One of the most important components of a business strategy includes market research. It is an indispensable part of product development. Conducting a research on various market factors that affect the development of business, the consumer behaviour, existing products and so forth are quite vital for business ventures to flourish.
Advantages of Market Research
Conducting a market research is the best way to gather required information about products and services and its effect on the consumers. There are many advantages of conducting a thorough and well organised research before beginning a new business venture or launching a new product. Some of the advantages include the following:
More information about competitors: market research gives clear cut information about existing competitors in the market. Information about the strategies adopted by competitors and its effect on the target consumers can be analysed effectively through such a research.
Behavioural patterns of consumers: Through such business strategies, companies can identify potential customers and their behavioural patterns.
Analyse the consumer needs: with a well planned market research, it is possible to evaluate the needs of the potential customers and manufacture products accordingly. The existing products can also be improved according to the requirements of the consumers.
Better communication: an effective research paves way for better communication between consumers and manufacturers. This will help to gauge the expectations of the potential consumers and meet their requirements more effectively.
Reduces risk: such research helps to minimise risk by analysing the exact requirement and demand of the consumers and thereby targeting better business.
Gauge the success of a business: a market research helps to analyse and evaluate the progress of a business. It shows the pitfalls of a business and how it can be overcome.
Types of Market Research
Though there are many methods adopted to conduct effective researches that help businesses to flourish, some of the most commonly used methods include the observational methods, historical, and experimental methods.
There are mainly two types of researches- the primary research and the secondary research. The primary research includes phone reviews, direct mails and personal interviews.
Phone reviews: telephonic interviews are conducted with a view to understand the consumer behaviour. It is an effective way of conducting research and can include a wider geographical area.
Direct mails: this type of research includes a list of direct and brief questions to the consumers through mails. This is a more expensive method compared to telephonic surveys but receives fewer feedbacks.
Interviews: personal interviews may include a group survey which helps to brainstorm new ideas to modify products or launch a brand new product.
The secondary research involves the use of reports made by government agencies, educational institutions and commercial sources. Information is provided by business departments, libraries and other governmental agencies. This is an inexpensive method of conducting research.
There are many market research consultants who provide valuable information to companies that help them to minimise risk and maximise profits. These consultants charge a particular amount of fees in return for the information gathered.