Why is Market Research Important for SMBs in India?

02/12/2021

Did you know there are 633.88 lakh Micro, Small and Medium Enterprises (MSMEs) in India as per National Sample Survey 73rd Round (2015-16)? To be specific, there were 630.52 lakh micro, 3.31 lakh small and 0.05 lakh medium enterprises in our country. Take a moment and let these numbers sink in.

Now, imagine the level of competition in this crowded market. How can you attract more customers and stay ahead of your competitors? How can you ensure that your customers like your products? And how can you boost your sales? Relax. Market research is likely to help you find answers to these questions.

With market research, you can gather information about a target market, consumers, and competitors. You can analyze and use this information to make well-informed decisions. For example, market research can help you learn more about your customers’ buying habits and how much they are willing to pay for a certain product. With this information, you can create better products, improve user experience, and build a solid foundation for a successful business.

To learn more about how market research methods can help your business, read on!

Importance of Market Research for SMBs

Well-planned business strategies are important to survive in today’s highly competitive world. One of these strategies could be constant monitoring of your business environment, consumers and competitors. Market research can help you achieve this. Here are some key benefits of conducting market research for SMBs:

Provides Insights

As a method of collecting and analyzing information, market research can play a major role in the business planning process. It may provide vital insights about competitors, customers and market conditions. These insights can be used to improve the performance of your business.. Market research can also in some cases help you recognize business areas that need more improvements or investments. For example, founders of a video-dating platform used market research and realized the unmet market need for a video-sharing platform. Therefore, they revamped their original platform into what has now become a major video distribution platform.

Helps to Meet Customer Expectation

You can use market research to know your customers better. It can help you understand what they want, how they want it and when they want it. Market research can also help you identify any gaps between customer expectation and experience. You can choose to use this data to improve your product offering and customer services. For example, a famous coffeehouse chain uses market research to find what its customers feel about the brand and its products. This data can be used to meet customer expectations by improving its products and services accordingly.

Improves Sales

As mentioned before, market research can help you identify customer needs and expectations. It can also tell you how your business is being perceived by your customers. You can choose to use these insights to make business decisions that meet their expectations. Remember, happy customers are most likely loyal customers. Loyal customers are likely to purchase again and refer a friend to the company. This will in turn, increase your sales.

Common Types of Market Research Methods

You can make smart business decisions by conducting market research. But before that, you need to understand which market research method is best suited to your primary business objectives. Here are four main types of market research methods:

Primary Research

This method involves analyzing any data that you collect yourself. You can also choose to hire a market research agency to do this task. However, hiring a professional agency may prove to be expensive since they mostly charge heavily for their services. In most cases, you can opt to conduct primary market research yourself at potentially lesser cost. There are four ways to perform this market research:

Interviews: Face-to-face, telephonic or video conference interviews can be a great way to obtain insights from your target audience. By directly talking to your customers, you may better understand their views, needs and expectations.
Surveys and Questionnaires: These are among the most commonly used primary research methods. They let you gather data from a large customer sample base. The gathered data can provide actionable insights into your customer’s satisfaction levels and brand awareness.
Focus Groups: Focus groups mostly consist of people who are intentionally selected for market research purposes. You can opt for a moderator/mediator to engage people into a conversation around your products or customer experience. Their responses may give you insights about a target market or consumer segment.
Customer Observation Sessions: During these sessions, you can observe how your existing or prospective customers engage with your product. These sessions are mostly conducted without any direct interaction with the researcher and the subject, resulting in observing genuine and unbiased reactions from the prospective customers. Therefore, you can possibly get more real insights about how customers feel about your product.

You can use any of these four primary research methods to collect first-party data or information.

Secondary Research

Unlike primary research, secondary research is conducted using second party or third party data. For example, it uses data that has already been published by government organizations, market research agencies, media sources, companies in your industry, and others. These data usually come in the form of articles, reports, e-books, studies, whitepapers, infographics or even videos.

If you have a limited budget, secondary research can be perfect for you. This is because most of the data is readily available and free of cost, in most cases. However, you may have to pay some fees to access data that is published by private companies.

Just remember, this type of market research can help you better understand your industry. With secondary research, you can learn important industry statistics and gain valuable insights about your competitors and customers.

Qualitative Research

This methodology focuses on providing insights through non-numerical data. It involves semi-structured or unstructured data gathered through both primary and secondary research methods. For example, you can use research methods such as surveys, interviews or focus groups. You can also opt to use data from already published articles, whitepapers, infographics and other secondary research methods to conduct qualitative research.

Qualitative research methodology may help you uncover what your customers are thinking. In fact, it may also help you understand the factors influencing a person’s buying behavior. These factors can include quality, price, multiple product options, and customer expectation. In simple terms, it can help you find the reasoning behind your customer’s needs, opinions and actions using this market research method.

After the data is collected, you can analyze it and gain statistical insights. These insights can be used to improve your business strategies and customer experience.

Quantitative Research

Quantitative research is a type of market research that focuses on collecting and analyzing numerical data. For this, you may use both primary and secondary market research methods to collect data. However, quantitative research typically involves questionnaires and surveys.

Under this market research method, you may choose to ask respondents to respond to your questions by selecting their answers from a specific selection of options. This way, respondents cannot elaborate their answers. And, by asking the same questions to many people, you can get a clear picture of how your target customers behave.

Please note that the research data is converted in numbers or figures. You may also use this numerical data to get more insights to guide your business decisions.

Conclusion:

To survive in this highly competitive world, it may not be wise to depend on guesswork and assumptions to run your business, without facts. You can do this by conducting thorough market research. It can help you stay up-to-date with the latest industry trends. Market research can also provide vital insights about your customers and competitors. You can use these data to improve your products, meet customer expectations, and create stronger business strategies. Having good market intelligence can help you make better business decisions and may potentially improve your sales. Happy researching!

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