Before companies can start to sell their business products or services and begin their operations full-time, they first conduct extensive studies to see if their offerings will be sustainable. These studies are used by companies to assist them in their present and long-term decision-making.
One of the studies that companies conduct is a market research. This type of research covers a large scope as it involves the gathering and interpretation of data about a potential product or service and the factors which revolve around it including customer preferences, target market, competition, government regulations, and technological advancements. Market research does not only involve “the market” which pertains to customers or clients but also covers the entire business environment (both internal and external).
Most companies conduct market research, but not all studies are done in-house. Companies sometimes hire an independent organization (usually a consultancy agency) to do the market research. These two parties then discuss the results of the marketing research and the company then has the discretion to partially or fully implement the recommendations listed by the third-party researcher.
Companies that conduct their own market research or even those who hire a business consultation agency understand that they cannot proceed directly with the market research. A proposal or “road map” is first created so that the market research can have a clear direction on what it wants to achieve. This document should also outline the smart goals and objectives of the research.
Market research proposals, together with the actual market research itself, require a long process before being completed. It can prove to be very costly for the company, but it can also provide long term-rewards through accurate market analysis. So, here are the top reasons why market research proposals are important and how it can aid your company to achieve long-term success.
As previously mentioned, proposals serve as an outline for your eventual market research. They make it convenient for you to conduct your market research as you are already presented with a guide on what data to obtain and how to interpret them. Proposal templates include the research objective, design, methods, and costs, to name a few.
The research objective can be very specific as you can include the short-term and long-term goals you want to achieve and how to achieve them, the products or services you will be offering and how can they offer a competitive advantage, your target market (which also includes data regarding demographics), and the location where you want your company to conduct operations.
Research design, meanwhile, refers to the structure of your study. There are different types of research design. These types include descriptive (survey, case study), co-relational (observational study, case-control), and experimental (experiment with random assignment).You can combine elements of some research designs to fit your own study. Studies concerning market research use either descriptive or co-relational, or even both, as the need to know and analyze customer preferences are vital to the overall result of the research. Additionally, surveys and interviews are required for market research as a sample size is needed (the bigger the sample size, the better) to determine the validity of the study and its relevance to the industry’s current situation.
Costs are not only limited to the expenses the company will incur during its initial capital investment phase but also include the expenses it will possibly acquire during its five to 10 years of operation. Among these expenses are the increasing cost of raw materials, employee salaries and benefits, and insurance. Expenses (which are usually found in income statements), together with other financial statements and ratios such as asset and liability reports, return on investment, cash flow, and profitability ratios are usually incorporated in the actual market research. They can also be listed in detail in the proposal for clients to get a clearer picture of the company’s long-term financial projections.
One advantage of market research proposals is that you or your company are not the only ones benefitting from the results presented in the document. External clients and other stakeholders also benefit from it. Market research proposals do not necessarily follow a strict format, but there needs to be a flow to keep your thoughts as well as the data organized so it can be easy for clients to follow. You certainly do not want the data to be jumping from one concept to another; cohesion must be observed.
Market research proposals are the first step in achieving a long-term plan for the company. The data that will be collated and analyzed are very important to the company’s long-term plans. No company, whether small or large, wants to stay in business for only a few years. Eventually, companies plan to expand and venture into other businesses and industries. Assistance from financial institutions, stockholders, and partners will then be needed to raise capital for further investment opportunities. This is where the market research proposals come in to serve as important factors when external sources decide to invest in your future ventures.
Most of the time, market research proposals undergo numerous revisions before they can be approved. Only when the proposal has been approved can the actual market research commence. Revisions are important so that data can be more accurately obtained and analyzed. Some contents of the proposal that usually undergo revisions are the research design, theoretical framework, scope of the study, target market, and the data gathering procedure.
A proposal’s research design may not be limited to a single type of as previously mentioned and may even combine two or three research design types. For the theoretical framework, it refers to the established and scientifically applied theories that will provide the framework for the study. Due to the hundreds of theories that have been created over the years, there is a chance that the theory or theories you have chosen may not be applicable or may not connect with the objectives you aim to achieve in the market research. As for the data gathering procedure, personal interviews or survey questionnaires are two options you can use to gather data.
Most of the time, market research proposals are confidential documents that should only be circulated within the company’s top brass since they contain information regarding competitors, products, strategies, and plans that your company will be mapping out. An information leak will definitely cause issues that will give competitors an edge over your company. So, before any study or proposal becomes a basis for further studies, all data should be secured and entrusted to only a few people.
The digital age has seen very quick advancements in technology. Expect smartphones to incorporate holograms and eyeglasses to function as a digital map and message service application within the next few years. Technology is evolving, as well as the market. The market research proposal you are conducting now may not even be applicable in the next three years, so there should be a need to continually update your study. Your current product or service may need an upgrade to fit today’s multi-functional and automated world, so you need to revisit it regularly. In addition, customer preferences change over time, rendering some products obsolete.
As previously mentioned, market research proposals may contain confidential information that might affect your position against your competitors. But creating proposals can also help you forge partnerships with a number of institutions that can assist in completing the proposal and the market research. Aside from approaching third-party business consultation companies, you can also tap the assistance of the academe and the government. Partnering with universities known for conducting research on business development will help you gain access to their vast library of resources. Also, forging a partnership with government entities will assist you in analyzing how government regulations and policies will affect your business.