How Important Is Market Research?
Marketing research has become essential amongst marketers and businesses in order to be successful. Marye Tharp, senior lecturer at the University of Texas, said “Any communication or marketing professional needs cross-cultural research and communication skills to be able to succeed in the future.” She emphasizes the need to understand the customer by cross-cultural research and development of efficient communication by market research to develop a successful product/service.
The definition of Market Research is a systematic, objective collection and analysis of data about a particular target market, competition, and/or environment; it always incorporates some form of data collection whether it is secondary research (often referred to as desk research) or primary research which is collected direct from a respondent (www.marketresearchworld.net). Market research is an essential part to launching and running a successful business. It offers many important benefits to companies that want to launch a new product or measure marketing initiatives and customer satisfaction.
World total market research spending was $18.9 billion in 2005, Europe counted for $8.3 billion, North America $7.1 billion and rest of the world $3.5 billion (CASRO, 2005). Despite a slight decline due to the recession, global market research turnover reached to $ 28.9 billion in 2009 (ESOMAR, 2010). These figures illustrate the importance of the research for the successful business activity. Information about the market gives the situation of demand and supply and also prices of the different commodities in the market. This information can be attained from various sources and formats in order to gain better understanding of the market.
Market research can also be used to divide the market into similar segments in order to target product/service to an exact person so that their needs are met. Segmentation allows division of the market based on geographic, personality, demographic, product, psychographic and gender differences. Knowing the parameters it is easier and more efficient to design the product and create the marketing plan. Segmentation helps to position the product to the exact customer in the best possible way.
The modern way for market research is online based research. The number of Internet users has grown from 350 million in 1999 to 1, 7 billion in 2009. Due to the accessibility of WWW to the businesses and customers, the share of online market research grew by 16% in 2005 to nearly $1.125 billion, compared to the $256 million spent in 2000 (William A. Cook Senior VP – Research and Standards for the Advertising Research Foundation).
After conducting the market research it is possible to use the collected information to predict upward or downward movements of the market. Concluding all research methods, it is possible to measure market effectiveness and create strategic marketing plan.
Figures show dramatic growth in market research and the importance it encompasses is impossible to overlook in a success of the business. From more modern research methods to the online methods the essence of the selling has changed and made it more accessible to everyone to make sure products and services are marketed effectively and successfully.