Market research is an essential part of what makes brands successful. Analyzing consumer behavior and market trends allows companies to capitalize on the main factors driving consumers to purchase their products. They can then optimize their strategy accordingly. Three of the many key questions market research aims to answer include: who is the target audience? What makes them buy a certain product? And, how can brands take advantage of trends to increase sales and brand awareness? In this blog, we will take a look at the pros and cons of market research as a whole.
The Pros of Market Research
Trackable Return on Investment
The valuable insights that come from market research can allow a company to gain information about the market and make their product successful. For instance, knowledge of customer satisfaction, consumer behaviors, and competitors lead to informed strategic decisions. In the long run, brands can arm themselves with this research.
Market research allows a company to see their buyers’ wants and needs and adjust their product to meet those needs. Combining this with an increased awareness surrounding current trends and viral fads empowers a company with all the information they need to optimize their product, advertising, and business plan. Actionable strategy can lead directly to a large uptick in sales.
Increased Brand Awareness
Knowing what people think about a brand and which audiences are aware of it is valuable information. With awareness research, brands can make decisions to increase awareness in certain target audiences and broaden the company’s reach as a whole. As a result, brands can take full advantage of tapping into markets they may not have known about previously. This can take the shape of anything from a small tweak in a company’s branding and advertising to a full-blown rebrand. Read more about brand awareness, the different kinds, and their benefits in Provoke Insights’ blog post about it.
The Drawbacks of Market Research
Every rose has its thorn, and market research is no exception. The knowledge and insights it provides come at a cost. A market research campaign is pricey. This price tag comes from compensating researchers for the time spent researching, writing reports, and developing insights. The knowledge of target markets and trends gained from market research typically saves companies time and a lot of money in the long run. Due to this, many are willing to budget for market research firms’ services.
DIY Can Be Misleading
Market research doesn’t help a company achieve its goals if it doesn’t produce accurate results. Firms who try to do internal or ‘do-it-yourself’ market research often get faulty insights. This is usually due to a lack of experience and savvy in the field. DIY market researchers lack the necessary experience in several areas that can compromise their ability to conduct market research successfully. For example, a lack of questionnaire development expertise may lead to questions being designed improperly. Incorrectly programmed surveys can produce skewed or incorrect results. In addition, inexperience with sample selection and failure to test properly for validity and reliability of results can lead to biased conclusions. Hiring a market research firm with trained professionals is an easy way of avoiding this.
Though there are certain drawbacks with market research, including cost and technicalities surrounding DIY research, the benefits are undeniable. When looking at the pros and cons of market research, it’s clear that brands should outline their needs and goals first. Ultimately, hiring a market research firm can set brands above the competition, better identify targets, and result in short-term and long-term ROI.
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