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The Importance of Market Research
Sometimes managements ask themselves the tough question why is market research necessary? Market research can be a costly exercise and in an era when businesses are cutting costs to survive, the relevance of market research brings even more questions. However, the fact is that market research has become more critically important today than ever before.
Increasing Relevance of Market Research
Business environments have become increasingly complex in recent decades. Rapid technological developments and globalization of economies are two key factors that have made survival in business more challenging than at any time in the past. At the same time, consumer awareness is very high due to easy access to information from all directions. Therefore, it is not easy any longer to predict consumer behavior or their changing tastes and preferences in a highly complex and dynamic market environment. This has compelled business organizations to become extremely sensitive to consumer choices, needs, and aspirations in order to sustain themselves in a competitive marketplace for a long time. Market research helps them to remain proactive to the consumer needs and retain their market share and customer loyalty for the long term.
Market Research as an Essential Management Tool
Top managements are faced with an over-supply of information and data because of the advances in information technology and data collection, especially in the Internet age. Managements need to apply market research tools and techniques to analyze the available data and information in a meaningful way so as to arrive at the best decisions for the organization. The question is no longer why is market research necessary? The real question is how to conduct market research in the most cost-effective ways in order to achieve the desired results without over-shooting the marketing budgets of the company. Efficiency and accuracy are both equally important to conduct successful market research in today’s organization.
Minimizing Response Time
The day of the slow-moving organization is past, and now it is the era of lean, mean and swift business organizations that can keep up the pace with the rapidly changing market trends. Businesses need to constantly reinvent themselves and re-configure their product and service portfolios in accordance with the needs of the markets. Market research is necessary to stay in touch with the changes taking place at the ground level and feel the pulse of change before it actually arrives. The early bird makes the maximum gain before hordes of competitors follow and the market saturates for a particular product or service. Another advantage for the early entrants is that they can garner a large slice of the market pie before the competition rushes in with similar offerings. Without investing in high quality market research, it is no longer possible to attain leadership positions in various market and product segments.
Market research is also necessary to predict the long-term market trends and re-position the organization well in time in order to perpetuate its lifespan. Smart business organizations are acutely aware of the critical importance of market research for their survival in an increasingly dynamic and complex global economy of today.
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