Market research involves the collection and analysis of data to obtain more information about the market, consumers, competition, launches, campaigns and everything that allows the best decision-making for a company. Furthermore, it is a vital part of any business strategy, whether it is a B2B or B2C business, large or small, new or old.
Most businesses know what market research is and recognize its importance in a general sense, but they may not realize how crucial market research is to the success of their business.
So you know, when you need to identify market trends and want to better understand your core customer or achieve a long list of other important goals, market research is the answer.
Types of Market Research
Market research is a broad category. In fact, there are many varieties of market research that can be used to achieve your specific business objectives. Next, we will explain the different benefits of each type of market research.
- Brand Research: It focuses on creating or refining your company’s brand to make a bold and favorable impression on your target market. You can analyze the level of brand awareness among your target audience, how loyal customers are to your brand, what kind of qualities people associate with your brand and other aspects of customer relationship with your brand.
- Evaluation of marketing campaigns: Some market research focuses specifically on the effectiveness of marketing campaigns. You can assess how many people have seen your ads online and what the click-through rate has been, for example. This type of information can help make adjustments if necessary and inform future campaigns to reach consumers effectively and keep customer acquisition costs low.
- Competitor Research: To obtain the information it is necessary to focus on competitors. Looking at a competitor’s marketing campaigns, brand reputation, revenue or sales volume, and other important data points can help you learn from their strengths and weaknesses.
- Customer Segmentation Research: An important type of market research, especially for new businesses, is customer segmentation. This research split their biggest customer base into various groups or individuals. Understanding the various sorts of consumers you need to connect with that can assist you to create individualized campaigns custom-made to each group.
- Consumer Research: Almost all market research involves the consumer in some way, but some research focuses specifically on better understanding consumers within a certain segment. You may want to know about their shopping habits, interests, motivations, and more. The better you understand your consumers, the more effectively you can engage them.
- Product Development: Product development requires first market research to ensure the concept has value, and then refine the product over time. For example, you may see sales of a flagship product drop and find that customer needs have changed and this product should offer a new feature to make it more useful or convenient.
- Usability Testing: Similar to product development research, usability testing focuses on products. However, the focus here is how consumers use your product. You can launch a beta version of your mobile app, for example, and get user feedback to find out if there are any bugs or other issues you need to fix.
How to carry out Market Research?
Companies can conduct market research through various means. First, it’s helpful to understand the difference between two main categories of market research data collection: primary and secondary research:
- Primary research is data that is collected by a company or an expert on behalf of the company for its market research purposes. In other words, it is field research. Some primary research is exploratory, meaning it is more open-ended, and other forms of primary research aim to provide insight into specific questions or problems.
- Secondary research involves using data that already exists and is available to you for market research purposes. For example, you can check government census data, industry data reports, or statistics on market trends. This sort of exploration can give a decent beginning stage to understanding the market all the more comprehensively and finding out about the opposition.
Secondary research tends to be a starting point before doing primary research.
There are several primary research methods that companies use to learn from consumers. Some of the more popular methods include:
- Surveys: Surveys involve asking consumers questions that they can quickly answer. Survey questions can be multiple choice or more open ended. Surveys can be taken in person, by phone, by mail, or online. They provide a quick and easy way to reach a large audience and get their feedback.
- Focus Groups: Focus groups tend not to involve as many participants as a survey. Instead, a market researcher leads a small group of consumers in a discussion to gain a window into consumer thoughts. Because the groups are small, most companies will put together multiple focus groups and take all the results into account. They can look through a one-way mirror or watch a recording.
- Interviews: Interviews are similar to focus groups but can involve even fewer people. An individual interview can be a valuable way to obtain detailed information from a client. These insights can be useful, but they don’t provide statistically reliable data like you can get from a large survey.
- Observation: Market observation involves observing consumers to see how they behave under natural conditions, such as a retail store. These consumers may or may not know they are being watched. For example, investigators can view security footage taken of a store to see which departments customers tend to go to first and whether they stop to look at point-of-purchase displays.
- Field Testing: Field testing involves making a business move, but doing it on a smaller scale and looking at the results. For example, a restaurant chain might test a new menu item at various locations and see how popular it is. If it’s a success, the company may feel more confident about adding the item to its menus throughout the region.
Companies can conduct their own market research internally, but many choose to share their objectives with an outside expert who can create a market research strategy and execute it. By outsourcing your market research, you can streamline the process, focus on your core competencies, and receive valuable data from the experts that you can then leverage to boost your business.
Does Market Research Work?
Market research requires time, effort, and money to complete, so it makes sense to spend these resources only if you’re going to get a positive return. The reality is that market research is still a crucial part of running a successful business because it really is worth the investment. Of course, market research alone won’t make your business successful, but it will give you the information you need to make strategic decisions that will lead your business to success.
We discuss various benefits of market research but consider the reverse reality. Without market research, you could fail to connect with customers, miss out on growth opportunities, be vulnerable to risk, make poor business decisions, and ultimately lose your customers to your competitors. Some companies get lucky without doing their research, but such cases are rare. Market research can help you avoid common mistakes and grow your business.