Market research is an organized effort to collect information about customers or markets. It provides information that is important in identifying and analyzing market needs, size and competition. it is an important component of business strategy.
Steps in market research
- Identification and definition of the problem. This will enable you to clearly recognize and list the problems.
- Developing the approach. Once you clearly define the problem, you move onto development of your approach.
- Design your research based on the problem identified, defined and the approach taken.
- Data collection. Information is gathered from the field using a selected method of data collection. Questionnaires are commonly used.
- Performing data analysis.
- Reporting and presentation of the research findings to decision makers who use that information in making major decisions.
Market research has several limitations such as being costly, it is faced by time constrain, it may be biased, inexperienced researchers and unable to provide solution to marketing issues.
When selecting a pricing strategy the size of the business, profitability, and level competition in the market should be considered. The pricing strategies that can be used include neutral pricing and penetration pricing. Neutral pricing is where you set the price of your products at the same level as those of competitors. This will not scare away customers hence good customer base can be created. In penetration pricing, the prices are set be slightly lower than those of competitors. This attracts more customers thus the product will be moving fast.
McDaniel, C. D., & Gates, R. H. (2005). Marketing research. Hoboken, NJ: Wiley.
Burns, A. C., & Bush, R. F. (2000). Marketing research. Upper Saddle River, N.J: Prentice Hall