The Importance of Market Research

Market research refers to the process of collecting, sorting, analyzing and interpreting market-related information to understand the current situation, trends, opportunities and challenges of the market, so as to provide the basis and guidance for the decision-making of enterprises. The importance of market research is mainly reflected in the following aspects:

Market research can help companies identify target markets, locate products or services, develop pricing strategies, select channels and promotional methods, and evaluate effectiveness and satisfaction.

Market research can help enterprises find potential problems and challenges, put forward suggestions for improvement and innovation, and enhance competitiveness and adaptability.

Market research can help companies understand consumer needs and preferences, establish and maintain good customer relationships, and improve customer loyalty and reputation.

Market research can help enterprises grasp the changes and dynamics of the market, grasp the opportunities and risks of the market, and formulate reasonable forecasts and early warnings.

Common methods of market research

There are two main methods of market research: quantitative research and qualitative research. Quantitative research refers to the statistical analysis of a large number of samples through numerical methods to obtain objective, quantifiable and generalizable results. Qualitative research refers to the in-depth discussion of a small number of samples through non-numerical methods in order to obtain subjective, connotative and interpretable results. The two methods have their own advantages and disadvantages, and generally need to be used in combination to achieve complementary effects.

The commonly used quantitative research methods are:

Questionnaire: By designing a series of questions, the target sample is distributed and recycled to collect their opinions and feedback. Questionnaire survey can be carried out by telephone, mail, network and so on, which has the advantages of low cost, fast speed, wide range and easy data processing, but it also has the disadvantages of difficult design, low recovery rate and affected data quality.

Experimental method: different samples are treated differently under the condition of controlling variables to observe and compare their reactions and results. The experimental method can effectively determine the causal relationship, which is scientific and accurate, but it also has the disadvantages of complex operation, high cost and difficult to promote.

Observational method: by directly or indirectly observing the behavior and performance of the target sample to collect their information. The observation method can avoid the subjective interference of the respondents and has authenticity and objectivity, but it also has the disadvantages of difficult to obtain deep information, affected by the environment, and difficult to quantify.

The commonly used qualitative research methods are:

In-depth interviews: Gather their thoughts and feelings through one-on-one, face-to-face, open-ended conversations with the target sample. In-depth interviews can obtain rich, detailed, and multi-dimensional information, which is flexible and in-depth, but it also has shortcomings such as long time, high cost, and difficult data analysis.

Focus group: by inviting a group (6-12 people) with common characteristics or interests of the target sample, under the guidance of a professional moderator, a free, interactive, collective discussion to collect their opinions and suggestions. Focus groups can stimulate the respondents' thinking and creativity, which are interactive and innovative, but they also have shortcomings such as being influenced by individuals, difficult to control, and difficult to promote.

Scenario analysis: By designing some scenarios related to the target sample, let them make reactions or choices according to the scenarios to collect their attitudes and preferences. Scenario analysis can simulate the real market environment, which is realistic and practical, but it also has the disadvantages of difficult design, influenced by the situation and difficult to quantify.

Successful Cases and Enlightenment of Market Research

There are many successful cases of market research. The following three representative cases are selected, namely Nescafe, Procter & Gamble diapers and Amazon recommend engine, to introduce their market research methods, processes and results, and the enlightenment that can be obtained from them.

Nescafé: A deeper understanding of consumer motivations and needs

Nestle coffee is one of the most famous coffee brands in the world, and its success is inseparable from the in-depth understanding of the market and consumers. In the 1940 s, Nestlé took the lead in developing instant coffee. At that time, the taste of instant coffee was close to that of soy coffee and was more convenient. However, after it was put on the market, consumers did not buy it. In order to find out why, Nestle conducted a series of market research and found the following problems:

Because instant coffee is a high-end brand route, beautifully packaged and expensive, only a few high-income people buy it, and most low-and middle-income people don't know what Nestle is;

Instant coffee has a bitter taste and a single variety, which cannot meet more consumer needs;

Instant coffee instant poor, more sediment, more effort is still uneven stirring.

Based on these problems, Nestle has developed a new product-Nestle instant coffee, which is popular among consumers because of its strong solubility, silky taste, low price, many varieties and simple packaging. The success of Nestlé instant coffee is due to Nestlé's in-depth understanding of consumer motivations and needs, as well as continuous product improvement and innovation.

From this case, we can get the following enlightenment:

Market research should take consumers as the center, deeply understand the psychology and behavior of consumers, as well as the factors that affect them, so as to provide products or services that meet their expectations and satisfaction;

Market research should be combined with product development. According to the results of market research, products should be continuously tested, modified and optimized to improve product quality and competitiveness;

Market research should be carried out continuously. As the market and consumers change, the methods, contents and objectives of market research should be constantly updated and adjusted to maintain the sensitivity and leadership of the market.

P & G Diapers: Using Scenario Analysis to Create New Markets

Procter & Gamble diapers is one of the world's most famous baby products brands, and its success stems from the creation and development of the market. In the 1950 s, P & G discovered a new market opportunity-baby diapers. At that time, the market share of baby diapers was very low. The main reason was that consumers had poor cognition and attitude towards diapers, thinking that diapers were unhygienic, uncomfortable, inconvenient, and expensive. In order to change this situation, Procter & Gamble conducted a series of market research, the most effective method is scenario analysis. Procter & Gamble has designed the following scenarios to allow target consumers (mainly mothers) to react or choose according to the scenario:

Scenario 1: Your baby is playing at home and suddenly pees a big bubble. What will you do?

Scenario 2: What kind of diaper will you wear for your baby when you take your baby outside to play?

Scenario 3: When your baby sleeps at night, he wets the sheets. What will you do?

Scenario 4: Your baby is in kindergarten. What kind of diaper will the teacher change for the baby?

Through these scenario analyses, P & G identified the following needs and preferences of consumers:

Consumers hope that the diaper can absorb more urine, keep the baby's skin dry and prevent the occurrence of diaper rash;

Consumers hope that the diaper can fit the baby's body shape, does not affect the baby's activities, and is not easy to leak urine;

Consumers hope that diapers can be easily changed and cleaned without taking up too much space and time;

Consumers hope that the diaper can have a certain aesthetic and personalized, in line with the baby's gender and age.

Based on these needs and preferences, Procter & Gamble has developed a new product, Procter & Gamble Diapers, which has the following characteristics:

P & G diapers with super absorbent core, can absorb up to 15 times the urine, keep the baby's skin dry;

Procter & Gamble diaper adopts the design of elastic waist circumference and fitting legs, which can fit the baby's body shape, does not affect the baby's activities, and is not easy to leak urine;

Procter & Gamble diapers are made of disposable materials, which can be easily replaced and cleaned without taking up too much space and time;

Procter & Gamble diapers are designed in a variety of colors and patterns, which can meet the baby's gender and age and increase the baby's fun.

The introduction of P & G diapers has changed consumers' cognition and attitude towards diapers, created a new market and became the leader of baby products.

From this case, we can get the following enlightenment:

Market research must be creative and pioneering, not only to meet existing market needs, but also to discover and create new market opportunities to increase market potential and growth rate;

Market research should use a variety of methods and tools, not only to collect and analyze objective data, but also to dig and understand the subjective thoughts and feelings of consumers, in order to improve the effectiveness and comprehensiveness of market research;

Market research should be combined with marketing, according to the results of market research, constantly adjust and optimize the marketing strategy, in order to improve the effectiveness and influence of marketing.

Amazon recommend Engine: Leverage Big Data and Artificial Intelligence to Improve User Experience

Amazon is one of the world's largest e-commerce platforms, and its success is inseparable from the continuous improvement of user experience. At the beginning of the 21st century, Amazon discovered a new market trend-personalized recommend. With the development and popularization of the Internet, the needs and preferences of users are becoming more and more diversified and personalized, and the traditional search and browsing methods can no longer meet the expectations and satisfaction of users. In order to improve this situation, Amazon has conducted a series of market research, the core of which is the use of big data and artificial intelligence. Amazon collects and analyzes the following information from users:

The user's purchase history: records the user's purchase of which goods, as well as the purchase time, quantity, price, etc;

The user's browsing history: records which products the user browsed, as well as the browsing time, number of times, duration, etc;

The user's evaluation history: records which products the user has evaluated, as well as the evaluation content, score, label, etc;

User's personal information: records the user's gender, age, region, occupation, interests, etc;

Based on this information, Amazon uses the following algorithms and techniques to provide users with personalized recommend:

Collaborative filtering algorithm: by analyzing the similarity between the user and the product, find out other users who have similar preferences with the user, or other products that have similar characteristics with the user's favorite product, so as to recommend the user with the product they may be interested in;

Association rule algorithm: by analyzing the user's purchase and browsing patterns, find out the user's purchase and browsing patterns, so as to recommend the user with the goods they may need;

Deep learning algorithm: by using the multi-layer structure of neural network, the user's information is extracted and abstracted, so as to recommend the user with the goods they may like;

The use of Amazon's recommend engine has improved user experience and satisfaction, increased user purchase and loyalty, and increased Amazon's revenue and profits.

From this case, we can get the following enlightenment:

Market research should use big data and artificial intelligence, not only to collect and analyze massive amounts of data, but also to use advanced algorithms and technologies to improve the efficiency and accuracy of market research;

Market research should focus on user experience, not only to meet the functional needs of users, but also to meet the emotional needs of users, in order to improve user participation and loyalty;

Market research should be combined with technological innovation. According to the results of market research, technology should be continuously innovated and optimized to improve the competitiveness and influence of technology.

Conclusion

Market research is the basis and prerequisite for strategic decision-making, product innovation, brand building, competition analysis and other important work. Market research requires professional methods, tools, data and analysis, as well as deep insight into the market and consumers. Taking Shangpu consulting as an example, this paper introduces the importance, common methods, successful cases and enlightenment of market research, aiming to provide enterprises with the secret of market research, so that enterprises can walk in the forefront of the market.

Shangpu Consulting is a professional market research and consulting company with rich market research experience and professional market research team, providing high-quality market research and consulting services to customers in all walks of life. The range of services offered by Champ Consulting includes:

Market analysis: a comprehensive analysis of the size, structure, trends, opportunities and challenges of the target market to provide the basis and guidance for customer market entry, expansion, maintenance and exit;

Product research and development: conduct in-depth research on the needs, preferences, behaviors and satisfaction of consumers in the target market, and provide suggestions and support for customer's product design, development, testing and improvement;

Brand strategy: systematically evaluate the brand image, value, positioning and communication of competitors in the target market, and provide strategies and solutions for customer brand creation, management, promotion and protection;

Marketing planning: a comprehensive planning of the marketing environment, objectives, strategies and effects of the target market, providing solutions and tools for the implementation, monitoring and optimization of the customer's marketing activities.

The service features of Champ Consulting include:

Customer orientation: take the customer's needs and goals as the starting point, tailor the most suitable market research and consulting solutions for customers, and provide customers with the most valuable market research and consulting results;

Data-driven: based on data, using scientific methods and tools to collect, organize, analyze and interpret market-related information, and provide customers with the most objective, quantifiable and scalable market research and consulting results;

Insight innovation: with insight as the core, using creative thinking and technology to explore, understand and explain the deep needs and motivations of the market and consumers, and provide customers with the most subjective, connotative and explainable market research and consulting results;

Effectiveness-oriented: with effectiveness as the goal, using practical principles and techniques, formulate, implement and evaluate actions and measures related to market research and consulting, and provide customers with the most practical, operable, and implementable market research and consulting results.

Examples of services offered by Champ Consulting include:

Conduct market research and consultation on the Chinese market for an internationally renowned automobile brand, help it understand the current situation, trends, opportunities and challenges of the Chinese market, and formulate strategies and plans for the entry, expansion, maintenance and exit of the Chinese market;

Conduct market research and consultation on user experience for a leading e-commerce platform in China, help it understand users' needs, preferences, behaviors and satisfaction, and design suggestions and support for the improvement and optimization of user experience;

I conducted market research and consultation on brand strategy for an emerging Internet finance company, helped it evaluate the brand image, value, positioning and communication of competitors, and created strategies and solutions for brand image, value, positioning and communication;

For a traditional food manufacturing enterprises to carry out marketing planning market research and consulting, to help them plan the marketing environment, objectives, strategies and effects, for the implementation of the marketing activities of the program and tools.