The importance and benefits of market research
Understanding the market you operate in (or would like to operate in) is critical to forming and achieving an organisation’s strategic plan. In addition to the organisation’s goals, key performance indicators, team structure, operations and finance plan, firms should incorporate findings from market research in their strategic plan. This includes analysing their customers, competitive landscape, business environment, understanding the market size and opportunity, and identifying emerging industry trends. Below are four benefits of market research and how it can be used to grow your business.
1. Improves understanding of your customers
Market research provides you with an opportunity to analyse your ideal customer on multiple levels. It can be used to answer questions like:
Who is my ideal customer?
What products or services do they want?
How are their needs and wants changing?
How do they want a product or service supplied?
The more information you have about your ideal customer, the better you can meet their needs. Furthermore, market research ensures that you develop products and services that are relevant and helps to target customers more effectively.
2. Understand your competitive landscape
Knowing who your competitors are and analysing their strengths and weaknesses could provide insights on how you can differentiate your products and services. With market research, you can benchmark your product or service against competitors and identify opportunities for improvement and growth. Furthermore, you can evaluate competitors’ pricing, marketing, sales and distribution strategies.
3. Improves understanding of the business environment and market size
Understanding your business environment is crucial for success. This includes understanding the external environment in which your business operates, including political, economic, socio-cultural, technological, legal and environmental factors that could affect your business.
Additionally, market research helps with understanding the size of the market. Understanding market size helps you distinguish between two categories: the addressable market, which is the total revenue opportunity for your product or service; and the available market, which is the portion of the addressable market for which you can realistically compete. Without this information, you may be competing in a market so small that chances of success may be limited.
4. Identify emerging trends and take advantage of those opportunities
Primary market research is often used to identify emerging trends in an industry. This includes surveying and interviewing key stakeholders, including customers, suppliers and distributors, to name a few. This provides you with an opportunity to stay ahead and take advantage of opportunities before competitors.
If you would like assistance with market research, click here.
Boraine Consulting is an independent boutique accounting and consulting firm operating in South Africa and the United Kingdom. Our research-driven process serves as the foundation of our consulting services, and provides our clients with the necessary context, intelligence, and key implications to navigate the market environment.