Importance of Market Research in Business
Did you know the market research services market size is likely to inflate from $95.49 billion in 2027 at a CAGR of 3.3%?
This is all because of the internet and technology advancements. Businesses are transforming from conventional back offices to digital platforms. This is all because of the reshaping structures of back office operations and innovation. Of course, the need or any gap in the corporate activities triggers the need to create or discover a solution, which is possible through in-depth market research. The advent of artificial intelligence, automation, data science, and digitalization of everything are fascinating people. This kind of change, which is evolving businesses or corporate activities, is like out of this world. Outsourcing back office work or research is making this transition fast and consistent.
Simply put, a research can help you change the dynamics of the market. Its impact can be seen on the business, its efficiency, & scalability, market, and customer behaviour.
Role of Market Research in Business
Let’s talk about a few crucial things that market research can do.
- Eases Making Informed Decisions
With data, it’s like a walkover to make informed decisions. Possibilities are there that these decisions are good enough to optimize resource allocation and drive growth. This is all because of data-driven insights. Those valuable insights guide you to the next step. Consider an eCommerce website. However, it can be a case of any online business (be it based on product selling or services). The integrated code in Google or search engine lets you collect customer (web visitors) data on the website. With those records, web owners make comprehensive decisions & recommendations, and design marketing campaigns that resonate to customers’ behaviour, preferences, cart, bounce rate, etc.
All in all, data analysis makes the research-concept worthy, and indeed, extremely useful. Users can tailor offerings that align with the market desires. This is how the fruit of that research appears through the success (more engagement, better customer experience, overwhelming sales, etc.via mining after research).
- Navigating the Competitive Environment
In today’s cut-throat competitive world, every entrepreneur wants to seek customer attention. The logic is simple. The more people you engage with, the bigger your brand becomes. Such brands rule their niche.
Are you wondering how market research can help you stay competitive?
Market research helps you to scan everything that goes on in your niche or industry. It reveals potential threats or risk, strengths, & opportunities. For instance, Apple Inc. It’s a big brand name that is known for its innovative iPhones, iPad, & MacBook. Despite having Samsung, and other brands in the market, it’s consistently leading. The role of market research is exponential in understanding customers needs, trends, marketing strategies, and innovation. With it, you find dots in the market, understand competitors’ strengths & weakness. And finally, this research guides you to pinpoint opportunities.
- Know Customers Insights
Market research allows businesses to discover customer intent. The scam of Cambridge Analytica was based on this very fact. In 2018, it was found that this company procured 87 million facebook users’ data using a third-party app. It was “This is Your Digital Life”. With this application, it created targeted political advertisements. Brexit’s referendum in the UK also proved it. However, this is a gray side of the customers’ insight research.
If you look into its brighter side, companies can easily understand what customers want, what their painpoints are, & more through online surveys and ethnographic studies. These insights will have sufficient data, guiding businesses to tailor their offerings and marketing strategies accordingly.
- Rise of Innovation
Innovation amplifies and takes businesses to a new level. Netflix is a fantastic example, which was scarcely known for DVD rental-by-mail service. It conducted an extensive market research and came out with an online marketing campaign. This is all because of research, which helped it in identifying emerging trends and technologies.
Eventually, it shifted from physical DVD rental business to online streaming. This innovation not only served customer preferences, but also matched the trending media. Simply put, market research guides you to draw innovation from threats and opportunities.
- Risk Mitigation
How easy it would be to sail across risks if you know the threat in advance?
Market research works on this principle. Let’s take the threat regarding Pampers of Procter & Gamble (P&G). The company found its sales declining because of its environmental impact and use of chemicals in it. To overcome this situation, the company conducted a market research and understood that the preferences & feedback of parents were changing. Finally, the research helped it with a way out to make overwhelming sales. It introduced Pampers Pure, which addressed the concerns of parents. It was made of organic products and had no fragrance.
This was an outcome of amazing findings through market research.
- Expansion and Diversification
Market insights are incredible when you want to scale up your business. Startbuck’s case is its perfect example. It wanted to cover the Chinese market. This coffee-chain business gained popularity in that very big market because of comprehensive market research (by understanding Chinese consumer behaviour, preferences, and local competition).
The market insights introduced it to the favourable conditions. Today, China is one of Starbucks’ fastest-growing markets. Not only in terms of market, but also it is contributing significantly to its global revenue.
- Satisfying Customers
As aforementioned, market research introduces to customer preferences and intent. Once you know it, finding a way to satisfy customers is like a cakewalk. In 2018, Airbnb conducted this research with the intention of understanding what customers expect. The findings of that research were significant. It revealed that customers wanted more curated and personalized travel experiences. This insight led Airbnb to come up with the idea of “Airbnb Plus” program. , which identifies and verifies high-quality listings that meet a set of design and comfort standards. This initiative was based on the understanding that customers were willing to pay more for a premium experience.
It resulted in higher customer satisfaction and also the loyalty increased. This example demonstrates how market research can guide companies in understanding customer preferences and delivering experiences that align with those preferences, ultimately leading to increased customer satisfaction and business success.
Conclusion
Market research plays a significant role using its elements, which orchestrate consumer preferences, market trends, and competitive landscapes with success. With each data point collected and every insight, market research adds to the success of a business, lighting up the path towards sustainable growth and prosperity.
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