Why should you undertake market research? | SupportBiz

Managing Growth

Why should you undertake market research?

 
The term ‘market research’ can broadly be taken to mean the collection of information, by a firm, about the industry, customers, prevalent trends, competitors as well as acceptance of its products/services. There are different ways in which market research can be undertaken. Irrespective of whether a firm is small or large, market research holds great significance.

Here are some of the most important ways in which market research can help your small firm.

Determining viability of a new venture

Market research can prove to be invaluable to an entrepreneur in determining the feasibility of the venture that he/she plans to start. It helps him/her decide whether there is a demand for the product/service that he/she plans to offer to the market, and whether he/she should undertake the risk of starting a new firm. Also, market research helps the entrepreneur take informed decisions about various aspects related to his/her products/services, such as quality, pricing, distribution and packaging.

Determining course of action

In the course of a business journey, an entrepreneur might wish to introduce new products/services, start new stores or enter new geographical locations. Market research is crucial to help the entrepreneur get all the information that he/she would require to determine the feasibility of these actions. It helps him/her realise the risks that they would be put up against due to these actions, and take informed decisions.

Understanding customer needs

Market research is of great significance in helping an entrepreneur understand the real needs of his/her customers. It provides information about what the customers actually want from the firm and its products/services, what they like and do not like. It helps the entrepreneur know the weak and strong points of his/her products/services, enabling him/her to capitalise on the strong points and improve on the weaker aspects.

Spotting opportunities

Continual market research can help an entrepreneur spot opportunities well in advance, enabling him/her to cash in on them. For instance, it can help an entrepreneur determine if he/she can offer any new product/service or introduce his/her existing product/service to a new target market, use a new distribution channel or avenue for promotion.

Spotting disaster signs

Just as continual market research can help an entrepreneur spot opportunities, it can also help him/her spot signs of disaster well in advance. This helps the entrepreneur take appropriate steps to protect himself/herself from the impending disaster, and be well prepared for it. For instance, a continuous study of the market can help an entrepreneur spot the signs of an economic downturn in advance, due to which he might decide to postpone the launch of a new product/service that he/she might have been planning.

Studying competitors

Market research helps an entrepreneur get invaluable information about his existing competitors, as well as those who are planning to enter the industry. It helps him/her study the strategies adopted by competitors, their products/services and processes, among other things. This enables the entrepreneur to determine the aspects where his/her competitors lack, and cash in on them.