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We dispel common myths surrounding market research and why it is still relevant today
By Anderson Market Analytics
A plastics manufacturer thought that its customers were mostly interested in environment-friendly products. The company spent much of its financial resources and product development funds to manufacture a superior environment-friendly product. In addition, it also spent its resources on a creative marketing campaign. The company promoted its product’s environment-friendly attributes. While the advertising was creative, unfortunately the product failed miserably.
Turns out, its customers were not looking for an environment-friendly product. Instead, they wanted a product that is durable and affordable. If only the company had undertaken a market research initiative and understood what its customers really wanted, it could have saved itself a lot of trouble. Besides, it could have saved a whole lot of money which could have been better spent elsewhere.
Failure to do market research and understand what customers are seeking is a recipe for disaster.
Market research is commonly misunderstood and sometimes maligned by businesses. But to those who are disciplined enough and think strategically, market research data is an extremely important function of any business organisation.
Whether you are collating information for a new product launch or merely finding out if people are satisfied with your level of service, market research plays a major role in business and product strategy.
Generally, businesses have two major goals – to return profits and to grow. In both these goals of any business, market research plays a key role in ensuring that the business remains focused on its goals. Failure to study the market and your customers could lead to more wasted time, effort and money. Sometimes, it could even cause the collapse of a product line or service.
But why do people shy away from market research?
Below are some reasons commonly given to wave market research away and why they are just another red herring.
1. Market research is too costly
Contrary to common perception, the cost of a market research is relative. In fact, it is dependent on the scope of research. If what you seek is lots of information, the cost will surely be higher. In this sense, one needs to be pragmatic.
The trick is to first determine how much your budget is. Then scope the research project according to your budget. This saves a lot of time and frustration.
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2. Market research is too time consuming
“We don’t have time for market research. We need solutions now!” is a commonly heard quip in the corporate boardroom. However, it is another misunderstanding on market research stemming largely from over generalisation.
Not all market research initiatives are time consuming. Some research projects can be completed in as little as four weeks. Others take longer, perhaps spanning a few months. Again, the trick is to scope the project well. Start planning early and determine from the outset when you need the results. If you need the results for presentation purposes for an event happening next week, then market research will not cut it.
3. Market research is for those who can’t sell their product or services
Actually, market research goes beyond mere insights to make the next sale. In fact, with the right approach, research data can potentially identify new groups of customers whom you may have missed. This could translate into a new line of customers for your business.
In addition, research can also yield new insights into reasons why customers choose your product or services. This could yield some unique insights on how you can continue to keep your customers happy and delighting them further.
4. Market researchers don’t know our business enough!
This could be partially true. But it is better for the market researchers not to know your business too well initially. This way, they would not be influenced by preconceived opinions and perceptions on how the industry segment or your customers behave.
Starting on a clean slate, market researchers remain independent and look at various perspectives to solve the problem. Eventually, they will gather enough data and amass sufficient knowledge about your business by talking to customers and competitors to give valuable feedback you would otherwise miss.
Running business is not just about making a sale and keeping the customer happy. One should also watch for competitive developments to stay ahead of the curve. Or else one could easily lose customers to a competitor.
5. What about the ROI on market research?
Market research is the beginning of a process. When done well by capable analysts, it yields great financial benefits. Without research data, one will be second guessing what customers really want. While trial and error may work for some, it is not the norm.
Market data gives interesting insights into your business, competitors and most importantly your customers. Eventually, with the right marketing messages, the return on investment (ROI) will be convincing.
Market research is one of the core services of Anderson Market Analytics. For more information and details on findings, please visit our website at www.anderson.my or call Alan Oh at 012-208 5823 or Dan Loh at 012-278 8794.