Purpose of Market Research

Purpose of Market Research

Identifying Market Opportunities

• Market research helps a business identify potential new markets. This could involve new geographic areas, demographic sectors, or unmet needs within an existing market.
• It can also help to identify new product development opportunities. This could be improving an existing product or creating a completely new one based on consumer needs and wants.
• The process may also highlight potential opportunities for market expansion, such as the development of new categories, segments, or strategic partnerships.

Understanding Customers

• A major purpose of market research is to gain a better understanding of customers. This can involve profiling different customer groups, understanding their behaviours and preferences, and identifying their needs and wants.
• Gaining insights into what customers think and feel about a brand, a product, or a service is also a key goal. These customer attitudes and perceptions can influence every aspect of a business, from product development to marketing strategy.

Competitive Analysis

• Market research plays a crucial role in identifying and understanding competitors. This could be analysing what other businesses are doing well, what they’re doing poorly, and identifying where there are gaps in the market.
• It allows a business to understand the competitive landscape, including the size, growth, and profitability of its competitors. This aids in strategic planning and helps to orient a business within its market context.

Anticipating and Reducing Risk

• Another core purpose of market research is to help a business anticipate potential risks. This could be market risks (like changes in customer preferences or technological advances), economic risks (like recession or inflation), or business risks (like operational inefficiencies or regulatory changes).
• Furthermore, market research can also help to reduce these risks by providing data and insights that allow for informed decision-making. Accurate understanding of the market leads to better strategic planning and a more resilient business model.

Evaluating Performance

• Market research is used to evaluate the performance of a business. This might include assessing satisfaction with a product or service, determining whether marketing efforts are effective, or benchmarking performance against competitors.
• It can also help measure a business’s reputation and brand image in the eyes of its stakeholders.
• The results obtained can lead to improvements and changes to maximise the business’s potential, making market research a vital tool for performance evaluation and improvement.