Previously, I wrote an introduction to market research in an article entitled A Simplified Market Research Method, which explains what market research is? and why do we need market research? as well as the simple methods commonly used in market research.
In this article, I would like to share information about when we need this market research?
There are 5 times when we need market research. If we have a business already or we have plan to open a business. These five times are truly relevant, namely:
We will discuss them further one by one as follows:
The pre-launch stage is the preparatory stage for the business that we will do or the preparation of the product or service that we will bring to the market. The preparation stage is an especially important period and will determine the success of our business.
The right period for doing market research at this stage is generally around 12 months to 6 months before the launching of our business or product. Market research conducted at this stage generally has the aim of ensuring several things such as:
- Is the USP (unique selling preposition) of the product or service that is planned for launching to the market has been clearly assessed by potential consumers compared to other products they have been using so far?
- Is the price of the product that we are going to offer to potential customers is considered in accordance with the value held by our product or service?
- Is the packaging of our products perceived attractive by our potential customers?
- Is the performance of our products meeting the expectations of the potential customers?
- Are potential customers willing to buy our product or services?
In general, the objective of conducting market research at the pre-launch stage is to find out and ascertain whether our products will be well received in the market by the targeted customers. If the results of market research indicate things that need to be improved, we still have time and could improve them before our product or service is launched to the market.
If we look at the objective of this market research, as reviewed in the article I previously wrote, namely A Simplified Market Research Method, the method used is quantitative research where we benchmark our products with several products that are widely used by consumers.
Next, we will discuss about market research conducted in the next stage of the product life cycle.
Market research in the launch stage is generally carried out within 6 months after the product is launched. The purpose of research carried out at this stage is to determine the response from consumers after our product is launched, including:
- To find out the consumer awareness of our product or brand.
- To find out where our consumers know the brands of our products from, for example, whether they know it from advertisements, or by recommendations from colleagues or family, or when they are looking at supermarket shelves while shopping.
- Knowing the consumer ratings of our products compared to the products they have used so far, both in general and according to certain criteria being asked.
- To determine the effectiveness of promotional activities and the marketing communication that we do.
- To find out the response from various groups of consumers, retailers, and distributors of our products.
Ideally, market research conducted for products that are launched can be carried out several times within the first 2 years of launch. During that period, we did the tracking, especially about the points mentioned above.
The growth period is a time when our products continue to keep growing after launch. An important indicator that must be considered is the comparison the growth of our products with the growth of the market or segment where our products are categorized.
For example, we have the skin care cosmetic products. If for example our products have a growth of 20% compared to the same period last year while the growth of the skin care cosmetics market is 10%, then our products will grow 2x faster than the market. It is certain that the market share of our products in the skin care cosmetics market will increase. This condition is what we call a growth condition.
However, if for example the growth of the skin care cosmetics market is 25%, then the growth then our products growth is smaller than the market and this will have an impact on decreasing the market share of our products.
So once again the important thing that must be considered at this stage is to find out whether the growth of our product is still greater than the growth of the market or segment where our products are categorized.
Therefore, market research conducted at this stage is mostly related to data analysis and tracking of the sales information and market data. In general, we can get data and information about the market or segment from a research company that specifically builds infrastructure for tracking in this field, such as companies called Nielsen Company, Euromonitor, BMI-business monitor international, and many more.
Important points that must always be considered in market analysis at this stage of growth are:
- Do our products continue to grow bigger or faster than the growth of the market or segment where our products are categorized?
- Which brands are included in Pareto products in the market? Pareto products are products that in total control 80% of the market share in a particular market or segment. This means that these are top brands from a particular market or segment
- Are there any new products launched on the market?
- How to analyze this growth if it is done based on geography (province, city, etc.) or based on certain market channels (modern outlets, general trade, e-commerce, etc.) and pay attention to which parts are experiencing faster growth than the market
- How is the position or ranking of our products compared to competitors?
The mature period is a time when our products have been in the market for a long time, are well known by consumers and have also been positioned well in the market as a top brand. One of the characteristics of the mature period is that our products tend to have a stagnant growth or the same as the growth of the market or segment.
If this condition persists when we reduce our efforts for promotion and allocate it for example to other products that we will launch, then we can say that our products are in a mature condition.
So, the mature condition means that our products are independent to survive in the market and generally this is because our products have loyal customers who have been satisfied with the performance of our products.
For this reason, our goal is to maintain this mature condition as long as possible, by always paying attention to the satisfaction level of consumers who have been loyal in using our products and maintaining the brand equity of our products.
This brand strength is especially important to note because it is an unbelievably asset. Because if we have succeeded in having a brand that is trusted by our consumers, this must be maintained and can even be developed to create other products that use the core brand as their identity.
The points that need to be considered in market research at this mature stage include:
- We know well who the loyal consumers of our products have been so far.
- Knowing what are the important things that we must fulfill so that they can continue to survive as loyal consumers.
- How influence do they have and whether this influence can be used to expand the marketing of our products.
- Opportunities for other types of products that can be created as variations of our mature product brands.
- What characteristics our consumers see as something unique from the products we have.
This condition of decline can occur in two ways. The first is if our product growth is smaller than the growth of the market or segment. This condition will result in a decrease in the market share of our products in the existing market or segment. We must remember that competition with other products in the market is dynamic. We should not be fooled by saying that our products are still growing, but when compared to market growth or segments where our products are categorized, it turns out to be bigger, so our competitors grow faster than us.
The second condition is if our product growth is minus compared to the previous period. This condition is of course even more serious. Because the sales of our products have decreased compared to before.
For this reason, market research carried out in conditions of decline generally considers the following points:
- To know which competitors are growing faster than our product growth.
- To find out why our consumers switch to using other products.
- What advantages do other products have so that our consumers are interested.
- Who are the consumers who are still loyal to our products and we can defend them.
- What kind of product development can we do to rejuvenate our products
This is a brief explanation of the 5 important times for us to do market research. In this article the explanation is more emphasized on why we do market research at each stage of the product life cycle and what are the important points and information need to be considered at each stage.
The more specifics will be discussed in a separate article.