The general purpose of market research is to provide the organization with relevant, accurate information about it’s consumers and the competitive environment. This benefits a company in many aspects of the business, and can ultimately save the company time, effort and money.
Benefit #1 – You get to know your customer
When first starting a business, or launching a new product, you first need to determine if there is a market for this product or service. This is where market research comes in. By completing surveys, collecting statistics and product testing, you will learn who will use your product, where they are, what they like, and where to advertise that will get their attention. Often if you test the product with your target consumer, you will discover ways that consumers use your product that you hadn’t even considered – which in turn builds your marketing and aids in advertising endeavors.
Benefit #2 – Referrals
In completing your market research, you will have developed a database of names, addresses and phone numbers. Not only are these people that participated in your surveys, these are your customers, and your sales people! After completing a survey if you were to send out a simple “thanks for participating” postcard, you’ll leave an impression with this consumer. Not only will this make them more likely to buy from you, either for the first time or again, but if your product is successful, they will refer friends and family to it. Word of mouth is a wonderful thing, and market research is another way to get your name out there.
Benefit #3 – Enhanced Products
Market research can help you to determine more about your consumer, but it can also tell you more about your product. What would your customers change about your product? Is the packaging keeping the product safe, and yet still appealing to them? Is there something missing from the instructions? Market Research can help lead you to product development, and continue to better your company and products.
Benefit #4 – You can save money!!
Market research can save you from making a poor investment. While market research is an investment in itself, spending the time to learn that no one really wants to use aerosol toothpaste isn’t such a bad idea. When you consider the costs of market research, think of it this way – You COULD pay whatever it costs for market research, OR you could spend the money to produce the aerosol toothpaste, it’s packaging, as well as put money into storage, shipping to stores, sales people to find the stores to distribute, and the advertising and marketing campaigns. Which do you think would be more cost effective? Saving yourself from a failed product launch, or dealing with the aftermath?
Remember to keep your market research on the priority list. Some things that appear to be good ideas, are easily rejected by the consumers, and can end up being very costly. While I personally have nothing against clear cola, the market likes what it likes, and brutally rejects what it doesn’t.