Doing your own market research on a regular basis is essential for keeping up with current market trends and maintaining a competitive edge. Whether you are starting a new business, expanding, or developing new products, conducting market research is essential. It helps you to understand your target market, increase sales, and spearhead business growth. In this article, we share 7 reasons why you should be investing in market research.
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1. Identify new customers
In order to identify potential new customers, you must first understand who your customers are. You will also need to know key demographics.
When looking at your product or service, it’s important to consider questions such as:
- Who will use your product or service?
- What is the age range of your customers?
- What is their income level, marital status, and geographical location?
Using market research to understand these factors will enable you to target customers more effectively.
2. Get to know your existing customers
Similar to the above point, you should also take the time to understand who your existing customers are. Here are some questions to ask:
- Why do your customers choose your products over your competition?
- How do your customers use your products?
- How do your products solve a challenge?
- Who or what influences their purchase decisions?
- What do your customers enjoy doing, watching, and reading?
Understanding how your existing customers use your products as well as what challenges your products solve will help businesses improve their products as well as identify upsell opportunities with existing customers.
3. Set realistic targets for your business
Now that you are armed with information about your target customers and existing customers, you can use this data to set achievable and realistic goals for continuous improvement and business growth.
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Being customer-centric in your approach is essential in today’s business climate. The most common approach in market research is to use an STP model: Segmentation – Targeting – Positioning.
Segmentation: Who will your product appeal to in terms of demographic, location, or other factors?
Targeting: How can you target and reach those sectors that your products appeal to?
Positioning: How can you position yourself in front of your competitors as your target market’s choice?
4. Develop new and effective strategies
Data from market research will help you to make more informed decisions. For example, relating to pricing, distribution channels, marketing mediums, or to identify opportunities to introduce a new product or service. These results will also help you to make more informed decisions about your existing operations and activities.
- Should you expand or reduce?
- Is there room in your current operations to diversify?
- Are you targeting the right audience with your marketing activities
Casio used market research to get better insights on customers & resellers and adjusted the marketing strategies to be more effective.
5. Solve your biggest business challenges
If you have already identified a problem in your business, conducting market research will help you determine the source of the issue. For example, you can determine if a new competitor has entered the market or if brand awareness has fallen short, causing a decrease in sales. There are several types of market research that can help you identify different shortcomings: brand research, consumer research, product development and usability testing, consumer research, and many other areas.
6. Investigate expansion opportunities
Market research helps you identify areas for possible business expansion. Given that it offers the opportunity to test markets to determine if there is room for a new product or service. You can also conduct market research to find the best location to open a new store.
7. Identify how to expand your offering
Market research may help you discover new markets that are under-serviced or in demand. For example, you can identify changing market trends due to new housing construction, increased levels of education, or other changes that will bring new opportunities for your business.
All in all, market research isn’t just for new startup businesses. Businesses of all shapes, sizes, scope, industry and experience levels can benefit from market research. Market research can help you to learn about new and existing customers, identify issues and solve problems, and even help explore new opportunities that pave the way for business growth.