Market research can help you effectively develop and launch new products and services. It can also tell you if you need to make changes to existing products and services and/or alter the way you are marketing them. Perhaps it will help you expand into new markets or identify new prospects based on age, income level, or location.
Research can be conducted in many ways: by mail, phone, online, in the form of surveys, interviews, focus groups and more. It can be qualitative and/or quantitative in nature, complicated or simple. Not only does it enable organizations to sell products, it also helps set policies, shape laws and promote ideas.
“As a society we are fascinated with marketing,” says Donald I. Shifter, a marketing professor in the department of business at Fontbonne University. “Almost every aspect of our lives what we eat, wear, find entertaining is influenced to some degree by marketing.”
Shifter defines marketing as the process of satisfying customer needs, adding that wants and needs are ever expanding with each generation no matter what country one lives in. The key to this, says Shifter, is to research who customers are and what their needs are.
Smart Business spoke to Shifter about what companies and organizations need to know before they begin the actual process of conducting market research.
What is the best strategy for getting started on the right foot?
Know the demographics of your customers and how your products will match their needs. Additionally, the geographic location of customers often dictates their needs. The research you are contemplating also must accurately take into account the current positioning of similar products, so you can adopt the right prices and places to sell your products.
Why is this knowledge so important?
It is important, if not vital, to know the customers’ needs because we live in a time when product options are expanding exponentially and customer preferences are also growing. Thanks to the Internet and all the information it provides, as well as social networking, there also is a growing tendency for more interaction on the customer’s part in making purchase decisions. Today’s customers are becoming increasingly sophisticated and their behavior can change quickly and/or be difficult to predict.
How can knowing your customers help improve results?
Marketers need to identify and understand the characteristics of their targeted customers to avoid developing products that have no chance of succeeding. For example, baby boomers might be interested in new types of vodka or wine offerings but probably won’t be interested in expanding their beer preferences. In the music field, most symphony companies are struggling as the younger generation is pursuing a wide variety of new kinds of music as well as the ways in which it is delivered to them (there are choices between using an iPod or purchasing recorded music and listening to it on a CD).
How does market research help the bottom line in the long run?
It can help in many ways. For example, it can help avoid costly manufacturing investments that won’t pay off. For example, say you’re determining whether to begin manufacturing a new model SUV automobile; however, your research shows smaller, higher mileage, environmentally friendly models would represent a more profitable investment. Or it could be that a competitive analysis would reveal that potential customers are already being satisfied and that there would be no competitive advantage for your company’s production of this specific product for the marketplace.
How has the Internet changed the face of market research, and to what benefit?
The Internet has revolutionized the way information is gathered, in scope, accuracy and even costs. The researcher must be skilled in the Internet’s use and in his or her ability to interpret the results for the action plans that ultimately must follow. The Internet has opened a very wide, global market, and the implications of data gathering are important, especially in basic goods (sneakers, jeans, cookware). One of the major benefits of the Internet’s application is that a much wider net is being cast for reaching customers as well as the relative low-cost to achieve and process customer orders. Wherever possible, the use of the Internet can benefit a company in risk reduction. The customers’ responses can be analyzed for future product inventory investments and the improved calculations for customer demand forecasts.
Why and when does ‘good research go bad’? How can you prevent this from happening?
This can happen when the product itself is not trending up or has run its course. Also, the funding to support focus groups and mailings along with online interviews could fall short, resulting in conclusions that do not yield actionable results.
DONALD I. SHIFTER is a marketing professor in the department of business at Fontbonne University. Reach him at (314) 889-4522 or email@example.com.