Importance of Business Research in

Management Functions

Rick Suttle has been writing professionally since 2009, publishing health and business
articles for eHow and Answerbag. He has worked in corporate marketing research and
 as a copywriter. Suttle has a Bachelor of Science in marketing from Miami University
and a Master of Business Administration from California Coast University.
By Rick Suttle, eHow Contributor

updated: January 11, 2011

Importance of Business Research in Management

Functions
Companies conduct business research for a number of reasons, including gathering crucial
information on consumers and business clients. However, companies must make sure they use the
correct methods for collecting customer information. Most company market researchers use phone
surveys when they want to get reliable information quickly. However, companies must make sure
they complete enough surveys so the results can best represent opinions of the entire demographic.

1. Testing New Products

o Business research tests the potential success of new products. Companies must
know what types of products and services customers want before they market them. For
example, a restaurant chain may initially interview focus groups to test a half dozen types of
fish meals. The focus groups will likely consist of small groups of customers. The objective of
the focus group may be to determine which fish meal customers like the best. The company
may even use customer input in naming the entree and ask how much consumers would
spend for the meal. Eventually, the company may test the fish meal through surveys with
larger groups of people.

Ensuring Adequate Distribution

o Companies may also use business research to ensure the adequate distribution of
their products. For example, a telephone directory publisher may conduct a distribution
followup study to make sure phone directories have been delivered to all residential
customers. Publishers of telephone directories base their advertising rates on distribution.
Therefore, ensuring that all residences receive phone books is crucial to the success of the
publisher's business clients. Similarly, a consumer products company may want to talk to
retailers about all the different brands they sell. The results of the business research will help
marketing managers determine where they need to increase their product distribution.

Measuring Advertising Effectiveness

 o Companies use business research to determine the success of their advertising. For
example, a milk manufacturer may want to know what percentage of the population saw its
most recent television commercial. The milk company may find that more people become
aware of its advertising the longer the television ad runs. The milk company may need to run
its television advertisements at different times if few people have seen the commercials.
Companies also use business research to see if consumers recall the message or slogan of
their commercials.

Studying the Competition

o Companies often use business research to study key competitors in their markets.
Companies will often start with secondary research information or information that is already
available. For example, a software company may want to know the percentage of customers
in the market who purchase its products versus competitors' products. The researchers can
then study the purchasing trends in the industry, striving to increase their company's share of
the market. Companies will often need to increase their market share in an industry to
increase sales and profits.

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