Market research as a vital tool for business success

Many successful businesses enjoy longevity because they periodically conduct and invest in market research. That way they stay tuned to changing market trends, are able to size up business opportunities and to improve on competitive nature of their businesses.  Whether you are a startup or looking at expanding an existing business, understanding the critical characteristics of your target market creates potential for increase in sales revenue, your profit, and return on investment (ROI). In essence, data and market research is vital for smart decision-making, business planning and overall success of your business.  How this critical aspect of the business is often overlooked, yet far too many business ventures fail as a result of poor market research, or lack thereof!

What is market research?

In its basic definition, market research is merely an information gathering exercise to determine the viability of something.
But more importantly, market research is a continuous process of collecting data, investigating and interpreting information about a particular market your company operates in, a product or service you offer for selling in that market, other companies competing with you in your market space and current and potential customers who purchase and consume the product or service you offer.
Analysing all of the above means continously investigating possible ways for the company to successfully operate in the market, sell producs and services, attract and retain the target audience, as well as gain competitive advantages.
Market research is therefore an invaluable business tool that helps you reduce the risk that a business idea will fail, essencially reducing the risk of being in business.
Types of market research
The scope of the market research you’ll undertake is influenced by your research objectives, i.e. what you want to learn about your market and factors influencing it.
Your objectives will also determine the types of market research that you need to undertake in order to be successful.
There are two main categories of market research:

The first one is primary research, which typically covers monitoring the effectiveness of sales, ascertaining the quality of services provided by competitors, understanding the channels of communication used by competitors, and assessing active competition within the market.
An example of conducting this type of research is to talk to customers, suppliers or competitors in the market.
The second one is secondary research, usually conducted by other people or organisations, but whose results you may be able to use yourself.
Secondary research typically covers published company reports data, existing surveys and studies, newspaper reports and Government data.
In turn, the nature of research is, broadly speaking, either qualitative  (as a result of  actually talking to people, asking for feedback and/or opinions) or quantitative (sourced through surveys from which figures and numbers are generated, analysed and presented in the form of meaningful charts, statistics, graphs and tables).
So what are some of the main business areas that data and market research have major influence on?

l Business model design & strategy
Having a greater understanding of your marketplace will enable you to create a sound business model and strategy to establish and grow your brand into one surpasses competition.
Through research a business is able to spot or anticipate market trends or changes, test viability of a business idea. More significantly, market data will help drive the development of sound a business model and strategy for product or service design, pricing, distribution and logistics, advertising media usage, amongst others.

l Competitors
Keeping one step ahead of your competitors is essential for business survival. Research can provide you with valuable information about existing competitors, their adopted strategies, and how those strategies impact on target consumers.  Such insights reveal existing gaps in terms of untapped or underserviced markets, threats and new opportunities in the market place, facilitating smarter decision-making.

l Customers
It is often said that “being a customer-centric organization is the Holy Grail towards unlocking the true potential of customer value”. Today’s best performing organisations are those that are customer-centric, meaning that their strategy and culture is based on putting customers’ needs first, and at the core of the business (Deloitte and Touche conducted a study recently and found that customer-centric companies were 60 percent more profitable when compared to companies that were not focused on the customer).Their way of doing business is such that it provides a positive customer experience before and after the sale in order to drive repeat business, customer loyalty and profits.  These companies do not just provide great customer service; they are deliberate about creating a great experience throughout the customer journey — from the awareness stage, purchasing process and finally through the post-purchase process. To succeed in being a customer-centric company, your can use market research as a tool to gain insight into your customers thinking; understanding your target customers’ buying behavior, interests, satisfaction levels with your products and services and how they prefer to be engaged. Through market research you also get to understand changing market trends such as population shifts, education levels of your target market, their social status, buying power and more.

With that information, you can segment your customers and identify opportunities to create products and services that match their needs.
You and I have seen too many products die a slow market death due to the lack of customer understanding and, quite frankly, market arrogance. Philip Kotler, the father of Marketing 3.0: From Products to Customers to Human Spirit, rightly advocates for putting the customer on a pedestal. He argues that the days of customers being treated like mere consumers are over, but should be treated as complex, multi-dimensional human beings that they are. Their level of sophistication and assertiveness has increased exponentially over years and they are able to choose companies and products that satisfy deeper needs. As the year draws to a close and you put business activity on pause or slow motion, reflect on your business — your successes, challenges, and next steps in your business growth. Be remindend that the business evironment is ever evolving internally, at competition level and broadly at a macro level, and that market research is critical in closing information gabs to enable sound business decision making.

Ensure that your  business processes and disciplines (from marketing, logistis to supply chain management) are all geared towards responding to this new generation of customers, which is not waiting to be told by sales and marketing people about their needs. The development of technology, access to internet and social media, amongst others, have empowered your customers to make sound comparisons of products and services and eventualy make prudent buying decisions based on options at their disposal. Research can help eliminate business complecancy by anchoring the business offering on expectations and peculiar needs of customers that you serve.
l Fundisile Serame is the owner of TechnoFundis, a research and innovation consultancy