Ignoring the process of gathering and evaluating market data is one of the most common ways in which companies are penny-wise and dollar-foolish.
Marketing research helps to determine whether your products and services meet the needs of potential customers, and what your optimum pricing strategy will be. Marketing research also allows you to get the maximum impact for your advertising dollar by showing you ways to differentiate your product from others on the market and how to target different consumer groups in different ways. By spending marketing research dollars, you will avoid wasting big advertising dollars.
A business colleague of mine recently bemoaned the tremendous amount of resources her company had allocated to a new consumer product, which was suffering dismal sales results. I asked the woman whether her people had determined what had gone wrong so that it wouldn't happen in the future. They had not found the problem, and as we talked further she revealed that no market research had been performed for this product.
Following our conversation, my colleague's company conducted marketing research for the product. The results indicated that the product was being offered in the wrong place and at the wrong price. There were other geographic areas where the product might work at a substantially lower price.
Of course, one of the first things a marketing research effort must determine is whether or not a new product should be introduced at all. Once the product is determined to be a viable product, then marketing research data can be used to form a marketing plan. Good marketing research provides information about target location and pricing strategy. It also tells you the right time to offer a product, and your optimum-targeted customers classified by geographic location, age, marital status, income, possessions, etc. Also, one of the most basic benefits of marketing research is obtaining a clear idea of your competition.
The marketing research effort begins with members of your company meeting with a research company to specify the objectives of the marketing research. …