Why is it worth investing in market research – Infographics
Nowadays, companies operate in a volatile market environment. We may read a lot about constant changes and disruptions that significantly modify the way of doing business.
In this context, regular and reliable market monitoring becomes extremely important. It is worth investing in market research because companies may operate more effectively today and prepare for what the future may bring due to the collected information.
Market research and company growth
Market research is a continuous process of gathering and analysing information about the market, products, customers, and competitors. An essential component of market analysis is converting complex data into practical know-how to transform the acquired knowledge into a specific action plan.
The wide range of data obtained thanks to market research allows us to draw conclusions and develop recommendations for many business areas. Therefore, market analysis helps us from the stage of business planning and fundraising, through designing a product portfolio, building a brand image, or identifying potential customers, to developing and modifying a company’s development strategy.
Building growth strategy
One of the types of market research is strategy analysis. It can support us in several complementary areas.
First, market research allows us to evaluate the company’s current strategy and verify whether it responds well to, for example, market trends, customer needs, and competition activities. Secondly, it helps us identify the factors coming from the business environment that have a significant impact on the company and the key success factors of market leaders. Third, it provides specific information on direct and indirect competition – strategies, activities, products, prices, budgets, marketing, sales, etc.
Fourth and most important, market research shows how to build or modify a strategy to accelerate the company’s growth and increase its sales and market share. Recommendations of this type may concern both the general growth strategy and detailed strategies such as sales, marketing, entering a new market, or internationalisation.
Minimising risk
In a highly uncertain and variable business environment, our actions are always subject to some risks. The risk may arise from, for example, lack of complete data, relying on unverified information, lack of harmonisation of indicators, lack of time, or not knowing relevant sources and necessary methodologies.
The risk can be significantly reduced if we make business decisions based on hard, verified market data. Market research helps us collect and analyse information on many different topics such as consumer behaviour, market trends, success factors, industry innovation, competition strategy, technologies, market segments, market entry barriers, or the effectiveness of marketing and sales channels.
Thanks to an in-depth understanding of market relationships, we can make better decisions in our companies – better because more effective due to minimising the risk of failure.
Setting priorities
Every day, we receive a lot of new information and data. In the media, we read about important events and changes that may affect our businesses. On the Internet, we find articles and analyses that may be useful in our professional work. On social media, customers and competitors publish posts that may seem important to us. In this amount of information, it’s easy to get lost and focus on the wrong part of it.
Market research effectively helps set priorities in our businesses by providing relevant and validated information. So, we can clearly see which new industries, innovations, technologies, or market niches are the most profitable or the fastest growing. We may identify challenges, difficulties, and issues that need to be dealt with in the first place. We can design a specific action plan for the next week, month, or year more rationally. We may focus on those factors that may bring the fastest results, the most significant profits, and the highest competitive advantage.
Monitoring trends
Essential elements of the effective business strategy include immediately following trends and not staying behind the competition. Some companies (e.g., start-ups) must go even further – not only follow changes but create trends and stay ahead of others in implementing new solutions, products or innovations.
By using market research, we can easily identify consumer, industry, technology, and business trends. The collected data may indicate, for example, how the market in our country and abroad is developing, what global and local leaders are investing in, and what new customers are looking for. Moreover, it is possible to verify whether a given trend is still increasing and whether it is worth including in our short, medium, and long-term plans.
The trend analysis can clearly show us where new business opportunities are hidden, in which direction our company should develop, what products should be added to the offer, what innovations can improve the purchasing process, etc.
Understanding customer needs
Since the customer is the key focus of every business, in-depth knowledge about customers should be the most critical asset of any company. However, understanding customer needs goes far beyond recognising their behaviour and preferences.
Thanks to market research, it is possible to obtain very detailed information that may be of great importance for building a competitive advantage. Consumer research also reveals what is hidden deeply. What unaware needs and preferences do consumers have? Why do customers choose a particular product from all other similar products? What does the purchasing process look like? Who are the decision-makers, and who are the consumers of the products? How important is each of the purchasing criteria for the customers? What price level is optimal for a given market segment? Which product functionalities are necessary, which build the competitive advantage, and which are unnecessary?
It is worth investing in market research!
Market research should be the basis for all important business decisions. Having reliable information about the market, customers and competition means a greater efficiency of the company – increasing profits, optimising costs, gaining larger market share, as well as strengthening the brand and competitive advantage. Therefore, it is worth investing in the market analysis if we think about further developing our business.
Let’s talk about how market analysis can help your business!
