Market Research: What is it and Why it’s important!

Market Research

Let’s take a quick look into what market research really is and why you need to do it!

In its simplest form, market research is the series of exercises that you need to perform to understand your customers better!

The main goal of Market research is to gain insights about customers behavior and motivations!

These Insights about your customers are the key to making organisational and product level decisions.

Case Study: New Coke

Do you remember the debacle with new Coke? This was one of the biggest product flops in history and is a common case study used to teach marketing and MBA students the importance of knowing your customers!

Back in 1985 Coca-Cola’s sales were dropping and they decided to reformulate Coke to be sweeter, to compete with Pepsi.

As with all big companies that are ready to make a significant upgrade to their product line, a lot of market research was done and the “facts” showed that in blind taste testing the new Coke outperformed both Pepsi and traditional Coke.

200,000 taste tests confirmed this. And yet, when New Coke hit the markets, it flopped so bad further deteriorating the company’s image and market share!

It wasn’t just that consumers didn’t buy it, the company received over 400,000 letters from angry customers.

Why? Because they had the facts, but missed this insight.  

However, these insights are hardly ever easy to come across. You will need to employ a variety of methods like surveys, interviews, data analysis etc to learn these insights about your customers and that is what market research is all about!

So why do market research?

Because It centers your business on your customer. It keeps you focused on pursuing the right opportunities and abandoning those that aren’t. It keeps you relevant, future-oriented, improves your decision-making capabilities and reduces your risk.

The key to success is a deep understanding of your customer. Market research is how you get there.

Pramod George

Here’s the funny part the new cook really did taste better but unfortunately The Coca-Cola company did not realise that brand loyalty trumps taste. People had an emotional attachment to the iconic brand and didn’t want it to be replaced.

Unfortunately for them,the a-ha moment came after the product flopped and their company nose dived in market share!

This is true even today with many companies and product developers who don’t do market research because they are convinced that their products are the next best thing since sliced bread.

So remember when getting started with market research to Never assume you know what your customers want, the risks are just too high.

This is why detailed and extensive market research is an important first step for every business!

Now you know why Facebook doesn’t simply add a new button or YouTube doesn’t simply add a new feature even though it’s sounds simple and easily achievable.

What we don’t realise is that there is significant market research that helps these companies decide which feature needs to be rolled out when!

Remember The key to success is a deep understanding of your customer and Market research is how you get there.

So question of the day!

What questions could you ask them that would give you a deeper understanding of your market?

Questions like, why they buy your product? Do they buy it for themselves or for others?

What about how they perceive your company versus your competition?

What could you be doing better to win more of their business?

Chances are there is at least one insight waiting to be discovered.

And the more insights that you discover, the more information you have to make sound business decisions.

What did you think?