The Role of Market Research

The Role of Market Research

What is market research?

• Market research is the objective collection, compilation and analysis of information about a market

• Effective market research will help the business to

  • Reduce risk when launching new products or entering new markets

  • Identify and understand the future needs and wants of customers

  • Understand consumer behaviour 

  • Identify how much consumers are prepared to pay

  • Identify potential gaps in the market (market niches) which can be exploited to increase sales

  • Identify competitors and gauge their potential strengths and weaknesses

• With effective market research businesses are well-placed to make informed decisions about the most effective way to use their valuable resources and develop a suitable marketing mix

• On-going market research helps businesses to update their marketing strategy in line with customers' changing needs and preferences

Market Orientation

Market orientation

• Market orientation is an approach to marketing that focuses on the needs of consumers and uses this information to design products that meet customer needs 

  • Consumers are at the centre of marketing decisions

  • Products which respond to consumer needs are developed 

  • Market-orientated businesses are usually more adaptable to to changing customer needs

    • For example, universities often develop new courses based on the feedback they receive from students and the changing requirements of employers 

• Market orientation should lead to a business benefitting from increased demand, increased profits, and a valued brand image as its products are more desirable than those of rivals

Tools of market orientation

• Market testing is the process of assessing customer reaction to a product or service before it is launched

  • It determines whether there is a potential market for the product or service

  • Features that are likely to be most appealing to consumers

  • For example, a healthcare business may conduct a focus group for a new brand of toothpaste

• Customer focus means putting your customers' needs first

  • Customer-focused businesses focus on enhancing customer satisfaction and building strong customer relationships