Marketing research may be defined as the systematic gathering, recording and analyzing of data about problems relating to the marketing of goods and services under essentially non-recurring conditions.
Marketing research is a formalized means of obtaining information to be used in making marketing decisions. Marketing research tends to stress the collection of past data to solve present problems.
For most marketing companies it is appropriate to conduct marketing research whenever a problem arises or to ascertain prospective challenges.
Benefits & Importance of Marketing Research
A company may get the following benefits from marketing research.
1. Consumer-Oriented Marketing
Acceptance of Marketing concept requires a thorough knowledge of consumer preferences, attitudes, and motivations.
Marketing research may provide help to management to remain consumer-oriented in its operations by furnishing the real needs of the target market.
2. Reduces Risks
Marketing research can considerably reduce the risks involved in executive decisions.
The risk arises because of two types of uncertainties – uncertainty about the expected outcome of the decision and uncertainty about the future.
Both uncertainties may be reduced with the help of marketing research which may form the basis of selection of suitable alternative to reduce possible risks.
3. Effective Managerial Decisions
Marketing research uncovers facts and information from both outside and within the company relevant to marketing decisions and provides a sustainable and logical foundation for effective managerial decisions.
On the basis of facts and information provided by marketing research, the marketing executives’ knowledge about the market environment and the company’s constraints is considerably increased.
This leads to effective managerial decisions.
4. Identification of Opportunities
Marketing research may help in the identification of marketing opportunities. These opportunities may exist in the form of untapped consumer needs.
The market survey may bring these untapped needs to the notice of the company’s executives. For example ‘Food Specialities Limited‘ has introduced a ‘Dairy Whitener‘ (as a substitute for milk) under the brand name ‘Every Day‘ to be used to prepare tea and coffee.
The product has proved to be a success because it is very convenient to use. The takeover of ‘Tately‘ by the “Tata Tea” was the result of marketing research to get dominance in the world market.
It had proved a very wise decision for TATA TEA, which has paid $40 crores for this purchase.
5. Stimulates Sales
With the help of marketing research better sales appeals may be designed, better ways of teaching the potential buyers may be identified and proper timing of promotion may be determined.
Marketing research may unearth new uses of the products and may identify the prospective market segment.
Thus, Marketing research May provide desired assistance to stimulate sales.
6. Integration between Company and Consumer Interests
Marketing research also integrates the company needs and Consumer Expectations.
Market research brings about an acceptable compromise between the needs of the majority of consumers and the products offered by the company.
The marketing company plans its production schedules according to the Expectations of the majority of consumers.
7. Assessment of Real Image of the Company
A marketing company may assess its real image with the help of marketing research.
Marketing research may tell the management of the Company where it stands with respect to the reputation of its products and with regard to its institutional image.
8. Reduction in Marketing Cost
Marketing research may not only increase sales but also helps in bringing down marketing costs by making extra effective efforts and by revealing wastes that can be eliminated. (Low-Cost Marketing Research Techniques for Small Businesses.)
9. More Profitability
Marketing research may increase the profitability of the company.
Profitability may be increased by identification of new markets, by exploring new marketing opportunities, by searching new uses of the products, by reducing possible risks and by the reduction in marketing costs.
10. Confidence and Progressive Spirit in Marketing Personnel
Marketing research may provide enough confidence and progressive spirit in the person engaged in the business activities of the company.
The personal may be simulated by knowing their company has sufficient understanding of its marketing situation and the total environment affecting its operations.
The sales department will promote sales with confidence because the products are designed, Merchandised, priced and promoted in a manner that which satisfies the consumers.
Thus, now you know the Benefits & Importance of Marketing Research for business.