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Why should I commission market research?

Do you tend to make business decisions based on your experience, the facts known to you, or your intuition?

Perhaps the way forward is obvious. Maybe the decision does not merit a huge spend on fact finding. Or maybe action is required quickly and there is no time for formalised research - even though it would be beneficial.

There is nothing wrong with intuition and common sense. They are a natural part of decision making in business – we all do it. However, when decisions require large financial resources and where the costs of failure are high, you need robust and reliable data. You need market research.

The purpose of market research – reducing risk

Whether you are looking to enter a new market, build your position in a market, create a new brand, find out how satisfied customers or employees are, target markets more efficiently, develop a new product, or test the effectiveness of an advertising campaign, the purpose of market research is to reduce risk.

Information you can obtain through market research

Market research is the systematic collection, analysis and interpretation of information relevant to marketing decisions. Common information requirements met through market research are listed below although this is by no means exhaustive and can, of course, be classified in different ways.

LabelTypes Of InformationMethods Used
Market Size & Structure
  • The value of the market in currency value and units sold each year
  • The historical trends in size of the market
  • The key consuming segments of the market
  • The competition and their shares
  • The route to market
  • Published market research reports
  • Desk research
  • Market surveys aimed at calculating consumption and brands purchased
Use Of & Attitude To Products
  • Awareness of suppliers
  • Attitudes to suppliers
  • Attitudes to products
  • Volume and frequency of purchases
  • Quantitative surveys carried out by telephone, mail/internet, face-to-face interviews
  • Focus groups
Customer Satisfaction
  • Ratings of customers (and sometimes potential customers) to show what they think is important in influencing their buying decision and how satisfied they are with their supplier on each issue
Promotion Effectiveness
  • Key messages for campaigns
  • Effectiveness of adverts and promotions
Brand Impact
  • Awareness of brands
  • Values attached to brands
  • The influence of brands in the purchasing decision
Pricing Effectiveness
  • Optimum prices
  • Price values attached to features of the offer
Product Tests
  • Likelihood of purchasing different products
  • Attitudes to products
Segmentation
  • Opportunities for segmentation based on demographics, behaviour or needs

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