Market research is indispensable for companies. In recent years, this research tool, which is considered a subfield of marketing research, has become increasingly important for business decisions with far-reaching implications. New developments, changing requirements and demographic change make it necessary to have a precise knowledge of the market. This is where supply and demand meet. Before a product innovation, a price determination, a marketing measure or other changes, it is therefore important for companies to know the future sales market exactly – research is essential at this point to know the needs of the consumers exactly. We support you in identifying the wishes of your customers with market research.
How do you define market research?
The following is therefore often used as a basic definition of the term: Market research is the systematic collection, processing, analysis and interpretation of data on market conditions that are required by the company in specific market situations. With the help of market research, companies can identify which products or services are in demand by customers and which are less important. In addition to the needs of customers, market research provides other target group-relevant information that is important for the company. This includes demographic data, salary structures or information on prices that customers would be willing to pay.
With the information obtained in this way, companies are able to adapt their product policy to the needs of the target group or modify existing strategies. However, market research not only serves to identify customer needs, but also analyzes the behavior of competitors and suppliers, the market constitution of a submarket and market trends. In this way, it provides a comprehensive overview of the market, which can be used by the company as a decision-making aid in many respects.
Why do companies need market research?
Surveys conducted on a regular basis are a crucial aid in business decisions involving the customer. With its early warning function, market research can identify risks in good time and thus make them much more predictable. This significantly simplifies decision-making in the corporate context and helps to reduce the identified risks.
Targeted market research also helps to better select information from the environment. This enables the company to control and implement processes much better. Market research can thus make a lasting contribution to the company’s goal-setting and implementation. Tasks and objectives Market research must therefore fulfill the following specific tasks:
Early warning function: early detection of risks and thus possibility of timely reaction on the part of the company. Innovation function: development opportunities and product innovations can be better anticipated. Product development can act more strategically.
Intelligence amplification function: the will-forming process within the company is promoted, the work of the company management is supported.
Uncertainty reduction function: facts become more concrete and objective.
Structuring function: learning processes within the company are promoted, targets become more comprehensible for all parties involved. Selection function: Information that is relevant for further business decisions can be better filtered out of the flood of information.
With the help of market research, concrete recommendations for action can be formulated for the company. This includes, in particular, findings for the area of marketing: development, review and possible adjustment of previous marketing measures and product innovations through preliminary tests or test markets.
Monitoring marketing success by analyzing market shares and sales development as well as checking customer satisfaction. Here, the certification of a company with a service seal such as Top Service (DIQP) or Geprüfte Servicequalität (DIQP) can be helpful. Both certifications already include the customer survey and thus provide an evaluation of the customer survey in addition to a seal of approval. The standard for carrying out the procedure was developed by the DIQP Deutsches Institut für Qualitätsstandards und -prüfung e.V. (German Institute for Quality Standards and Testing) and certification is carried out by SQC-QualityCert.
It is also possible to investigate customer preferences and precisely identify customer needs. The company can adapt its offers to these needs and open up new markets more effectively. In addition, the entire marketing process can be modified in such a way that it directly addresses the target groups that are important for the company.
How market research works
Market research is a living process consisting of several phases. The basis is the research question, which, with the help of the survey, provides the necessary information requirements and thus – in the best case – answers the research question. Finally, the information necessary for the answer is collected and processed accordingly.
The process of this research can be divided into six phases, all of which apply to the generation or preparation of data. During the first phase, the company determines what information is important for the survey. Phase two determines the research method, the documents for which are developed and finalized in phase three. Phase four focuses on identifying the desired data, which in turn is processed, evaluated and analyzed in phase five. The sixth and final phase serves to present the results and answer the research question. Depending on the knowledge gained, the further actions of the company result.
Phases of market research
Phase 1: Determination of the research question and determination of the information needs.
Phase 2: Determine the research method
Phase 3: Prepare documents for the survey
Phase 4: Determine the required data
Phase 5: Processing and analysis
Phase 6: Answering the research question, presenting the results, and deriving recommendations for action, if appropriate.
Why is market research important for a company?
If a company wants to make well-founded and trend-setting decisions for the future, the results of a well thought-out survey provide the basis for this. It provides information on various issues that are important for the company. These have an influence on central questions in the company. In addition to marketing, this also includes product and pricing policy.
The company thus has more certainty in its overall planning. Without market research data, business decisions are based solely on the current behavior of consumers. Changes in the market – whether in the sales or procurement market – cannot be predicted, or can only be predicted with difficulty.
However, because market trends usually emerge quickly and therefore require the company to adapt, it is crucial to identify them in good time on the basis of surveys. If this does not happen or happens inadequately, the consequences for a company can be far-reaching.
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