Market Research — The Elixir to Improving Your Business

Have you wondered what thought goes into building a product and how companies manage to come up with the right features that a consumer would appreciate? The truth is that a ton of research goes into coming up with the right product idea and figuring out what a consumer expects from you when it hits the market.

Companies partake in Market Research to understand just about everything a consumer expects from their product, like pricing and the different features on offer. This is done by researching the consumers of that particular target audience and understanding how they’d react to their product. Not only is Market Research one of the most important factors in determining the success of the product, but it is also key to arriving at the right market segmentation and product differentiation from their competitors and gain a significant advantage. It effectively links the consumers, customers, and marketers through the information that will help the company define marketing opportunities, product likability, features, and existing problems you can improve on.

In simple words, it helps you build a product for your customer and market it efficiently!

Defining Your Market Research Process

It is extremely important to have the right framework for your market research initiative. Asking the wrong questions might not just give you the wrong answers, you could end up with disastrous results. Case in point, Tropicana changed its iconic logo without conducting the right market research and consumers were not very happy with the new look. Sales dropped by 20 % and Tropicana went back on their decision and decided to continue with their old logo in only a few months. This goes to show how important it is to define your market research process.

The first step of the process is to define the problem you need a solution to and identify how you’d go about conducting this research. It is imperative that you do this as illustrated by the previous example. While defining the problem you need to make sure that your questions can be answered by your customers in an easy way and that you do not end up with too much or too little information. Thus, defining your problem and what solution you expect will give you much-needed direction in an otherwise dark alley. In continuation to our previous example on Tropicana, A good problem statement to address would have been

“Would a change in our logo help shift consumers from a competitor to our customer base along with what impact it would have on our customers”

Once you have your problem statement in place, you need to identify how to conduct your research in the most cost-efficient and time-efficient manner while at the same time, managing to get a large number of data points with a good accuracy percentage. Consumers can be biased or distracted if you do not get your approach right which can lead to getting wrong information from the market. The most commonly used approach for market research is through questionnaires. While designing your questionnaire, it is important to ensure that you don’t have too many questions and that the answers to them can be

used to come to a solution for your problem statement. Each question should be framed correctly so that customers do not misunderstand the question. A simple trick any seasoned marketer will use is to group simple questions first to encourage customers to answer. Questions of the same type should also be grouped together to make it easy for the consumer. Now you know why demographic questions are grouped at the beginning of the end.

Marketers also need to come up with what is called a sampling plan to improve the accuracy of the survey. The sampling plan addresses three key questions:

Whom to Survey?

How many people should they survey and

How should we define the accuracy of the survey?

The first two questions are focused on defining the target audience, they can include demographic factors like age, sex location, ethnicity etc. This is followed or precluded by identifying the right size of your survey audience. The third question helps you determine the accuracy of your survey by using sampling probability. This helps you understand the deviation from your questions and get accessible insights.

Once you have your survey results in place, the next crucial bit in your market research process begins. You now need to collate your findings from all your sources and analyze them to understand what your findings have for you!

Collecting your results can be a very expensive affair. Some people can be indifferent to online surveys. A lot of research goes into figuring out the best time to send a survey. Research says that any time between 6 PM and 9 PM generally works best on weekdays, with Mondays being the exception. Of Course, everyone has their own approach to doing this.

Analyzing your survey results becomes easier when you have a framework to tabulate your data. Marketers often summarize every data point to make their findings easy to read. This can be done by analyzing averages, measuring dispersion, and using statistical decision models to figure out the best way to quantify their findings into actionable insights. A well-constructed Market

The research process will more often than not give you actionable insights into what you can do to accelerate the growth of your customer base.

How Beats by Dr. Dre defined their marketing strategy through consumer insights

The 2014 ‘Hear What You Want’ campaign by Beats by Dr. Dre was based on consumer insights that helped them understand those noise cancellation headphones are a great market and they could potentially create a best-selling product with the right strategy.

Market research on athletes also helped them understand that they often used music to improve focus and build confidence. Thus, they designed an advertisement that featured different athletes using Beats by Dr. Dre Headphones to drown out the noise from voices of their critics and rivals to focus on positive and motivational thoughts before competing. The emotional tug combined with an effective marketing strategy based on Market Research helped Beats Dr. Dre become a product for the ages and the best-selling headphones in the USA and Europe before a £3bn acquisition by Apple.

Here’s a link to one of the advertisements: https://www.youtube.com/watch?v=nYYBzjAPh7E

Funding towards market research has been at an all-time high as companies are realizing the value of customer opinion and the impact it can have on your success. Not only has it made it easier to build a better product, but marketers are also able to sell their products more efficiently and to the right target audience. Most big companies have their own Market Research departments. The scope for these companies often extends further than questionnaires and onto studying consumer habits, shopper behavior, industry analysis, and their motivation to buy their products.

These often lead to market research departments having a big say in defining brand strategy and consumer business development methods.

— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —

Author: Harish R
Editorial and Digital Marketing Team, NjM
Class of 2023, NMIMS Mumbai

Creatives: Priyanka Mohan
Creatives Web & Promotions Team, NjM
Class of 2023, NMIMS Mumbai