What is The Difference Between Market Research and Market Analysis

If you have ever been a part of strategic meetings in your company, or wondering if your product/service is taken well by the consumers - the term market research and analysis must be extremely familiar to you. In fact, these two terms are often used interchangeably, and it is easy to mistake one for the other. 

While often used interchangeably, the terms market research and analysis in business are not synonyms. Market Research, in fact, forms only a small part of Market Analysis.

If this leaves your head scratching, don't worry - for in this article we will go through everything that you need to know about market research and analysis in India

 

What is Market Research

In order to gather feedback, and judge how well your product/service is performing, your company would have conducted several exercises. These exercises are primarily used to judge the feasibility of specific business decisions, and can prove vital data to help you judge consumers' reactions to the various changes in your business. Successful market research practices could very well be the key difference between the success and the failure of a company.

 

The intent here is to arrive at an answer to a set of specific questions about the strategic business move a business intends to take. Usually, Market research tends to be consumer-centric.

 

For instance - take the example of popular fast food chain of restaurants - Domino's. They operate a flourishing chain of pizza businesses, with a mammoth 50% market share in the food delivery business across the world.

 

They could have very well not changed any of their practices when they entered the Indian market, and would still have been moderately successful. But their market research pointed out that the Indian customers prefer their pizza "spicier", and more "Indian". Rather than going for authentic pizza varieties that they usually serve in their "home" markets - they came up with authentic recipes to cater to the Indian taste.

 

As a direct result, Domino's has captured the tongues and the hearts of the Indian consumers, giving them a whopping 70% market share in the Pizza home delivery segment in India. 70%.

 

Of course, there were other factors involved in the Domino's success story, like their marketing campaigns, standardization of taste and menus across the different outlets, and coming up with truly gob-smacking recipes to satiate the Indian tongue has also played a major role.

 

Benefits of Market Research in India

As we'd seen with the example of Domino's, market research can prove to be extremely beneficial to businesses. Here's an inclusive list of benefits of conducting thorough market research practices:

 

1. Strengthen your Business Position - Businesses can utilize market research to gain a better understanding of their customer pool, and can utilize this information to stay ahead of the competition
2. Business risk management - Market research on new product/service lines allows businesses to take an educated guess on how the different stakeholders will react. Some businesses even spend a small portion of their investment to test the concept, and crunch the different numbers to see if investment in this new line makes sense.

 

3. Identification of Threats and Opportunities - Data collected from research can be an important tool that can be used to forecast and protect against prospective threats and dangers during a strategic business event. Market research, when done properly can also uncover potential opportunities that your business would have otherwise missed, or worse, have your competitor cash in on it.

 

4. Provides a Benchmark - Planning, and enforcing the plans much easier when the research has already provided you with benchmarks, including revenue projections, market share projections, among others. These numbers can be utilized to motivate your employees and get your targets achieved faster. According to a PWC survey, 69% of the companies grow faster when you set benchmarks ahead of time.

 

What is Market Analysis in Business

The generic definition of market analysis " A thorough assessment of a market in a specific industry" is a bit too vague, especially in the context of understanding the difference between market research and analysis. Let's provide a bit more context for you, which will help you better understand the difference between the two terms down the line.

 

With Market analysis, you will be able to study the different variables at play in your market, including important information that will be crucial to the survival of your business as a whole.

 

Market Analysis often includes the assimilation of all the facts that one can gather about an industry without a specific question to answer. It takes a broad approach to collect historical and current facts, and forecast potential outcomes. The market size, competition, trends (market, social and political), analysis of distribution channels, and answers to basically any other question that the industry might need.

 

Benefits of Market Analysis in Chennai

Market analysis is the fundamental building block to the success of an organization. The benefits of market analysis include:

 

1. Market Profitability - By gauging the barriers to entry/exit, supplier concentration, purchasing power and other such factors, estimating market profitability becomes an easy task. If the profitability is positive, but the analysis indicates potential risks on investment, the business conducts in-depth market research to find solutions to tackle the potential risk, and make decisions accordingly.
2. Identify Emerging Trends - Proper market analysis exercises can help your business get ahead of the competition, and identify potential emerging trends that your business can cash in on.
3. Understand The Nuances of the Market - Understand every single minute detail of the market including broad details like market size, barrier to entry/exit, investment required, target customer analysis and minute details like specific variants/opportunities that the business could capitalize on.
4. Provides Context For Past Mistakes - Market analysis can help businesses understand and learn from past mistakes. This could be a context for why the sales of a particular product line tanked, or why a certain marketing tactic backfired - allowing businesses to ensure that they don't repeat the same mistakes twice.

 

 

Difference Between Market Research and Analysis

If it isn't evident by now, the term market analysis is much broader than what market research encapsulates. In fact, market research is merely a part of the process of conducting market analysis. Market analysis contains five key elements

1. Competitor analysis
2. Industry Analysis
3. SWOT Analysis
4. Consumer Analysis
5. Market Research

Market research usually begins with the questions that are determined from the other functions of a market analysis.

For instance, your business could have outlined a potential opportunity in the industry by analyzing the emerging trends. However, you might not have enough data to commit to a massive investment pursuing the potential opportunity, only to realize it wasn't feasible in the first place. This is where market research comes in.

Market analysis is comprehensive, and usually takes into account historical data, apart from the data collected from market research and reach meaningful business decisions.

However, this has led to the common misconception that market analysis is 100% a secondary research affair. That no new data is collected, and only pre-published/pre-existing data is used for the process, and market research is the function which focuses on collecting new data.

However, this assumption is mostly incorrect. While, yes, market research deals primarily with primary data (pun intended), it does not relegate market analysis to a purely secondary research function. Both these tools are important elements in the success of any business - big or small.

Conducting Market Research and Analysis - The Problem

For big organizations, funds to conduct market research and analysis are easier to come by. This, however, might not always be the case with smaller businesses. Small businesses usually tend to focus their limited capital on their core business, and tend to shy away from market research and analysis efforts, despite understanding their many benefits.

With the increased focus on agile teams, and lean workforces, it becomes even tougher to conduct market research and analysis for small businesses. Business owners can't justify hiring a full-time team to conduct these exercises from time to time. It becomes a traditional damned if I do, damned if I don't dilemma.

The solution to this dilemma is rather simple and elegant - Krysalis.

Krysalis - The One Stop Shop For All your Business Consultancy Needs

Krysalis is a boutique business consultancy located in Chennai. We offer a wide variety of business consultancy services, but we are primarily known for our expertise in market research and analysis.

 

We understand the necessity to conduct thorough research and analysis, as understanding markets and customers, and creating strategies that address the many nuances of a product/market is key to the growth, profitability, and success of any business. Krysalis has a host of offerings for you to choose from, depending on what your business might need the most. Insightful research, after all, is paramount in this endeavor.

 

1. Voice of Customer

Krysalis specializes in studying the customers' perspective of your business, and helps businesses understand the deeper needs of the customers. Over the last few years, we've carried out diverse studies in multiple fields including, paints and surface coatings, cables, construction equipment, abrasives, IT services and hospitality services. With Krysalis you'll be able to answer several important questions:

 

1. What does your customer like and dislike about your product/service?
2. Where do you stand in the mind of the customer vis-a-vis competition?
3. How your after sales service is received, and how high the quality of your product/service is.
4. Who is your potential competition, and what are their strengths and weaknesses?
5. Are there threat of substitutes for your product or service?
6. Are there regional or segmental differences in expectations?
7. What needs to be done to increase market share?

            and more.

 

One such client who benefited a lot from our voice of customer business proposition is one of India's leading telecom providers- - Bharti Airtel. Krysalis carried out a six month detailed study, covering over 1000 customers every month to study the reasons for customer churn, leading to a revision of strategies to improve customer retention.

 

2. Market Size Estimation

Krysalis specializes in estimating market potential for complex products/markets and provides important insights. We have helped estimate the market size for a number of industries, including that for gear boxes, cables, metal enclosures, and fishnets to name a few.

 

Did you know that the market for Olive oil is over $150 million per annum, and that the low tension cables market is valued over $2 billion? Corrugated boxes alone make for a $3 billion market. We have more where this came from, help us help your business make key investment and strategic business decisions.

 

One such client who has benefited a lot from our Market size research is English Indian Clays Limited. Krysalis conducted a detailed customer satisfaction study in all the key customer segments, highlighting segment specific expectations and recommended crucial strategies to improve satisfaction levels.

 

3. Concept/Value Proposition Testing

What if you launch a new product/service - say an air purifier, or a smartphone based blood pressure monitoring device. How much should you produce? What should be your pricing strategy? How are you going to distribute these products to your customers? How will you position your brand? Find out the answers to these questions and more through our concept acceptance study.

 

We've helped many companies test new products and concepts in different markets, and have helped them take key decisions in their business.

 

For instance, take the case of Woodstock Ambience. They're a venture funded IT/ITES housing provider, and were looking to understand the mind of their potential client. This study helped the company decide on the format and the pricing of their housing product.

Understanding the needs of your customers, and the state of the overall market is crucial in making every single successful business decision. If your business is ready to take the next step, why don't you shoot us a mail to consulting@krysalis.co? We'll be more than happy to help your business grow.