What is Marketing Research in Business
Each entrepreneur, company or groups of partners who are thinking of a new business usually raise the following questions:
- How will the service or product be promoted or sold?
- What will be the target audience, cost, and sales?
- How will a potential buyer learn about a service or product?
- How will the service or product reach the consumer?
- How much will it cost to organize and start production?
What will be the monthly, quarterly, annual income?
- The list of questions does not reflect the problems associated with the choice of technology for the production of a service or product, and personnel requirements. Although, in terms of highlighting the main point of business, these issues are more significant. Having received the answer to them, we can conclude: whether to engage in this type of business.
- Therefore, the goal of the marketing research in business is to get all the answers to these questions, analyze them, come to conclusions and pick a better strategy to deal with the business further.
- Marketing research is a type of sociological research focused on studying the market situation, desires, preferences and behavior of consumers and other market players. In practice, it consists of a system search, collection, and analysis of information in order to make the right management decisions in the field of production and marketing of the company’s products.
- The goal of any marketing research is ultimately the formation of the company’s strategy and tactics, taking into account the actually existing and potentially possible factors and conditions of the market, on the one hand, and its position and prospects, on the other. At the same time, the essence of the research traditionally consists not in establishing some absolute truth, but in reducing the level of uncertainty of the market situation, especially with a long-term forecast.
- Based on well-conducted research, the company is able to reduce business risks and potential losses. Special demand for such research arises where the market is surplus and the advantage is not with the seller, but with the buyer. In the course of the marketing research, several groups of tasks are solved at once: search: collection, filtering and sorting of information for further study; descriptive: identifying the essence of the problem, structuring it and identifying all existing factors; casual: finding the connection between certain factors and the problem identified; test: approbation of the found ways or mechanisms for solving a marketing problem; predictive: prediction of the future market situation.
Carrying out a brief basic analysis of the market
To begin with, the geographical (territorial) and commodity borders of the marketing research are determined. Specialists of Adrenaline Studios recommend starting the marketing research with a detailed description of a service or product, identifying their basic consumer qualities. This is important, both for the next stages of studying the proposed market niche and for collecting further information (statistical data).
Study of sales channels
An important part of marketing research information is the study of sales channels in order to identify the most effective ones. Such a study gives you a balanced approach to determining the costs associated with the organization of sales, working capital, allowing the normal functioning of the business. This can ensure against possible costly mistakes and disappointments.
Determine the range of consumers
A very important part of information about the market that you can get making marketing research is information about customers. Often, attention is focused on the end-user — companies or people who finally buy your service or product. The important point here is that if a real consumer purchases goods directly not from you, but in places where you entrusted him to bring it to them, from distribution channels (stores, wholesalers, etc.), then your customer will not be only the end-user, but also the channel itself.
Here your customer will not only be the one who directly uses the product or service, but also the one who will accept it from you to deliver to the final customers. Detailed consumer studies are a vast separate topic for this research.
Marketing research referring to the customers
In this matter, everything is important; therefore, to clarify the most important points for sales, it makes sense to study:
- The level of customer satisfaction with the products on the market and their requests (expectations) for various aspects of the service or product.
- The order of making a purchase decision (for example, the degree of loyalty to a particular brand, if the end customer is not an individual, but a legal entity, that is, a company, then who makes a decision about the purchase and what motivates it).
- How the buyer perceives information about the product, coming to him from various channels and advertising media.
- The average amount of consumption for a certain period (for example, traditional purchases — bread, pasta, etc.)
Segmentation of the consumer market
When identifying market segments of services and products that have a production and technical purpose, the grouping based on geography, directions of use, types of organizations buying products, and the size of such purchases will be effective.
During the segmentation of the consumer market, mainly proceed from such signs as:
- Demographic (grouping by age, marital status, sex, religion, nationality);
- Geographical (distribution by zone);
- Socio-economic, which means grouping consumers according to income level, occupation, level of education;
- Behavioral, meaning the separation of consumers into groups, according to the level of their general idea of the product, the nature of the product and the reaction to it, the relationship to the product.