It takes only a quick look at the trending headlines to see that “recession” and “inflation” are hot button topics. Whether looking to fill their gas tanks, do their weekly grocery shop, or buy their first home, consumers today face rising prices on a regular basis.
In times of economic downturn, since consumers decrease spending, many companies cut down on their expenses as well. However, while it may sound counterintuitive, one area which companies should prioritize is market research. Here’s why.
Some Certainty During Uncertain Times
With so much uncertainty in the economy, conducting research is one practice that can help to provide some predictability.
Market research enables companies to make strategic business decisions that are backed by data and insights. Acute business decision-making is never more integral to a business’ success or more important than during an economic downturn.
What is the optimal price for a product or service? Would offering a bonus product or service help the product sell at its current price point? Is what you’re selling deemed a necessity or merely a “nice to have” during inflationary times? These are just some of the questions you can answer using market research.
Why Market Research Is a Must
Consumers can’t completely stop buying during a recession; instead, they buy less, switch brands, buy alternatives, or buy completely new product concepts.
Because drastic shifts in consumers’ lifestyles, purchase habits, and brand preferences occur during these times, more than ever, insights are key.
From quantitative surveys such as concept tests, shelf tests, and attitude & usage studies, to obtaining rich and detailed feedback from video interviews and qualitative research, you can uncover new decision patterns among verified purchasers of your products.
Silver (and Potentially Even Gold) Linings
While the word “recession” doesn’t have positive connotations, if you take the time to understand your consumers’ needs, it is possible for your company to thrive.
Similar to your company’s market research spend, perhaps counterintuitively, recessionary times can also make for a good time to ramp up your advertising and marketing efforts.
It’s in these times that, because other brands are pulling back their brand awareness efforts, your brand can get more visibility. Competing brands cutting their advertising and marketing budgets means that your advertising and marketing dollars can go further. Following this school of thought, companies like Unilever are not cutting ad spend for now. In fact, “on average, increases in marketing spending during a recession have boosted financial performance throughout the year following the recession.”
As you’re presented with an opportunity to gain market share, you’ll want to make sure your efforts are paying off. Rather than guessing whether your ads are resonating, you can test and confirm whether your ads are driving a powerful call to action with Prodege’s flexible Ad Effectiveness solutions.
In addition to utilizing market research to minimize losses, you can also employ it to uncover new opportunities. With competition decreasing, it may be a good time to enter the market, especially with a product that will make sense for the times and could potentially save consumers money. “In 2001 [during the recession], for example, Procter & Gamble’s successful introduction of the Swiffer WetJet established a new product category that eased the chore of mopping floors and weaned consumers away from cheaper alternatives.” However, before introducing a new product, make sure to do your market research!
Use Market Research To Identify White Space
Market research enables companies to not only navigate change but to also take advantage of it in order to meet emerging opportunities.
In addition to helping your business mitigate the negative consequences of an economic downturn, consumer research can help you recover quicker and possibly even find new areas of success.
Looking to understand how specific groups of consumers are prioritizing their spending and where they are cutting back? We’d love to help you quickly get the answers you seek!
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