Market Research: Explanation, Importance, Types, Methods
Market Research is a very important step that business should take, before introducing any new product or service in the market, and also before making any change in their goods and services. It helps the business to understand what the customers want, how will their new product meet the needs and requirements of the customer, also the market scenario and the future opportunities or threats that the organization might face.
Proper research followed by a proper and effective analysis helps the organization to prepare planning and strategies accordingly. A good business organization would never underestimate and neglect Market Research because it plays a major role in the success of the business.
What is Market Research?
Market Research is a very technical and organized way by which an organization collects information or data from a targeted market about the reaction of the customer. It can be seen as an initiative to understand the customer in an analytical manner. Market Research is a mechanism that includes both Quantitative and Qualitative techniques.
A properly collected data gives a summary of the requirements of the customers and also this method examines the behavior and psychology of the customers regarding the products and services.
An effective Market Research with proper and transparent data has always been of great help for any business organization. The process of Data Collection, which means collecting data through the process of research, has always been considered as the backbone of any Market Research.
Data collection is not about only collecting data, instead, it also includes every possible evidence through which an analyst can come to some conclusion. It includes various technical processes. It is the application of mathematics, statistics, and also at times, it requires programming.
A proper collection completes the entire process of Market Research. A rigorous Market Research which tampered with data or wrong analysis would be of no importance.
As mentioned above Market Research is such an important tool and it should be used effectively. Few points stating its importance have been stated below:
- Customers have always been considered as superior in the business, their needs should be understood, and accordingly, products and services should be produced. Improving the existing products, launching new products whenever consumers need it is important. Through Market Research this can be understood and hence, products and services can be modified as per the needs of the customers.
- If there is any change in the market demand for certain goods and services, then proper research will be sufficient to understand the reason behind this change.
It can give the organization hints about the future of the product including how much profit any particular product or service can bring to the organization. It can also tell where to sell the product, how to improve, and what other things can be done to attract and satisfy a large number of customers. Serves as the best tool through which the prediction of a product can be done.
It is the basis of everything. Depending on this certain plans and strategies can be initiated.
Types Of Market Research:
A proper and useful Market Research is of mainly 4 types. Among these types, an organization will select depending on their objectives and goals. They have been mentioned below:
1. Explanatory: This is performed when there are scarce facts and information available with the researcher about the research cause, also, there is a need to gain more knowledge, information, resource about the gap of the Research. This can be gained through access to secondary data.
2. Descriptive: After getting the data, the hypothesis created through it needs to be tested in the Descriptive Market Research. Through this hypothesis testing, a proper conclusion to the given problem is got.
3. Causal: When a cause and effect relationship is established among the variables, then this is known as Causal Market Research. This type of research answers questions related to why a particular change is observed in a certain variable due to the change that happened in another.
4. Predictive: When market research is conducted to analyze the future of a given variable of the market, then this is known as Predictive Market Analysis. This type of market research can be subclassified into 2 types:
Methods Of Market Research:
Market Research, as mentioned, is a mechanism. There are some laid down steps and guidelines which monitors how and effective Market Research is conducted.
Also Read: Guerilla Marketing: Explanation, Types, Examples
Few of such methods have been mentioned below:
1. Surveys: this means interrogating the samples by creating a questionnaire and asking them to fill it up with proper, genuine, and honest responses. The sampling method of Market Research can be conducted in person, it can be done online by sending them the questionnaire, through calls, or maybe via mails.
2. Focus Groups: Conducting the research by asking a particular group to answer the provided questionnaire when they are being monitored in a particular location.
3. Observation: Observing while consumers buying the product or services, understanding their behavior while purchasing the product, or maybe while answering the questionnaire is what is included in the observation method.
4. Field trials: This can be done by giving new products to the store and understand how the customers react aids the organization to have realty check on their initiatives This is what happens in the field trials.
Above mentioned is everything about Market Research and out of the all methods mentioned, the survey is a very popular method and it is widely used.
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