What stops a business from investing in market research?
Many small to medium size businesses know that they should conduct some form of market research. But, what do you think it is that stops many businesses from making the investment? Is it a misunderstanding of the value it adds to the business, or is it something else? Do you have an experience you can share?
There's much of value and a lot of real-world experience speaking to us in the foregoing comments. (Sorry I'm joining so late - I just came on board recently.)
FYI: With the project resources available these days for custom-design market researchers, there's not much good reason for small/medium firms with consumer markets (B2B is another matter), to forego their own projects. Tools exist to obtain good, informative and original marketing research that yields product-specific results proprietary to you, the client. If you can, get it on a full service basis, i.e., with a report and presentation to clarify the results and discuss the marketing implications. Should be rather easy to justify, as remarked above, on a ROI basis.
I've worked in large corporate B2B environments in market research / competitive intelligence / strategy development roles for many years. The issue is not unique to small/medium businesses. In my experience, many people in leadership roles have difficulty identifying the value of the research because there is not an easy link to a monetary measure. I found that many people, at all levels in the organization, assume that most any information that is needed is available "free" on the web. There is a real lack of understanding of the process of data gathering, analysis, and -- most important -- interpretation. My most repeatable success in corporate was presenting summary conclusions identifying probable impact on the business as well as possible actions to either capitalize on a strength or overcome a weakness. As others on this thread have cited, there are many misperceptions about market research and market researchers.
When a business is succeeding many new business owners do not see the need to invest in the market research while they are profitable. Some business owners will only consider the market research needs when the numbers dip or the business is in a downtrend. This is counterproductive to "keeping an edge" and market research should be an ongoing consideration both before launching a product and during the product's market lifetime. Also, market research should be made easier and available without too much capital investment to encourage struggling business owners to invest any of their already stretched capital- possibly as a service that can recover costs from any ROI.
Market feedback strategy in necessary for every business because by this study you can improve your product and also by the help of this study you know your original standard, and you also find ground realities,...
There are several reasons; especialling coming from someone like myself; who has worked for Fortune 500 and smail companies in past. First of all the Fortune 1500 more or less set the market segments covered by the typical providers of these services (e.g., Frost & Sullivan, Gartner, etc.). Second the cost for a market segment report ranges from 3,000 to nearly 10,000 $US. Out of range for most small and medium size enterprises. Second, many small and medium size buinsess may have few employees with the relevant experience to address the challenge, let alone know which questions to ask or report to select. Thirdly, it is best to get a blended view of a market. Translation, you really need to comb through several market reports to neturalize the bias, from a single report. And finally, fat and ignorance is blizz success of some small business, blind them to envisioning a future that would be other than the current success. I call that the diosaurs feeding on the savania before the asteriod hits.
In my experience, companies are reluctant to invest in research because they think it costs too much and takes too much time. I encourage them to start small, by identifying the one story they would like to be able to tell their investors, their customers, or the market at large, and then do some research to validate, inform, or in some cases refute that story line. Often, once they see the power that having data to support your claims wields as part of a solid communication and marketing strategy, they come back for more!
Not understanding what marketing is really all about...Marketing is understanding "what part of the customers mind you wish to own" and you can only get to that point in your organization if you know what is going on in your market place...Not doing marketing research is a death knell from my view to many mid sized companies...I always did market research in areas that influenced our customers, and since they were furniture and cabinet manufacturers, we purchased periodicals etc. that spoke about what was going on the industry.
We were also a member of an Association, whose main purpose was to let us know what was happening in the Industrial Coatings Industry...I also used D&B for researching potential customers in geographic areas, by employees, by SIC code, and by credit rating...
I think it is simply the pricing in combination to the industry and category your business falls in. If anyone here has a small business and has spoken to an IBISWorld rep for example it makes you question if the quote they give you is at all worth it if your business isnt generic enough to make the most use from their data. Then to really make it worth it a custom research has to be commissioned which is a lot more money than IMO their over-priced reports already are.
Hello Steven , first of all I think that the bsinesses small & medim size don"t go for market research because of the cost value ,they can"t offer to pair the cost & some of them do have market research but not in proper way or make their own ,without going to consultants companies , from my own experience I was incharge of a company ,the owner was refusing to pay that much cost .
Here in Brazil, only large corporations usually invest in research. Hiring companies or research institutes are costly and this removes investment opportunities. In fact, for most companies, research is understood only as a costs. Doing research is essential to get answers identifying the target audience, their tastes and habits.