IMPORTANCE OF MARKET RESEARCH - DUDAS - 2025

The market research is a process used to determine whether a product or service offered by a business is viable or not. Its objective is to help the company to know in advance if what it intends to offer will have a good acceptance among its potential clients, to avoid losses and to be able to find the best possible alternative.

The importance of market research can be seen in all sectors in which you will try to sell a product or a service. When carried out with potential customers, the company can discover what interests them the most and receive direct feedback on what they are offering.

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In this context, the market is understood to be the set of potential customers for an offer, together with the companies that offer a service or product related to that particular sector. During the investigation, aspects such as competition, consumer interest, the value offered by other companies and the opportunities for differentiation are studied.

The market research process can involve all kinds of different tasks, depending mainly on the sector in which it is being carried out. However, although it can be done very differently in each case, it is a fundamental part when creating a new business or improving an existing one.

What is market research for?

To understand the importance of market research, it is necessary to understand what its main objectives are and what benefits it brings to the companies that carry it out. In this section we will see exactly what this process is for.

1- Understand the competition

In practically any sector in which a company can offer a product or service, it is most likely that there are already others that are dedicated to something very similar. Market research has among its main objectives to understand the competition and discover what their strengths and weaknesses are in order to contribute something new to customers.

For example, a person who is considering opening a restaurant in their neighborhood would have to previously investigate several factors: the number of competitors they would have in the area, what type of food each of them offers, which are the most demanded and what can they contribute that is different from what already exists.

2- Find out if there is demand for a service or product

One of the most important factors in being successful with a business is offering a product or service that customers are willing to pay for. In fact, many startups fail because what they are trying to sell is not interesting to their target audience.

Among the main reasons for the importance of market research is the need to study what customers in a given sector are buying, and what they are willing to invest their money in. In this way, the entrepreneur can avoid investing in products that nobody wants and focus on others that are in high demand.

3- Find new business opportunities

In many cases, market research is not only used during the validation phase of a business idea: it can also be used to discover what to sell.

By carrying out this process, the entrepreneur can discover needs among his potential clients of which he was not aware until that moment, thus being able to develop a new product or service that covers them.

For example, a psychologist may be conducting market research to try to recruit new patients, but he realizes that most of his competitors have problems with marketing in their clinics. Because of this, he decides to offer advertising services for health professionals, thus changing the course of his business.

4- Improve a company's offer

The importance of marketing research does not end the moment the first product or service is created. On the contrary, good companies carry out this process periodically, with the aim of studying how their customers are responding to their offer and improving it based on the information they receive from them.

For example, a person can create a virtual course and put it up for sale, believing that it is already complete. However, when conducting market research he realizes that his buyers have some doubts about the information he shows them in it, and that his competitors talk about some topics that he has not covered.

In this way, after conducting the research, the creator of the course decided to update it to solve the needs of its buyers in the best possible way. Over time, this strategy leads you to attract many new customers and keep them satisfied with their purchase decision.

Why is market research important? 5 reasons

We have already seen that market research can be used to fulfill a multitude of different objectives. However, many people are not clear about the benefits of doing this task. Next we will see why it is so important to study the market and the competition no matter what phase a business is in.

1- Help the company grow

The most important factor that determines whether a company will be successful or not, and therefore whether it can grow, is whether it is able to meet any market demand. When a company meets one of the needs of its customers, it will have much less sales problems and therefore can make profits and expand as much as it wants.

Market research is one of the most useful tools when it comes to finding new needs and discovering the best way to satisfy them. Therefore, an entrepreneur who wants to be successful with his business has to carry out this process to achieve the best possible results.

2- Avoid economic losses

At the same time that market research helps improve the profits made by a company, it can also avoid the appearance of money losses when launching a product or service. This can be even more important to entrepreneurs than getting new customers or buyers.

When a proper research process is carried out, the company can discover if there are enough people who are interested in its offer or if, on the contrary, its idea would not have buyers to be carried out.

In this way, the entrepreneur can avoid investing in something that would not be successful and would cause him losses, something that could even end his company.

3- It allows to anticipate changes in the market

As we have already seen, research is not a process that has to be carried out only during the creation of a company, but should continue to be carried out even when it has already been established. The main reason for doing this is that markets change over time, so something that works today might stop working tomorrow.

For example, with the advent of the Internet and digital technologies, many business areas have become obsolete in a very short time. The companies that were able to anticipate these changes and adapt to them have survived and continue to make profits, while those that did not have to close or suffer major losses.

At the same time, market research can also help new entrepreneurs spot opportunities before others discover them.

By analyzing the changes that are taking place and the new demands of the consumers, it is possible to create new businesses that achieve great success simply because they have no competition and offer something very valuable to customers.

4- Help create a good business plan

One of the most important tasks when opening a new business is to define very clearly what it is going to do, and how exactly it is going to do it. For this, one of the most used tools is the business plan: a document that details all the activities of the company, from marketing to the creation of the product or service.

Market research can be very useful when making a good business plan. This is because this process allows the entrepreneur to discover the methods used by his competition, the most effective techniques within his niche, and the products or services that his potential clients demand the most.

5- Provide objective data about the business

The last reason for the importance of market research is that it allows entrepreneurs to know first-hand if their results are good or not. A company may be making a profit, but if its competitors are much more successful, over time they will most likely take away their customers.

For this reason, market research allows companies to discover what areas they need to focus on at any given moment and what steps they should take to take their business to the next level.

Themes of interest

Importance of research for society and humanity.

Kind of investigation.

Scientific method.

Exploratory investigation.

Basic investigation.

Field research.

Applied research.

Pure research.

Explanatory research.

Descriptive research.

References

1. "Market research" in: Entrepreneur. Retrieved on: February 02, 2020 from Entrepreneur: entrepreneur.com.
2. "Market research" in: Investopedia. Retrieved on: February 02, 2020 from Investopedia: investopedia.com.
3. "The Importance of Market Research Explained, or Why You should Research Markets" in: My Management Guide. Retrieved on: February 02, 2020 from My Management Guide: mymanagementguide.com.
4. "5 Reasons Why Market Research Is Crucial For Your Business" in: Medium. Retrieved on: February 02, 2020 from Medium: medium.com.
5. "Why is market research important for new business ideas?" at: Business & IP Center. Retrieved on: February 02, 2020 from Business & IP Center: bl.uk.