Savvy Businesses Realize the Value of Market Research

Summary: Not all new product ideas are good business ideas. Before deciding whether to launch a new enterprise, business owners need to find out whether there is a market for their product or service.

2 minutes to read. By author Michaela Mora on January 8, 2010
Topics: Business Strategy, Market Research

Value of Market Research

Smart businesses understand the value of market research. Every business that wants to acquire and retain customers needs to conduct market research, particularly in these current economic times. Here are three fundamental questions about target customers that businesses should ask.

1. Will They Use the Product or Service?

Product usage is conditioned by many factors, but the most important one is whether there is a need for it. Other factors include socio-cultural trends, competing alternatives, situational factors, perceptions, attitudes, and habits.

2. Will They Buy It?

Even if there is a need, this does not necessarily mean you can sell it at any price. There are numerous instances in which a product has great appeal, but customers are not willing to pay the price the company wants to charge. Pricing is also influenced by a number of factors beyond a company’s financial situation, including competitors’ pricing, alternatives, brand perceptions, and more.

3. How Will They Have Access to the Product or Service?

Product awareness, positioning, and distribution are keys to the success of a business. Low awareness, poorly executed marketing, and brand strategies, inadequate operational systems, and an inefficient supply chain will often lead to wasted resources, higher customer acquisition, and retention costs, and revenue loss, despite all indications that a need for the product exists and that customers are willing to pay for it.

Consider More Than Products

When thinking about customers, think of perceptions, customer experience, and behavior in the context of their core values, lifestyle, family situation, culture, the competitive landscape, their particular socioeconomic situation, and the economic and political state of affairs that surround them.

Companies come in contact with target customers through public relations activities, advertising and promotional programs; product or service usage; and interaction with sales representatives, employees, technical support, and customer service.

These customer touchpoints often overlap, meaning a company would benefit from a customer-centric market research plan that permits a 360-degree‐view of its target market. This will ultimately deliver insights to guide business decisions that lead to sustainability and growth.

As published on January 8, 2010, by the Dallas Business Journal