Why do you need a Market Research?

Why do you need a market research? A market study? What for? A real waste of time and money! I know my sector well because I have been working there for 10 years…” You have surely heard this sentence before, perhaps you have already pronounced it. And yet, the benefits of market research on a business in creation have been proven by the greatest specialists. Here are the reasons why do you need a market research and the virtues of market research.

Only 10% of entrepreneurs rely on real market research to launch their business. This often remains sloppy because, it must be admitted, doing it well takes some time and can cost a lot of money. Admittedly, market research is not a compulsory step, but it allows you to identify the environment and the market more precisely, and therefore to make judicious choices. How and why do market research?

Reasons why do you need a market research?

The purpose of market research is to help companies make decisions about the development and marketing of different goods and services. Market research represents the voice of the customer inside and outside business organizations.

Doing market research is recommended for many simple reasons, linked to the decision making of any manager, businessman or politician:

• Reduce risks.
• Making important business decisions
• Discover opportunities.
• Improve results.
• Securing investments and funding
• Determining new business opportunities
• Maximizes the return on investments.

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Like any other research process, it is based on a series of planning steps and methodical execution:

• Definition of the problem
• Development of the problem
• Research design
• Data collection
• Preparation of data analysis
• Preparation of the report

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The goals of doing it are:

• Early and timely recognition of trends, opportunities and risks in the markets relevant to the company
• Limitation of the risk of wrong decisions (“flop minimization”), increasing the success of new product launches
• Support for decision-making within the company, strategy development for marketing and sales
  the improvement of the level of information relevant to the decision-making process for decision-makers with regard to the following aspects:
  • Timeliness
  • objectivity
  • precision
  • relevance
  • fashion trends
  • desire for pleasure

Central areas of knowledge of market research

Based on the goals of market research , market research has various subject areas in relation to which it can make research-based statements:

General market characteristics and market developments:

• Customer segments
• Customer behavior and needs
• Customer Satisfaction and Loyalty
• Acceptance of new product developments
• Buying motives, motivation of consumers (consumer insights)
• Effect of advertising
• Competitor monitoring, competition analysis
• Market position

A market research is not there for the sole purpose of validating or invalidating a project. Above all, it makes it possible to identify other avenues for moving it in the right direction. This step is not to be taken lightly, because it will determine your positioning, your strategy and your start. Do not be afraid to ask yourself, to think carefully about this study beforehand and to talk about it around you.

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Process of a market research project

The process is based on the steps of an empirical (observed) survey:

• Formulation of the problem
• Defining the study design
• Defining the sources of information
• Determination of the performer
• Determination of the data collection method
• Sample selection
• Design of the survey instrument
• Carrying out the data collection
• Editing and coding of the data
• Analysis and interpretation of the data
• Presentation of the research results

This is basically corresponds to the process of social science studies. A special task is consulting and implementation, which is not part of market research, but which is offered as a service by many market research institutes.

Read also: What is the difference between data science and Big Data?

Research Classifications: quantitative and qualitative

Based on the survey objective, they can be divided into quantitative and qualitative researches.

Quantitative

The goal is to find numerical values ​​about the market. If only actual, objective findings are determined, one speaks of ecoscopy in contrast to demoscopy, which determines opinions and attitudes to certain questions (i.e. wishes, fears, plans, etc.) and processes them quantitatively and statistically.

Research methodology that seeks to quantify data and generally applies some type of statistical analysis:

• Field research

Applied by extracting data and information directly from reality, through interviews or surveys in order to respond to a situation or problem previously raised.

• Cabinet research

Denomination used to designate the research that collects data from internal sources and secondary external sources and the studies carried out with these data. This research collects data or public information to which anyone has access.

• Operational research

It deals with the scientific preparation of decisions.

Operational research, refers to the use of mathematical, statistical and algorithmic models in order to support decision-making. It is used in the analysis of real and complex systems, with the purpose of improving and optimizing performance and considered a branch of applied mathematics for business administration, industrial engineering and economics.

• Advertising research

The research is related with the different aspects related to the communication process in the society. It includes in these 3 areas of study:

• • Analytical Research: Socioeconomic Investigation of Advertising. It includes the study of advertising at a global level, from a socioeconomic, legal, technological approach, with a descriptive nature.
  • Investigation of advertising messages: Analysis of advertising messages, from its creation to its effects.
    • The proportions or preliminary ideas (concept test).
    • Creative expressions.
    • Understanding of the message.
    • Credibility of the message.
    • Memory of the message.
    • Attention to the message.
    • Attitudes and behaviors.
  • Media research: Study of the different advertising media. Its main research objects are: media diffusion, message quality, audience, advertising equivalencies, advertising recall, media content, and investment.

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Qualitative

The aim is to determine motives for certain behavior in the market, as well as expectations and attitudes (psychological market research).

This is regarded as the most important market research method using a psychologica, e.g. through indirect questions, exclusion of leading questions, distractions and control questions.

Establish a hierarchy between the different behaviors and other psychological variables. Identify and exploit concepts, words, etc. This is to reduce and limit the field of subsequent investigations, or to expand information on certain aspects that have not been made clear in an initial investigation.

The techniques used in these investigations are called qualitative techniques. The main ones are:

• In-depth interview

This is a personal meeting between the interviewee and the interviewer, in which it is intended to obtain information regarding the beliefs, motivations or opinions of the interviewee, with the support of a guide of questions to direct the interview. This technique generates in-depth information about a specific subject.

• Group techniques

Mainly they are the focal group and the discussion group . They consist of sessions where a conversation takes place with a specific purpose and topic. They are also directed on the basis of a guide of questions and its purpose is the analysis based on the presentation of ideas of the interviewees, generating topics of discussion. This technique generates information on many subjects, but it is more general, as it is carried out in a group.

• Mystery shopper

Also called mystery shopper or mystery shopper, since the researcher enters the environment to investigate to evaluate its components, posing as a customer. The researcher may or may not make the purchase, making objections about the product or service to analyze and observe the behavior of the seller.

• Observation

Registration of behavior patterns of people, objects and events in a systematic way to obtain information.

Big market research companies:

• The Nielsen Company in London
• Kantar Group in the U.S.
• IMS Health in the U.S.
• GfK in Germany
• Ipsos Group in Paris

Market Research, Objectives, Different Types, Pitfalls to Avoid and Examples Research Survey Questions

Sources:  CleverlySmart, PinterPandai (in Indonesian language), SurveyCrest, Cint

Photo credit: qimono via Pixabay

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