To start with, ‘Market Research’ is not just a function of ‘Marketing’, it is the stepping stone to formulating the organisation’s overall strategy. Its objective is to delve into various facets of the consumers the organisation aims to target and understand it in depth so as to direct the right efforts to garner success for the organisation. Apart from understanding the demographic-socio-economic composition of the population in a certain geography, it also looks at competition objectively.
Market research helps to understand the wants and changing trends of the target population and understand the strengths and gaps in the competitors’ offerings. It is about not depending upon assumptions, rather verifying facts on ground zero. The method and technique of the research depends on the stage the product is. Some common tools of market research are:
n Reading: There are several academic studies already conducted on most topics. Especially when profiling the target market, it is easier to refer to census data on demographic qualifiers. This can help identify the market potential, existing products/players, volume of sales, etc.
n SWOT Analysis: When one looks at the organization’s desire to serve, it is imperative to understand itself first. Strength-Weakness-Opportunity-Threat Analyses look at every aspect/department (separately or as a whole) of the organization and evaluate its potential to deliver the desired results. This is majorly introspective and uses a magnifying glass view of every process/policy/method/machinery in the organization. An organization may have an excellent quality control method but has no R&D facility, so even though they focus on delivering right quality, they may not be able to keep up with changing times and fail in the long run. The SWOT Analysis will bring this out for the organization to be followed by appropriate strategic decisions and actions. It should be the most repeated activity in any organization.
n Sales Information: One can collate and analyse the sales/usage data of own and/or competitors’ products. This is a clear indicator of buyer behaviour. This also helps chalk the changing trends. The challenge here is to get access to accurate information especially about competitors’ products. This is periodic and an ongoing process. Mostly managed by the sales/marketing teams.
n Market Survey: This is the most extensive tool with a very wide scope of application. It is like collecting data from the horse’s mouth.
Market surveys are of several styles and each has adequate merit and applicability. It may be a dip stick on a small focus group or it may be on a large scale. It can be via personal interviews, filling questionnaires online or on paper. It can be at an industry level or just a organization level and may be limited to a smaller or larger geographical location. The crux of market survey is to compile the data, pull out the statistics, analyze them and derive conclusions from the facts available. Many times buying behaviour alters in course of time, while it could be because of changing trends/styles it could also be a reaction to other factors – economic trends, some incidents/occurrences in that geography etc which is not directly indicated in the market survey.
The other factor is, a whole market survey effort may go waste when one realizes that the targeted population was inappropriate for that study.
So if one wants to truly understand the strengths of the competitors’ products, it is pointless to interview their own consumers, it is important to identify the persons who use the competitors’ products and understand their reasons for that.
n Product Modelling: This is a very effective tool to evaluate the acceptability, appeal, usability and utility of a given product. Usually to understand the potential of a new product or variant. Product modelling gives the organization a feeler of the uptake of the product. If any feature of the product is not liked, then they have the choice to replace or remove it. And if the product is appreciated, they have to be prepared to meet the demand.
n Test Campaign: Similar to product modelling is testing communication campaigns- mostly advertising. When an organisation wants to change its branding or when they want to make a major change in the advertising strategy, it is appropriate to test its acceptance by running the same on a small scale before burning advertising budgets in ineffective/harmful campaigns.
Market research with all its methods and tools helps an organization face the reality of its situation. It is then the ability of the decision makers to create the right strategy in order to overcome challenges and build strengths. The relevance of ‘Decision Making’ can never be over emphasized here. Therefore, no matter what tools and techniques one uses, if the management fails to read the message, all market research fails.
It is therefore, imperative for management and boards to bring an open mind and willingness to accept facts presented and to be able to immediately take relevant and concrete actions to bridge the gaps and build a successful business strategy.
