Why Market Research is Important

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Market research should never be underestimated. Many successful new businesses enjoy longevity because their owners conduct regular market research to understand their target market, identify consumer problems, and pinpoint realistic competitors. 

It’s the simplest way for entrepreneurs to keep up with market trends and maintain a competitive edge by sizing up your business opportunity. Market research is the collection and analysis of information about consumers, competitors, and the effectiveness of marketing programs. While market research is crucial for a business startup, it's also useful for established businesses to increase profits.

Market research can be carried out at various stages of a business life cycle, from pre-launch and beyond. Having a greater understanding of your marketplace from the very start will enable you to create a sound business strategy to establish and grow your brand into one that’s better than the competition.

 There are four important steps to any successful market research study:

1. Investigate whether similar research has previously been carried out

2. Analysis of the existing relevant data that meets your objectives – providing it meets your budget.
3. How will the existing data be used and by whom?
4. Do you need to conduct your primary market research too? If so, with whom?

Is Market research really that important?

In today's time do big company giants take market research seriously?

To answer all these questions; here I present the Starbucks decision based on market research. 

Starbucks:

Starbucks Corporation is an American multinational chain of coffeehouses and roastery reserves headquartered in Seattle, Washington. As the largest coffeehouse in the world, Starbucks is seen to be the main representation of the United States' second wave of coffee culture. Starbucks has been a successful company over many decades because of its business strategies which they implement. 

Methods of Market Research:

One notable way that Starbucks conducts its form of market research; is through its My Starbucks Idea platform. This strategy was rolled out in 2008 as part of the company's "Transformation Agenda" at the time. Since then it has gone through some different iterations, but the basic idea behind it remains the same: customers, potential customers, and employees can go to the website to submit any ideas they have for new offerings, changes they’d like to see to anything that already exists, requests to bring back old products, and more.

Starbucks regularly tests new products in select stores, which helps the company figure out if it needs to make any changes before launching them in other markets — or if it will even continue the launch in other markets. Starbucks also uses data from several market research firms, as well as data gleaned from its stores, to shape its new product lines.

Here's the emergence of dairy-free milk products into Starbucks- 

Market Research Company Mintel reports that during the period from 2012 to 2017, overall sales of dairy-free milk alternatives in the U.S. grew 61%, with almond, coconut, and soy milk being the most popular types. Starbucks has kept pace with this trend among health-conscious consumers and customers with special dietary limitations. In 2015 it launched drinks with coconut milk, and in 2016, it began offering almond milk. Starbucks also began offering oat milk in its European stores in 2018 to keep up with trends there.

The company says that a major reason that it launched these dairy-free milk alternatives was that they were some of the most requested offerings on its My Starbucks Idea platform. During 2014, the company also tested the use of coconut milk in stores located in Cleveland, Los Angeles, and Oregon. The results of the tests and combined market research were positive enough for Starbucks to begin rolling out coconut milk nationwide.

Hence, with the help of daily feedback and by understanding the perspective of potential customers, Starbucks brought an influencing change in the market.

Market research provides information, which helps the business to analyze and identify the market needs. 

As customers preference changes, market research is the platform which connects you to the customer and hence you can market the products of their need which will result in achieving business growth. 

Written by – Soham Upadhye

Edited by - Bushra Makhdoomi