The contemporary world of business is hugely competitive. A great number of companies with a broad range of offered products and services operates in every industry. Customers are becoming more and more knowledgeable and aware of their needs and requirements. It is difficult, therefore, to imagine effective selling activities if knowledge about a given market and competition as well as about the purchasing process and customers is unavailable. This is where marketing research comes into play – it helps, among others, in gathering and analysing this type of data.
Yet, marketing research is not only limited to intelligence about a preferred product taste, favourite shopping place or maximum acceptable price. Marketing studies may, in fact, lead to much deeper conclusions and far-reaching changes within companies. Unfortunately, this type of research is still sometimes underestimated and significantly unappreciated.
In this text we are going to have a closer look at what marketing research is really about. We are also going to identify all key areas in which this type of research leads to optimisation of market operations.
What is marketing research?
Marketing research is a continuous process of collecting and analysing objective data relevant for company management and related to such issues as:
- market functioning,
- demand flexibility depending on product feature changes,
- offer of the company and its competitors,
- distribution channels,
- marketing communication,
- preferences of target groups,
- factors driving customers’ behaviour,
- purchasing process.
What is the difference between marketing research and market research?
Marketing research constitutes a part of market research. It is conducted when data concerning links between the market and a specific company is needed.
Market research is a broader term. This type of research is conducted when information is collected with respect to market situation, method of industry operation, competitive landscape or market segments. What is subject to analysis is the market as such, factors that influence it as well as relationships between particular market elements. (Find out more about market research – what it is, how it can be conducted, and many more information.)
Why is marketing research so important?
Professionally conducted marketing research decreases the risk of taking wrong decisions related to business growth, as well as sales and marketing. Why?
The research yields objective and reliable information concerning the market and its participants. It allows one to get to know decision-makers, advisors in the purchasing process, customers and users. This type of research makes it possible to determine the needs, preferences, expectations, requirements and opinions of each target group that is of relevance to a given company.
With such extensive knowledge an enterprise may satisfy the key needs and wishes of its offer recipients. The company development strategy may, therefore, be adjusted to suit the needs of target groups on every level of one’s business activity:
- product that meets customers’ expectations,
- sales channels that are most frequently used by those purchasing a given product category,
- marketing communication that suits the preferences of its recipients,
- price adjusted to the possibilities of customers,
- after-sales services tailored to the needs of particular market segments.
Research provides answers to a number of key questions
It can be, therefore, said that marketing research is essential to professionally and effectively run a given company, boost its market share and enhance competitive advantage.
Data obtained in the course of marketing research allows one to make decisions in many areas of company operation, e.g. with respect to the following questions:
- what to produce and what materials and components to use?
- how many products to produce within a month?
- when to launch an new offer?
- when to implement modifications to the offer and what changes to plan?
- to which market segments should products and services be addressed?
- what actions should be taken to boost the value and volume of sales?
- how to prevent excessive sales decrease at the final stage of the product life cycle?
- which strategies lead to an increase in market share?
- which marketing and sales strategies and tools should be used in order not to waste market opportunities?
Research allows to better understand the market and prepare for changes
Obtaining data about the market and consumers is an important, yet not the only, function of marketing research. Unfortunately, numerous enterprises stop at this level and fail to unleash the full potential of this type of research. They learn what the preferred bedroom decoration colour is in a given season but they fail to get the deeper insight, among other things, into what the desired innovations are or what substitute products the customers are looking for.
Below we present a whole range of fields in which marketing research proved both, important and useful:
- Obtaining information – e.g. where customers usually buy ceramic tiles in a given city? how small and medium sized enterprises choose the supplier of leasing services?
- Explaining observed phenomena – e.g. why energy drinks proved to be so successful? why customers fail to make repeat purchases in a given store?
- Forecasting future trends and behaviour – e.g. how are buyers going to respond to a price increase? what is the sales potential of a given product category going to be in the coming years? how are purchasers going to respond to a new, innovative product?
- Creating development strategies – e.g. how will demand develop depending on the location of the new store? which from the considered business concepts is most likely to have the highest return on investment?
- Searching for innovations and market niches – e.g. what completely new product would be able to meet several identified needs? do customers have any unconscious or undetermined needs or requirements?
- Monitoring of the level of goal’s attainment – e.g. have sales increased as a result of an advertising campaign or other factors? to what extent has customer satisfaction increased after changes in customer service were introduced?
Marketing research is relevant for every aspect of activity
It is easy to fall into the trap of thinking about marketing research only in terms of standard research methods (e.g. surveys, interviews, observations, focus groups) used in typical situations (e.g. taste or price tests). Yet, it is better to consider marketing research as a very broad spectrum of company development possibilities. Upon closer inspection of possible types of research, one may realise that there is considerable room for improvement in a number of fields.
- Strategic research – helps to select optimum market strategies, operational plans and company development directions.
- Business environment research – identifies factors, trends and tendencies that affect the market and hence, can indicate new opportunities or threats that one should be prepared for in advance.
- Product research – leads to the creation of the offer that satisfies the needs of consumers.
- Price research – makes it possible to determine the willingness of buyers to accept a given price level.
- Marketing communication research – indicates methods for enhancing the effectiveness of marketing, advertising and promotional activities.
- Brand image research – allows one to take immediate actions, e.g. in case new competitors emerge or crisis situations arise.
- Advertising research – makes it easier to increase the effectiveness and optimisation of advertising budgets.
- Selling research – allows one to estimate the sales potential of a given product category or a new or innovative product.
- Customer satisfaction and customer loyalty research – aims at monitoring the customers’ satisfaction with the offer, communication, customer service, etc. as well as at systemically assessing the likelihood of repeat purchases, which allows one to quickly respond to negative changes.
- Distribution channel research – allows to concentrate on sales in places that offer the largest selling potential.
- Customer service research – leads to increased customer experience related to a given brand.
- Market segmentation – identifies key target groups and indicates their features and preferences.
It is not always possible to conduct marketing research single-handedly
Performance of marketing research is a very extensive task. Companies often lack internal resources necessary to be able to conduct comprehensive and professional research projects in-house. In such a case they decide to cooperate with specialised research agency.
PMR is a one of such research companies that not only ensures the collection of data through marketing research but also offers:
- harmonisation of data coming from various sources,
- analysis and interpretation of obtained results,
- preparation of conclusions coming from the research,
- suggestions and recommendations concerning further actions,
- preparation of a wide-range report from a research study,
- clarification of all doubts during joint working meetings.