“The price of light is less than the cost of darkness.” – Arthur C. Nielsen (Founder of one of the world’s largest MR agency, AC Nielsen)
Market research is more important today than ever because of the increased complexity and cut-throat competition in the business environment. Customers are now exposed to a wide choice of products and services, thanks to the cheaper and effective digital marketing platforms. Customer-driven organizations need to understand what their consumers want, develop products that those consumers will use, and maintain a competitive advantage over other companies in their respective industry. The main objective of market research is to ascertain how the target audience will accept a particular product or service. Market research also helps marketers capture information for market segmentation and tailor their advertising efforts.
The ultimate objective of market research is to discover consumer insights and the “voice of the consumer” which can be used to drive business decisions and implement a marketing strategy for an organisation. It also further asses how the consumer behaviour is impacted by the changes in the marketing mix. In this exploratory series, we will discover how Market Research has been helping organisations in their branding, marketing and advertising efforts.
Brief History of Market Research
Market Research was developed as an idea in the late 1920s by Daniel Starch, at a similar time when advertising was introduced in the United States. Daniel’s theory was that, if the advertising is effective, it must be must be seen, read, believed, remembered, and then acted upon by the intended target audience. He started interviewing people about the recollection of ads in various magazines and publications to understand the reach and effectiveness of the same. And in one century of its existence, as any other industry, the market research industry also has gone through phases of innovation and transformation. Today, the industry is growing at 7-8% per year and is expected to touch $100 Billion by 2025.
Why should organizations conduct Market Research?
To win in today’s digital era, companies need access to key insights on consumer behaviour and market trends. Market Research is one of the most powerful tool to engage with customers, and discover their wants and needs. Regardless of what growth stage the company is, a structured Market Research is critical to confirm and improve the business with reduced risks.
Organizations can benefit by:
- Discovering opportunities to serve their potential customer base
- Identifying the best way to meet the unmet needs of the customers
- Estimating the addressable market size
- Identifying the window of opportunity and barriers to enter the market
- Segment the target market based on demographics
- Understanding the competition, their strategies and market share
- Feedback on products and services offered
- Measuring the advertisement effectiveness
In a nutshell, the three key facets or Market Research are Market (size and scope for a particular product or service), Offering (Define and Design a suitable product or service) and Customers (Understanding the target ideal customer)
Interesting case studies
Nike, one of the world’s leading sportswear brand wanted to revamp their apparel line in the 90s. The company wanted to widen their market and cater their clothing offering to the budget fashion savvy segment also. Nike conducted a large-scale product and pricing market research to identify the unmet needs of their target market. Based on the research, the company decided to broaden its product spectrum and increase its market share in the middle and low-price ranges. Though their focus remained on the high-end market, new product range catering to this unmet need market were introduced and was one of their top marketing success story.
Starbucks, the world’s biggest coffee chain, heavily relies on customer data to develop new products and offerings. The company constantly analyse and monitor social media, consumer feedback from in-store product testing while launching a new product. Starbucks has its own customer feedback platform and based on the inputs from this, they wanted to tap into the unmet needs of the health-conscious customers. The company started offering dairy free alternatives at their outlets including Soy milk, Coconut milk and Almond milk. Based on the customer trends, it also started serving Oat milk to the European market. The new products were highly successful and brought in a larger customer base of health-conscious coffee consumers.
Get in touch with us for more information on how we can assist you with Market Research as a tool to grow your business. We can run a diagnostic on your firm to establish what type of research you would need.
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