Table of Contents
Introduction to Market Research
What Is Market Research And Why Is It Important?
Market research is the process of gathering information about your target market and customers to verify the success of a new product, help your team iterate on an existing product, or understand brand perception to ensure your team is effectively communicating your company’s value effectively. Market Research is important because today’s consumers have a lot of power. They can research your product or service and make purchase decisions entirely on their own.
Market research is a critical component in the research and development (R&D) of a new product or service. By conducting market research, businesses can gain valuable insights into their target audience, identify their needs and preferences, and ensure that their new product or service is tailored to meet those needs. Without proper market research, companies risk investing time and resources into developing a product or service that fails to resonate with their intended audience.
Benefits Of Conducting Market Research For Businesses
Market research allows you to meet your buyer where they are. By engaging the right people and data, a business can use this research to position itself in the market and predict where the market will go in the future. Market research allows you to get information from a larger sample size of your target audience, eliminating bias and assumptions so that you can get to the heart of consumer attitudes. As a result, you can make better business decisions from knowing the bigger picture. It also provides insight into a wide variety of things that impact your bottom line.
Types of Market Research
The aim of market research is to look at the market associated with a particular good or service to ascertain how the audience will receive it. This can include information gathering for the purpose of market segmentation and product differentiation, which can be used to tailor advertising efforts or determine which features are seen as a priority to the consumer. Market research consists of a combination of information that has been gathered by the company or by a person hired by the company, secondary information, or information gathered by an outside source.
Primary data is first-hand information you gather yourself, or with the help of a market research firm. You control it. It’s useful when segmenting your market and establishing your buyer personas. Primary market research tends to fall into one of two buckets: exploratory and specific research.
Secondary research is particularly useful for analyzing your competitors. Secondary data is pre-existing public information, such as the data shared in magazines and newspapers, and government or industry reports. You can analyze the data in new ways, but the information is available to a large number of people.
Exploratory market research gathers lots of open-ended data from many people to better understand a problem or opportunity. The goal is to gather perceptions and opinions regarding an issue, so your company can decide how to address it. But first you have to understand how your market sees the issue. To collect information about a problem and insights about how to solve the problem. As a researcher, you will use secondary data that currently exists to provide insights about your goal. You’ll need to remain open to what you discover. The data you collect may indicate new ways to restructure your research problem or look at it from a different perspective. The goal is to collect more information about a topic, not pose or substantiate a solution.
Market research firms often use specific questions to gather feedback on a new advertising campaign, or to refine a planned new product. In specific research, the business can take a smaller or more precise segment of its audience and ask questions aimed at solving a suspected problem. Descriptive research tests the research question to discover if it is accurate or inaccurate. This method measures how often and to what extent variables in the study are correlated. You can collect data through observations, surveys, or interviews. Because the researcher records the data, bias can occur. As opposed to a survey that is directly filled out by the respondent, the data can be skewed if the researcher records a response that they personally prefer.
Causal research looks at the cause-and-effect relationship between variables. If one variable changes, the researcher can record the impact on another variable. Causal research can answer “what if” questions that include price changes, packaging changes, adding or removing product changes and more.
Steps to Conduct Market Research
Market research is the act of gathering, analysing and interpreting information for the purpose of solving marketing challenges. It’s an ongoing process to become familiar with the business environment, customers and their preferences. In marketing research, companies examine all four Ps, which are product, price, place and promotion. This includes public relations, the development of new products or services, promotions and advertising, pricing, branding, modes of distribution, and market conditions. Here are the steps to perform market research:
Step 1: Define The Problem Or Objective
An actual market research plan requires identifying the goals followed by planning. If you frame your problem too broadly, you will get vague answers. Too narrow, and you may not understand enough. Determine the scope of what you want to study and what conclusions you hope to arrive at. Think about what decisions will be made based on your research. When it comes to executing an effective marketing research process, it’s wise, to begin with the end in mind. In short, what do you aim to accomplish through your research?
Step 2: Determine Research Design
The initial phase of this planning focuses on choosing your data sources – where you will get the information and insights you are looking for. At the core of this effort is effectively identifying your target audience. This is essential because you want to be sure that the feedback and data you gather come from the people who are most relevant to what you are researching.
Step 3: Identify Data Collection Methods
Data captured from surveys, interviews, and other methods reveal customer behaviours that indicate why they buy particular products or take certain actions. Typically, most products are designed to solve a customer’s problem. You can rely on qualitative and/or quantitative data to help you get started.
Step 4: Design Data Collection Forms
When it comes to acquiring insights into a given issue, study, research, or even individuals, data is highly crucial. This is why it is viewed as a critical component of all the systems that comprise our modern world. Collecting data is integral to conducting market research. Organisations connect with stakeholders — such as prospects, customers, competitors, investors, and employees — to learn more about their target market and how they can better serve them. The data an organisation collects can steer its entire business strategy, so it’s vital for the data to be high- quality, secure, and relevant.
Step 5: Sample Design And Selection
Sampling is the process of selecting a few items from a given population to be investigated. Sampling offers several benefits over the census. There are several ways to draw a sample from the definite or indefinite population. Each type of sampling procedure has its merits, demerits, and applicability. Depending upon the need, an appropriate sampling procedure may be followed. In real practice, not a single type, but a combination of several types of sampling procedures is used. Sampling procedures can be categorised into two broad classes:
1. Probabilistic Sampling Procedure
2. Non-probabilistic Sampling Procedure
Step 6: Data collection
Data collection is described as a systematic way of acquiring, monitoring, measuring, and analyzing reliable information to support research undertaken by groups of specialists from many fields. While the methodologies and aims of each field may differ, the main data-gathering methods employed in the process are generally the same.
Step 7: Analyze Data
Researchers use several statistical methods to analyze their data, including advanced decision models and predictive analytics. Averages, statistical regression, spreadsheets and charts may all be part of your analysis. Depending on the research tools you use, analytics and reporting, like those included in online surveys, will supply ready-to-use information. Your data should be tabulated and ready for the next phase where you present your findings to your company or research sponsor for their review.
Step 8: Prepare And Present Report
The purpose of creating a market research report is to make calculated decisions about business ideas. Market research is done to evaluate the feasibility of a new product or service, through research conducted with potential consumers. A market report gives the company’s marketing department an in-depth picture of customers’ needs and wants. This knowledge can be used to improve products, prices, and advertising. Good marketing research will help you identify those risks and allow you to mitigate them.
Market Research Template
Data collection and analysis
Results and findings
Conclusion and recommendations
Market Research Examples
Surveys represent a cost-effective way to determine consumer attitudes without having to interview them in person. Consumers are sent surveys in the mail, usually with a coupon or voucher in order to incentivize participation. These surveys help determine how consumers feel about the product, brand, and price point.
Focus group Research
Focus groups provide you with a handful of carefully-selected people that you can have test out your product, watch a demo, provide feedback, and/or answer specific questions. This type of market research can give you ideas for product differentiation, or the qualities of your product that make it unique in the marketplace.
Observation-based research allows you to sit back and watch the ways in which your target audience members go about using your product or service, what roadblocks they come across, and which aspects of it could be easier for them to use and apply.
Experimentation is a useful form of analysis that professionals use in a variety of industries. Experimental research is a method of gathering information and data on a subject through observation in controlled settings Understanding the benefits of experimental research design can help you better use it in your professional career. By assessing the results of this type of study, you can determine correlations between the variables applied and their effects on each group.