The Benefits of Market Research

Market research is one area where mistakes can prove expensive both financially and strategically – financially because it incurs cost and strategically since wrong research questions could generate skewed results. The time in product life cycle when market research is conducted is extremely important as it decides the nature of research questions adopted. Is it during ideation phase, introduction phase, growing markets, mature market stage/ commodity stage or declining phase?

There are several reasons why a company needs market research. It could be used to arrive at –

• Tools to measure Potential market
• Market share reports
• Market characteristics
• Business trends
• Competitor activities
• Sales trends

It is critical to differentiate between features and benefits before entering market. Market Research helps in identifying these elements of the product from potential buyer perspective. Market is uncertain, reactive and propagating. Buyer’s needs are variant, one person’s feature maybe another person’s benefit and therefore they have to be segmented and niche markets identified based on user needs. Based on these segmentations and niche market identification, Marketing plan can be devised and marketing collateral developed.

Market Research is helpful in identifying competitive advantages through identification of competitors and barriers for entry into potential markets. Benefits of such a research include-

• Differentiation of a product and recognition of product’s unique selling points,
• Better understanding of core competencies
• Pricing model development and
• Possible alliances with other marketing agencies to penetrate into current and newer markets with minimum effort.
• Product positioning
• Road maps for new product
• Branding
• Identification of channel partners for selling or supply chain improvements

Based on the nature of Market Research adopted, the nature of questions used, it is possible to get an idea of how people in a locality perceive marketing tactics and what is the best way to reach them.

Market Research plays an important role in branding. Badly conceived names or improperly juxtaposed slogans could send wrong messages to target market and create a bad image in viewer’s mind. Re-branding strategy also involves conducting market research to capture opinion of local market, client and stakeholder about the new and old brand names, before any changes are implemented in marketing plan and materials.

Market Research is the foundation for competitor analysis, situational analysis and SWOT analysis which in turn helps in Strategy formulation and operational alignment to adapt to the growing market needs.

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