Market Research (Part 1)

Many businesses—even large fast-moving consumer goods (FMCG) companies capable of investing millions of dollars in launching a new product—often underestimate the importance of understanding the market. While they are willing to spend millions on product development and marketing campaigns, they may hesitate to invest just a few tens of thousands of dollars in market research before planning their strategy. As a result, they fail for reasons that could have been anticipated and avoided.

One common justification for skipping market research is the belief that, “I’ve worked in this industry for ten years. Who could possibly know this market better than I do?”

Why Is Market Research Important?

Market research is one of the most critical factors determining the success or failure of a new product launch, marketing strategy, or communication campaign. It is often described as the “sixth sense” of a business.

When conducted properly, market research provides accurate, reliable information that enables marketing, communications, and public relations professionals to make informed strategic decisions. It helps companies understand consumer behavior, market trends, competitive dynamics, and customer expectations, allowing them to develop effective marketing strategies with greater confidence.

Conversely, if market research collects inaccurate or misleading information that fails to reflect market realities, the resulting decisions are likely to be flawed. Marketing and PR activities based on unreliable data often lead to ineffective campaigns, wasted resources, and missed business opportunities.

The Laser Beer Case: A Lesson in Market Research

A well-known example illustrating the importance of market research is the launch of Laser Beer in Vietnam.

The brand reportedly invested approximately US$30 million in its initial launch. Everything appeared well prepared—from its logo, packaging, and slogan to a carefully designed brand positioning strategy targeting young, energetic, and successful consumers. The company also executed a comprehensive Integrated Marketing Communications (IMC) campaign supported by a series of high-profile advertisements developed by Saatchi.

Despite this substantial investment, Laser Beer ultimately failed in the Vietnamese market for one simple reason: Vietnamese consumers were not yet familiar with the concept of bottled fresh beer.

At the time Laser entered the market, fresh beer served in local beer halls cost only around 2,000–5,000 VND per glass (equivalent in volume). Although Laser positioned itself as fresh beer rather than a premium beer, it failed to convince consumers why its product offered superior value compared with existing alternatives.

This failure illustrates how insufficient market research can undermine even the most ambitious marketing campaigns.

Small Marketing Changes Can Produce Significant Results

Real-world experience demonstrates that relatively small adjustments in marketing strategy can dramatically influence sales performance.

For example, companies may improve results by increasing product sampling, expanding advertising to raise brand awareness, refining product quality, revising pricing strategies, strengthening brand positioning, or improving communication messages delivered to consumers.

Many of these strategic questions can be answered through Brand Health research, a market research tool designed to measure brand awareness, consumer perceptions, satisfaction, loyalty, and competitive positioning.

Without reliable market research, marketers are forced to rely primarily on intuition, assumptions, or personal opinions when making important business decisions. This significantly increases the likelihood of costly mistakes.

Because of the specialized knowledge required, only a small number of companies conduct market research internally. Most businesses instead rely on professional market research agencies with the expertise and tools necessary to collect and analyze accurate data.

Why Do Many Vietnamese Businesses Lose in Their Home Market?

International corporations have long recognized the value of market research and incorporate it into nearly every strategic decision they make.

Rather than relying on a single source of information, they often combine reports from multiple research agencies while maintaining their own internal market intelligence teams to verify findings independently. This multi-layered approach improves decision quality and reduces business risk.

In contrast, relatively few Vietnamese businesses have developed the habit of systematically collecting and analyzing market information before making important decisions.

Recent surveys indicate that Vietnamese companies generally allocate very limited budgets to market research. Even organizations that do invest in research often fail to utilize the findings effectively.

Common problems include:

• Limited understanding of what market research can actually provide.
• Unclear business objectives before initiating research.
• Lack of a well-defined marketing or business strategy.
• Insufficient budgets allocated to research activities.
• Strategic decisions that are frequently changed based on the personal preferences of senior executives rather than research findings.

These shortcomings have become one of the major reasons many domestic businesses struggle to compete successfully against international competitors—even within their own home market.

Experience Alone Is Not Enough

Many companies are willing to invest millions of dollars in launching new products but hesitate to spend a comparatively modest amount on understanding the market beforehand.

The reasoning often sounds familiar:

“I’ve been working in this industry for ten years. Nobody understands this market better than I do.”

While confidence gained through experience is valuable, this mindset is both subjective and risky.

Customer needs, preferences, purchasing behavior, and market conditions are constantly evolving. Information that accurately reflected the market five or even ten years ago may no longer be relevant today.

Successful businesses recognize that markets never stand still.

This is precisely why many companies with histories spanning more than a century continue to conduct market research regularly. Continuous research enables them to monitor changing consumer expectations, emerging trends, competitive movements, and new business opportunities.

Rather than relying solely on past experience, these organizations combine accumulated expertise with current market intelligence, allowing them to make smarter strategic decisions and maintain long-term competitiveness.