Amalgamating Market & Marketing Research – Current Agenda for Risk Management
Written by Srijani Chaudhuri
In order to understand whether a particular strategy will work or not, it needs to be analyzed. The necessity to analyze, demands for the ability to measure. Measurement in turn points out the need to find the right set of data and to obtain the essential data, adequate market research is crucial.
Let’s think of a scenario where a company plans to launch a new product. Now, with the launch of a new product, certain risks are involved- how will customers accept the new product? Are there already similar products available in the market? Will the product grab new customers?
To answer such questions, the company needs to conduct market research. Market research refers to data and analytics focusing the whole market. This includes gathering relevant information about target consumers, figuring out the market trends, and understanding market segmentation. The basic idea is to bring forward a clear picture of the past and present and draw a relation with the future. It creates an awareness of the probable risk in the market and consequently prepares the company to react.
As per the previous example, market research would involve assembling information of current competitors, assist the company to detect the target purchaser with the motto to set the pertinent pricing model. If the study shows that there is high competition and the target audience is budget-conscious, the strategy would be to create a low pricing model to acclimatize to the situation. Thus market research provides information that allows to act accordingly and give the product the best chance of survival.
Irrespective of whether it is a large company or a small firm, it is important to understand the market for it will ascertain varied factors that can influence the business or clients. The know-how of the competitors, determines the business health of a company. If a rival company, has faced a managerial exit, it is obvious, there is a turmoil in the company and a dearth of a leader. Similarly, layoff in a company indicates the lack of strength. On the other hand, an expensive contract bagged by a competitor is worrisome for the rival company. In short, the continuous decisions and events taking place in other firms in the similar market needs to be monitored for a clearer picture of the whole industry.
While market research is the principal step, marketing research is a method to analyze the bygone and progress. Marketing research typically rotates around the efficacy of an operation and considers brand assertiveness, customer gratification, and feedback prior to generating a data profile. It is a blend of primary and secondary research in a strategic manner.
Marketing research digs into how consumers react in reality. In an era of active social media, social media surveillance can be an important measure to build decision. To understand whether the new launch will hit the market hard or not, it is necessary to check the review of similar products on various sites. On the same note, as a recruiter, the employment market analysis will provide a projection of industries within a specific region. Therefore, marketing analytics emphases on real market response.
Marketing analytics do not restrict itself to record the online performance, it also looks into more holistic tactics to the in depth study of marketing efforts, like offline data recording (sales and lead generation). It looks into the impact of marketing, specifically on pipeline generation and revenue growth.
An organized and scientifically structured market research approach is critical to managing risks related to global sourcing relationships. In most risk management programs, relevant market data, trends and insights are almost totally ignored, where all the focus seems to be on contract metrics (SLAs, turn-around time, quality, etc.) and contractual terms & conditions. A robust and effective risk management program must overlay contractual relationship metrics with market data.
Hence, for risk mitigation and company growth there needs to be an amalgamation of market and marketing research. The following research approaches can be useful in mapping the initial steps for risk management in the realm of market & marketing analytics.
Firstly, an economy overview is helpful in defining the current market position. A trend analysis (at least five years) will depict the growth prospect of that industry. It is also beneficial in identifying parallel markets where the right investment can be made. Secondly, shift share analysis can be a major indicator of geo-political causes. Local knowledge, like political disturbance or geographical hazards will determine why certain companies are out-performing. A data driven exercise can build comparative advantage. Thirdly, occupational analysis points out the inclination of certain skills within a region. This information will not only help recruiters but also be advantageous for the organization in providing training to the existing employees. Finally, performing strategic analysis gives the overall picture. This helps in understanding the effects of new businesses entering, departing, rising or shrinking in a region and how it is capable for affecting the existing business.
Therefore, the crux; a good market analysis is vital as it allows a firm to remain competitive in the market and manage risk proactively.
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