes in their preferences. Although no research can guarantee 100% success, careful data collection and analysis significantly reduce risks and help avoid mistakes during planning.
Types of market research
There are several main types of market research that can be divided into desk research and field research:
Desk research
Desk research involves analyzing existing data such as reports, statistics, and databases. This method is effective when quick information about the market is needed without significant costs. During such research, both internal and external data are examined. Internal data includes sales analytics and customer information, while external data may include media materials, government statistics, and competitor pricing.
Field research
Field research is conducted through the independent collection of data. These studies are generally more informative, as they reflect the real situation in the market. They can include both quantitative and qualitative methods.
Quantitative research
Quantitative research answers questions about who and how many. They can take the form of surveys, phone calls, questionnaires, etc. These studies help determine market capacity, competition levels, and customer loyalty to certain products. However, it is crucial to correctly define the sample so that the results can be generalized to the entire target audience.
Qualitative research
Qualitative research explores questions of how, why, and for what purpose. They help understand why consumers choose one product over another, what factors are a priority for them, and what exactly they need. For such research, it is essential to select a qualified interviewer who can extract sincere and detailed responses from participants.
Combined research
Combined research incorporates both quantitative and qualitative methods. This allows for the advantages of quantitative data to be utilized alongside the depth of understanding provided by qualitative research. Such research includes hall tests, home tests, and mystery shopping methods.
How to conduct market research?
Market research can be conducted either independently or with the help of specialized agencies. The first option significantly saves costs, as there is no need to hire experts. However, independent research is usually suitable for small businesses that need to conduct one or two types of analysis, such as understanding customer satisfaction levels or monitoring competitor prices.
The process of market research includes five stages:
- Preparation: defining the problem and setting goals;
- Methodology development: selecting research subjects and methods;
- Data collection: conducting surveys, interviews, etc.;
- Analysis of collected data: conclusions and interpretation of data;
- Reporting results: presenting results to clients or the team.
When should market research be conducted?
Market research is necessary when a company plans to enter a new market or launch a new product. Data collection will help predict the level of demand and identify areas to focus on for achieving competitive advantages. If the company has been operating for a long time and has established processes, it is worth asking a few questions:
- Are there problems that require a review of the strategy?
- Is additional information about the market needed for decision-making?
- Are data required to assess the effectiveness of previously completed work?
- Is there a desire and resources to make changes in the company's operations?
- Is there enough time and budget to conduct the research?
If most of the questions can be answered positively, then conducting market research would be justified. However, it is important to remember that the research itself will not bring financial benefits. The key is to properly analyze the obtained information and apply it in practice. For example, the company "Kis" faced a decline in profit and, after conducting research, found that the rules for displaying products in stores were violated, which allowed them to correct the situation and restore profits to previous levels.