Since the global economic recession of 2008, both the consumer demand and the consumer expenditure have declined drastically almost on all fronts. The US economy, though better than before, is still struggling to attain its lost stability. Most companies follow the path of cutting all departmental costs, including employee salaries and benefits, during these difficult times. But, Professor John Quelch says in an article that in case of market research, the costs should actually be increased rather than being decreased during such phases of recession. Why?

Professor Quelch says that it is during these periods that the manufacturing industries need to know more than ever about the changes in the behavior pattern of the consumers. Consumers become more conservative and cut down their expenditures to maintain their old savings. Preferences shift from superior to inferior goods, so that income and price elasticity curves change. Consumers as well as investors give more time to bargaining and negotiating prices. Demand for durable goods also increase, while demand for non-durable and luxurious commodities fall. All these trends need to be studied more closely and categorized according to demography and geography. And, this is what market research basically involves.

Cutting down market research budgets is just a short-run measure. In the long run, it will actually lead to dwindling returns. This happens because of incomplete or skewed information about the demand of products and services. In order to keep themselves updated about the changing consumption patterns, the companies need to conduct regular market research. It also helps to discern exactly what motivates the consumers to buy more goods and services during tough economic times. The key for the entrepreneurs to face recession successfully is to stay up-to-date with the ever evolving market prospects.

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