What is Market research?
Market research is an essential tool to help organizations make informed decisions by gathering information on customers, products, and their challenges in the market.
It includes studying customer preferences, current trends within the market, relevant competitors and their offerings, and demographic data to completely understand its environment.
Market research endeavors to uncover consumer needs, analyze their behavior, and understand what motivates their purchasing decisions.
Market research is an invaluable tool for businesses, allowing them to identify potential opportunities and challenges within the market.
It involves activities such as surveys, interviews, focus groups, and data analysis to help determine market demand for new products or services while assessing a proposal’s viability.
By gathering and analyzing data appropriately, businesses can make effective decisions in their operations.
Market research is essential to the success of any business. By utilizing gathered consumer data, organizations can make informed decisions that can help shape their strategic objectives, adapt existing plans, and create products or services better suited for their target audience.
Market research helps entrepreneurs to base their decisions on facts rather than guesswork.
It can identify areas with the greatest innovation potential, ensuring resources are used in the most constructive ways possible. Additionally, businesses utilize market research during various stages of development for different purposes.
A business survey to learn more about its target audience’s preferences and purchasing patterns is an example of market research.
They might ask about their age, gender, financial status, and the products they buy.
Put simply, Investigating the market is like a detective solving a mystery! Businesses are trying to uncover what people want so they can make all the right choices and give their customers exactly what they need – it’s just like Sherlock Holmes looking for clues!
Marketing research process
The market research process is designed to fully understand a company’s marketing strategy, highlighting its weaknesses and strengths.
The first step in a successful marketing research project is clearly defining the question or issue you are trying to answer.
Once that has been done, it’s time to formulate an effective research strategy that collects and analyzes relevant data.
After gathering and interpreting the data, a complete report can be created detailing the results of your study.
Evaluate the opportunity
Determining the problem, you are trying to solve is the first step in tackling your research objectives.
Asking specific questions can help you identify demanding needs and uncover potential opportunities for success.
The following questions may be helpful to ask in the initial stage:
- How many of our most recent clients are first-time buyers?
- How can we make them repeat customers?
- Why are sales lower than last quarter?
- Is our pricing too high?
- Why do consumers add things to their shopping cart but then discontinue their purchase?
- How can we improve the efficiency of our checkout process?
Create a research plan
A market research plan can help an organization outline how to handle the concerns or problems it desires to solve. The available budget, the study technique used to collect data, and the project scope all influence how you plan and design this research.
Research can be conducted using two main methods: Primary and Secondary.
Both draw information from different sources to gain a comprehensive understanding of your marketing strategy.
Primary research: Primary research can be expensive and time-consuming, but it is often the most reliable way to answer important questions accurately.
This analysis involves gathering original data through surveys or in-person interviews, then synthesizing that data into a comprehensive report.
Secondary research: Gathering information from other sources—such as research reports, websites, and government files—is known as secondary research data.
Since it is typically more cost-effective and accessible, many investigation plans utilize secondary data. It involves analyzing and synthesizing the collected information to acquire the desired outcome.
Collect the data
Once you have established your objectives, start collecting relevant information from various sources using various data collection techniques.
Surveys: Conducting a survey is an effective primary research method that can provide useful insights into business practices, marketing strategies, and market demand.
Organizations can gain valuable feedback on their product or service offerings by surveying the right target audience with relevant questions.
A/B testing: It is a user-experience research methodology. This study compares two or more variable versions, such as different website layouts (A and B), to determine which would lead to increased customer engagement.
The aim is to increase site visitors monthly by specifying the version receiving the highest direct traffic.
Social media polling: Creating a poll on social media can be an efficient and cost-effective way to extract useful insights from current and potential customers.
By analyzing survey results, companies are better equipped to design products that optimally meet customer needs and enhance overall user experience.
Interviews: Face-to-face or phone interviews provide businesses with valuable insight into customer needs and expectations.
Through focused questioning, companies can better understand their target customers, such as when they have been clients or why they chose this brand over others in the market.
Focus groups: Focus groups collect insights and feedback from a select group of people about a certain product or service.
Through this method, moderators can explore opinions and emotions that potential (or current) customers have concerning the relevant item as participants answer open-ended questions or are asked to discuss with one another.
The data collected is non-numerical (qualitative), thus providing important qualitative information on the topic.
Analyse your data
Data analysis is a powerful tool for understanding and improving an organization’s market performance.
By analyzing raw metrics, trends, and patterns emerge which can help answer important research questions about the marketplace.
With the right tools, data analysis provides meaningful insights that reveal more about institutional challenges or successes than simple metrics alone.
Following these types of analysis, you can evaluate the data:
Descriptive analytics: Descriptive analytics uses analysis tools to present data in charts and graphs, providing a visual representation that helps one understand the bigger picture.
This type of analytics can quantify performance with numerical metrics such as unique users or page views.
Diagnostic analytics: Imagine if your website’s visitor numbers have dropped by 20% in the past five months; it is important to understand why.
Analysis tools can be useful for investigating the cause and effect of this decline.
For example, consider if there are too many pop-ups or a slow page load speed that could discourage users from returning to your site; such issues can be identified with appropriate analysis methods.
Predictive analytics: Companies can use predictive analytics to create accurate models to forecast future results based on existing data.
For instance, if an analysis reveals that there is usually a spike in apparel sales when the school year begins, organizations with e-commerce sites should prepare for increased online traffic during this period.
Prescriptive analytics: This analytics tool utilizes a combination of descriptive, diagnostic, and predictive analytics to enable businesses to make informed decisions and take the optimal course of action.
Predictive analytics can provide valuable insights into trends, like the rise in clothing sales around the school year.
Prescriptive analytics then takes this knowledge one step further: it recommends a solution that meets higher online traffic demands – such as finding suitable web hosting plans with increased capacity.
Present your results
After researching and analyzing the data, you can create a comprehensive report to communicate your results.
To make sure it is accessible to all viewers, consider creating a multimedia presentation such as a slideshow, video, or interactive dashboard that provides visual representations of the data.
The main focus should be making the information easy for everyone who reads or views it.
All marketing research reports should capture key information regarding the company, such as customer profiles, target audience purchasing habits, and relevant market competitors.
Most importantly, these reports must provide great insight into the questions asked to achieve a successful study outcome.
Reports usually aim to craft a narrative about the outcomes of a study, often with illustrations such as charts and graphs.
Further, they offer integral perspectives from those experiencing or using the company or product in question, which provide insight into their behaviors and desires.
All of this information helps build an overall picture that can inform decision-making within organizations regarding gauging success or struggles with an offering.
The research study should demonstrate how the company can manage these issues, providing constructive suggestions for modifying its marketing and customer-targeting strategies.
Incorporate your findings
Once your data has been presented, creating action plans based on the findings is essential. These may include constructing new strategies or refining existing ones.
Major discoveries could lead to radical changes for your marketing campaigns, while minor details can still be leveraged to improve your overall business strategy.
For example, if your analytics reveal a difficulty in capturing and sustaining young audiences, you may need to redesign your social media campaigns to attract a more diverse demographic.
Alternatively, offering discounts on social media platforms exclusively for younger customers could be enough to keep them engaged with your brand.
Analyzing the data will enable you to stay ahead of market trends and make timely changes to benefit the company’s growth.
Types of Market Research
Market research, or marketing research, gathers information on customer needs and preferences to identify the target market and gain insights into how this audience thinks and behaves.
By utilizing these data points, companies can better understand their target market’s behaviors when making strategic decisions.
There are eight types of market research, each with its own methods and tools.
- Primary research
- Secondary research
- Qualitative research
- Quantitative research
- Branding research
- Customer research
- Competitor research
- Product research
Primary and Secondary research
Primary and secondary research has previously been discussed in detail.
Qualitative research
Qualitative market research involves gathering primary or secondary data without numerical values that cannot be quantitatively measured.
Research teams conduct in-depth market studies to understand better various factors that contribute to the success of a product.
This market research serves as an analytical tool to draw conclusions rather than produce a clear understanding of what a target audience believes.
For example, qualitative market research can be utilized to gauge the response of a new consumer demographic toward a new product and decipher its meaning for the company.
Quantitative research
Quantitative research requires the collection of data that is numerical in value, which can be gathered from either primary or secondary sources.
Researchers often utilize various techniques to collect market research data, including polls, surveys, desk research, online statistics, and financial records.
This information can provide valuable insights for historical benchmarking based on factual figures and data. Additionally, there may be experimental aspects involved in this process.
Researchers can utilize quantitative market research to create a basis for additional exploration of concepts through qualitative market research in the future.
Branding research
Through brand market research, organizations can better understand their existing and potential customers’ perceptions, enabling them to develop a strategic plan for maintaining and managing their desired brand identity. It could include tone of voice, visuals/imagery, and core values.
Interviews, focus groups, and surveys provide valuable insights for research. For instance, brand awareness surveys can assess participants’ familiarity with a particular brand and determine their likelihood of purchasing.
Additional areas for brand research are also around brand loyalty, brand perception, brand positioning, brand value, and brand identity.
The goal of the research will be to determine how to know if:
- There are positives to highlighting to enhance your brand’s image.
- How your brand compares to others
- There are areas to boost your brand’s activities.
Customer research
By conducting customer market research, businesses can gain insights into the buying habits of their target customers and identify areas for improvement to increase sales.
This study aims to gain an in-depth understanding of our customers and continuously monitor their interactions with the company.
The research will explore topics such as:
- Customer satisfaction: Find out what causes customer satisfaction, as higher customer satisfaction can lead to improved customer retention.
- Customer loyalty: This analysis examines how customer loyalty is strengthened across their lifecycle through various experiences.
- Customer segmentation research: Gaining insight into your consumers’ characteristics, behaviors, and preferences is essential for understanding who they are and what they have in common.
Competitor analysis
Conducting competitor market research entails comparing your company’s strengths, weaknesses, and marketing strategies with your competitors.
It can also involve understanding the competitive landscape in a particular market and learning how best to enter new markets.
This research aims to gain insights into how to distinguish our company from the competition and develop our capabilities for a sustainable future by closely monitoring emerging trends and understanding customer desires.
To conduct a competitive analysis, researchers can use SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis on your company and its competitors to compare how they measure up.
Conducting primary research by speaking to customers about their buying behaviors and conducting secondary research to analyze your competitors’ market share, sales figures, operational structure, etc.
It can provide a complete picture of the marketplace. With this data, you can identify opportunities for improvements that will help establish yourself as a competitive player in the market while also coming up with unique ideas to set yourself apart from other businesses.
Product research
Product market research is an essential component of launching successful products and services.
Effective research can ensure that your offering meets consumer needs, stands out from the competition, and performs optimally upon launch.
This study analyses consumer insights surrounding your product and determines its value and functionality. Furthermore, it may guide how the product could be upgraded or adapted for future developments.
Product research may be divided into several categories:
- Product branding: Is the brand and design of this product effectively appealing to potential buyers?
- Product feature testing: Changes may be tested at different stages of development with target audiences (e.g., initial design, version updates, or pre-launch) to see if added or reinforced features are accepted positively.
- Thinking about product design: How can you help your customers resolve their current or future issues?
- Product marketing: Are your marketing messages enhancing the memorability and saleability of your product, or can they be improved further?
Market research advantages and disadvantages
Considering the pros and cons of market research is essential to understand its full potential.
Therefore, let’s explore how different advantages and disadvantages come into play.
Advantages of Market research
Better customer understanding
A market research study can provide vital insights into your desired target audience and their preferences.
You will be able to understand who is likely to buy your product, what pain points customers face, the motivations behind their buying decisions, and more, all of which can help you create products and marketing strategies tailored specifically for them.
Managing risk
Conducting market research is a key component of effective risk management. It can provide valuable insight into customer behavior patterns, enabling you to make informed investment decisions in new products or services.
In addition, gathering data through research provides the foundation for business judgments, reducing risks associated with changes and growth initiatives in the target market.
By collecting insights and analyzing their implications for your company’s strategy, you can reduce exposure to uncertainty while paving the way for sustainable growth opportunities.
Increasing sales
A comprehensive market research strategy is essential for driving sales and success in your business. By understanding the needs and desires of your target audience, you can create a customer-centric approach that meets their expectations.
Researching trends with these customers can help you recognize new opportunities, so you’re better prepared to capitalize on them.
Additionally, by attaining an understanding of how consumers make decisions about purchases, you are more likely to develop strategies that succeed in improving overall sales figures.
Improve brand recognition
The primary goal of market research is to strengthen brand awareness and refine marketing and advertising strategies.
Understanding the types of channels potential customers use makes it possible to craft tailored advertisements specifically for that group. Additionally, gathering information on which social media networks are utilized most frequently by consumers can help form a comprehensive marketing plan suited for those platforms.
Finally, researching the type of materials your target audience is most receptive to allows you to create content tailored specifically for them.
Identify new business opportunities
Market research allows businesses to uncover new market opportunities and shape evolving consumer trends.
By examining customer wants and needs, companies can identify areas of the market that need to be adequately served. Such insights can help businesses create innovative products or services that satisfy unmet customer demand.
Improving product development
Market research provides companies insight into consumer opinions and preferences regarding existing or prospective new products.
This valuable feedback allows businesses to refine or enhance their products by incorporating customer suggestions into the product design and introducing new features that cater to the needs of their audience.
By considering what customers value most, companies can create offers that accurately align with their wants and needs, boosting customer satisfaction.
Disadvantages of Market research
It may be expensive
Implementing an effective market research strategy can be costly for small organizations. For this reason, outsourcing the process might not be feasible.
However, investing in market research pays off in increased sales and profits. To reduce cost, one option is to focus on conducting primary research only on key areas that need attention—for instance, marketing techniques tailored toward your target audience.
Time consuming
Market research is necessary to remain competitive in today’s ever-changing business environment; however, it requires much time and resources.
From formulating an efficient plan and recruiting participants to gathering data and analyzing results, there is a need for steps that must be completed before coming up with solutions.
It can significantly impede decision-making processes and the company’s ability to respond quickly to developments within the market.
