Why is Market Research Important?

The top brands in the world rely heavily on data to formulate their strategy and inform their decision making, from product positioning, marketing message, packaging design to even product feature.


By understanding what customers want and how the consumer journey mapping looks like for your clients, you can truly form a strategy to give what your customers want in a way that only your company can deliver or in a way that no competitors can deliver better than you.

This includes knowing and influencing how your customers become aware of your products and solutions, form perceptions of quality and eventually which channels customers go to purchase and repurchase your products and solutions.


Using analytics and insights to improve on the conversion at every stage of the consumer funnel can result in a significant difference in the end outcome.


Consider this, a Brand A selling product X with the following consumer funnel: 1,000 customers knows about brand A, of which 10% (100) think product X is good, 5% (5) of those who thinks it’s good actually buys it. Imagine if you could improve awareness to 1,200 customers and raise the percentage of these 1,200 who think product X is good and buys it to 15% and 10%, you would have increase sales of product X from 5 to 18. Now, multiply this by a few more zeros. I think you get what I mean.


Consumer Purchase Funnel


What is Market Research?


Market research is the activity of gathering data and information about what the market needs and prefers. This includes every aspect of the business – from branding, product, pricing, marketing, channels, and customer service. Knowing how your audience feels and behaves, allows you to take steps to meet their needs and eliminate or narrow the experience gap – what the customers expects you deliver versus what you deliver.


Market research is marketing’s best friend. It helps marketers predicts what customer needs, communicate the most desirable traits of the product or solution and at times, even create demand that wasn’t there in the first place. Marketing and research go in hand in hand. Good market research is a strong multiplier for marketing, helping in the implementation, refinement and delivery of the goods or solution to the market.


Why is it even more important post-COVID19?


Without research, business decisions are based on previous consumer behaviour or even intuition.


The problem with the COVID19 pandemic is that consumption habits have changed and what appears intuitively previously may not be now. For instance, ecommerce adoption by both merchants and consumers have leapfrogged by at least half a decade, experts say. Commuting patterns have also changed, and with it, timings, and mode of consumption of advertisement as well as purchasing habits.


Source: Sprout Social

Source: Sprout Social

The aim of market research is to ensure that decisions you make are supported by objective empirical findings from the end-user that the product will be sold to and not the intuition of the marketer selling it. In short, market research ensures that the companies strategies and decisions are insight-driven.


By identifying and collecting feedback from your target audience, you get insights of how they feel about your brand, your products and services, as well as your marketing message before you go to market, in a big way. Subsequently, you can continue to gather feedback and adjust as you move to new geographies etc, allowing you to improve continuously.

This will lead to a higher chance of success, both in the short and long term.



How does Market Research translate into a Winning Strategy?

Winning Strategy derived from good market research focuses on the 3 Cs – Customers, Company and Competitor.


A good strategy articulates how customers' needs can be delivered by your company in a way that your competitors is unable to, given the context that you and your competitors are operating in. It is about finding that competitive edge through a differentiated, well thought-out set of activities.


With good market research and careful strategizing, the chances of success in finding this sweet spot become much higher.



Conclusion


With faster product cycles, stiffer competition, changing habits because of the pandemic and your competitors utilising more data-driven decision making, it is even more imperative that you also practice insights-driven decision making!


Written by Kok How Lee, founder of KeyHole Insights. Kok How is an economist, strategist and consultant with over 15 years of experience in both the public and private sector.


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