What is Market Research? Definition, Objectives & Important

Market research is crucial during the startup phase of your business and it's equally important once you're established, you still need to know about your market, your competitors, and your customer's tastes and trends.

What is market research?

Market Research

Did you know that one of the main reasons would-be entrepreneurs fail is because they haven’t done their market research. it’s easy for you to believe you have an excellent idea for a business. But if you want your business to be a success, it’s a good idea to check it out more widely is there a market for your business?

I will buy your products or services. Market research is a cost-effective way to check out if your idea is a winner. Market research provides you with answers and information. So that you can make better decisions. You can find out what your customers want and then match your products and services so that they fit better.

It can make you more competitive and improve your chances of success. You don’t always get new information from your market research. Sometimes it confirms what you already know but you have wider proof. So it’s not just your opinion or that of your family and friends and make sure you take notice of what you learn.

Important Facts Hidden in your Research

There may be small but important facts hidden in your research that make all the difference to your success. of course, it’s not always completely positive. Market research can throw up results that are critical or negative that can be tough to take but don’t hide away or ignore them.

Some of those comments may be well-founded they may give you valuable insight so that you can refine or adapt what you’re offering. All make changes to your pricing you may even get some hints and tips on how to do your marketing better. You may be thinking that this sounds great but hiring a market research professional is expensive.

But don’t worry there are lots of simple and low-cost techniques that you can use to get the information. You need there’s more about these in this module have a look and you’ll be well equipped to do it yourself. But remember market research doesn’t make decisions for you and of course there’s no guarantee of success.

Market research is crucial during the startup phase of your business and it’s equally important once you’re established. You still need to know about your market, your competitors, and your customer’s tastes and trends.

Use the information in this module to find out how market research can help you make informed decisions and improve your chances of success.

Three Main Objectives of Market Research

A market research project can generally have 3 different types of objectives.

Administrative: Help a company or business to grow through adequate planning, organization, and control of human and material resources, and thus meet all specific market requirements in a timely manner.

Social: Meeting a customer’s specific needs through an essential product or service. The product or service must satisfy the needs and preferences of the customer when consumed.

Read Also: What is Social Media Marketing? – Benefits of Social Media Marketing

Economic: Determine the economic degree of success or failure that a company can innovate in the market, or introduce new products or services, and thus provide certainty to implement all operations.

Why is Market Research Important?

It’s so important to your tech startup or your tech business or any kind of business. The reason is that the majority of people when they try to build a business or when they have a product idea they ignore the market research and this is a very vital step.

The main reason that people usually ignore it, because maybe it’s a little bit boring. They don’t know how to do it and they just want to ignore it. Altogether because they don’t find it as important as the technology they build, their app word or the look of their app or basically what they’re trying, what is it that they’re trying to present to the marketplace.

So basically the majority of businesses fail because they ignore the market research.

So now let’s have a look at what it is?

It might be a little bit boring, but it’s so vital to the business itself.

Example: Suppose you have your product named “P”, right this is your product, this is something that you want to build or you have already built and you wanna sell.

Whether it’s an Internet service, a subscription service, or whatever it is that you’re trying to present to the marketplace, this would be your representation of your product.

On the other side, we have our market, we have the potential people that might be interested in your product. But let’s think of it a tiny bit differently. So let’s say that A, B, C, D is the population that you want to target, so this would be the representation of the market itself.

So just to make it simple well, I’ve got four stick figures here let’s say these are four different people ( A, B, C, D ) that might potentially be interested in your product, now let’s see –

What happens if you get your market research wrong?

So basically present your product to the A person and this person says no you present that to the B person whether it’s Facebook Ads, Google Ads whatever, it is this person says no as well they don’t want your product and so on and so D, you go for the C person they would say no as well and the last person they would say no and what happens is that your business is gonna die.

It’s gonna die out your product is never gonna make out and basically, what’s gonna happen is you’re not gonna make any money and you lose all the money that you spend on product development, basis solely because you just built the wrong product and you can simply understand through this example, how dangerous it could be if you pick the wrong product.

The product that no one wants, so that’s why the startups should do proper market research, so in the sure, you don’t build a product that no one wants and that is something very dangerous.

Fraction of the Prototype

The reason is that most of the time, you would say “okay I can’t tell if people want my product or not because I haven’t got it. I want to have a fraction of the prototype, it’s just an idea”. Well, you might be right but there are plenty of ways that you can research the market.

But, it’s not a scheme or it’s not some sort of a weird thing that you want to pull off, it’s just simple market research methods that you can put in place to see if people are willing to pay for your product and that is something very important.

Most of the time what startups do is they go and talk to every single person in a kind of a test market and they provide them with forms and questionnaires and all that and they ask.

If you have this problem “would you buy this product” I don’t think that’s very effective you would be able to acquire some knowledge regarding what people want or need in that particular product, but you cannot make sure that when your product is ready these people are gonna kind of use your credit card or give you money for that particular product?

So there’s a huge gap between selling your product, actually charging money for it and getting money for it, and asking people if such a product exists would you be willing to buy it. So don’t make that mistake.

Proper Market Research

Most of the time you can even go out there do proper market research, make money while you’re doing market research, develop your product and then make sure that you have a winning idea.

We all have more than hundreds of ideas, but you need to be able to kind of handpick the ones that are gonna work and even narrow down to the ones that gonna match the marketplace perfectly.

You have the potential to have more and more people say yes to your product.

Read Also: What is Market Capitalization? How to Evaluate Market Capitalization?

When you do your market research properly, something else is gonna happen which is very cool and the majority of the time you have fewer barriers, in terms of doing a good job in marketing.

When you have a product that people already want, they’re gonna go to the forums and talk about it, they’re gonna give you good reviews. If it’s something that fits their problem well and you are gonna get a lot of word of mouth kind of free advertising.

You’re gonna get pretty social media free kind of people or people blog about your product for free and give you free exposure. That’s nothing when you have a good product a good match to the marketplace.

You are going to make a buzz and people would love to try out your product because of course, this would solve their issue or problem, but it’s gonna make their life better. This should be something that they were looking for.

Benefits of Efficient Market Research

  • Make Informed Decisions – The growth of an organization depends on how the management takes decisions. Using market research techniques, management can make business decisions based on results that support their knowledge and experience. Market research helps you understand market trends, so do it frequently to get to know your customers well.
  • Get Accurate Information – Market research provides genuine and accurate information that will prepare the organization for any future mishaps. By properly researching the market, a company will undoubtedly go a step ahead and thus take advantage of its existing competitors.
  • Determine market size – A researcher can estimate the size of the market to be covered in case a product or service is sold for a profit.
  • Choose a suitable sales system – Select a precise selling system as per what the market is demanding, and according to this, the product/service can be placed in the market.
  • Know customer preferences – It helps to know how customers’ preferences (and tastes) change so that the company can satisfy preferences, shopping habits, and income levels. Researchers can determine the type of product to be made or sold based on the specific needs of consumers.
  • Gather details about the customer’s perception of the brand – In addition to generating information, market research helps the researcher understand how customers perceive the organization or brand.
  • Analyze the methods of communication with the customer – Market research serves as a guide for communication with current and potential customers.
  • Productive business investment – This is a great investment for any business because thanks to this they gain invaluable information, it shows researchers the way forward to take the right path and achieve the necessary sales.

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