Why is Market Research Important for a Business?
Market Research as we all know is the assembling, analyzing and understanding of information which can deal with that of a market or product / service. The need for conducting market research is more crucial now than ever, it is a key to effective decision making.
There are basically two types of market research – primary research and secondary research. Primary research can include qualitative and quantitative research whereas secondary research deals with using the existing form of data available. By conducting market research one gets to know the advancements made in technology, change in consumer preference, impact of economic situation of consumer choices, reduce the possibility of failure, predict the upcoming trends, etc. Market research will help determine how much the product or service must be priced, what should be the channel of distribution used, what medium must be used to convey the message to the consumers about new product launches etc.
Market research is not just conducted once, if the business wishes to expand its operations or even sustain in the market for the long run then market research is conducted on a continuous basis. This keeps the marketers updated on the latest happening in the market.
Market research must not be an end to itself such that it only aids in decision making. It isn’t necessary that the final outcome of market research must hold true to what can arise in the future. Market Research is used when a firm is looking to expand, launch new products or services, overcome competition and update service levels.
The entire process of market research is as follows:
1. Define the problem
2. Create a research plan
3. Develop a sample plan
4. Data collection
5. Analysis of data
6. Interpretation of data
7. Research Report
Depending on the size of the business and the scope of studies the cost incurred in market research can vary from that of few hundred dollars to that of millions. Market research must not be restricted to just big companies, it is equally essential for small companies to undertake as well.