Monday, 14 May 2018 02:47

Importance of Business Research in Management Functions

By  Rick Suttle

Source: This article was published By Rick Suttle - Contributed by Member: Edna Thomas

Companies conduct business research for a number of reasons, including gathering crucial information on consumers and business clients. However, companies must make sure they use the correct methods for collecting customer information. Most company market researchers use phone surveys when they want to get reliable information quickly. However, companies must make sure they complete enough surveys so the results can best represent opinions of the entire demographic.

Testing New Products

Business research tests the potential success of new products. Companies must know what types of products and services customers want before they market them. For example, a restaurant chain may initially interview focus groups to test a half dozen types of fish meals. The focus groups will likely consist of small groups of customers. The objective of the focus group may be to determine which fish meal customers like the best. The company may even use customer input in naming the entree and ask how much consumers would spend for the meal. Eventually, the company may test the fish meal through surveys with larger groups of people.

Ensuring Adequate Distribution

Companies may also use business research to ensure the adequate distribution of their products. For example, a telephone directory publisher may conduct a distribution followup study to make sure phone directories have been delivered to all residential customers. Publishers of telephone directories base their advertising rates on distribution. Therefore, ensuring that all residences receive phone books is crucial to the success of the publisher's business clients. Similarly, a consumer products company may want to talk to retailers about all the different brands they sell. The results of the business research will help marketing managers determine where they need to increase their product distribution.

Measuring Advertising Effectiveness

Companies use business research to determine the success of their advertising. For example, a milk manufacturer may want to know what percentage of the population saw its most recent television commercial. The milk company may find that more people become aware of its advertising the longer the television ad runs. The milk company may need to run its television advertisements at different times if few people have seen the commercials. Companies also use business research to see if consumers recall the message or slogan of their commercials.

Studying the Competition

Companies often use business research to study key competitors in their markets. Companies will often start with secondary research information or information that is already available. For example, a software company may want to know the percentage of customers in the market who purchase its products versus competitors' products. The researchers can then study the purchasing trends in the industry, striving to increase their company's share of the market. Companies will often need to increase their market share in an industry to increase sales and profits.

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