Are you unsure about your business decisions? Marketing research can eliminate your doubts and reduce the risk of an inappropriate investment – you can find out more about this topic in this article.
What is marketing research?
Marketing research is the process of collecting, analysing and interpreting data on the market, customers, competitors and other aspects related to marketing and sales. Their aim is to acquire knowledge that will help us make more informed and accurate business decisions, select appropriate marketing strategies, better understand customers’ needs and preferences, and learn about the competition.
For example, marketing research enables:
- Analysing the market, trends, forecasts, competition and other factors that may affect the success of our business;
- Getting to know customers, understanding their needs, behaviour, preferences and opinions about our products or services;
- Testing our new products or services. Marketing research can help us assess the potential of a new product or service and determine what modifications may be needed before it is fully implemented;
- Evaluating the effectiveness of the marketing campaign and examining the effectiveness of our activities (advertising, promotions, sales campaigns, etc.);
- Getting to know and analysing the competition. Getting to know and understanding its strategy, offer, prices and market position.
Marketing research can be carried out using a variety of methods, such as surveys, interviews, observations, analysis of demographic data, analysis of online shopping data, focus groups, and more.
When is marketing research useful?
Marketing research is helpful in the various aspects of our business, especially in the context of making key strategic decisions.
Such research will be most valuable and useful in:
- Intending to launch and develop our new product or service. Marketing research helps to estimate the prospective interest in our product among consumers, and assess their needs and preferences. Marketing research can help us establish the competitiveness of our product and a price that will be attractive to our target group;
- Adapting your activities to different customer groups. Marketing research identifies and classifies different market segments on the basis of demographic, psychographic and behavioural characteristics, etc;
- Learning about customers’ needs, expectations, motivations and purchasing decisions. This enables us to understand better our product target group and tailor our products, services and communication channels to it;
- Analysing the competition, learning about their strategy, offer, price, and customers’ perception of such competition. This allows us to reinforce our strengths and develop unique values that our competitors do not have;
- Evaluating the effectiveness of our advertising, promotional and communication campaign. By analysing performance results, you can allocate budgets better and adapt your marketing strategy to current trends;
- Understanding which distribution channels are most effective in reaching our customers;
- Surveying the level of the satisfaction of our customers. Through surveys, we can learn about their opinions about the product or service, and the problems reported. This allows to introduce necessary changes and adapt the offer to market needs;
- Discovering market trends and forecasts. Marketing research enables us to anticipate changes on the market and adapt our activities better and quicker to changing conditions or customers.
What risks does marketing research minimise?
Marketing research helps to minimise the risk of making wrong business decisions. By carrying out a market analysis, we have the chance to tailor our product or service better to consumers. The risks in each business sector may vary depending on the specifics of our products or services. So let us describe what risks marketing research can minimise using the example of the cosmetic industry, as this is one of the businesses where such research plays a key role.
The first thing worth describing is the risk involved in launching a new product. Marketing research will allow us to estimate prospective consumers’ interest in our new cosmetic product before we fully launch it. We can carry out pre-tests, such as focus studies, in which a group of people tests a product and then gives feedback on it. This allows us to validate our product, find its possible weaknesses and address them, thus avoiding the financial losses that could occur after a failed product launch.
You can read more about this in the article: “Marketing surveys before product launching – are they advisable?”
Marketing research also reduces the risk of the inappropriate market segmentation and inappropriate selection of our target group. It allows for the accurate understanding of the preferences and needs of different cosmetic market segments. For example, we can conduct surveys to identify target groups with different preferences for skin, hair or facial products. By learning about the differences between market segments, we can tailor our products and marketing strategies for each group, increasing the effectiveness of our operations and achieving greater success.
Marketing research can also help in choosing the right packaging for new or existing cosmetic products. Analysing consumer preferences, colours, designs or impressions related to packaging avoids mistakes and ensures that the product attracts attention and responds to consumers’ expectations.
Another risk that marketing research will help us to avoid is the risk of miscommunication. Research will allow us to understand our target group’s preferred communication and message channels. This allows us to optimise our advertising or promotional activities, thereby achieving greater reach and better results. For instance, research may reveal that the younger generation prefers to communicate via social media, while older people are more responsive to traditional TV advertising.
To conclude, marketing research is extremely important for minimising the various risks involved in launching new products and conducting effective marketing activities. They provide a possibility for the better understanding of consumers, their preferences, needs and purchasing decisions, which enables making more accurate business choices and increases the chances of success in the present-day competitive world.
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