When launching goods or services, doing market research is crucial. Before diving into market research, we have to understand what a market is. Market refers to a place where two parties meet and engage in exchanging goods and services. The two parties can be labeled as buyers and sellers.
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Market Research and How to Do It
The market can be a physical space, like a shopping outlet. It can also be an online store where there is no face to face contact between the buyer and the seller. Some stores have both online and physical presence. When a brand decides to launch a new product, they usually do a thorough research of the market.
Observing the combination of the primary and secondary data they have collected, the company then continues to segmentation. Segmentation is done by dividing the entire consumer base, based on geography demography, psychography, and behavioral segments. After segmentation, the company moves on to targeting.
Targeting a customer segment means adhering to what they want and tailoring your product to satisfy customers, attract new customers, and retaining them. After that, the company does the job of positioning. Positioning means creating a product and offering a value that the product will have an essential place in the hearts of the targeted consumers. This is important because, through positioning, the business is giving the targeted consumers to use their product or service over the thousands of alternatives available in the market.
What is Market Research?
Market research can be defined as the process through which a business determines a group of potential customers for their new goods or services. Companies engage in market research by researching their potential customers.
Through the research conducted, the business can then target their target market. Furthermore, they can also get customers’ ideas and opinions regarding their new product.
What’s the target market? The target market can be defined as the group of potential customers to whom the company wants to sell their new product. Through segmentation, the organization can find a group of potential customers.
Segmentation means dividing the customer base between the basis of age, gender, geography, and many other filters. The target market can be considered as a portion of the total customer base.
Through targeting, the company diverts more effort into attracting these potential customers. The customers of the inherent customer group share similarities, like the same age, the same demography, the same buying power, and income. Targeting the right group of customers is a crucial step in market research.
Now we need to understand the purpose of conducting market research. When launching a new product, they analyze the market to observe how customers react to the products currently available. This observation helps them understand how customers will respond to their products.
This observation includes information on market segmentation and product differentiation. These observations help marketers to better tailor the advertisements to that potential group of understand or better understand what the customers are looking for in such products. As a result, companies can then include more of the features that the customers are looking for. For market research, the company has to undertake many tasks to aid their research. The business has to collect data revolving around the business sector they want to launch their product. After collecting data, they need to analyze this data, interpret it, and establish a pattern. The pattern will be made using the relevant data collected from the research, and this will help them in the decision-making process.
The data for the research can gather from the primary data source and secondary data source. Primary data refers to the data collected through fieldwork. Primary data can obtain in five ways, these include observational research, survey research, focus group research, behavioral research, and experimental research. Observational research is the data researchers can gather through observing and setting relevant actors in unobstructed situations. Survey research is something we are very familiar with.
Through survey research, researchers can gather information on what the customer likes and dislikes. Focus group research is a method where the company interviews a group of people. The groups usually contain six to ten persons. Behavioral analysis is where researchers analyze customer’s buying patterns. Lastly, experiment research generally conducts to find out cause and effect relationships.
Secondary data are the data we can collect from the internet, other sources, like internal records, databases, data warehouses, and data mining. Sometimes, the company’s give the researching task to third parties or buy information from them. These data collection methods are a part of MIS. MIS, in other words, a marketing information system refers to the collection, sorting, analyzing, interpreting, and distributing the collected data when needed promptly to the marketing decision-makers.
The marketing information system relies on internal records, marketing intelligence systems, and marketing research. When in a hurry, organizations sometimes buy information from third parties, and third parties use the marketing information system to deliver accurate data to these marketers.
How to Do Market Research?
To conduct market research, the company will use a combination of primary and secondary data. Usually, the company will do it themselves or hire someone to do it for them; the company can also find the data they want to use. These data help the business to understand what the customers want and what they are missing.
Once finished with collecting data, the business will analyze and establish a pattern to understand if their new product will interest consumers or not. After investigating, if the consumers show a real interest, the business can then work on their business plan. In case the consumer’s response is negative, the company can put more work into the product, alter it to better suit the customers’ taste, and then go forward with their business plan.
In conclusion, marketing research plays a crucial part when it comes to launching a new product. It will determine whether the customer reacts positively or negatively to the newly launched product. Therefore, for a successful product launch, marketing research is a must-do.