The Importance of Continual Market Research to Overall Business Success
Market research is typically conducted when starting a business, expanding a business, or launching a new product or service. Too often, it is believed that market research only needs to be done at these critical stages but in actuality, it should be an ongoing process. The most effective and successful businesses know that market research should happen routinely in order to keep a finger on the pulse of the overall market/industry, be able to adapt to consumer trends, and stay a step ahead of competitors.
The first roadblock when it comes to the potential of market research is believing that it only needs to be conducted once or in rare, specific circumstances. However, when you consider the broad nature of market research and the vital business decisions it can inform, it is evident that this should, in fact, be a frequent process incorporated into many of your business processes.
First, it helps to be clear on exactly what market research entails. One of the more comprehensive definitions comes from Entrepreneur. They define market research as “the process of gathering, analyzing and interpreting information about a market, about a product or service to be offered for sale in that market, and about the past, present and potential customers for the product or service; research into the characteristics, spending habits, location and needs of your business’s target market, the industry as a whole, and the particular competitors you face.”
So, how often should you conduct market research? Unfortunately, there is no definitive answer to this. It will vary based on the needs of your business and your specific industry or market. Hotels and airlines, for example, usually conduct market research daily, or even hourly, when they evaluate competitor rates to determine how to set their own. Other businesses may only conduct an overall industry analysis annually.
We tend to think of market research as a planned process, and it should be, but it isn’t always something you explicitly set out to do. Rather, it can occur through the normal course of business. Chances are, if you are a business owner or a high-level manager, you subscribe to industry publications and follow industry leaders – and even your competitors – on various platforms. This daily information is keeping you informed of general trends and changes to your existing industry.
Although these passive, informal actions will lead to helpful industry insight and may be included in the research, meaningful market research should be organized, methodical, and intentional and set out to answer a specific question or analyze specific aspects of the business. This may include things like:
- Gauging the success of a current product or service
- Determining if your target markets need to change
- Figuring out how to make marketing more effective
- Establishing which products/services have the highest potential
- Choosing between multiple locations for a new store, office, warehouse, etc.
- Exploring new threats or opportunities that have emerged in the market
One of the key aspects of market research that should be done very regularly is competitor analysis. There’s no hard and fast rule as to how often competitive analysis should be conducted but a good recommendation is quarterly. We’ve seen above that it can even be daily in industries like tourism and travel if warranted. Quarterly is a good starting point, though some experts recommend monthly.
It’s evident that there is no one-size-fits-all approach to conducting any type of market research. However, one thing is certain, it is imperative for business success. It is easy to get caught up in the day-to-day aspects of your business but conducting market research forces you to stop working in the business and spend time focusing on the business. There are various primary and secondary sources as well as qualitative and quantitative methods you can use. If you are unsure of the best way to approach your market research, our advisory services offer premium market research to help you properly address and answer the most important business questions.