How Does Market Research Improve My Business Strategy?

In 2008, juggernaut coffee house Starbucks pulled 70 per cent (61 stores in total) of its stores in Australia due to underperformance. How did a giant coffee brand that had succeeded in many other countries struggle to connect with the folk from Down Under? Australians have an intimate relationship with coffee and prefer home-grown boutique cafes. In trying to infiltrate an already mature coffee market, Starbucks stumbled. 

When a business has a superficial or inaccurate understanding of a market, they might find that their products may not perform as well as they hope. And this is why carrying out thorough, deep market research is an absolutely vital step before starting to market and sell products. 

Why is it important to carry out market research? 

Market research gives enterprises valuable insight into customer preferences, habits and behaviours. It is a critical step in the research and development (R&D) process when rolling out a new service or product. When you have conversations with potential customers, you gain an understanding of their needs and are in a better position to determine if you’re meeting them. By testing out early prototypes in small focus groups, instead of launching immediately, you mitigate risks and can address problem areas, improve features or re-strategise. 

Understanding a market requires knowledge of market demand, saturation and size. It also involves gathering information about product pricing, target audiences, marketing channels and competitors. In carrying out market research, and in developing products that provide value to consumers, you gain a competitive advantage over rival brands. 

Primary and secondary research

Research can be conducted via two methods: 

Primary research: This research involves actually going down to the ground and speaking to the source. You can either conduct research in-house or outsource it to a third-party, like an integrated marketing agency. Types of primary research include: 

  • Face-to-face or virtual Interviews
  • Product testing 
  • Focus groups
  • Surveys
  • Field studies at competitor stores or products

Secondary research: This involves research that has already been conducted and compiled by government agencies, journals, publications, and magazines. Secondary research is preferred over primary research if you have time and budget constraints. 

At BDSA, we carry out both primary and secondary research during the Brand Discovery phase. 

Understanding your competitors

Do you know who you’re going head-to-head with to gain greater market share? How do these competitors price their products? What is their content strategy? Are they under-serving a consumer segment? Study what they’ve done and closely watch new products or services they launch. With a competitor analysis, you will be able to be aware of your competitors strengths and weaknesses and find ways to use this to your advantage.

Understand what the industry benchmark is, measure yourself against it and find innovative solutions to give yourself an edge. One powerful way to set yourself apart from the competition is through brand differentiation. With strong branding, communicated through consistent brand voice and visuals, you are able to create a brand that consumers readily recognise and gravitate towards. A positive brand experience gives you the upper hand: where other brands disappoint, you delight. 

Types of competitors

Generally, there are two types of competitors to be aware of: 

Direct competitors:  Enterprises that sell products or services in the same category as you and the ones who are always on your radar. An example of a pair of direct competitors would be Starbucks and Coffee Bean. 

Indirect competitors: Businesses that sell different products or services from you but which fulfill the same needs. These types of competitors are sometimes overlooked, but provide great new business opportunities. An example would be Starbucks and Boost. 

Venturing overseas

To overcome the limitations of a small domestic market, local companies may also decide to expand internationally. The type of competitors they work with in this new region may vary dramatically from that of their home country. These competitors might already hold a large market share and have a deep understanding of their consumer profiles. How do you attract new consumers and ensure they respond well to your product in such an environment? Market research and understanding the competitor landscape in this foreign territory becomes especially critical. 

Gain the competitive advantage with compelling corporate branding 

Enterprise Singapore’s Enterprise Development Grant (EDG) equips local companies with the financial capability to digitalise and innovate. With up to 80% of costs subsidised and BDSA supporting the grant-applying process, you can brand your products in a hassle-free, cost-efficient manner. Take advantage of marketing grants for SMEs and get a leg up with your competitors.

Together with the help of a digital branding agency in Singapore like BDSA, start your process of market research and the development of a strong brand with a well-defined personality. We distill your brand’s mission, vision, values and promise, construct brand pillars and position your brand. 

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