Utility of Business Market Research During Recession

The global economy experiences highs and lows in cycles, much like an ocean wave: when it expands, its crest reaches a peak, collapses, and then begins to rise all over again. When the economy improves, it is referred to as "economic growth," and when it deteriorates, it is referred to as "economic contraction" (or "downturn"). The economy is considered to have entered a recession if it shrinks for two straight quarters. Planning with care can be crucial to an organization’s ability to survive difficult economic times, especially during recessions. This is why business market research during a recession is such a potent tool. It may seem counterintuitive at first, but by better understanding the changes that a recession brings about in their target market, businesses can maximize their profitability during a downturn. In this article, we will discuss how b2b market research can help companies during a recession.

The Main Causes of Recession (Are We Facing One in 2023?)

There are several potential causes of a recession. Some of the most common ones include the following:

• When an economy experiences rapid growth and inflation, the central bank may raise interest rates to cool things down. This can lead to a decrease in spending, which can cause a recession.
• A recession can be caused by a financial crisis, such as a bank failure or a credit crunch. When lending dries up, businesses and individuals can't borrow the money they need to keep the economy going.
• Recessions can also be caused by external factors, such as a sudden drop in the price of a country's primary export, a natural disaster, or a war.
• Government policy mistakes, such as fiscal tightening or monetary policy errors, can also lead to a recession.
• Structural factors, like technological unemployment or decrease in productivity, can lead to a recession.

These are just a few examples of the many potential causes of a recession. The specific cause of a recession can vary depending on the country and the state of its economy at the time. As of December 2022, there were no signs of a global recession in the economy. Although economists and financial professionals are still debating the possibility of a recession, it may not last as long or be as severe as previously anticipated. Nevertheless, it’s worth noting that most forecasters still anticipate a recession in 2023. Consequently, organizations should stay prepared, and for that, conducting business market research might be the key to weathering the coming storm.

The Power of Market Research During an Economic Downturn

Market research for startups can help businesses gain a deep understanding of their customers and the overall marketplace. Companies can make informed decisions about how best to adapt their products, services, and marketing strategies to the changing economic conditions. Here are a few ways that market research can benefit companies during an economic downturn:

• Identifying cost-saving opportunities
• Identifying new revenue streams
• Developing effective marketing strategies
• Identifying segments of loyal customers
• Product innovation market gaps identification

How Market Research Can Aid Your Business During a Recession

Market research can provide some predictability in an unstable economy. Based on data and insights, it can assist businesses in making strategic business decisions. Here are a few notable ways it can help business organizations weather a recession:

Get an Edge Over Your Competitors

“What our competitors are doing?” isn't necessarily the greatest question to ask during a recession. Instead, businesses should concentrate on what their rivals aren't doing. According to Harvard Business Review, market research expenditure decreased for four consecutive quarters, during the Great Recession of May 2009. Larger corporations tried to reduce research investment by up to 20%. This meant that businesses all over the world were cutting back on spending, particularly on market research. According to the same report, 9% of firms not only survived the Great Recession, but thrived. These are companies that had solid market research plans, enabling them to outpace rivals in sales growth by more than 10%. Market research helped them carry out essential, fundamental work, which revealed how their audience was responding to financial difficulty. It also revealed how that audience would still make a purchase even when money was tight, given that they find enough value in a product.

Ride the Change in Customers’ Spending Trends

It's natural to assume that consumers limit their purchases during recessions. However, retail food purchases from "mid-tier brands" increased during the Great Recession as several other industries battled to keep up. The most intelligent businesses were able to recognize that consumers were not inclined to stop spending during the crisis, but rather, divert their purchasing power elsewhere. In reality, it is the values that matter to consumers which change during a recession, not necessarily the amount of money they spend.

Commit to Precise Pivots

Business market research enables companies to pinpoint exactly which part of their operations needs to pivot and, more crucially, what change(s) to make. As opposed to a wild guess, you can make these judgments knowing that they are sound as they are supported by solid business market research. While your competitors spend months discussing layoffs and downsizing, you can dominate your market by launching new products and services that have the best possible chance of succeeding based on actual consumer feedback.

Final Word

When it comes to business development, business market research can reveal crucial perspectives and fresh opportunities. It always pays to use the correct types of market research approaches to achieve your business goals in today's unstable economic climate. At the same time, you must work with one of the top market research companies in India to ensure that your efforts are successful. When looking to partner with a reputable firm that offers proven market and desk research services, look no further than Unimrkt Research. We integrate advanced technology into our research methods to bring the best results. We offer quantitative and qualitative market research services for different industries on a global scale in a variety of languages. Unimrkt Research also offers company profiling & monitoring services to assist organizations to strengthen their business health. To know more about our market research services, call +91-124-424-5210. You can also email sales@unimrkt.com or fill out our contact form, and we will respond at the earliest.