مديريت

May 2008

The Importance of Marketing Research for Iran Companies

Most of the managers in Marketing, Sales and other related areas know Marketing with this definition: "Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual (customer) and organizational objectives". The concept of marketing defines marketing as a process which is intended to find, satisfy and retain customers while business makes a profit. But central to all these definitions is the role of the customer and his relationship to the product.

Beside this definition, as a one of the most important tools for Marketing measurement, Market Research is a continuous process for collecting, investigating and interpreting information about a particular market a company operates in or a product/service the company offers for selling in that market, and also about potential and existing competitors and the past, present and potential customers who purchase and consume the offered product/service. So, conducting market research means making an analysis of all information about the market, product/service, customers and competitors in order to investigate possible ways for the company to successfully operate in the market, sell the product/service, attract the target audience and gain competitive advantages.

Market research consists of a plan that charts how relevant data is to be collected and analyzed so that the results are useful and relevant for making marketing decisions. Once the research and the related analysis are complete, the results are communicated to management. This provides management with in-depth information regarding crucial factors that have an impact on the target market and existing marketing mix.

Planning and conducting market research is one of the key duties of marketing departments and teams. For your company it is also important to organize regular market research to get insight into the market, investigate spending habits of your customers, identify existing and potential competitors, develop solutions for product promotion and advertizing, increase your company’s recognition, improve your business reputation, and so on. Researching the market is an important activity providing your company with more business planning solutions that can improve the company’s performance, improve sales and increase revenue.

Any businessman who works in a professional condition knows the importance of market research. To prove this statement, let’s view why you should research markets. Market research is important for your business because it provides you with the following opportunities:

1)     To make Marketing Decisions: Marketing Research helps the Marketers to make a decision about the product or service. Sometimes a marketer might believe that the new product or services is useful for the customers. However, research may show that customers do not need a product or are meeting their needs with a certain competitor product or so on. Similarly good marketing research strives to provide options for the successful introduction of new products and services. This makes the market entry of a new product or services less risky.

2)     Survive the competition: Marketing Research helps in ascertaining and understanding competitor information such as their identity, marketing network, customer focus and scale of operations. This helps in surviving and in certain cases, even leaving behind the competition. Moreover, with market research you can also help understand the underserved consumer segments and consumer needs that have not been met.

3)     Helps to decide Target Markets: Research helps provide customer information in terms of their location, age, buying behavior & gender. This helps the marketers zero in on the target markets and customers for their product & services

4)     Maximize profits: Apart from profit maximizing steps such as item optimization, customer profitability analysis, and price elasticity, Marketing research allows you to find out methods that can help you maximize profits for example, products price elasticity research can help you ascertain the impact of an increased price on the sales and the profits of a product. This emphasis on the profitability also helps the company’s focus to shift from maximizing sales to increasing the profits of a company. This helps the company survive in the long run & maximize its profits

5)     Increasing the sales: Increasing the sales of your product or services helps the company in maximizing its profits. By understanding the customer's needs, wants & attitude towards the products and determining whether your products fit the bill, marketers can increase their sales. This helps in not only increasing the sales to the target customers and people already using the product but also converting the non-users into customers for the product Therefore, market research is imperative for a company to know what type of products or services would be profitable to introduce in the market. Also with respect to its existing products in the market, good market research enables a company to know if it has been able to satisfy customer needs and whether any changes need to be made in the packaging, delivery or the product itself. This enables a company to formulate a viable marketing plan or measure the success of its existing plan.

The importance of market research is explained by three key opportunities that your business gains. First, you get sales increased, then you reach better customer management, and finally you lead your company to continuous business growth and development. Taking into account these opportunities, you should research markets because market researching paves the way for better inventory management, business planning, time management, employee management, etc. Obviously the marketing department of your organization can optimize its marketing campaigns through planning and conducting market research activities.

Written by :

Alireza Ahmadi

MBA