We are often asked what the value of a market research is. In a business environment, the concept of “market research” seems to have little street credit. However, every successful business owner knows that not only the production of competitive goods or services has value, but to discover and know the value of the proposal beforehand helps to define the competitiveness and possible success. Therefore, it is probably just as crucial as the product development itself.
The first stage in an export business plan is market research of external markets – in other words, the collection of all necessary information for the exporter about the relevant market. Despite the initial unpopularity of this tool and understanding of the fact that such work is essential, many potential exporters neglect this stage in the development of their export activities. Their arguments are usually a limited budget, lack of understanding of the importance of this stage, the lack of understanding on how to use the knowledge or other reasons. So, for all the doubtful managers, we’ve outlined the three biggest advantages of market research:
Discovering the Prospects of Your Business
In the end, market research ultimately answers one key question: to export or not to export a product to a specific country. Many business owners tend to respond to this question with thoughts such as: “What am I paying money for? For “permission” to export? And if in the process of the study we will understand that it is better not to export, it turns out, the money is wasted?”
Suppose you turned this reasoning around and considered the costs of not researching the viable success of your product. Investing all your time, energy and resources in the export and discovering it has all gone to waste. Market research can save costs, prevent unnecessary time and creates a strategic direction you otherwise missed.
Because, let’s face it, investing funds to organize export to a country where goods have no demand, in which there are too many strong competitors or the pricing policies “do not let the product enter the market niche” with prices as yours, or other barriers – political or economic, and perhaps administrative are more expensive than skipping the market research phase. Developing an understanding of your market before entering it and weighing the “pros” and “cons” helps you discover the prospect of your business and potentially save you a lot of money.
Become Responsive to Your Customer’s Demand
All managers need to understand that market research is a clearly structured, but not necessarily universal procedure. In each case, such a study can include items that are specified by the customer. First, every market is analyzed because each market is different.
For example, when entering a market already populated and fast growing, you need to analyze the preferences of consumers in detail. This enables you to timely react to their changing needs. When entering the market, with gradually falling sales figures, you must first find out the causes of such dynamics and, if necessary, change your own marketing policy. Thus, the market study defines the parameters of the market (in addition to product and country) which you, as exporter, are most interested in.
An example from China which shows the need for market research is that red wine is much more popular than white wine, even though the Chinese palate prefers the sweet white wine. This is because red is a color with many positive associations in China, red wine looks healthier than white and many Chinese people think it looks fancier to drink. In this case, deciding to bring white wine to the Chinese market, might be a mistake.
Improve Your Product
Market research helps to see your product from a different perspective – the foreign consumer. Comparing the different market aspects and combining them with the characteristics of your product, you have the chance to create a unique selling point. Conducting market research, you primarily improve your product, as paradoxical as it may sound.
Market research also has some stereotype disadvantages you should do well to be aware of: The first of which is searching for buyers. Why conduct a market research when there are no potential buyers? The answer is simple – market research does not and will not focus solely on finding clients. Targeted negotiations with potential partners is a separate step and much more complex and serious than the collection of market information. Undoubtedly, a market can be a place with a large number of manufacturers and buyers of products. However, the ability to sell the product with the declared quality and price, set by you, is still a form of art. This is time-consuming work which requires patience and a professional approach. Difficulties may arise in the application of the obtained information about the market, how “to read” market research. But with the support of a competent specialist report about the market research will “say” more than you can imagine, and definitely, will save your time and money. Therefore, for every business, market research is of importance. It will help see the prospect of your business, become more responsive to client demand and helps to understand your own product more.
We hope that all your tools, including market research, will make your export effective. If you have any questions or want to receive a free consultation about services which our Agency offers in the process of promoting your company to new markets, you can leave a request in the feedback form and we will call you!
This article was created by our Russian partners from Svoi Ludi. Svoi Ludi assists Russian companies coming to China and non-Russian companies coming to Russia. You can find more information about them at: www.svoiludivkitae.ru