What are the benefits of market research? There are plenty.
What are the benefits of market research? There are plenty. The advantages of conducting market research typically center around the strategic, marketing, and operational needs of a business. Learn more.
The advantages of conducting marketing research center around 3 key areas:
- Strategic benefits
- Marketing benefits
- Operational benefits
Market research is typically used to address at least one of and sometimes all three of these outcomes.
Choose to complete market research and you should expect a standing ovation from all of your colleagues.
It's that good of a decision.
What Types of Businesses Use Market Research?
Our market research company partners with organizations from varying sectors and industries.
There are no bounds as to what type of business should and should not different types of market research methodologies.
Here are some common profiles of users of market research:
- Start-ups or companies looking to launch a new product or service
- Organizations looking to expand into a new or unknown market
- Businesses who don't understand their customer and non-customer profiles
- Companies who want to learn more about why their customers buy or don't buy
- Firms that want to learn more about how they compare to the competition
- Organizations who want to understand more about employee morale and engagement
Although this is only 6 profiles of common users there are many, many more.
Usage of data and insight circles back to the three core benefits of market research. Let's take a closer look at what those are.
Benefit of Market Research #1: Strategic
The first benefit of using market research is the strategic benefits. Market research is the foundation of sound strategy.
Why base major decisions like the direction of a company on gut feelings when you can base them on facts and evidence?
This is all part of the growing data-driven regimes in organizations.
Market research can tell an organization...
- Which strategy will perform best in the market.
- Which market offers the greatest chance of success.
- Which product to move forward with.
The strategic benefits focus on recommendations and action items at the 30,000-foot level whereas the next 2 benefits are far more tactical.
Learn more about data-driven decision-making and why it's so important.
Benefit of Market Research #2: Marketing
This is likely the most common use of market research and the most widely accepted benefit.
Market research can fuel your marketing approach by:
- Honing in on messaging and design.
- Telling you what audiences to market to through segmentation.
- Teach you about where customers and non-customers spend their time on media to help guide budgeting.
As a market research company, we spend the majority of our time working with marketing personnel.
Furthermore, market research (like ad concept testing surveys) can test messaging and ad creative.
User experience (UX) research can improve websites to promote more conversions.
Voice of Customer (VoC) can tell an organization about what customers love and hate about your brand and help define competitive differentiators.
Market research can be a goldmine for a marketing team.
Benefit of Market Research #3: Operational
The final core benefit is operational improvements. This may include tactical changes to an organizational structure.
It may also include reworking or retraining departments to focus on different approaches with customers.
For example, say you learn from market research that shipping time and customer support is the most important part of the customer experience.
Your organization may then choose to train sales teams to highlight these 2 factors as part of its sales pitches to future prospects.
Market research may also change your process.
If you learn customers felt left out after they placed a customer service call, you may use the data for the market research to institute a follow-up text or email post-contact.
These are types of operational improvements that can be driven through data and customer feedback.
Additional Benefits of Market Research
We couldn't stop at just three. Here are a few more reasons your organization can benefit from market research.
Defines Your Target Audience
Before bringing a product to market, it's important to understand who your customers are (or who they will be).
Market research uses consumer data to accurately define their behaviors, attitudes, and opinions.
Not only does it help define your target audience, but it also helps you actively listen to your customers on a personal level.
This gives the opportunity to also solve potential problems in customer satisfaction.
Once you understand your target audience, marketing becomes more effective.
Therefore, with a clear understanding of the demographics of your audience, you are able to be strategic to a specific group of people.
This saves a ton of money and resources in the long run.
Learn more in our blog post: What is a Market and Customer Profiling Survey?
Assess the Competition
Market research can also help you understand where your brand stands against competitors.
Through conducting what is called a competitive assessment, profiles all of your competitors and gives a full analysis of what customers think about them.
This way, you can take advantage of understanding their weaknesses and how you can utilize your strengths.
Interested in reading more about competitive assessments? We've got you covered. Read our Ultimate Guide to Conducting a Competitor Analysis.
It's important to stay innovative and always stay one step ahead of your competitors.
However, all this innovation comes with a lot of risks and uncertainties.
One way to fight that is through market research!
For example, using package label testing surveys can help companies understand if a new product’s packaging will stand out on the shelf against the competition.
Another example is a pricing sensitivity survey. This type of market research benefits companies by measuring which price point works best for their target audience.
Another great tool to consider is sensory research, which is commonly used in the food and beverage industry.
The goal of this research is to determine the customer’s overall experience with the product.
Respondents answer questions like:
- Do you enjoy the flavor of this product?
- How would you describe the texture?
- Would you recommend this product to a friend?
Through using market research, companies can minimize risks and product failure associated with releasing a new product/service.
Here at Drive Research, we offer a variety of market research services to help you succeed and meet your goals.
*Editor's Note: This blog was originally posted in April of 2018 but has since been updated.
Market research involves gathering data about consumers’ needs and preferences. However, for any product, company, or industry, market research is a valuable tool and helps for strategic decision-making.
Interested in learning more or receiving a proposal? Contact our team today.
- Message us on our website
- Email us at firstname.lastname@example.org
- Call us at 888-725-DATA
- Text us at 315-303-2040
George is the Owner & President of Drive Research. He has consulted for hundreds of regional, national, and global organizations over the past 15 years. He is a CX certified VoC professional with a focus on innovation and new product management.
Learn more about George, here.