Why Prioritize Studying the Market
“Customers are always right.” No matter how problematic it may sound to some entrepreneurs (and customers as well), it is a fact that business always considers a huge factor concerning the customers. Businesses, aside from its primary purpose to maximize profits for its owners, have to serve its customers efficiently.
In order for a company or an entrepreneur to do that, and before anything else, they have to study the market. Prioritizing to study the market will give anyone a headstart. Here’s what you can expect after studying the market:
1. A deeper understanding of target customers
Customers are one of the most important stakeholders in a company. It is important to know who they are and how they behave in the market. When you study the market or conduct market research, you will have a full profile of your target customer, knowledge on what are their needs and wants, what triggers them to buy and not. This information will help the company adjust its strategies and plan effective tactics to make loyal customers.
For example, your business is an outsourcing company. The target customers are SMEs and small entrepreneurs. Through market research, you will know who they are; their age, location, gender, and income. Also, how they behave, what are their needs and wants, what they lack and what they have the most. Through that, you can adjust your pricing and make it affordable for them. You can modify your product placement to work in favor of them. And you can craft effective campaigns given that you have full knowledge of how they behave. Once you know their thought process, you will predict their buying behavior.
The moment you have enough information, you can now take advantage of it for the strategies to work for your favor.
2. Advantage over your competitors
Studying the market is not just about the customers but also your competitors. Knowledge of their strengths and weaknesses will help you adjust your place in the game in the marketplace. Their weaknesses can be your avenue or a solution to win over a customer. Their strengths may serve as your standard to exceed and to serve as a challenge to think and create more effective strategies.
If your competitors are always ahead of you, it is surely because they invested time, effort and money on their market research.
3. Future prediction
In business, it is not just the present state that matters. What is ahead of you also counts. The data of the current state has an influence on what can happen in the future. And this will give insights to business strategists on possible outcomes of the company’s prior and present actions and decisions.
Also, the data of previous trends and cycles may be incorporated into strategy formulation. Some data may lead to some occasions that already happened in the past. These data will serve as a warning or a precautionary measure.
4. Loss minimization
Monitoring the business and even the political environment can provide clues useful in formulating strategies. For example, there is an expected economic slowdown in the next quarter, or there is an increasing trend in oil prices in Saudi Arabia, you can start adjusting strategies that can counter the effects of future problems. Make sure that these actions will be ‘fail-proof’ to avoid further damages.
Most issues of the bankruptcy of companies are because they did not anticipate 1) the future and the problems and 2) the damage it brought to them.
Studying and mastering the market is like providing yourself a roadmap where shortcuts, smoothest roads and obstacles are provided. You’ll know what road to take, where to turn for shortcuts and when to slow down if there’s roadwork ahead. Attention to detail is the key where data and information are crucial for one’s success.