Market research can also help you in determining where and how to direct marketing and advertising resources.
Market research, conducted effectively, can help you to find out the requirements for your product or service, the likelihood of a product selling, identify market demographics, and determine the best locations for setting up stores. There are many ways of uncovering this kind of information, such as conducting research online, targeting focus groups, and even counting the numbers of customers and getting feedback from them directly.
Market research helps to familiarize you with market conditions, consumer behavioral patterns, and also Government rules and regulations. It also helps you to find out how many competitors there are in your area of business and what hold they have in the market, technological developments and economic trends.
Sometimes the term “market research” relates primarily to the financial analysis of industries, companies, or various sectors of the market. The research is generally carried out by analysts or business owners, who then give the results to prospective investors and investment consultants.
Various Kinds of Market Research:
Market Testing: Prior to introducing a product on a large scale basis, a small amount of samples are placed in the market, and consumer response is monitored to gauge its acceptance.
Concept Testing: This is the process of utilizing qualitative and quantitative methods to assess consumer response toward a product before introducing it into the market. It is also used to create communication designed to amend the attitude of consumers about existing products.
Mystery Shopping: This is a tool that is used to determine the quality of service in a retail outlet. Mystery shoppers are sent by companies to act as customers. They then provide a record of their experience, like the time taken to get the attention of a salesperson, or the responses made to queries. It is usually used to improve the quality of services or for finding out about the competitors’ services and products.
Store Audits: This is a process of collecting data which is obtained from records or by analyzing the inventory. It is done to improve functional efficiency, limit risk and reduce liability.
Demand Estimation: Estimation is made about a product’s demand by conducting research.
Sales Forecasting: The level of sales is determined according to the demand for a given product. Based on this, a business’ future sales prospects are estimated.
Customer Satisfaction Studies: Research is carried out to determine whether a company’s products or services meet the expectations of customers.
Distribution Channel Audits: In this, the distributor’s and retailer’s tactics toward a brand, product, or company is analyzed.
Price Elasticity Testing: Consumer sensitivity to changes in the price of a product is assessed.
Market Segmentation Research: Unique market segments are determined in order to modify products, services, pricing, distribution, and marketing messages according to each segment.
Consumer Decision Research: This is carried out to find out what stimulates people to purchase particular products, and to analyze the cognitive process of arriving at a buying decision.
Brand Positioning Research: Research is carried out to determine how a product stands in the market relative to a similar product by a competitor.
Brand Equity Research: This is conducted to determine what motivates people to choose a certain product over another.
Whether your objective is to spread out into new segments of the market, introduce a new service or product, or determine consumer responses, every small business can reap benefits from well-designed market research studies.