WHY IS MARKET RESEARCH SO IMPORTANT
Clarke Ricks
School of Business, Liberty University
BUSI 690: Policy and Strategy in Global Competition
Dr. Hicks
April 6, 2022
WHY IS MARKET RESEARCH SO IMPORTANT
Firstly, we should clarify “What is Market Research?” It can be described as the action
of gathering, analysing and interpreting information to help solve marketing challenges. We
use market research for a variety of reasons, it helps us make educated decisions for
example determining the feasibility of launching a new product before dedicating time and
budget into the new venture. Market research is a vital element when developing your
marketing strategy. When done correctly it can help to enlighten your marketing activities –
such as understanding the requirements of your target audience, helping to understand
what key messages you should convey and how to convey them.
It should be treated as an ongoing activity – you should always be learning about your
business environment, your customers and their needs and preferences. The environment is
constantly changing so it’s important to make sure you are researching it and understand
what factors are changing that could impact on your marketing plans.
Without market research we are reliant on instinct and anecdotal information to make
key business decisions, this is not always accurate.
What types of Market Research can you do?
Ultimately, you want to gain deep insights through market research, there are multiple
types of research you can do to get the best insights, depending on what you want to know.
Some of the most common types of market research activities include:
1. Brand Research
2. Campaign Effectiveness
3. Competitor Research
4. Consumer Research
5. Customer Segmentation research
6. Product Development
7. Usability testing
Market research involves two central types of research:
Primary Research – this can often be referred to as “field” research and involves
gathering new data, first-hand, that has not been collected before.
Secondary Research – is sometimes referred to as “desk” research and involves
gathering data that has already been compiled and organised for you. It includes reports,
government funded studies, textbooks, historical records and statistical databases.
Within these types of research methods there are a few different types of data
collection methodologies that can be used, such as:
Qualitative research, which is an exploratory approach and uses activities such as
focus groups, in-depth interviews and Ethnographic research – which involves participant
observation as part of field research.
Quantitative research uses objective measurements and numerical analysis of data
that is collected through research methods such as surveys, polls and questionnaires.
How to conduct Market Research:
You should always ensure the end goals and objectives are clear. Your target audience,
business objectives, challenges and end customer should be at the heart of it.
1. Set out clear objectives and goals before beginning the research.
2. Identify your target audience and market size.
3. Make sure your sample size is representative of the audience you are targeting. This
means there should be enough respondents in the research sample that reflect, as
accurately as possible, the larger target audience population.
4. Choose the most suitable market research and data collection methodologies based
on objectives.
5. Create your research questions – this is applicable regardless of which data
collection method you choose.
6. Ensure the questionnaire is neutral and is not leading. Remain impartial throughout
the process.
7. Build in questions that validate other parts of the questionnaire.
8. In a qualitative focus group setting include open ended questions and allow for
flexibility for respondents to freely speak on a topic that might not have been covered in the
questionnaire.
9. Once data have been gathered employ robust analysis skills to interrogate and
decode the findings.
10. When research findings are determined, make sure to not take these in
isolation. Examine the macro environment also (such as language, cultural, economic,
political situations) to validate the findings.
Does Market Research work?
In short yes, absolutely. There are enough examples out there of product and business
failures simply because enough market research was not done from the outset. Planning to
launch a new product, or export to a new market without adequate research is a recipe for
disaster. You need to really understand your customers and your competitors before making
such a leap.
With more and more companies exporting to many global locations it’s important to be
aware of the cultural and language differences in those markets. So, while research in one
geographic location will yield certain results this may not be replicated in another location.
The famous case, where their company slogan “Finger Lickin’ Good” translated as “Eat Your
Fingers Off” in Chinese is a great example of this.
However as per point 10 above, while market research will help determine our
marketing strategy and focus where our marketing efforts should lie, they should not be
taken in isolation. Take the famous “example from the 1980s. While research and focus
groups were extremely favourable of the new coke flavour, it failed to understand the
significance of the brand affinity and nostalgia that consumers had with the original taste of
Coke. In this instance the wider environment and brand impact should have been taken into
consideration before making the final business decision.
Used correctly, market research is a powerful tool to help minimise the risks involved
when making key business decisions.
How Market research can help your marketing strategy:
Market Research can significantly help your marketing strategy as it helps to provide
key insights and information to the business. It can provide a deeper understanding on your
customer and competitors. Research will help to understand who is buying your product or
service, who is not buying your product or service, what motivates them, and whether they
are loyal to your brand – ultimately leading to increased sales over time.
Similarly understanding the wider market environment can help identify new
opportunities for your business. As the market changes its important to continue to
research and understand ways you can improve on your offering based on the changing
consumer preferences or market dynamics.
While there were many factors involved in why Nokia had such a spectacular fall from
grace within the electronics market, ultimately, they failed to research and understand the
changing market trends. They were late to the market with new innovations, while their
competitors, customer preferences and technology were advancing so fast. Others such as
Samsung, Sony and Apple iPhone moved in and quickly became some of the leading
electronics brands in the world.
