The State of Market Research in 2024

Very few businesses operate without consideration for tomorrow. To make well-informed decisions, companies must possess a comprehensive understanding of their industry and customer preferences. Unfortunately for them, that kind information doesn’t just fall out of the sky. It needs to be unearthed or discovered. This is where market research comes in. The goal of market research is to equip firms with a more nuanced view of the consumer and position them to successfully meet their demands.

In-depth research has opened opportunities for certain companies to embrace the Blue Ocean strategy by targeting non-customers in the industry. Take the Nintendo Wii, for example. Its success can be attributed to Nintendo identifying a significant untapped market—individuals not traditionally involved in gaming but interested in a more accessible and interactive experience. The findings revealed that conventional controllers were too complicated for many. Consequently, Nintendo designed the Wii with a special controller that allows users to engage through physical movements. This resulted in new categories of people becoming interested in gaming, such as families and seniors, who could now play games without prior knowledge of traditional controller buttons.

Yet, despite its numerous advantages, market research is like the broccoli of the business world—essential but not everyone’s favorite. Notable founders and thought leaders have pushed back against its importance. Let’s explore the reasons behind this reluctance. By the end of this article, we’ll know if their opinions were valid or just good ol’ rebellion.

Why Was Market Research So Unpopular?

Steve Jobs famously said “People don’t know what they want until you show it to them. That’s why I never rely on market research.” The creation of products like the iPhone and iPad exemplifies this philosophy, where Apple led the market by introducing devices consumers didn’t know they needed. Due to the consumers inability to articulate their needs for revolutionary products, relying solely on market research might limit innovation. He argued that market research might confine a company to incremental improvements, whereas true innovation arises from daring to go beyond what consumers explicitly express.

The idea of punctuated equilibrium in evolution complements this thinking. What? I promise It’s not as complicated as it sounds. According to this concept, change often happens suddenly after stable periods. In business, this means big innovations, like Dyson’s Bagless Vacuum Cleaners, don’t always come from gradual improvements based on market research. Instead, they happen when companies take bold steps beyond what customers express, anticipating new needs. This shows the importance of exploring uncharted territory for groundbreaking innovation, even if market research alone won’t lead the way.

While Jobs held this perspective, many pioneers before him, like Henry Ford, didn’t completely dismiss market research. Ford, critical of relying solely on it, believed in a balanced approach. He used market insights to refine innovations rather than dictate their initial direction. Ford’s revolutionary mass production of affordable cars, though not prompted by explicit consumer demands, showcased the power of combining market understanding with innovation.

Another reason for the poor approval ratings of market research is its costliness. Hiring consultants for in-depth market analysis can be expensive, especially for smaller businesses. Despite the potential benefits, the financial burden often leads companies to question the return on investment in extensive market research.

How Do We Approach Market Research Today?

“We can’t do new things unless we have permission and we don’t have permission to work on new things until people like our core service.”

– Brian Chesky (Airbnb)

Market research these days is more about looking inside and making what we already do even better, rather than just getting approval from others. Brian Chesky gets it—he says we need to make our main services awesome before trying new things. It’s all about building a strong base and making sure people trust what we already have.

This aligns with James Dyson’s Yoda-like wisdom. He astutely noted that conceiving a good idea is only the starting point; the true challenge lies in persuading people to embrace and invest in it.  Understanding the inner workings of service illuminates what works and how to enhance appeal to our target audience. Before new concepts, we secure excellence in core services.

As we take a close look at how we work inside, get what our customers like, and make our current stuff even better, we’re not just keeping things going well now. We’re also setting up the stage for new and cool ideas that blend right in with what we’re already great at. It’s like a journey of always getting better, tied up with how our customers’ needs and how things work in our industry change over time.

Airbnb under Brian Chesky’s leadership is all about being ahead. Why stick to one way of figuring out what customers want when you can use all sorts of tools. With things like social listening and real-time analytics, they’re able to catch onto how feelings are changing and make quick decisions. Tired of staring at spreadsheets? No problem! They add AI and machine learning to the mix to go through tons of data fast, finding the patterns and trends that help them be super efficient and precise in their market research.

Who Benefits Most From Market Research

Lastly, we want to explore the interplay between key players in this equation; the consumers, the companies, and the crewmates steering the organizational ship. Who truly stands to benefit most from the comprehensive insights derived through market research? Is it a mutual win-win scenario, or does it parallel the seemingly futile task of Sisyphus pushing a boulder uphill?

The Consumer

  • Through market research, businesses  are able to better understand consumer needs and preferences. By analyzing this data, companies can tailor products and services to better meet consumer expectations.

  • Researching market trends helps businesses set competitive prices. Consumers are satisfied by fair pricing and a range of choices within their budget.

  • Finding consumer challenges and pain points with current products is crucial for finding new market opportunities. This insight fuels innovation, leading to the development of solutions, rather than mere products..

  • Collecting the needs of diverse customer groups can benefit customers as a whole. For example, addressing accessibility requirements makes the product more inclusive, accessing a broader audience, as well as usually improving general user experience

Patagonia, a well-known outdoor clothing company, conducted market research to understand the rising demand for sustainable and eco-friendly products. In response, they implemented initiatives such as the “Worn Wear” program, promoting the longevity of their products and encouraging customers to buy used items. This resonates with environmentally conscious consumers seeking ethical options.

The Company

  • The valuable data and insights obtained through market research aid companies in making informed and strategic decisions. It helps in assessing market demand, identifying opportunities, and understanding potential risks.

  • Understanding market trends and consumer preferences through research enables companies to stay ahead of the competition. By offering products and services that align with or surpass consumer expectations, a company gains a competitive edge.

  • Product development can use market research as a guide to identify gaps in the market and areas for improvement. Companies can innovate and introduce new features based on consumer needs, enhancing their product portfolio.

  • Defining target audiences and understanding user behavior can help make products that people will want to use. Companies can take advantage of that to create more effective and targeted marketing campaigns, optimizing resource allocation.

  • Market research can even identify areas where intellectual property protection is crucial, ensuring the longevity of innovative endeavors.

Pfizer, a company iIn the pharmaceutical sector, deeply explores health trends and potential areas for new drug development. These valuable insights not only influence their innovation strategy but also steer the acquisition of patents, protecting their intellectual property. This dual strategy ensures they sustain a competitive advantage in the industry.

The Crewmates

  • Showing the impact of a product or campaign can inspire and engage internal teams to be more productive. Seeing positive market responses to products or services can boost morale and motivation among employees.

  • Exposing internal teams to industry trends, competitor strategies, and customer behaviors can also help to find opportunities for learning. Employees gain insights into the broader industry landscape, fostering a more holistic understanding of the business environment.

  • By seeing what other companies do, team members can use those tactics to improve their own workflows. That can lead to process and quality improvements across the whole company.

At Tesla, the triumphant launch of the Model 3, driven by detailed analysis, not only lifted the morale of the engineering team but also instilled pride and dedication in the employees pivotal to the electric car’s development. The positive reception from consumers validated their efforts, inspiring an unwavering commitment to innovation.

. . .

Gcinizwi Dlamini Avatar

Gcinizwi Dlamini / Content Writing Intern @ Phase

Writer, part time super-hero and mint chocolate ice cream advocate.