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Importance Of Market Research For Marketing Strategy

Published on Dec 27, 2023 by Ed Rodgers

Hindsight, they say, is 20/20.

Capably looking backwards with the clarity to see missed opportunities can be a great learning tool to both avoid the same pitfalls as well as better prepare moving forward.

Every year provides many learning opportunities for business leaders and academics to study into the foreseeable future. How we use those learnings or experiences can vary widely by organizations, but it is critical to employ some level of change to a strategy or tactics influenced by the recent events.

The CMO Survey, whose mission is to collect and disseminate the opinions of top marketers in order to predict the future of the marketplace, track marketing excellence, and improve the value of marketing in firms and in society, surveyed almost 300 CMOs in conjunction with Deloitte, Duke University's Fuqua School of Business, and the American Marketing Association. In the March 2023 Survey, the focus on marketing spending and hiring growth due to economic uncertainty was the key takeaways.

However, marketing research continues to play a significant role. Reviewing some of the findings, CMOs rate the quality of their internal marketing research at 4.2 on a 1 to 7 scale. Additionally, 72% of CMOs indicated that they include research as part of their budget. But the good news is that since 2017 the investment in marketing research has grown from 3.4% to 10.5% which translates into a 209% increase in research investment.

Consumer and Shopping Change All The Time

One topic area that was especially interesting was the fact that marketers are keenly focused on product quality as the shrinkflation and price increases have occurred in many B2C sectors. Changes in consumer behavior shifts due to price conscious buying and the proliferation of skipping or seeking less expensive options. Additionally, the use of partnerships to extend into new markets and build relationships continues.  Resources towards seeking new segments and avenues for sales increased in 2023 again as it did during the pandemic.

The 2023 report shows that marketing research is part of 69% of the reporting companies. The takeaway from the CMOs surveyed is their companies continue to prioritize research to make marketing decisions for customer acquisition and consumer facing communication decisions.

Market Research and Strategy Creation Going Forward

The current economic and recent pandemic influences have caused a fast shift of consumer behaviors, leaving businesses needing to understand how behavior changes impact their products and services. These shifts are shuffling the priority order of what consumers value in a brand when making buying decisions. Along with the changes is a contraction of competition in some sectors where consumers are searching for new brands and options.

Even with some CMOs mentioning their intentions to increase market research, the expectation is that planned and existing research will undergo a healthy review. Among the areas market research should be used as companies are planning for the next year are the following:

Trust signals by target audiences – The expectation is that consumers will rely on trusted brands and services.  This is an outcome of the heightened awareness of a corporation’s social responsibility, supply chains and how organizations treat employees.  Consumers are expected to be more discerning in these areas.

Use and growth of social media – Companies will need to recognize and engage their audiences on social channels to both build trust but also to listen and respond to their targeted segments.  Additionally, this is where the greatest access to new customers and options to grow the brand exist with new buyers.  A new facet to marketing success is the use of influencers on different platforms as advocates and promoters of different products.

Ecommerce and online access – Consumers have become more comfortable shopping online, leaving many companies to believe this will not change but only continue to grow.  The requirement is to understand and capitalize on digital marketing to inform and attract buyers who are now looking for online offers and new options to replace unavailable brands.

Know the value you deliver – Companies recognized they were unprepared for the impacts of the pandemic. A reset to pursue insights that provide guidance around newly prioritized areas is needed. This reset should revolve around the goal of understanding what loyal customers value in your product and brand.  This will help build a strategy that will capitalize on those strengths and the attributes that are producing the desired outcomes.

Marketing organizations have been challenged unlike any time during the modern era due to the pandemic. Businesses need to consider creative solutions to unknowns, adapt quickly to changes, and consider unproven approaches to ensure they successfully connect with and respond to their audiences. As the CMO Survey indicates, Marketing leaders are glad they weathered the changes but will not be as unprepared for the next disruption.

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