Power comes from knowledge, and in the business world, knowledge is often equated with money. A company is better able to meet and exceed customer expectations and, ideally, make money doing so, the more data it can collect about how, when, and why people use its products or services. Businesses that rely on a standard market research process have an easier and better time obtaining useful information. Look at Understanding Market Research Basics:
What is Market Research?
The process of evaluating the viability of a new service or product through research done directly with potential customers is known as market research, also known as “marketing research.” Market research enables a business to identify the target market and obtain consumer opinions and other feedback regarding their interest in the good or service.
This kind of research can be carried out internally, by the business itself, or by an outside market research firm. Surveys, product testing, and focus groups are all viable methods. Typically, test subjects receive free product samples or a small stipend in exchange for their time. The development of a new product or service requires extensive research and development (R&D).
- By speaking with potential customers directly, businesses use market research to assess the viability of a new good or service.
- Through market research, businesses can identify their target market and receive immediate opinions and feedback from customers.
- This kind of research can be carried out internally, by the business itself, or by a third party market research firm.
- Focus groups, surveys, and product testing are all part of the research.
- Market research combines primary information, which is information that is directly gathered, with secondary information, which is information that has already been gathered by an outside party.
Understanding Market Research
The goal of market research is to examine the market for a specific product or service to determine how the target market will respond to it. This can involve gathering data for market segmentation and product differentiation, which can be used to target advertising campaigns or figure out which features customers value most.
In order to develop products that consumers will use and to maintain a competitive edge over other businesses in their industry, market research is a crucial tool for businesses.
To finish the market research process, a company must perform a number of tasks. Based on the market sector being looked at, information must be gathered. To find any patterns or pertinent data points that it can use in the decision-making process, the business must analyze and interpret the resulting data.
Types of Market Research
Market research aids in reaching meaningful conclusions, whether an organization or business wants to know consumer purchasing patterns or whether customers are likely to pay a specific price for a product.
The following types are available depending on the procedures and equipment needed:
- Primary market research, which combines qualitative and quantitative research, is as follows:
Primary market research is the process by which companies or organizations speak with the final consumers or hire a third party to conduct pertinent studies to gather data. The information gathered may be quantitative or qualitative (non-numerical) (numerical or statistical data).
Two types of information can be gathered during primary market research: exploratory and specific. Open-ended questions are asked in a thorough interview format with a small group of people, also known as a sample, in exploratory research to explore a problem. The sample size in this study is limited to 6–10 participants. Contrarily, specific research is more focused and is employed.
Primary market research, as previously mentioned, combines qualitative and quantitative market research. Semi-structured or unstructured data is gathered for a qualitative market research study using some of the most popular qualitative research techniques, such as:
- One of the frequently used qualitative research techniques is the focus group. Focus groups are composed of six to ten people, and they typically respond to online surveys that are sent to them. The best thing about focus groups is that data can be gathered virtually, without direct contact with group participants. However, because complex information is collected using this method, it is more expensive.
- One-on-one interviews: As the name implies, this technique entails one-on-one communication during which the researcher conducts an interview with the respondents in order to gather information or data. Most of the questions are open-ended and are phrased in a way that encourages responses. This approach heavily relies on the interviewer’s skill and experience in posing questions that elicit responses.
- Ethnographic research: This kind of in-depth study is carried out in the subjects’ natural environments. With this approach, the interviewer must adjust to the respondents’ surroundings, which may be a city or a remote village. Geographical restrictions may make it difficult to carry out this kind of study. A few days to several years can pass between phases of ethnographic research.
Employing online surveys, questionnaires, and polls, organizations conduct structured market research using qualitative research methods in order to gain statistical insights for decision-making.
Pen and paper were once used for this method. To obtain useful insights, this has developed into sending respondents structured online surveys. In order to structure and design their survey in a way that will elicit the most responses from respondents, researchers use contemporary, technologically advanced survey platforms.
Data is easily gathered and reported through a well-structured mechanism, and necessary action can be taken with all the information made readily available.
- Secondary market research:
This type of research makes use of data that has been compiled by organizations outside of the market, such as government agencies, the media, chambers of commerce, etc. Newspapers, magazines, books, business websites, free government and nongovernment organizations, and other publications all publish this information. The following are the methods used by the secondary source:
- Public sources: Great places to find free information include libraries and other public spaces. Government libraries typically provide services without charge, and a researcher can record the information that is readily available.
- Business sources: Commercial sources are pricey, despite being trustworthy. Local publications like newspapers, magazines, journals, and television are excellent commercial sources for information.
- Educational Institutions: Although not very common, universities and other educational institutions are a wealth of information because more research projects are conducted there than in any other industry.
How Market Research Gathers Information
Primary information is that which has been gathered by the business or a person it has hired, while secondary information is that which has been gathered by an outside source. These two types of information are combined in market research.
Primary data is information that a company has directly gathered or that has been gathered by a person or company that has been hired to conduct the research. Exploratory and focused research are the two main subcategories of this information type.
Exploratory research, which is less structured and uses more open-ended questions, produces questions or issues that the business may need to address. Exploratory research frequently draws attention to problems that specific research addresses by providing solutions.
Secondary data is information that has already been gathered by an outside party. This can include demographic data from official census records, research studies published by trade associations, or presented findings from another company engaged in the same industry.
How to Conduct a Good Market Research
You must educate yourself about your clients, rival companies, and your sector if you want to run a successful business.
The right questions must be asked to the right people in the right ways during market research. This gives your company a direction and enables you to remain aware of the needs and price points of your customers.
When conducting market research, there are two ways you can apply your findings:
Write a marketing strategy for your new venture.
Determine how well your current marketing strategy is working.
The right questions must be asked to the right people in the right ways during market research.
To conduct market research, follow these 5 steps:
- Specify the purpose of your research.
Defining your research objectives is the first step in the market research process. Think about it:
- What essential data are you hoping your study will elucidate?
- What specific information do you need about your market or customers?
You can keep your research focused and efficient by outlining your research objectives.
You might need to choose whether to introduce a new product or service, for instance. The next step in your research would be to determine how much the market is willing to pay for your new product or service as well as whether or not it will be accepted by consumers.
- Formulate your research inquiries
Create a list of research questions for your market, customers, and competitors after you’ve decided on an objective. For instance:
Querying your market:
- What are the main demographics of your market (such as age and gender)?
- How will the market and your customers be affected if you launch a new company or product?
- Is the economy in the area where you work stable?
You should ask your clients:
- Who are your ideal clients and what are their habits?
- What location are they in?
- What characteristics characterize the ideal client for your company?
Concerns for your rivals:
- What kind of person would typically compete with your business?
- What are the key advantages of your rivals?
- What are the main flaws of your rivals?
Start by reading industry reports on the IBISWorld website.
- Compile your study
There are two different methods for gathering data, and both involve asking questions:
- A smaller number of respondents and greater investigation are required for qualitative data (focus groups and in-depth interviews).
- To reach specific conclusions, quantitative data from a large number of respondents is used (surveys and questionnaires).
Methods for conducting research
Typical techniques for gathering data include:
- surveying over the phone and mailing out forms
- personal interviews and online surveys
A face-to-face meeting may be necessary to fully understand personal preferences, such as color preferences, but you can conduct a straightforward “yes or no” survey over the phone.
Online surveys can be carried out in a number of low-cost ways, including:
using Google Docs to create forms, or using SurveyMonkey
- Explain what you discovered.
In this step, you’ll organize your findings and interpret them. In essence, what have you learned?
When organizing and arranging your data, keep your research goals top of mind. Find ways to organize your data better; doing so will make it simpler to draw conclusions in the future.
Here are some pointers for organizing data:
Find any significant trends; consider organizing your data using lists, tables, diagrams, and mind maps.
Utilize your marketing strategy to analyze your data and identify your data’s advantages, disadvantages, opportunities, and threats (SWOT). A SWOT analysis is something you can include in your business plan.
Interpreting your results is one of the most crucial steps in the market research process. What does the research indicate to you? You can determine what the study’s findings are by responding to this question.
- Reach judgments and conclusions
When you have your results, enquire:
- What does your research mean for your company?
- What will you do to address the situation?
Any conclusions you draw should be in line with the aims of your research as well as the objectives you have for your company.
Examine all the information gathered:
- Make sure your data are accurate and without gaps.
- Examine the main trends or issues in your market or industry.
- Analyze any potential advantages, disadvantages, strengths, and threats.
- Select the strategies that will make up your marketing mix using the information you have gathered.
Market Research Example
Many businesses use market research to test out new products or to learn what kinds of goods and services consumers want but don’t currently have.
For instance, a business that was thinking about opening up shop might carry out market research to gauge the viability of its good or service. If consumer interest is supported by market research, the company can confidently move forward with the business plan. If not, the business should use the findings of the market research to modify the product to align it with consumer preferences.
Conducting market research can help you make informed investment decisions, learn more about the industry and competition, and better understand the future of your business. By using the right tools to Conduct Market Research and following the process outlined in this guide, you will be able to achieve great results.