Many successful businesses enjoy longevity because they periodically conduct and invest in market research. That way they stay tuned to changing market trends, are able to size up business opportunities and to improve on competitive nature of their businesses. Whether you are a startup or looking at expanding an existing business, understanding the critical characteristics of your target market creates potential for increase in sales revenue, your profit, and return on investment (ROI). In essence, data and market research is vital for smart decision-making, business planning and overall success of your business. How this critical aspect of the business is often overlooked, yet far too many business ventures fail as a result of poor market research, or lack thereof!
What is market research?
In its basic definition, market research is merely an information gathering exercise to determine the viability of something.
But more importantly, market research is a continuous process of collecting data, investigating and interpreting information about a particular market your company operates in, a product or service you offer for selling in that market, other companies competing with you in your market space and current and potential customers who purchase and consume the product or service you offer.
Analysing all of the above means continously investigating possible ways for the company to successfully operate in the market, sell producs and services, attract and retain the target audience, as well as gain competitive advantages.
Market research is therefore an invaluable business tool that helps you reduce the risk that a business idea will fail, essencially reducing the risk of being in business.
Types of market research
The scope of the market research you’ll undertake is influenced by your research objectives, i.e. what you want to learn about your market and factors influencing it.
Your objectives will also determine the types of market research that you need to undertake in order to be successful.
There are two main categories of market research:
The first one is primary research, which typically covers monitoring the effectiveness of sales, ascertaining the quality of services provided by competitors, understanding the channels of communication used by competitors, and assessing active competition within the market.
An example of conducting this type of research is to talk to customers, suppliers or competitors in the market.
The second one is secondary research, usually conducted by other people or organisations, but whose results you may be able to use yourself.
Secondary research typically covers published company reports data, existing surveys and studies, newspaper reports and Government data.
In turn, the nature of research is, broadly speaking, either qualitative (as a result of actually talking to people, asking for feedback and/or opinions) or quantitative (sourced through surveys from which figures and numbers are generated, analysed and presented in the form of meaningful charts, statistics, graphs and tables).
So what are some of the main business areas that data and market research have major influence on?
l Business model design & strategy
Having a greater understanding of your marketplace will enable you to create a sound business model and strategy to establish and grow your brand into one surpasses competition.
Through research a business is able to spot or anticipate market trends or changes, test viability of a business idea. More significantly, market data will help drive the development of sound a business model and strategy for product or service design, pricing, distribution and logistics, advertising media usage, amongst others.
Keeping one step ahead of your competitors is essential for business survival. Research can provide you with valuable information about existing competitors, their adopted strategies, and how those strategies impact on target consumers. Such insights reveal existing gaps in terms of untapped or underserviced markets, threats and new opportunities in the market place, facilitating smarter decision-making.
It is often said that “being a customer-centric organization is the Holy Grail towards unlocking the true potential of customer value”. Today’s best performing organisations are those that are customer-centric, meaning that their strategy and culture is based on putting customers’ needs first, and at the core of the business (Deloitte and Touche conducted a study recently and found that customer-centric companies were 60 percent more profitable when compared to companies that were not focused on the customer).Their way of doing business is such that it provides a positive customer experience before and after the sale in order to drive repeat business, customer loyalty and profits. These companies do not just provide great customer service; they are deliberate about creating a great experience throughout the customer journey — from the awareness stage, purchasing process and finally through the post-purchase process. To succeed in being a customer-centric company, your can use market research as a tool to gain insight into your customers thinking; understanding your target customers’ buying behavior, interests, satisfaction levels with your products and services and how they prefer to be engaged. Through market research you also get to understand changing market trends such as population shifts, education levels of your target market, their social status, buying power and more.
With that information, you can segment your customers and identify opportunities to create products and services that match their needs.
You and I have seen too many products die a slow market death due to the lack of customer understanding and, quite frankly, market arrogance. Philip Kotler, the father of Marketing 3.0: From Products to Customers to Human Spirit, rightly advocates for putting the customer on a pedestal. He argues that the days of customers being treated like mere consumers are over, but should be treated as complex, multi-dimensional human beings that they are. Their level of sophistication and assertiveness has increased exponentially over years and they are able to choose companies and products that satisfy deeper needs. As the year draws to a close and you put business activity on pause or slow motion, reflect on your business — your successes, challenges, and next steps in your business growth. Be remindend that the business evironment is ever evolving internally, at competition level and broadly at a macro level, and that market research is critical in closing information gabs to enable sound business decision making.
Ensure that your business processes and disciplines (from marketing, logistis to supply chain management) are all geared towards responding to this new generation of customers, which is not waiting to be told by sales and marketing people about their needs. The development of technology, access to internet and social media, amongst others, have empowered your customers to make sound comparisons of products and services and eventualy make prudent buying decisions based on options at their disposal. Research can help eliminate business complecancy by anchoring the business offering on expectations and peculiar needs of customers that you serve.
l Fundisile Serame is the owner of TechnoFundis, a research and innovation consultancy
LEC to switch off households over debts
MASERU – The Lesotho Electricity Company (LEC) will from Tuesday next week begin switching off clients who owe it money.
The LEC issued a seven-day ultimatum to all customers who owe it on Tuesday last week. The deadline ends on Monday.
It is expected that the LEC will begin switching off households that have defaulted.
The state-owned power company, however, is not going to touch any government department or business entities that owe it on grounds that they are in payment negotiations.
The LEC move comes barely two weeks after it cut electricity supplies to the Water and Sewerage Company (WASCO) thus causing it to fail to pump water to communities countrywide for more than two days.
The LEC says it is owed close to M200 million by government departments, businesses and individuals.
The LEC spokesman, Tšepang Ledia, told thepost that the government and the businesses will not have their electricity cut because they are in negotiations.
“We are in negotiations with the government and businesses and hopefully they will pay,” Ledia said.
“We advise the ordinary people to pay their debts before the 20th of March 2023 or else we cut the services,” he said.
The LEC says it is running short of funds for its daily operations.
In December last year the company increased power tariffs by 7.9 percent on both energy and maximum demand charges across all customer categories for the Financial Year 2022/23.
Last week the LEC boss, Mohato Seleke, said postpaid consumers and sundry debtors owe the company M169.4 million.
He said unless the debtors pay he will be unable to buy electricity from ’Muela Hydropower Project, Eskom in South Africa and Mozambique’s EDM.
This, he said, could cause serious load shedding in the country and could be devastating for businesses.
Seleke said the LEC spends M630 million monthly to buy electricity.
“If postpaid consumers do not settle their debts this could prevent the LEC from being able to buy electricity which can lead the country to encounter load-shedding,” Seleke said.
Seleke said collecting debt from government department ministries was a challenge as there is an understanding that since LEC is a state-owned company, it will continue supplying government agencies with electricity and they will settle their bills when they have funds to do so.
Seleke said the LEC has lost M21 million to vandalism during this financial year.
Bumper payout for former mineworkers
MASERU – AT least 11 316 current as well as former mine workers are set for a bumper payout after Tshiamiso Trust began disbursing the first billion Maloti to workers who are suffering from silicosis and tuberculosis.
The payment comes two years after Tshiamiso Trust began processing claims for the historical M5 billion settlement agreement between mineworkers and six gold mines in South Africa.
Speaking at the payment announcement in Maseru last week, the Trust’s CEO, Lusanda Jiya, said it has been two years since they officially began accepting claims.
“Our people come to work every day with the mission of impacting lives for the better, and the first billion rand paid out to over 11 000 families is just the beginning,” Jiya said.
“We know that there is no compensation that will ever be enough to undo the suffering endured by mine workers and their families,” he said.
“However, we are committed to deliver our mandate and ensure that every family that is eligible for compensation receives it.”
Jiya said the Trust is limited both in terms of the time in which they can operate, and the extent to which they can assist those seeking compensation.
Broadly speaking, the eligibility criteria include among others that the mineworker must have worked at one of the qualifying gold mines between March 12, 1965 and December 10, 2019.
Secondly, living mineworkers must have permanent lung damage from silicosis or TB and deceased mine workers representatives must have evidence that proves that they (the deceased) died from TB or Silicosis.
Tshiamiso Trust has a lifespan of 12 years, ending in February 2031.
Over 111 000 claims have been received to date, through offices in South Africa, Lesotho, Botswana, eSwatini, and Mozambique.
The Trust is working with stakeholders in these countries and others to mobilise its efforts and expand operations.
The history of silicosis in South Africa goes back to the late 1880’s when the first gold mines began operations.
The gold was stored and locked in quartz, a special rock that contains large amounts of silica.
Crystallised silica particles can cause serious respiratory damage if inhaled.
In the earlier days of gold mining, dust control, health and safety standards and the use of PPE (personal protective equipment) were not as advanced as they are today.
Tshiamiso Trust was established in 2020 to give effect to the settlement agreement reached between six mining companies.
The companies are African Rainbow Minerals, Anglo American South Africa, AngloGold Ashanti, Harmony Gold, Sibanye Stillwater and Gold Fields.
The settlement agreement was reached and made after a ruling by the Johannesburg High Court as a result of a historic class action by former and current mineworkers against the six gold mines.
Justice for Miners is a coalition of interested parties in the mining sector launched at the Nelson Mandela Foundation in Johannesburg in 2020.
The Johannesburg High Court approved the setting up of the Tshiamiso Trust to facilitate payment by the companies to affected miners.
Farmers cry over cost of livestock feed
MASERU – Lehlohonolo Mokhethi is a farmer who has been running a successful poultry business, thanks to a small loan he got from a local bank.
He now has 300 chickens.
He says his vision is to rear 5 000 chickens by 2025 and employ 30 youths. But he is now grappling with a new challenge: the ever increasing cost of chicken feed.
That is threatening the viability of his business.
“The biggest challenge is that food prices increase every day, feeding is expensive,” Mokhethi said.
“It is quite difficult to make profit in business if each and every day food prices increase. Today I am buying a bag of food with a certain amount then the next day the price has increased,” he says.
“Our customers fail dismally to understand that food has increased and the Chinese are taking our market because they sell at a low price thus I run at a loss.”
Last week, a top attorney in Maseru who is also a prominent farmer, Tiisetso Sello-Mafatle, called a meeting for farmers to discuss these challenges.
She says the government must regulate the prices of livestock feed.
That is critical if the farming business is to succeed, she says.
Attorney Sello-Mafatle says farmers must come up with a structure for livestock feed prices which they would present to the government for gazetting.
“We should state our regulations and give them to the government to make everything easy for both parties because we cannot wait for the government to make regulations for us,” Sello-Mafatle says.
She adds that “farmers should be bullish about what they want and never have fear endorsing new things”.
“I will not be challenged or cry (because of) what life throws at me but I will cry when things are not happening the right way,” she says.
Mafatle says farmers need to know who they are and know the capabilities they have.
“This will help a farmer in becoming the best in any field they are in once they are confident about themselves,” she says.
Karabo Lijo, another participant, said they have to influence the cost of inputs in agriculture, especially livestock feed.
“We have to go back to cost-price analysis where as farmers we are able to derive the selling price and the break-even point in our production,” Lijo said.
“We can also derive the stable or constant mark-ups on our products,” he said.
“We need to do research to increase the ability to produce byproducts which are likely to have the longest shelve life,” he said.
The meeting urged farmers to diversify their products by introducing such things as mushroom farming. They said mushrooms can grow very well in Lesotho due to its favourable climate.
The farmers also demanded that there should be regulations on how land can be sold or borrowed in Lesotho.
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