The Importance of Market Research

What is market research and why is it necessary to the growth and success of a business? Well to understand the importance of market research, it's first useful to understand what marketing is.

What is Marketing?

You've probably studied marketing at school, at least at a basic level. You might remember the 4 Ps of marketing:

• People
• Price
• Place
• Promotion

Marketing is about creating awareness. It's about connecting with your target market. It's about letting potential buyers find your business.

To achieve this, you need to address the 4 Ps. For example, if you expect to sell your product or service, you need to know who your target market is. The people who would benefit from your product or service need to know you exist. So it's important to identify and create a profile for the types of buyer who would buy from you.

The same applies to price...at what price would target consumers be willing to buy your product or service? If your product is priced too high, buyers may not be enticed to spend. On the other hand, if your product is priced too low, it may suffer the consequence of being perceived as low quality. So as the name of the game implies, the price must be right!

Place, or location, can be critical to your success, especially if you're running a brick and mortar business. Online, your business would not stand to gain from location, so place would be replaced by search engine rankings and ad placement.

What about promotion? This is how you advertise your product - how you create awareness. It ties all of the Marketing Ps together. There are many ways to promote your business or product - we won't discuss those here.

The point for now is that target consumers need to know you exist, know how they can benefit from using your product, know that the price outweighs the inconvenience of living without your product, know that your business is reputable and solid - not just a fly-by-night. And of course, they need to know how to find you.

So what is the importance of market research?

Market research is a critical tool for making marketing and management decisions. The analysis of resulting market data can help you:

• Decide whether to enter a market
• Decide whether to launch a product or service
• How customers feel about a current product or service
• Customer satisfaction with a product, service or brand
• Compare the sales performance of your product to your competitors'
• Tailor the messages and imagery you will convey to your target market
• Determine if your current marketing efforts are working
• Find out what customers expect, and what would make them buy again or buy more
• Determine gaps in the market that can be filled with a new product or service

Running or starting a business without conducting regular, relevant market research is a serious management mistake. It's like packing for a holiday without checking the weather conditions at your holiday destination. Make sure to base your business plan on relevant and accurate market research.

Don't underestimate the importance of market research.