Importance of Marketing Research

Toying with a new product idea, wanting to boost up your sales, or planning to launch a new product, the importance of marketing research has grown unprecedentedly, especially in the times of recession.

In fact, Philip Kotler, the marketing guru, acknowledges that it is only by marketing research, planning, implementation and control that effective marketing management can be accomplished. Before we can highlight the benefits of this research in management, let us effectively look at the concept.

It is the process of gathering, recording and analyzing the data related to products and services. This need for market research is derived from the concept that only by understanding the needs and wants of the target audience and by effectively meeting them, you will achieve the organizational goals and surpass the competition in the specific market.

Thus, arises the need to collect data about the customers, competitors, and other forces in the marketplace. This data in turn is collected and analyzed to make relevant marketing decisions, be it in relation to setting up a business, developing a product, creating a brand or coming up with an advertising campaign.

There are two methods of marketing research, namely primary research or secondary market research. While primary research seeks to understand customer motivations, opinions, and needs through quantitative and qualitative field research, secondary market research uses already existing sources of information to gather the data.

This research helps the marketers to make a decision about the product or service. Sometimes a marketer might believe that the new product or service is useful for the customers.

However, research may show that customers do not need a product or are meeting their needs with a certain competitor product and so on. Similarly, good research strives to provide options for the successful introduction of new products and services. This makes the market entry of a new product or service less risky.

Marketing research helps in ascertaining and understanding competitor information such as their identity, marketing network, customer focus, and scale of operations. This helps in surviving and leaving behind the competition. Moreover, with market research you can understand the under-served consumer segments and consumer needs that have not been met.

Research helps provide customer information in terms of their location, age, buying behavior, and gender. This helps the marketers zero in on the target markets and customers for their products and services.

Apart from profit maximizing steps such as item optimization, customer profitability analysis, and price elasticity, marketing research allows you to find out methods that can help you maximize profits.

For example, a product's price elasticity research can help you ascertain the impact of an increased price on the sales and the profits of a product. This emphasis on profitability also helps the company's focus to shift from maximizing sales to increasing the profits of a company. This helps the company survive in the long run and maximize its profits.

Increasing the sales of your products or services helps a company in maximizing its profits. By understanding the customer's needs, wants, and attitude towards the products and determining whether your products fit the bill, marketers can increase their sales.

This helps in not only increasing the sales to the target customers and people already using the product, but also converting the non users into customers for the product.

With an understanding of the customer, competitors, products, and the overall industry needs, this research can equip the management with the power to make better decisions.

However, the importance of marketing research is limited to just being a marketing tool that helps you make an informed decision. So, rather than basing all your management decisions on a customer survey, use this tool as a guide and supplement it with intelligent decision-making.