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September 15, 2020
1 min read
Market research is the process of gathering, interpreting, and using information about factors that influence the success of a business.
It could be about a target market, a competitor, or an entire industry. Market research is critical to the success of a business, so it should be regularly carried out.
Sometimes you’ll hear market research and marketing research used interchangeably. But there are some differences between the two terms.
So what is marketing research?
It’s a wider way of understanding consumer preferences.
Marketers don’t specifically research market factors like competitors and in-depth customer insights. That’s where market research comes in.
Public opinion surveys have been around for a long time. But manufacturers only really started listening to market demand in the 1940s.
Factory capacities had increased and consumers were more aware of the choices they could make. If mass-produced goods weren’t selling, manufacturers needed to know why.
It’s widely understood that this is an important task. What is market research actually worth to a business?
If you’re starting or scaling a company, there is a lot you can learn from market research:
Market research is key to finding out who your potential customers are, and everything about their buying habits.
By understanding who and where your target market is, you’ll be able to build customer profiles or personas. Successful companies have completely fine-tuned these details.
With market research, you can learn about customer age, gender, and location. You can find out what they already buy, how much they earn, and what triggers them to make a purchase.
All this information will help you in creating profitable products, strategizing impactful marketing campaigns, and designing an effective customer journey.
Whatever product or service you offer, you’re bound to have competitors.
That’s healthy. It shows that your business isn’t too niche, and it can help you achieve an advantage.
How? Well, if you scrutinize the way competitor companies present themselves to customers, for instance through products or marketing, you’re sure to find weaknesses.
Your job is to capitalize on those shortcomings with a better version. But it isn’t all negative: finding where your competitors have succeeded will benefit you as well.
If they’ve created something amazing, it’ll show you exactly what your target market responds positively to.
Nothing would be more disappointing for your business if you poured everything into a product, only for it to completely flop.
There are different types of market research you can carry out to stop this from happening.
From a simple survey to beta testing or a user trial, you can get feedback on your products and services before launch.
Using market research to test out products is a great method to use even during the design process.
A focus group can tell you what elements to change or which design to choose. In the long run, it’s a cost-saving exercise.
Any business that wants to be successful needs to be ready for change.
While nobody can see the future, some people are really good at predicting it. Market research can open you up to a lot of insights that will help your business evolve.
Look at how some of your favorite brands managed to identify gaps in their industries, way ahead of time. Or check out some forgotten brands, and find out where they failed to grow.
A little hard work in researching market factors will help you set a clear roadmap for the future of your business.
There are some guiding principles to follow if you want to conduct market research.
Don’t worry, it isn’t a strict process. While you’re researching, you’ll be able to tap into your creative side when finding and interpreting information.
But it helps to follow a general framework. Here’s what you can do to get the most out of your market research:
You can’t start researching without knowing what it is you’re looking for.
Find a question about your business that needs to be answered. It could be about process, or products, or customer service.
Whether you’re just starting out, or you’re looking for ways to improve and scale, this first step is probably the most important.
Defining the problem right away will help you stay focused on your market research. Maybe you want to find out:
Here’s a term you may not be familiar with.
A research design is essentially a blueprint for your research project. It will help you decide which methods you’ll use, and who you’ll get information from.
You could use three different types of research design, depending on how easy it was for you to define a problem in the first place:
Once you know what direction your market research is going to take, you should look at which methods are best for the job.
The objective of market research is collating usable data. Some well-known methods include focus groups, in-store observations, and user testing.
Consider what will be most useful to your business. Data can be qualitative, which is non-numerical, or quantitative, where you’ll be looking at figures and values.
Use this step to establish where you will be getting your information from. Will it be a specific group of people or a broader range?
When you’re ready to start researching, identify the best way to collect the information you need.
There are several ways to record data, but there are only a couple of ways to collect it.
You could directly approach participants, or you could indirectly review them. Your research method will influence your data collection method.
When it comes to data analysis, focus on finding patterns or trends – try segmenting the information into manageable chunks.
You’ve worked hard to gather information, and now is the time to show off the results of your market research.
Hopefully, the data you’ve collected will answer the problem you defined at the start of your journey.
Take a look at the results and try to understand what this information means for your business. Does it tell you what you need to know? How can you grow or change, based on the market research?
Sharing this with your team is key if you want to accelerate growth. You might also want to share it with your customers, if you feel the results will influence their behavior, too.
We’ve looked at research designs, plus some of the methods you could use to collect meaningful data.
But it’s worth knowing that when it comes to market research as a whole subject, there are two core types you could pursue.
Once you’re aware of these, you’ll be able to identify which type you have decided is right for your business.
This is a very hands-on approach.
Primary research is completely controlled by you. You collect information or you direct a specialist market researcher to do it instead.
This type of market research will take time and effort, but it could help you to build a strong rapport with your customers. It will also get you straight to the root of the problem that you have defined.
Here are some examples of primary market research methods:
This is a much broader way to gather information.
Secondary research is more desk-based and will make use of more widely available data. It can be really useful to companies who want rapid insights or industry trend reports.
While it pays to prepare for secondary research in the same way you’d prepare for primary research, it is generally a much faster process.
Here are some examples of secondary market research methods:
Let’s take a more detailed look at some of the most common methods used in market research:
This is a really popular primary research method, and for good reason.
When a focus group is made up of the right people, it will lead to a lengthy discussion that generates tons of information.
The purpose of this method is to bring together a select number of participants who share a common interest. Check out the customer profile you have built for your business and find some key characteristics.
You might want people who have the same educational background. Perhaps they should all live in the same area or work at similar companies. Either way, the point is to encourage them to talk to each other.
Hire a market research analyst as a moderator to guide the conversation, keep it relevant, and ask the right questions. They will be able to collate the data you need.
Checking that your product or service meets your customers’ requirements is crucial throughout its lifetime.
The best time to capitalize on user testing is before you launch a new product, using a select group of people who can give you direct feedback. You might want to incentivize them for their efforts.
This is a pretty focused method of market research that will give insights that are completely tailored to your business.
What you want to achieve from testing is clarity on how your product can be improved, if at all. But it can also offer up some other insights.
Your test customers could provide an unbiased comparison of your product against a competitor’s version.
They might also show you a viewpoint you hadn’t considered, that would influence the way you test marketing for a new product launch.
This is a great technique for brands to consistently use. It gives fascinating, rapid insights into the perception your audience has of your products.
With social listening, you track social media platforms for mentions that are relevant to your business.
It could be mentions of your brand, competitor companies, your products, or just some top keywords.
Your job is to then analyze the information you get from that tracking and implement any changes that the data has encouraged you to make.
Using social listening is similar to observation and focus group methods. You’re surveying your target audience in a natural environment, and getting some truthful feedback.
Social listening is different to social monitoring. When you listen, you’re making the changes that customers have hinted at. If you take no actions, you’re just monitoring.
You already know that staying aware of competitor activity is hugely beneficial to any business.
Conducting market research that specifically targets your competitors is a strategic method. Your objective is to gain an advantage, whatever factor it is you choose to focus on.
Analyzing competitors can help influence almost any area of your business. From marketing to product design, it is often relatively easy to collect usable information.
If your focus is on the product, conduct a comparative shop for rival companies. Review price structures, count how many options are available, and go in-store to check quality.
Assess your brand’s strengths, weaknesses, and threats against your findings. For a richer set of data, analyze a handful of your competitors, instead of just one.
This may be the most used method of market research.
It makes sense. Surveys are incredibly versatile: you can ask different types of questions, in many different formats.
Your business can collect survey data via your website, using a pop-up or asking the question at checkout. Participants could be questioned over the phone, face-to-face, or by filling out a form.
When it comes to what you’ll ask, you should consider whether open-ended or closed questions are most useful.
This is why identifying your research design is important. You could gain great insights from yes or no questions, but it may also be more helpful to ask participants for more details.