4 Ways Investing in Market Research Can Save Your Company Money
For us at 360 Market Reach, we intrinsically know that market research is a great investment. We also know that our clients need to see a concrete return on their investment. The function of market research is to understand your target customers better with the ultimate goal of growing your business (IE: $$). With marketing budgets stretched tight, Marketing Departments need to prove the value of market research to ensure it secures it’s place in the annual budget. In order to get top-level buy-in for your market research budget, we’re sharing some insight into the ways that market research can save your company money in the long run.
1.Validate the Concept in the Innovation Phase
When you invest in market research, you are spending those funds on knowledge that will sustain you in the long term and not waste money developing products, services or marketing that will ultimately fail to meet your needs. We always hear of the big mis-steps such as New Coke or McDonald’s Arch Deluxe, but there are many more products or services that don’t quite make it to market, but have hundreds of thousands of dollars invested in them before the flaw is uncovered. Understanding and evaluating barriers earlier in the process saves not only money, but precious resources. It’s much more costly to make a mistake while you are almost at the point of production, rather than at the innovation phase. Knowing this information in advance is essential so as to not invest in the wrong idea. Early concept testing or a quick max-diff exercise are just a couple of low-cost tools at your disposal to narrow the field of ideas invested in and save your company both money and time. Our philosophy is….test, refine, and test some more so that when you hit the “GO” button, success lies ahead.
2.Find the Right Price Point
10 cents doesn’t seem like a lot of money, in fact most people would give away a dime without even thinking about it. But when that dime is the difference between 20 million people buying your product and 40 million people buying your product, that 10 cents is crucial. Market research can help to identify where that crucial turning point in price lies. It’s often a fine line between making greater profit on your offering and turning off potential customers by pricing out of their range. Pricing research typically doesn’t require a big investment, so the money needed for 20 research projects can easily be recovered with one key product pricing adjustment. Whether the price point is a forty-cent difference for a small product or a few hundred dollars difference for a high-end luxury product, market research can identify the best option to produce the greatest income for your business.
3. Measure More With Brand Tracking Programs
Here at 360 Market Reach, we develop Brand Tracking Programs to measure not only brand awareness and loyalty but brand stretch (what are the next areas of expansion for your brand) and measure evolving category trends. Brand Tracking Programs help with everything from keeping a pulse on the overall landscape of your category to the impact of competitive line extensions and price adjustments. They also help you understand what aspects of your marketing efforts are most impactful. As brands are constantly being bombarded to spend their money developing line extensions, building various sponsorships or brand ambassador programs, etc., Brand Tracking Programs provide insight into the overall value and ROI of key investments. Understanding the return on your investments can prevent your brand from wasting money on activities that don’t perform.
4.Determine the Value of Premium Placement with Virtual Shelf Testing
Product placement is a big deal, especially when that product is being placed right next to its biggest competitors. One aspect of market research that comes in handy with many of our customers is using a virtual shelf test. This allow consumers to provide you with the insights on where they are looking first and what stands out to them as they view the shelf across many geographic areas and retail types. From this, you’ll understand exactly where your product should be placed on the shelf and if it’s worthwhile to move forward with premium placements. Virtual Shelf Testing lets you hear directly from the people that want your product so that you have the best chance to maximize your ROI.
These four aspects of market research that we discussed today are only a fraction of how market research can save your company money.
Want to chat more about how market research services can save your company money? Get in touch today for a 30-minute marketing research assessment today.