Post by sumaiya12 on Nov 1, 2024 22:50:18 GMT -5
Any management decision in business is associated with risk. Clients, partners and even your employees may react to it in a completely different way than you planned. To reduce this risk and make the results of your actions more predictable, you need to carefully study the external environment. Therefore, every person who dives into the world of business needs to know what marketing research is and how it is conducted.
A Guide to Marketing Research: What It Is and How It's Conducted
Content
What is marketing research?
Marketing research is the content writing service process of gathering information about the environment in which a business operates. It may be designed to assess the target audience, competitors, consumer preferences, product development trends, effective communication channels, and other important details.
If you are working in a narrow niche, well-organized research will give you a comprehensive picture that will help you understand all the nuances and effectively predict the results of each action. But usually, a business deals with a very large and diverse market environment. In this case, research only illuminates a fragment of the big picture, allowing you to understand whether you should move in this direction.
To fully understand a broad field of activity, two components are required - continuous marketing research and expertise. Large successful companies spend up to 45 billion dollars annually to study their environment and up to 10-15 billion to find qualified employees with extensive experience in a particular field.
What is the importance of marketing research?
To understand this, you can compare two competing businesses to people walking in the dark in an unfamiliar area. One has a flashlight, and the other is feeling his way. Guess which one will get more bumps and bruises, and which one will reach its destination first?
Market research is just such a metaphorical flashlight. It gives a significant competitive advantage: while others learn from mistakes, you predict the results of your actions, reducing costs and increasing profits. Examples of such advantages:
Optimization of warehouse logistics. You sell exactly as much as you can, without deficits or surpluses. The company does not lose money due to missed opportunities or renting additional space.
Satisfying customer needs. Existing products meet basic customer expectations, but customers always want more. By making the best multifunctional product at a reasonable price, you will become a market leader.
Ahead of trends. By carefully studying the development prospects of your industry, you can become the first in a new segment. Exclusive presence in a non-competitive environment will allow you to quickly make a big profit.
Avoiding mistakes. If during your research you learn about a reduction in market volumes or a change in trends, you can cancel your planned decision in a timely manner. This will allow you to avoid unnecessary losses and choose a more productive investment direction.
When to conduct the study?
Before, during and after the action. It is never too early or too late to do your research. You need to keep your finger on the pulse of the market to stay on trend. However, there are some events that definitely require a thorough investigation of your business environment.
Launching a new business or line of business
Let's say you have a great idea. But it requires investment and therefore involves material risk. To minimize it, you need to answer a few questions:
Is there a demand for the future product? If so, how much is it?
Who is your target audience? What are their demographic characteristics?
Do you have competitors? To what extent do they satisfy consumer demand and needs?
What market are you planning to enter - growing, stagnant or declining?
Which communication channels are effective for your target audience?
Product line update
Smartphones are updated every year, and demand for older models is rapidly falling. But when Coca-Cola decided to change the classic recipe of the drink for the first time in decades, it suffered the biggest losses in the company's history. Which option is optimal in your industry? The answer will be the process of market research:
What makes your new product different? What are its advantages over the old one?
Does it satisfy other needs? What functionality does it have - more or less?
How susceptible is your target audience to change? Is it ready to accept radical updates?
How often and how deeply do competitors update their products?
What is the potential economic impact of your decision?
Rapid changes in the company's position
Obviously, growth is better than decline. But in both cases, you need to know what exactly caused the changes in the financial situation. If you ignore the reasons and rest on your laurels, you may suddenly find yourself in a sharp turnaround in dynamics. Therefore, you should look for answers to the following questions:
What factors caused the changes? What is the weight of each of them?
How sustainable is the dynamics? Can it be taken into account in the company's development plans?
How do you compare to your competitors? Is this a unique phenomenon or a general trend?
What recent events and management decisions could have influenced the growth dynamics?
Is there an urgent need to change your marketing strategy?
How is marketing research conducted?
When a company wants to learn about the business environment and its position in it, it can use different sources of information. Its decisions will determine the methods of market research, the costs involved, and the volume of results obtained. Let's look at how the choice of methodology depends on the origin and form of data organization.
Primary information
Primary research is research in which the marketer collects information independently. This means that the necessary data is missing or unavailable for a specific reason. For example, no one has yet studied a certain market segment or a competitor has done so and is keeping the results secret.
In primary research, a company directly contacts its target audience. It can collect two types of information:
Quantitative. Anything that can be described by numbers or variables "Yes" or "No". For example, the cost of consumers to fill up their car.
Qualitative. Anything that cannot be measured quantitatively. For example, a favorite flavor of yogurt. Statistical methods can also be used to study such data, although the approach will be different.
Initial research usually consists of two stages. The first is exploratory. In this stage, consumers are asked open-ended questions without definite answers. For example, “What would you spend the extra thousand dollars you have left over at the end of the month on?” The exploratory stage helps identify problems and needs. It is vital for businesses in the early stages of development.
The second stage is specific. Having initial market data, you can refine it to optimize your marketing strategy. In this case, you need to ask closed questions, having defined the answer options in advance. For example, "Which brand of drinks do you like - Coca-Cola or Pepsi?" The specific stage leads you to specific actions and management decisions. There is practically no uncertainty in it.
Secondary information
Secondary research uses ready-made data sets that someone has already collected and systematized before you. All you have to do is conduct an in-depth analysis, draw conclusions, and turn them into specific business decisions.
The most important source of information is commercial agencies that conduct various types of marketing research and sell the resulting materials. Such data is expensive, but it is always reliable and easy to use. If you have serious budget constraints, you can try using public sources - government statistics, collections and news data. But in this case, you will have to systematize the information yourself, and sometimes check its authenticity.
An example of secondary research is an analysis of the construction materials market based on general sales statistics and financial statements of public companies. If we are talking about commercial sources, an example would be buying a report on the main trends in the Internet of Things.
Basic methods and tools of marketing research
The research scheme is built in accordance with the features of your product and its target audience. For example, high-level managers will agree to answer a few questions over the phone faster than to come to your office in person. The optimal background for a survey about food products will be a tasting, and for cars - a thematic exhibition.
A Guide to Marketing Research: What It Is and How It's Conducted
Content
What is marketing research?
Marketing research is the content writing service process of gathering information about the environment in which a business operates. It may be designed to assess the target audience, competitors, consumer preferences, product development trends, effective communication channels, and other important details.
If you are working in a narrow niche, well-organized research will give you a comprehensive picture that will help you understand all the nuances and effectively predict the results of each action. But usually, a business deals with a very large and diverse market environment. In this case, research only illuminates a fragment of the big picture, allowing you to understand whether you should move in this direction.
To fully understand a broad field of activity, two components are required - continuous marketing research and expertise. Large successful companies spend up to 45 billion dollars annually to study their environment and up to 10-15 billion to find qualified employees with extensive experience in a particular field.
What is the importance of marketing research?
To understand this, you can compare two competing businesses to people walking in the dark in an unfamiliar area. One has a flashlight, and the other is feeling his way. Guess which one will get more bumps and bruises, and which one will reach its destination first?
Market research is just such a metaphorical flashlight. It gives a significant competitive advantage: while others learn from mistakes, you predict the results of your actions, reducing costs and increasing profits. Examples of such advantages:
Optimization of warehouse logistics. You sell exactly as much as you can, without deficits or surpluses. The company does not lose money due to missed opportunities or renting additional space.
Satisfying customer needs. Existing products meet basic customer expectations, but customers always want more. By making the best multifunctional product at a reasonable price, you will become a market leader.
Ahead of trends. By carefully studying the development prospects of your industry, you can become the first in a new segment. Exclusive presence in a non-competitive environment will allow you to quickly make a big profit.
Avoiding mistakes. If during your research you learn about a reduction in market volumes or a change in trends, you can cancel your planned decision in a timely manner. This will allow you to avoid unnecessary losses and choose a more productive investment direction.
When to conduct the study?
Before, during and after the action. It is never too early or too late to do your research. You need to keep your finger on the pulse of the market to stay on trend. However, there are some events that definitely require a thorough investigation of your business environment.
Launching a new business or line of business
Let's say you have a great idea. But it requires investment and therefore involves material risk. To minimize it, you need to answer a few questions:
Is there a demand for the future product? If so, how much is it?
Who is your target audience? What are their demographic characteristics?
Do you have competitors? To what extent do they satisfy consumer demand and needs?
What market are you planning to enter - growing, stagnant or declining?
Which communication channels are effective for your target audience?
Product line update
Smartphones are updated every year, and demand for older models is rapidly falling. But when Coca-Cola decided to change the classic recipe of the drink for the first time in decades, it suffered the biggest losses in the company's history. Which option is optimal in your industry? The answer will be the process of market research:
What makes your new product different? What are its advantages over the old one?
Does it satisfy other needs? What functionality does it have - more or less?
How susceptible is your target audience to change? Is it ready to accept radical updates?
How often and how deeply do competitors update their products?
What is the potential economic impact of your decision?
Rapid changes in the company's position
Obviously, growth is better than decline. But in both cases, you need to know what exactly caused the changes in the financial situation. If you ignore the reasons and rest on your laurels, you may suddenly find yourself in a sharp turnaround in dynamics. Therefore, you should look for answers to the following questions:
What factors caused the changes? What is the weight of each of them?
How sustainable is the dynamics? Can it be taken into account in the company's development plans?
How do you compare to your competitors? Is this a unique phenomenon or a general trend?
What recent events and management decisions could have influenced the growth dynamics?
Is there an urgent need to change your marketing strategy?
How is marketing research conducted?
When a company wants to learn about the business environment and its position in it, it can use different sources of information. Its decisions will determine the methods of market research, the costs involved, and the volume of results obtained. Let's look at how the choice of methodology depends on the origin and form of data organization.
Primary information
Primary research is research in which the marketer collects information independently. This means that the necessary data is missing or unavailable for a specific reason. For example, no one has yet studied a certain market segment or a competitor has done so and is keeping the results secret.
In primary research, a company directly contacts its target audience. It can collect two types of information:
Quantitative. Anything that can be described by numbers or variables "Yes" or "No". For example, the cost of consumers to fill up their car.
Qualitative. Anything that cannot be measured quantitatively. For example, a favorite flavor of yogurt. Statistical methods can also be used to study such data, although the approach will be different.
Initial research usually consists of two stages. The first is exploratory. In this stage, consumers are asked open-ended questions without definite answers. For example, “What would you spend the extra thousand dollars you have left over at the end of the month on?” The exploratory stage helps identify problems and needs. It is vital for businesses in the early stages of development.
The second stage is specific. Having initial market data, you can refine it to optimize your marketing strategy. In this case, you need to ask closed questions, having defined the answer options in advance. For example, "Which brand of drinks do you like - Coca-Cola or Pepsi?" The specific stage leads you to specific actions and management decisions. There is practically no uncertainty in it.
Secondary information
Secondary research uses ready-made data sets that someone has already collected and systematized before you. All you have to do is conduct an in-depth analysis, draw conclusions, and turn them into specific business decisions.
The most important source of information is commercial agencies that conduct various types of marketing research and sell the resulting materials. Such data is expensive, but it is always reliable and easy to use. If you have serious budget constraints, you can try using public sources - government statistics, collections and news data. But in this case, you will have to systematize the information yourself, and sometimes check its authenticity.
An example of secondary research is an analysis of the construction materials market based on general sales statistics and financial statements of public companies. If we are talking about commercial sources, an example would be buying a report on the main trends in the Internet of Things.
Basic methods and tools of marketing research
The research scheme is built in accordance with the features of your product and its target audience. For example, high-level managers will agree to answer a few questions over the phone faster than to come to your office in person. The optimal background for a survey about food products will be a tasting, and for cars - a thematic exhibition.