Doing market research prevents a situation that happened to the Ford Edsel – creating a much-publicized product that nobody wants. Ouch.
Marketing helps businesses understand competition, potential, and future customers. It can add significant value to products and services and help companies make informed decisions. The four P’s (product, price, promotion, and place) of the core marketing mix cover a vast area of business operations. Add in people, process, and physical environment, and you have a robust foundation of research for a new business.
Check out these five ways marketing can help a new business prepare for, predict, and adapt to obstacles and opportunities.
1. The Ideal Customer
If you want to sell a product or service, it is helpful to offer something people need or want. Businesses did not always work – or try to work – this way. And it is easy for a company to drift off course from this principle.
Bill Gates said that the failure of the Ford Edsel is among his favorite case studies. The firm developed the car without paying attention to market research. Having performed the essential market research and listening to the results could have saved the company around $350 million.
One of the worst gaffs was that the company tried to please everyone with the vehicle. It released 18 variations of the car and seemingly attempted to make it masculine and feminine all at once.
Innovation and diversification are excellent business practices. In the first instance, however, it is normally safer to listen to what market researchers say about the ideal customer. Focusing on your clients’ wants and needs establishes a solid base before expanding into other areas of the market.
2. The Market Stage
J. C. Doyle, an Edsel marketing manager, said: “People weren’t in the mood for the Edsel. Which is a mystery to me … We gave it to them, and they wouldn’t take it. Well, they shouldn’t have acted like that.”
Paying attention to thorough market research is essential before launching a product or service. Blaming the market for not buying a product does nothing for the business but costs it money and reputation. Instead, it is critical to get to the root of what consumers want and give it to them.
As well as telling a company if its product or service is in demand, effective market research will show the firm if that demand is increasing, stable, or falling. Entering a market in decline can be costly. It is better to spend time and money on market research so that the firm can focus its efforts on a growth area or at least a market where demand and sales will be stable and predictable.
3. Reaching Customers
With market research before a product or service launch, a business can prepare its strategy and refine its tactics for the coming months or years. This might involve planning television ads, exhibitions, car decals, billboards, content marketing, social media marketing, or any of the myriad communication channels. Marketing research will help a business identify which channels will communicate messages best according to the lifestyles and needs of the potential customers.
Marketing will allow the firm to outline how it will attract and communicate with its clients. It doesn’t matter whether the business thinks that bi-weekly long-form content on Medium is a good idea if their customers are primarily watching daily videos on Instagram.
Firms can then use their market research to build customized lists and connect with potential business partners and consumers, creating brand ambassadors that become a part of a consistent brand experience. Leadar’s ease of use and extensive database make it an excellent tool for building consumer lists and finding investors and business partners.
4. Knowing Your Niche (or Outdoing Other Players)
Since marketing identifies all the major players in the business, who they play with, and how the company in question can fit into that overall picture, enterprises can decide whether they intend to steal major amounts of market share from other brands or occupy an underserved area of the market.
Rather than attempting to please everyone all at once, marketing can help a business occupy a niche, which has the advantage of attracting new, loyal customers, and not having to worry too much about competition from other players, at least at first.
Domino’s is an excellent example of how market research helped a company gain market share. In 2009, the firm had less than 10% of the pizza restaurant market and was making a loss. With market research-based rebranding, it identified things that customers disliked and fixed them. Among other things, it became one of the first firms to take orders via social media.
5. Defining the Brand
Like all things with modern marketing, branding starts with the customer. The idea is to make a name, logo, color, and style synonymous with a company. Well-known brands are recognizable by their colors, shapes, and fonts, resulting from creative efforts built on market research.
Market research can help a new business define how it wants to be seen by its customers rather than leaving that to chance. It can determine whether it will be helpful to be known for being fast, great value, family-run, fun, or another notable trait. And marketers can see how these traits align with the firm’s core values to create something authentic that drives the firm and resonates with consumers.
With psychographics, demographics, and consumer behavior analysis, market research adds value to products and services, builds stronger relationships between businesses and consumers, and boosts sales by focusing on business activities.
While we have seen that the Edsel became infamous for demonstrating what happens when a company does not listen to its customers, a new business can achieve a quicker, more successful launch by focusing on thorough market research practices and following the advice accordingly. Since market research helps businesses identify opportunities and react to market trends, it is invaluable for a new business and effective throughout its life.