The Value and Purpose of Market Research

Market research refers to the activities that provide basis and guidance for market analysis, market selection, market development and market maintenance by collecting, sorting, analyzing and interpreting market-related information. The value of market research is mainly reflected in the following three aspects:

Understand the customer's needs, preferences, behavior and motivation, understand the relationship between customers and products/services, and provide the basis for the design, pricing, distribution and promotion of products/services;

Identify market opportunities and threats, identify market potential and risks, and provide guidance for market selection, entry, expansion and maintenance;

Break through the inertia and limitations of enterprise thinking, and provide inspiration and support for enterprise innovation and change.

The purpose of market research is to help enterprises solve practical market problems and improve market competitiveness and efficiency. The purpose of market research can be divided into the following categories:

Descriptive purpose: describe the current situation, characteristics, scale, structure, trends, etc. of the market, such as market research, market analysis, market monitoring, etc;

Diagnostic purpose: to diagnose market problems, causes, effects, etc., such as market assessment, market testing, market diagnosis, etc;

Predictive purpose: to predict market changes, development, demand, etc., such as market forecast, market forecast, market simulation, etc;

Exploratory purpose: to explore market opportunities, potential, innovation, etc., such as market insight, market research, market development, etc.

Misunderstanding of Market Research and Coping Strategies

Market research is a complex system engineering, involving market research objectives, content, methods, processes, results and other aspects. In the practice of market research, many enterprises will fall into some misunderstandings and misunderstandings, which will lead to poor research results and even make mistakes in decision-making. According to the practical experience of Shangpu Consulting, common misunderstandings in market research can be summarized into the following four categories:

Myth 1: Market research always provides surprising findings

Some companies have high expectations of market research, believing that market research will be able to provide some amazing, unexpected, and disruptive results to help companies achieve market breakthroughs and leadership. However, such expectations are often unrealistic and even harmful. Because the essence of market research is to provide valuable information, not to provide surprising findings. Market research sometimes gets some unexpected results, but often it gets something that looks ordinary or verifies what we already know. These results do not mean that market research is worthless, on the contrary, the verification of existing ideas and the discovery of unexpected results are important value of market research. Validation of existing ideas can help companies enhance their confidence and basis for decision-making, and finding unexpected results can help companies identify market opportunities and threats, and adjust market strategies and actions.

Coping strategy: enterprises should set reasonable expectations of market research according to the purpose and content of market research, do not pursue surprising findings too much, but pay attention to the value and significance of information. Enterprises should analyze and interpret the results of market research from multiple angles and levels, find out the laws and trends, extract useful insights and inspirations, and provide support for decision-making and innovation.

Myth 2: Market research tells you how to design a product/solution.

Some companies have an overly simplistic understanding of market research, arguing that it can provide specific direction or advice on how to design or optimize products/solutions, or provide direct points of opportunity for important innovations. However, this understanding is wrong and even dangerous. Because the essence of market research is to provide valuable information, not to provide specific solutions. Market research cannot replace the creativity and judgment of the enterprise, and cannot directly determine the design or optimization of the enterprise's products/programs. Market research can only provide market status, problems, needs, opportunities and other information, and enterprises need to be based on this information, combined with their own resources, capabilities, objectives and other factors, comprehensive analysis and evaluation, to develop appropriate product/program design or optimization program.

Coping strategy: enterprises should clearly distinguish between market research information and product/program design or optimization program, do not confuse or simplify the relationship between the two. Enterprises should make full use of the information of market research, stimulate the creativity and judgment of enterprises, carry out diversified thinking and exploration, and form a distinctive product/scheme design or optimization scheme. Enterprises can also conduct repeated market research in the process of product/program design or optimization to verify and improve the design or optimization of the product/program.

Myth 3: Market research is expensive and time-consuming

Some enterprises are too sensitive to the cost and efficiency of market research, believing that market research will increase additional expenditure and time, affecting the operation and efficiency of enterprises. However, this sensitivity is unnecessary and even harmful. Because the essence of market research is to provide a valuable return on investment, not to provide unnecessary spending and time. The cost and efficiency of market research is not absolute, but relative. The cost and efficiency of market research depends on the purpose, content, method, process, results and other factors of market research. The cost and efficiency of market research should match the value and quality of market research, not the quantity and speed of market research. The cost and efficiency of market research should be viewed from a long-term perspective, not from a short-term perspective. The cost and efficiency of market research should be viewed from a holistic perspective, not from a local perspective.

Coping strategy: enterprises should correctly view the cost and efficiency of market research, do not excessively save and compress the cost and time of market research, but reasonably plan and arrange the cost and time of market research. Enterprises should choose the appropriate methods and processes of market research according to the purpose and content of market research to ensure the quality and value of market research. Companies should evaluate the return on investment of market research and optimize the cost and efficiency of market research based on the results and impact of market research.

Misunderstanding 4: Market research is "filling out questionnaires" and "doing interviews"

Some companies are too narrow-minded about the methods and processes of market research, arguing that market research is the collection and analysis of market information through some regular, fixed, superficial means, such as questionnaires, interviews, and observational surveys. However, this narrow-mindedness is incomplete and even wrong. Because the essence of market research is to provide in-depth, multi-dimensional, comprehensive information, rather than providing simple, single, one-sided information. The methods and processes of market research are not static, but diverse, flexible and innovative. The method and process of market research should be selected and designed according to the purpose, content, object, environment and other factors of market research to adapt to the complexity and variability of the market. The method and process of market research should collect and analyze market information from multiple angles and levels to improve the effectiveness and accuracy of market research.

Coping strategies: Enterprises should look at the methods and processes of market research in an open way, not limited to some traditional, regular and superficial means, but try some novel, innovative and in-depth means. Enterprises should customize the methods and processes of market research according to the characteristics and needs of market research to adapt to the diversity and dynamics of the market. Enterprises should collect and analyze market information from multiple angles and levels to improve the comprehensiveness and depth of market research.

Conclusion

Market research is an important basis for enterprises to formulate strategies and marketing decisions, but many enterprises will fall into some misunderstandings and misunderstandings when conducting market research, which leads to poor research results and even makes mistakes in decision-making. Based on the practical experience of Shangpu Consulting, this paper analyzes the value and purpose of market research, and points out four common misunderstandings in market research: market research always provides amazing findings, market research tells you how to design products/schemes, market research is expensive and time-consuming, market research is just "filling in questionnaires" and "doing interviews", and puts forward corresponding coping strategies and suggestions, help companies improve the efficiency and quality of market research, avoid research traps, and achieve market insight and innovation.