Never undervalue the benefits of a well-executed market research project. Lack of it will likely have a negative impact on a company’s bottom line, despite the fact that it is sometimes (and incorrectly) perceived as a costly undertaking.
There are numerous reasons why market research should be an integral part of any business plan, including evaluating a new product, determining the next steps for promoting a service, and deciding how to create an internal team approach to your offering. The options are limitless, and the expenditure is a “no-brainer” when weighed against the rewards.
What is market research?
Market research is the systematic, unbiased collection and analysis of data concerning your target market, competitors, and/or environment with the purpose of gaining a deeper understanding of them.
It allows you to discover more about your target audience so you can create better products and adjust your marketing messaging to their needs.
Through market research, it is possible to estimate the likely sales of a new product or service, as well as the required advertising budget for optimal profits. It prevents you from wasting time and resources on commercials and other marketing operations for a product that may struggle to gain market acceptance.
Why Market Research?
Now that you understand what market research is, here are 7 top benefits you stand to gain by conducting market research;
1. It helps marketers execute effective marketing campaigns.
Marketing research benefits marketing management by giving decision-relevant information. It reduces the uncertainty surrounding important decisions.
A consumer sees an advertisement for a product that appears to be ideal for them and exults in their good fortune; yet, this scenario likely did not result from luck and should not have. Through strategic market research, businesses make these situations conceivable. With relevant knowledge of its target market, a business is able to build products and marketing strategies that directly appeal to consumers. This, therefore, increases the Business’ conversion rate, and the data gathered is capable of catapulting the same business to success.
2. It helps you understand what countries are valuable to expand into first.
Market research is the first step in expanding internationally. This research method is crucial for organizations since it can provide a wealth of information about the market, competition, and consumers.
Due to the vast cultural and traditional differences in Africa, it is impossible to collect all the information necessary for the design of business plans, especially sales, marketing, and promotion strategies, without a thorough research procedure. This is essential because you must identify your objectives and potential hazards to avoid the possibility of cultural blunders.
Similarly, when you undertake market research across multiple African markets, you may determine which market(s) in the continent your product fits into. Thereafter, you can plan your entry, execution, and expansion.
3. It helps you avoid resource waste.
Market research guides you so that you don’t waste your time, energy, and resources developing or redesigning a product or service only to discover later that there isn’t a market for it. To thrive where others fail, it’s critical to understand your market, learn about their preferences and expectations, and scout out the existing competition.
In the words of Sir Arthur Conan Doyle, the author of Sherlock Holmes, “It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.”
4. It helps improve your NPS score.
Net Promoter Score (NPS) is one of the most extensively employed measures for measuring customer loyalty and satisfaction. It allows you to comprehend and monitor how your clients perceive your brand. Specifically, it attempts to answer the following question: “Will my present customers bring me more new clients through word of mouth?”
You can build tactics to increase customer loyalty based on the customer insights gleaned from market research, which is the essence of NPS. This is especially crucial given that customer experience is becoming the focal point of global enterprises.
5. Market research enables businesses to be innovative and follow trends.
The business environment is constantly in flux, as new competitors emerge and customer purchasing habits and tastes vary. All of this necessitates a continuous evolution of the business proposal.
To combat this, many businesses apply innovative thinking to all elements of their operations, including their products/services, distribution networks, and marketing. Therefore, if your business fails to follow trends to stay relevant, your market strength will eventually decline (does the story of BlackBerry sound familiar?).
The purpose of any product, innovative or not, is to satisfy customer needs. The stronger the connection between the two, the greater the likelihood of a successful and long-lasting product. Discovering what the target market believes can provide vital information into the direction of the innovative idea’s development and the path it should pursue.
Market research and innovation can therefore be viewed as a balance between risk and reward. The risk is that clients may learn about the innovation before the company desires them to; the benefit is gaining a deeper understanding of how to fit innovation to the intended audience.
In the world of people, products, and pipelines, it is essential to use market research to inform the innovation model. It means that the company can better develop a product that will work for consumers (people), using a pipeline that customers can comprehend.
6. Market research helps you understand product-market fit.
According to Shopify, your ability to find product-market fit for your business is an early indicator of success.
In a similar vein, Hubspot asserts that distributing surveys to consumers is the most practical way to measure product-market fit and understand how they perceive your products.
By performing market research based on consumer input, you can acquire insight into market segments with high customer demand and low fulfillment rates. This enables businesses to comprehend their customers’ pain points and how they can make their lives easier. Understanding product-market fit can allow you to optimize product sales, strengthen customer relationships, and enhance your own work performance.
7. It helps you assess your competition.
Additionally, market research can assist you to understand how your brand compares to competitors.
Through what is known as competitive analysis, you can profile your competitors and obtain a comprehensive evaluation of what customers think of them.
Thus, you can take advantage of their shortcomings and exploit your talents to your advantage.
Is it beneficial to hire an external research team?
If we’re being completely truthful, the answer to this question is never “no.”
Finding a competent market research team in Africa is vital if you want your research project on the continent to be successful.
This is because working with a good team provides you with a perspective you would likely lack if you managed the project alone. It is feasible to conduct market research on your own, although it is not recommended. Data can be misconstrued, along with other errors, if an inexperienced team is hired.
In conclusion, having a good understanding of your consumers from day one will help you define your market accurately. You may then effectively promote to these customers, while also ensuring that your cost structure is in line with anticipated demand levels. The more you know about your customers, the easier it will be to address their demands and provide them with relevant messages. Furthermore, it will assist you to comprehend the broader landscape, i.e. those you do not want to target as well as the primary substitutes and competitors.
Market research is the collection of information regarding customer demands and preferences. It is also a crucial tool for any product, company, or industry since it facilitates strategic decision-making.
At Survey54, we provide a variety of market research services to help African businesses achieve their objectives. From online surveys to focus groups, we offer a comprehensive range of market research services.
Interested in further information or a proposal? Contact our team now.