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How tech companies can use market research to gain a competitive advantage

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tech companies use market research

With a current annual growth rate of 4.2%, the global technology industry is expected to reach a $5 trillion valuation by the end of 2021. But amid all this growth and with so much money to be made, competition in the space is fierce.

With ever-changing business models, new market entrants, and increasing regulatory pressures, if companies stand a chance of survival, they must continue to look for new ways to anticipate the future and stay ahead of the competitive curve. One of the primary ways that successful tech enterprises achieve this is by conducting in-depth market research to better understand consumer wants and needs, analyze market trends, and keep a closer eye on competitor activity.

All of these factors give insights into how companies need to differentiate their offerings to secure a larger share of the market – or at least maintain their current position. On that note, here are some ways in which tech companies are implementing market research strategies to gain a competitive advantage over their rivals.

Understanding the ‘why’ behind consumer behavior

In a world that has become obsessed with quantitative data, qualitative research is becoming an increasingly valuable tool since it helps companies get behind the “why” of consumer behavior.

If you aren’t familiar, qualitative research is a form of market research that goes beyond just focusing on statistics and instead tries to paint a full picture of the motivations that prompt consumers to behave the way they do. In the tech industry, this is done by utilizing various techniques such as journey mapping, mobile ethnography, and UX testing.

With access to this data, key decision-makers can quickly see the full picture of how and why customers choose to interact with their brand, the reasoning behind their actions, and the areas that could be improved to enhance the customer experience. This allows them to reevaluate strategies to meet demands and respond with more agility (and accuracy) than their competitors, thus securing a crucial advantage.

Of course, this is not to say that tech companies should neglect the importance of big data. On the contrary, the global big data industry is expected to grow to a staggering $274 billion by 2022 due to the simple fact that it provides a vast array of benefits when harnessed successfully. These benefits include improved decision-making, increased efficiency, minimized risk, and the ability to unearth valuable insights that would otherwise remain hidden.

Keeping an eye on rivals

For tech companies, keeping an eye on competitors can help to secure a competitive advantage in several different ways. Firstly, competitor analysis enables tech enterprises to improve products and services by looking at what works for their rivals – and what doesn’t.

For example, if one rival target a similar market segment, the other company can easily assess consumer reaction to new product launches through methods such as social listening before developing a similar product of their own. Furthermore, analyzing competitors enables businesses to gain a deeper understanding of their strengths and weaknesses and how to exploit them for higher revenues and reduced overhead.

Whether analyzing the competition for vulnerabilities, or opportunities for partnering, purchasing, or aligning resources, this competitive analysis provides the information they need to make more informed decisions and streamline operations to obtain an advantage.

Lastly, through the use of a sophisticated market research tool, it’s possible for companies to monitor industry players and analyze specific categories to gain a snapshot of the macro trends and identify who is winning and losing market share. Armed with this information, business leaders can tailor their strategies accordingly, such as when to time a new product launch and which engagement channels to prioritize.

Keeping tabs on consumer preferences and market trends

Just as technology advances quickly, so do consumer preferences. Of course, trying to predict them is one thing, but keeping carefully monitoring how customers behave and interact with brands in real-time is a whole other kettle of fish.

With this in mind, even if a tech company manages to develop and launch a successful application or software, it must always be ready to adapt to the market demand and current trends.

To accomplish this, companies turn to a wide variety of data sources, some primary, some secondary, to keep an ear to the ground with the current state of affairs within their particular segment. Whether bi-annual or yearly, client check-ins usually prove to be rather beneficial in maintaining individual product lines since companies can react to direct feedback from their current customer base.

Once again, market research tools can also help acquire a full picture of the industry and any emerging trends that may be worth capitalizing on (or avoiding). Through the analysis of this data, companies can better understand the macro changes that are impacting the industry by tracking historical trends over time.

Improving branding through consumer insights

Despite its huge importance, branding is still one of the main areas of weakness for many tech companies. However, through proper market research, business leaders can more accurately evaluate their branding strategies and assess the effectiveness of their current efforts.

This is done by gathering consumer insights through surveys, polls, or analysis of social posts and content sentiment to gauge engagement with their brands and highlight potential problem areas and aspects that need improvement. Being able to address these shortcomings in company branding is vital in securing a competitive advantage since the company will be able to focus on repositioning itself strongly in the minds of its customers.

If they can build trust, establish credibility, and portray authority within the space, it could prove to be far more beneficial than launching a new product or revamping internal operations.

On top of this, fostering a strong brand also allows companies the luxury of charging more for their products and services. Take Apple, for example, which has managed to set itself apart from the vast majority of the industry in terms of perceived value. Nowadays, Apple is associated with prestige, social status, ingenuity, and high quality, which allows them to charge sky-high prices for what is essentially a very similar product to most of its competitors.

Conclusion

There are no two ways about it – competition is about as stiff as it gets in the tech industry. With some of the world’s biggest brands operating in the space and trillions of consumer dollars up for grabs, companies must do everything they can to secure an advantage over their rivals if they want to maintain a foothold in their respective markets.

Thankfully, however, with a well-executed market research strategy (and subsequent analysis), tech companies can gain a competitive advantage over their rivals as they develop a deeper understanding of their consumers, improve their branding strategies, and keep up to date on key industry players and macro trends.

Thanks for Reading!!

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