Before delving into how financial market research can be leveraged for increasing your business’ profits, let’s take a brief look at what it is all about. For the academically interested, market research is about: collecting information, systematically cataloging it and analyzing it threadbare for identifying opportunities for a particular product or service before it is launched on a commercial scale.
Why is Market Research Important?
Smart businesspersons see market research as a decision making tool based on ground realities – it prepares the foundation for either accepting or rejecting a business idea (or model) or a product not tried in current context, select territory, among specific consumers or a entire population.
Market research is a prelude to making an investment and should always be made by experienced top management consulting firms to evoke interest among savvy investors who look at projects from the demand point of view for the planned product or service. However advanced a product may be or service utility oriented, if not financially viable, investors are likely to reject it.
Reasons for Conducting Marketing Research
Though most entrepreneurs tend to be foolhardy with their project ideas and will want to avoid spending money on market research, investors and other stake holders tend to look from a different angle to ensure that the investment proposed is safe and has been done prudently. Prudent often means scientifically investigating a demand and forecasting growth potentials (and pricing) during the product life cycle.
From a different perspective the importance of market research to an entrepreneur are enormous – it will help to plan (manufacture or outsource) select the right type of product or service commensurate with his/her personality, stay within capital constraints, choose technology partners, set up new manufacturing facility or opt for a takeover or even choose an entirely new activity.
Spending money on market research is worth every rupee, and the biggest benefits of market research include:
1. Get a fair assessment of potential demand and forecast scenarios
2. Avoid pitfalls – product redundancy, unfeasible, statutory limits…
3. Repurpose a product or service and proper pricing
4. Quit selected territories, repackage, revamp distribution, channelize…
5. Revitalize abandoned product lines and make fresh investments…
6. Explore export potentials and source raw materials
7. Resurrect closed factories and develop new sales channels
Top Management Consulting Firms with extensive and proven research methodologies attract investors and can help to raise the required money for funding product development and starting operations faster.
How can Market Research Improve a Business?
If you already own a business or have just assumed responsibility of a fledgling business that is making a loss and you want to make a turnaround, then again a full throttle market research can help you to put the business back on rails. This means commissioning a Researching is no mean job even for top management consulting firms; the first step they all take is formulating a market research strategy relevant to their customers’ business environment and their ability to bring in fresh capital for a total revamp.
Here is how to improve market search once the strategizing process has been completed.
Exploring Customer’s Current Brands
A good strategist is one who will want to explore what can be salvaged or how best it can be improved from its current position to reduce future expenditures and make it more profitable. Often this means:
• Writing a plan for improving brand perception and awareness
• Systematically comparing own brand with competitors’ brands’
• Public’s perception about the current brand (Positive Vs Negative)
Understanding the Customer Better
There is nothing more to a sound strategy than reading customers’ minds, but all require some basic information without which moving ahead becomes difficult. For a near-precise research for many consumer products the following information is obtained.
a) Age of the consumer – helps with positioning the products in terms of price, packaging appeal and advertising in the media
b) Gender of the consumer – helps to choose the right channel/media primetime information and product modifications if needed
c) Marital status of consumer – there is a broad gap between preferences when it comes to marital status – typically medications, birth control devices, medical services and products all come under this category
d) Demographic information – it can precisely point to sell what products, where, when and the price to charge – helps to appoint dealers, establish distribution points and acquire warehousing facilities
e) Assessing current distribution practices – doing business is growing more complex with consumers demanding better services at competitive prices and faster deliveries – it will help to explore the electronic media, marketplaces such as Flipkart for expanding and conscripting more customers at lesser cost
f) Get insights in trending products – Keeping an eye on new product lines and discontinuing redundant products manufacture is critical to saving money and staying ahead in market share – helps to develop new products, revamp existing products and exit businesses that are no more in sync with business objectives
Market Research Companies for Higher Profits
Market research companies are the key to increasing profits on a sustainable basis. Though it would sound great to do market research in-house, the problem with this approach is not every business will have the requisite expert resource to do a flawless job. Secondly why do with in-house employees when market research companies can do a better job at lower cost; and more effectively in a shorter period?
Hiring a market research company is no mean task – authentic, experienced market research companies are difficult to find, but not necessarily a herculean task. Ask these few questions of a research firm and if you hear a positive response with verifiable references then you should think of hiring the firm.
1. For how long the market research company has been in existence
2. Verifiable references who will vouch for the quality of service
3. Core customers the company has serviced in the past
4. Resource people available at the firm and their experience in research
5. Fee chargeable for services and a detailed contract draft
6. List of projects executed in recent past and types of market research done that are relevant to your activity