Tampere
20 May, Monday
14° C

The library of essays of Proakatemia

Market research



Kirjoittanut: Lucas Pääkkönen Alvim - tiimistä SYNTRE.

Esseen tyyppi: Yksilöessee / 2 esseepistettä.
Esseen arvioitu lukuaika on 4 minuuttia.

Market research

 

INTRODUCTION

In this essay, I’ll be going throw what is market research, its importance and different ways of gathering information about consumers.

Market research is essential to any company, as basing your strategy on a knowledge of the market can help to ensure profitability. A company is able to define realistic sales goals when they know their market size, growth and the price the customer is willing to pay. Marketing will be better done once the company knows who they are trying to reach, why do they want to buy the product or service and where can the company find those people. A company doesn’t need a market understanding to be able to survive and thrive, but they will be missing a lot of opportunities without it.

Market research is the gathering of the data that will support companies: identifying market needs, planning the product or service to meet market needs, analyzing the market and competition, redefining the product or service features and delivery methods to best meet their customer’s needs, pricing their offering, reaching the market and setting financial goals (Wenze, 2012).

 

IMPORTANCE OF MARKET RESEARCH

Market research is so important to any company as it is from there that the company gets its understanding of the current place of the market and where it is headed. A good way of picturing market research is by imagining a fair, where there are many different stands selling products, even if the stand sellers don’t make an deliberated market research, they are researching the market at all times, by listening to customer feedback, watching the prices of the stands around them and comparing it to their own prices to understand if they fit, by seeing how the other stands manage to get the attention of the customers and if one stand has a brilliant idea, the other ones soon will be copying it (Hague et al., 2013). So the market research gives you the required information that enables you to adjust your business practices to be able to maximize your profits.

Market research helps in understanding customer needs by through interviews and surveys and consequently, the analysis of the answers, unveiling customers’ real motivations, desires, and pain points, making the company understand better its customers.

Companies are able to identify valuable new opportunities by analyzing consumer behavior, industry trends, and their competitors, as possibly they will find some unmet needs or emerging niches on the market. As a new feature in their product that could catch the attention of the consumers or an underserved market segment. The market research will enable the company to capitalize on the changes of the market.

 

EXAMPLE

A great example of a company benefiting from market research was Lego. Lego is the biggest toy company in the world. Lego´s original kits were designed as unisex, but it had already been forged in the minds of most people as a “boys’ game”. Lego repeatedly tried to fight against that idea and launched several lines more directed to girls, but one by one they failed. Girls accounted for fifty percent of potential users, but only ten percent of the actual Lego players. Lego then started a market research, where they observed the girl´s playing habits and asked extensive questions on what they would want from Lego.

Based on that market research Lego launched in 2012 the line named “Friends”. The line was a huge hit exceeding all expectations and more than doubled the initial sales forecast for its first year. The total sales of building sets in the U.S for girls tose by twenty-eight percent and the share of girl Lego players increased sharply, even the senior design manager of Lego, Benedikte Schinkle Stamp said “We had so much research and so much testing on girls that we were never in doubt about the product”. (op4g, N.D)

 

DIFFERENT METHODS OF GATHERING INFORMATION ON THE CONSUMERS

While conducting a market research, there are multiple different methods that can be used to gather information about the consumers.

Surveys. With well-planned straightforward questionnaires, you will be able to analyze the answers of your target group. Doing a survey is a quantitative approach, with its strengths being that it will gather efficiently numerical data, making it easier to analyze statistically, but the questionnaire may oversimplify answers and it doesn’t go deep enough to understand the complexity of consumer behavior. There are different ways of doing the surveys, in-person surveys are usually done in places with a lot of foot traffic and provide the opportunity to present the consumers with some kind of sample and get their feedback, usually, this kind of survey gets a lot of answers but they are also costly as someone has to stand on the street doing them. Telephone surveys have become increasingly more difficult as people have become resistant to relentless telemarketing, making it harder to convince them to participate in the questionnaire. Online surveys are inexpensive, they gather customer opinions and preferences, but you don’t have to much control over the pool of respondents.

Interviews. While surveys are a quantitative method, interviews are a qualitative method, interviews give the opportunity to go in deep on the consumer’s behaviors and its motivations, but realizing interviews are time-consuming and the pool of answers is detailed but not to broad.

Focus groups. A moderator leads a discussion of a group of people using scripted questions. This method brings a social dimension, there can be idea generation and the realization of shared feelings and opinions between the participants, but there is space for the most dominant vocal participants to affect the groups discussion and opinions

Observation. Is the direct observation of consumers’ behavior, seeing their real actions, but not knowing their motivations. (ALLBUSINESS Editors, 2023)

 

CONCLUSION

In conclusion, every business can use a market research to access how is the market now and their position in it, where is it headed, what opportunities may surge, etc. I think the Lego case is a great example of how a well-done market research can impact decision-making and the company’s results. So market research ensures that businesses stay aware of the evolving market, so that they can make decisions based on information provided by the market research.

 

REFERENCES

ALLBUSINESS Editors (2023) The five basic methods of market research, All Business. Available at: https://www.allbusiness.com/the-five-basic-methods-of-market-research-1287-1.html (Accessed: 17 October 2023).

Hague, P.N., Hague, N. and Morgan, C.A. (2013) Market Research in Practice : How to Get Greater Insight From Your Market. Kogan Page.

. op4g (no date) Lego builds female fanbase (and revenues) thanks to market research, Op4G Blog. Available at: https://blog.op4g.com/lego-builds-female-fanbase-and-revenues-thanks-to-market-research#:~:text=As%20a%20result%2C%20girls%20accounted%20for%2050%25%20of,extensive%20questions%20about%20what%20girls%20want%20from%20Lego. (Accessed: 14 October 2023).

Wenze, A.M. (2012) The entrepreneur’s guide to market research. Praeger

Post a Comment