Conducting Useful Market Research
Uploaded by schoolblows on May 04, 2007
Conducting Useful Market Research
Market research is the cost effective collection and analysis of information about the customer and market to support better business decisions. The key to market research is obtaining useful information, both perceptual and factual. It’s important to know what the customer knows, (awareness and familiarity), what the customer thinks and values (opinions and beliefs), what the customer feels (attitudes and emotions), what the customer does and is likely to do (usage and behavior), and what drives and motivates the customer to buy. Whether a business is looking to develop new opportunities or to expand their existing base, market research is vital in that it cannot be obtained from any other source.
Why Do Market Research?
The customer base is never static. Markets shrink, grow and segment constantly requiring frequent adjustments by the successful enterprise. The primary benefit of market research is to help business understand the customer. Through usage and attitude studies a business can better understand customer needs and their reaction to a product or service. Just as important is an understanding of customer reaction to a competitor’s product or service. Market research attempts to assess a range of intangibles about customer preferences, purchasing patterns and contentment, thereby helping to better focus resources.
There is a marked difference between price and value. Market research tells the business what motivates the customer to buy. Knowing the answer helps the firm set the price for its product or service. While some customers look only at price, others consider dependability and value.
Market research is needed to test and develop new products and services. Is the product or service needed? Information for innovative new products is rarely available except through market research. Businesses discover where the most lucrative areas for their new product or service are, and what the most effective launch programs are.
The most famous last words inside any firm are: "We don't have any real competition." According to The Digital Economy:
- Of the companies on the 1979 list (of Fortune 500 companies), 40% no longer exist as corporate entities.
- Most medium- or large-sized companies in North America introduce more than one new product per day. Last year Sony introduced 5000 new products. Even something as seemingly stable and low-tech as beer requires innovation; 90% of Miller's revenues come from beers that didn't exist 24 months ago.
- Product...