Importance of Market Research for Businesses

The importance of market research is often undervalued as many entrepreneurs and startups rely on gut feel or intuition to make investment decisions. As a consequence, more than 90% of the businesses and one of the major reasons is attributed to not conducting a formal market research and feasibility study. 

Findings suggest that entrepreneurs and startups underestimate the importance of market research and how it can help them in assessing the market conditions, competition and consumer potential. Moreover, a comprehensive market research study can provide businesses with a clear picture of profitable products and services and answer specific questions about the willingness of end-users to buy and consume the same. 

Consequently, a market research exercise helps in formulating a business plan, devising a market entry strategy, identifying a target audience and making key investment decisions. Market research can be conducted for either creating a new business/marketing plan or testing existing plans. 

Market Research & Data Collection Methods

The Market Research can be classified into Primary and Secondary Research.

Primary Research – Within this approach, the data is collected by either interviewing or surveying consumers, competitors, industry experts and other stakeholders as mentioned below:

• Interviews – Conducting personal interviews via telephone, in-person, email and/or mail
• Surveys – Conducting personal surveys via telephone, in-person, email and/or mail
• Focus Groups – Conducting group discussions (6-10 people) to provide feedback regarding a concept, product or service and/or marketing campaign 

* Conducting interviews and surveys is more cost-effective with the latter being preferred as it allows researchers to quantify the data and reach to meaningful conclusions. On the contrary, Focus Groups lead to productive discussions but are time-consuming, costly and present researchers with a challenge to analyzing the data.

Secondary Research – Within this approach, the data is collected from pre-existing sources which include but are not limited to articles, journals, reports, published papers, newspapers, magazines and government portals. 

Data Analysis

The primary data is typically analyzed by deploying either quantitative and qualitative approaches. The quantitative approach refers to conducting surveys and doing a statistical analysis. The questions are typically close-ended which helps in statistically analyzing the data. The qualitative approach refers to using interviewing methods to learn about respondents’ opinions, values and beliefs. The questions are typically open encouraging respondents to share their thinking and school of thought. 

Common Mistakes

Reliance on Secondary Research – While secondary is a great place to start but in most cases, it lacks context and the information is either outdated or does not provide a full picture therefore making business decisions based on secondary research is considered very risky. 

Search Engines & Web Resources – Relying on search engines and web resources to gather information could lead to inaccuracies thereby making reliability and validity of data questionable. 

Surveying Acquaintances – Surveying only the people you know may not be the right way to collect the data, questioning the reliability and accuracy of the information. Therefore, it is important to identify and screen respondents based on the research aims and objectives and reach out to them for data collection. 

To perform in-depth market research, it is highly recommended to seek expert advice and engage research professionals. Consider market research as a strategic long-term investment that can help businesses not only become competitive but also grow, succeed and become profitable. 

Research Konnection is the best-rated Market Research Company in Dubai assisting clients in business setups and expansion in Dubai, Abu Dhabi and UAE. At Research Konnection, we specialize in Market Feasibility Studies, Business Plan Development and Business Modeling. Feel free to reach out to us at hello@researchkonnection.com and follow our founder Waqas on LinkedIn.