The Importance of Market Research
Why It's Critical For the Success of any Business
Market Research is defined as the process of gathering data on goods and services to determine whether the product or service will satisfy customers' needs. Market research can identify market trends, demographics, economic shifts, customer's buying habits, and important information on competition. Knowing this information is essential for the success of any business. It will guide entrepreneur in making strategic business decisions, uncovering unmet customer needs, and in many cases, help to discover new ideas for products or services.
Every entrepreneur runs their business idea by their nearest and dearest, gauging their reaction and obtaining what they deem to be useful information. Although primarily, it can produce ideas and objections that may not have been explored yet, it is vital to remember who these reviews are coming from; they will be biased! An entrepreneur’s enthusiasm and passion for their business idea, along with their personal connection to those they are asking will mean the data is far from relevant or useful. In order to take any business idea to the next stage it is essential to prove, using reliable information, that the idea is wanted or needed by the target market. Every entrepreneur will know starting up a business is taking a step into the unknown; it is therefore essential to arm your business with as much information and data on your target market as possible. Conducting primary market research is an opportunity that an entrepreneur should not miss out on; it is a chance to get into a customer’s head and get to grips with their purchasing decisions.
The majority of start-up businesses will produce a business plan to outline vital strategic information before launching a product or service. It can however be noted that the level of research that is conducted to strengthen a business plan is relatively low. It is vital to conduct both primary and secondary market research into your business idea to fully understand the feasibility of the project as well as key target market information.
Secondary market research will give a background look into your market, the success of previous products or services as well as your target market’s previous purchasing habits. By conducting such research it can give entrepreneurs an outline of where to take further research; it will reveal holes in current data and areas for deeper investigation.
Start-ups have a series of barriers to overcome when seeking credit; primary research can help remove some of these. Once primary market research has been conducted and an idea has been modified and finalised into a business plan, a funding will increase dramatically. By showing an investor primary market research findings that underpin a business plan and highlighting the potential for success, it will present as a lower risk to them.
In short, market research helps the entrepreneur to:
Ø Communicate effectively
Ø Identify and understand opportunities
Ø Pinpoint obstacles or problem
Ø Benchmark and evaluate his success
Dr. Harmeet Matharu, HOD, Commerce and Management Department.