Market Research

In this article, we talked about the meaning of market research, the types, the methods, the examples, and we discussed the benefits.

Definition

Market research is “The process of gathering, evaluating and understanding information about a market, about a product or service to be offered for sale in that market, and about the past, present and potential customers for the product or service; research into the characteristics, spending habits, location and needs.

It is also the action or activity of gathering information about consumers’ needs and preferences.

Types of Market Research

Primary research

Primary research is research that you collect yourself but going directly to the target market through a range of methods. Because it is data you create, you own the data set.

Secondary research

Secondary research is the use of data that has previously been collected, analyzed and published (and therefore you do not own this data). An example of this for market research is. Most information is freely available, so there are less costs associated with this kind of secondary research over primary research methods.

Qualitative research

Qualitative market research is the collection of primary or secondary data that is non-numerical in nature, and therefore hard to measure.

This kind of market research is used to summaries and gather, rather than pin-points an exact truth held by a target market. For example, qualitative market research can be done to find out a new target market’s reaction to a new product to translate the reaction into a clear explanation for the company.

Branding research

Branding market research assists a company to create, manage and maintain the company brand. This can relate to the tone, branding, images, values or identity of the company.

Research can be carried out through interviews, focus groups or surveys. For example, brand awareness surveys will ask your participants whether the brand is known to them and whether it is something they would be interested in buying.

Customer research

Customer market research looks at the key influences on your target customers and how your company can make changes to encourage sales.

The aim of this research is to know your customer inside out, and continuously learn about how they interact with the company. Some themes covered by this include:

Customer satisfaction – Exploring what keeps customers happy, as higher customer satisfaction is more likely to lead to increased customer retention.

Customer loyalty – This looks at what experiences have happened to lead to greater customer loyalty across the customer lifecycle.

Customer segmentation research – Discovering who the customers are, what their behavior and preferences are and their shared characteristics.

Competitor research

Competitor market research is about knowing who your competition is and understanding their strengths and weaknesses, in comparison to your organization. It can also be about your competitive offering in the market, or how to approach a new market.

The main methods of market research include:

Surveys:

A widely used method where a set of questions are distributed to a large sample of people, allowing for quantitative data collection on opinions, demographics, and behaviors.

Focus groups:

A qualitative method where a small group of people discuss a specific topic in a controlled environment, providing deeper insights into attitudes and motivations.

Interviews:

One-on-one conversations with individuals, offering detailed qualitative data on personal perspectives and experiences.

Observation:

Watching and recording customer behavior in a natural setting to understand patterns and interactions without direct interaction.

Field trials (experiments):

Testing a product or marketing strategy on a smaller scale in a real-world environment to evaluate its effectiveness.

Primary vs. Secondary research:

Primary research involves collecting data directly through methods like surveys and interviews, while secondary research utilizes existing data from sources like industry reports or government statistics.

Qualitative vs. Quantitative data:

Qualitative data focuses on opinions and descriptions, while quantitative data provides numerical measurements.

Choosing the right method:

The best market research method depends on the research goals, target audience, and budget.

Examples of market research include:

conducting customer surveys to understand preferences and buying habits.

organizing focus groups to gather in-depth customer insights.

conducting interviews with potential customers.

analyzing competitor data, and running test marketing campaigns to gauge product reception.

Surveys:

This is a common method where companies send out questionnaires to a large sample of potential customers to gather data on demographics, opinions, and buying behavior.

Focus Groups:

A group discussion facilitated by a moderator where a small group of targeted individuals share their thoughts and perspectives on a product or service.

Interviews:

One-on-one conversations with customers to gain detailed information about their needs, motivations, and experiences.

Observational research:

Watching customer behavior in a natural setting to understand their interactions with a product or service.

Experimentation:

Testing different marketing strategies with a controlled group to measure their effectiveness.

Social media analysis:

Monitoring social media conversations to understand customer sentiment and perceptions about a brand.

Benefits of market research:

Customer-centric approach:

Deepening understanding of customer needs, behaviors, and pain points to tailor products and services accordingly.

Competitive analysis:

Assessing competitor strengths and weaknesses to identify potential market gaps and opportunities.

Identifying growth opportunities:

Discovering new market segments, product features, or customer needs that could drive business expansion.

Risk reduction:

Testing new ideas and concepts with potential customers before significant investment to minimize the chance of failure.

Informed decision-making:

Using data-driven insights to guide business strategies and product development.

Marketing strategy development:

Creating targeted marketing campaigns based on accurate customer demographics and preferences.

Brand loyalty:

Building stronger customer relationships by demonstrating a deep understanding of their needs.

Trend identification:

Staying ahead of market changes and emerging trends to maintain relevance.

Product development optimization:

Incorporating customer feedback into product design and features to improve satisfaction.