Should I do market research?
Before answering whether companies should do market research, it is worth reflecting on the following Brazilian reality: more than 71% of new companies close over the first five years! On the other hand, the understanding of “expensive” may be that of:
• Invest in equipment, raw material, packaging, hiring, records, lawyer, accountant, human resources and not having the expected return.
• Apply equity or third parties’ funds after a few months “discover” that there is no market for the product!
• Spend on design, decoration, rent, renovation, stock, advertising, marketing and only then come to the conclusion that the profile of the clientele that has access to the chosen point of sale is not that of compatible income to consume the services offered!
The concept of “expensive” is, therefore, very subjective and could not be analyzed only in absolute values! All of these situations are examples that, in a large number of times, explain the high percentage of enterprises that are unable to survive or consolidate.
But they also demonstrate how the research could guide the decision-making of entrepreneurs that involve risk.
There is still no awareness that research is carried out to reduce business risks, to eliminate “guesswork” (I think it will work, I think it will sell, I think the consumer will want to buy, I think there is a market , I think it will be cool …) and to test hypotheses!
The aspect to be considered in the question “is market research expensive?” It is always: what is the relationship between the cost of the necessary research vis-à-vis the amount you intend to invest? In other words, if the project in question requires a certain volume of resources, how much of this amount should be directed to research in order to reduce uncertainties?
Nobody does a search just because it is interesting, chic or trendy!
Market research exists and is developed to answer objective questions, clarify doubts that involve risks, provide guidance on strategies and positions, support decision making, in short to help companies grow, projects to be carried out and ideas turned into results!
Serious research considers data collected from the past, monitors information from the present, and signals trends and directions for the future.
However, to properly process this set of numbers and indicators, experience, accumulated knowledge and much, much study and analysis are required. But that would already be part of another theme, the subject of the next article, about the most appropriate criteria for choosing a research company.