Market research is the first step towards understanding your target audience, your market, and the factors that influence purchasing decisions of the buyers.
But what does market research involve?
In this article, we will discuss what market research is, why businesses need it, the different types of marketing research, and real-life examples of successful market research done by companies.
Market research is the process of gathering crucial data on a company’s target market, industry, and competitors. Market research combines consumer behavior and economic trends to validate and enhance your company plan.
Marketing research allows a business to identify its ideal customer and gauge customer demand for its offerings. Companies can offer superior goods, enhance the customer experience, and create an effective marketing plan to attract new customers.
Marketing Analysts
Marketing analysts evaluate data to support a company’s marketing. They can help companies increase revenue or optimize marketing initiatives with their expertise.
Marketing analysts clean, sort, and analyze data. In particular,
- Collecting, cleaning, and classifying data using techniques such as surveys or website analysis
- Reviewing marketing campaign results to enhance efforts (such as revenue growth, reach, or engagement)
Product Marketers
A Product Marketer, or Product Marketing Manager, promotes a company’s products and services to the appropriate demographic. They are responsible for researching the company’s offerings, identifying selling points, and developing promotional strategies.
A marketer’s primary task is to convince potential buyers of the product’s worth. The following marketing research strategies and ideas help to accomplish this objective:
- Choosing which marketing materials to produce and share
- Planning and executing promotional spending plans
- Using collaborators in the content creation process to generate material that accurately represents the product and brand
- Organizing and managing a publication schedule
Content Marketers
A content marketer’s responsibilities span a wide range, including information gathering, strategy development, content production, and promotion.
By keeping tabs on industry trends, keywords, target audiences, content gaps, and best practices (in terms of SEO, auditing existing content, and using analytics), a content marketer may better attract leads and convert them into customers.
A content marketer’s responsibilities might expand to include market research and content performance analysis, depending on their level of expertise.
Social Media Marketers
A social media marketer is a professional in advertising who uses social media sites to spread the word about a business’s products and services. Social media sites like Facebook, Instagram, Twitter, and TikTok frequently advertise to a broader audience, foster relationships with present consumers, and provide brand-new offerings.
As a social media marketer, you can be responsible for the following duties:
- Manage an organization’s social media strategy
- Post social media updates with copywriters and designers
- Track social media data to improve performance
- Follow social media trends, technology, laws, and best practices
- Address user comments and messages
- Social listening technologies can reveal a company’s social media reputation
All Marketers
All marketers use market research to figure out whether or not a new product or service will be successful. The findings may be applied to modify the product’s design and improve the launch plan.
Information obtained to identify market segmentation might fall under this category. It also influences how to differentiate products, which then gets used to customize advertising.
To finish the market research process, a company does various things. Information is gathered based on the market segment that the product is targeting. This data is then evaluated, and pertinent data points are interpreted to conclude how the product may be created and sold to the target market group most effectively.
Market research lets you get to know your most important stakeholder, your consumer. Focus on your consumers’ wants, requirements, and preferences — survey current consumers about your product’s delivery and functioning.
Let’s take a look at the many uses of market research, as well as the pros and cons of using market research.
Keep Your Focus On The Customer
The first step in making your company customer-centric is conducting thorough market research to learn more about your target audience.
You may learn about the wants and needs of your target audience and other relevant details through market research. You need to know your customers to build a customer-centric business, and market research helps you meet clients’ wants and preferences. Customers and your company can both benefit from this situation.
Improve Audience Engagement
Understanding your target clients helps you reach them better. A well-planned marketing effort saves time and money.
To properly engage with your audience, you must customize your marketing materials. Your tone, aesthetics, and product characteristics should communicate to your target demographic. When you “speak their language,” customers are more inclined to listen.
Recognize Potential For Growth
Market research is crucial for every business, not just startups or those introducing new items to the market. Market research should be conducted regularly to help identify and capitalize on growth prospects.
Testing Ideas Reduces Risks
Ensuring product demand is an effective risk-reduction strategy.
If you want to know if your product idea will sell, you must conduct serious market research. Never build a product on a hunch due to the risk involved. Having a proof of concept gives you greater confidence in your efforts and increases your chances of successfully attracting investors.
Make Decisions Based On Data
The results of market studies allow businesses to make educated, data-driven decisions. These results can serve as a map that directs a company’s decisions toward attracting and keeping its ideal consumers.
Perform Better In The Field Of Competition
Doing thorough market research might give you a leg up on the competition. One benefit of customer knowledge is the potential to outperform the competition in customer engagement. Also, by learning more about the competition, you can better assess where you are in the market.
Some important uses of market research are:
Demand Forecasting
Businesses may benefit from marketing research to better anticipate what consumers will want. Through various methods, it helps companies manufacture just the appropriate amount of items to meet expected demand.
Sales Analysis
With the use of marketing research, companies may evaluate their sales figures. It reveals which products are moving well, whether or not the sales team is doing their job, which supplies need to be stocked more, and how much capacity to build.
Advertising Research
Effective and efficient advertising mediums may be determined using marketing research. According to the advertising objectives of the business, it evaluates the ad’s topics, appeals, headlines, communication clarity, attention value, etc.
Positioning Research
Market research may help determine where a product, service, or brand should be positioned in the marketplace. Businesses can position their items in the market better because of the data it collects and offers about potential clients.
Market Segmentation
Information on the market is gathered and relayed to businesses using this method. It’s how companies learn essential details about their prospective clients, allowing them to divide the market into niches.
Product Research
Market analysis plays a crucial role in the product development process. Supplying data on market trends, product testing, and an analysis of the company’s present product mix helps businesses develop the best possible products.
Pricing Research
Market analysis helps companies determine the best-selling prices for their goods. Competitive pricing tactics, consumer price expectations, and the influence of external variables on pricing decisions may all be gleaned via marketing research.
Distribution Research
Learning how best to get goods to people as quickly as possible is the goal of this study on distribution methods. Distribution channels are analyzed and identified as a part of marketing research to select the most effective market intermediaries, lower distribution costs, and measure the channels’ efficacy.
Customer Satisfaction Research
This involves speaking to consumers about their brand-related buying experiences. Marketing research aims to learn how customers feel about the items a business offers.
Market research is crucial for more than just making some positive assumptions. As stated above, market research is beneficial, and not doing it might cost your company in the following ways:
Never Learning Your Competitive Advantages
Market research lets companies optimize practically every process. It highlights what processes or activities are on-brand, lean, and practical while also highlighting things your competitors may be doing you can incorporate, siphoning clients, growing market share, and gaining competitive momentum.
Avoiding Customer-Centric Marketing
Market information helps companies understand customers. Consistent customer and market segmentation is an art and a science. Companies may learn new sales tactics, create more effective brand messaging and commercials, and spend more on customer-facing platforms and contact points via customer-focused market research employing focus groups, surveys, interviews, field studies, and more.
Strategic & Operational Risk Rising
Market research helps businesses avoid making rash judgments. Organizations know what works internally and outside. With this data, they may adjust procedures and allocate resources to:
- Improve budget cycles
- ROI decision-making
- Accelerate product or service launches
- Improve product or market entrance strategy
Cannot Make Data-Based Enterprise Decisions
Enterprise choices based on real-world, credible facts inspire more confidence. Therefore, stakeholders have higher trust in company decisions that:
- Have more preemptive, not reactive, plans, patterns, and actions.
- Improve competition prediction.
- Improve customer prediction.
- Reduce market anomalies and improve response.
While big data has revolutionized how researchers acquire and analyze data, study design remains mostly unchanged. The three main categories of market research are outlined below.
3 Types Of Marketing Research
Exploratory Research
Exploratory research uncovers subject-related data and perspectives for companies. It seldom gives enough data to make market judgments, but it allows organizations to establish stronger research objectives for future studies.
Exploratory research often employs qualitative methods, including consumer and expert interviews, focus groups, and secondary sources like books, syndicated reports, and trade publications.
Customer feedback may be gathered and discussed in online groups. Idea Exchange is a closed, members-only network that Hallmark established to learn more about how their customers engage and speak about its products.
The community members stepped in to teach the greeting card company how to speak the customer’s language through online surveys, which Hallmark then implemented in its marketing strategy.
Descriptive Research
Descriptive research helps companies make decisions and track progress. It uses a standardized framework with close-ended questions to obtain quantitative data for statistical analysis. Surveys, questionnaires, and some experiments can offer the data needed to draw conclusions, take action, and track evolving attitudes and behaviors.
This can gather customer demographics, assess a product’s market potential, or track a target group’s attitudes and behaviors. They can draw market-wide inferences from the data obtained.
Apple is among the world’s top technological corporations. Apple could do this because of its dedication to product innovation and customer market research. Apple’s in-house research team is evidence of the company’s devotion to the discipline.
The Apple Customer Pulse is an online community dedicated to meeting the needs of tech consumers through data analysis and market research gleaned from a wide range of customer satisfaction surveys.
These surveys have allowed Apple to refine and improve its products in response to customer feedback. Apple, for example, has made several of its gadgets with larger screens to enhance the viewing experience for its users.
Causal Research
Companies employ causal research methodologies to determine a cause-and-effect link between variables. Descriptive and causal research is quantitative. Instead of reporting, researchers utilize experiments to predict and test ideas about a company’s goods and marketing.
For example, an organization could experiment with packaging or advertising to see how it affects sales. Causal research can be helpful, but it’s impossible to isolate and prove any one variable’s potential to cause any given impact. Thus, its results should be moderated by other studies.
Dove’s successful #SpeakBeautiful campaign was sparked by the discovery that female Twitter users are twice as likely to post a critical self-review than a positive one.
The #SpeakBeautiful campaign, launched by the soap company in collaboration with Twitter in 2015, was substantially informed by data gleaned from social media listening. The number of negative tweets has decreased from 5 million in 2015 to 3.4 million in 2016, a fall of 36.8 percent. Overall, the campaign was a big success for the company, with the hashtag being used more than 168,000 times.
4 Methods For Conducting Primary Research
Primary research has several methods. The best strategy depends on your questions and situation. The major market research methodologies are interviews, surveys, focus groups, and observations.
Interviews
Interviews are phone or in-person one-on-one or small group question and answer sessions. Interviews are best for gathering plenty of data from a small sample. Interviews with specialists are common. To clarify personal research, ask follow-up questions.
Surveys
When a big audience has to respond, internet surveys using paid or accessible technologies are convenient and cost-effective. Pre-written questions provide respondents minimal freedom if their answer doesn’t fit (making it more difficult to skip questions), and response rates can vary. If a survey is too long, participants may grow bored and leave. Short surveys don’t capture enough data.
Focus Groups
Focus groups acquire data from a small group of subject matter specialists. To discuss ideas, the group talks. Businesses use this strategy to research specialized markets and clients.
Observations
By observing and taking notes, observations are unbiased. This strategy avoids direct researcher-subject contact. This strategy eliminates interview or survey bias by observing actual reactions. Cameras or skilled observers can be employed for this purpose.
Where To Find Secondary Research
Secondary research is a study that has previously been conducted by others and published. Publications from regulatory bodies, industry groups, and competitors are included. Because of the time and cost reductions associated with secondary research, it is typically the method of choice for startups and other businesses operating on a tight budget.
Using the right search phrases, you can find an abundance of useful secondary sources on the Internet, but that wouldn’t be enough to take your marketing research process to the next level. Secondary sources also include magazine and newspaper articles, trade journal and industry publication content, reference library use, and communication with relevant professional groups.
Government entities often provide outstanding secondary research data for no cost. In contrast, accessing data released by private companies may need authorization or payment.
The 4 C’s Of Marketing Research
The 4 C’s of Marketing are Customer, Cost, Convenience, and Communication. These four factors are what ultimately decide a business’s success or failure.
Customer: The customer is at the center of each successful marketing plan. If customers don’t buy what you’re selling, you won’t make any money. Satisfying customers should be a company’s first priority since it may result in substantial financial gains.
Cost: Cost is an important aspect of marketing since it requires time and resources to build a strong brand and communicate effectively via many mediums.
Convenience: Marketing may be simple or difficult, depending on the specifics of your business and the people you’re trying to reach. In a nutshell, the complexity of your business directly correlates to the likelihood that you will need to invest resources into advertising.
Communication: Last but not least, effective communication is critical for every company’s success since it facilitates the development of a loyal customer base.
How To Conduct Marketing Research
1. Interviews
The term “market research interview” refers to any method for gathering information from a respondent in the context of market research. Interviews can range from brief conversations on the street to lengthy discussions in a focus group or the telephone (in the form of a tele-depth).
2. Surveys
Make use of questionnaires and surveys to learn more about your target audience. You can learn a lot about your audience by observing your customer’s habits and noting their broad tendencies and preferences.
The survey participants may not always be honest, but this is an attempt to collect information. Just make it clear that these are the findings from the survey and not universal truths.
We’re all intrigued by others’ thoughts. Participants may help you answer that question and contribute to the development of your market research through surveys.
3. Focus Groups
A focus group is a research technique that involves interviewing a small group of people in an organized and controlled setting. The sample is selected according to a set of predetermined demographic characteristics, and the questions are crafted to elicit useful information.
Observations of the group dynamic might inform future studies on consumer decisions, goods, or contentious subjects, participants’ responses to focus group questions, and even participants’ body language.
Compared to one-on-one interviews, focus groups are less intrusive, more organic, and simpler to conduct than experiments or large-scale surveys.
4. Observations
Observational marketing research is a qualitative way of gathering and interpreting information collected by directly or indirectly viewing and observing other people in natural or prepared contexts. This can be done as part of the research process for marketing products or services. It’s the first (and sometimes only) thing that’s done when starting a new marketing effort.
To achieve the highest quality and most useful findings, social research techniques and observational research methods can be carried out covertly or openly. In addition, researchers may choose to take part in the activity in order to offer a more informed report.
Starbucks Coffee Company
Starbucks‘ business decisions are informed by market research in the form of consumer feedback. In 2008, Starbucks launched “The Idea Platform” to collect customer feedback. It was wildly successful, yielding invaluable insights into consumer habits and tastes. The company still welcomes client feedback through suggestions for future products or services, suggested modifications, requests to reintroduce discontinued items, etc.
The following are components of Starbucks’ approach to market research:
- Keeping tabs on cultural shifts
- Keeping tabs on online activity
- Collecting comments from the public
- Testing merchandise in-store
Zappos
The American company Zappos sells shoes and apparel online. Market research methods tried and tested by Zappos, such as surveys and in-person interviews with customers, allow for excellent customization of its products for their customers.
The secret to Zappos’s sustained success is treating consumers like genuine people, not just another number. In-depth interviews and customer satisfaction surveys were developed for this same reason.
By conducting in-depth surveys and conversations with customers, Zappos is able to hone in on their specific wants and requirements. Using these methods, businesses may better connect with and meet the demands of their customers.
KFC
More people, according to studies, are interested in eating nutritious fare. KFC has responded by forming a partnership with Beyond Meat, a company that makes vegetarian meat alternatives. In August 2019, KFC began selling a limited quantity of Beyond Meat fried chicken to the public for testing purposes. In about 5 hours, the Beyond Fried Chicken completely sold out. KFC saw a growing need for vegetarian and vegan choices and quickly adapted by expanding its menu to include them
The LEGO Group
LEGO has traditionally catered to male consumers because of its focus on construction toys. But LEGO didn’t want to restrict itself to serving only one gender. Its goal was to get all kids interested in its products.
LEGO studied the play behaviors of 3,500 girls and their moms over the course of four years. This method proved quite useful for estimating the potential of entering a new market.
In response to the market research findings, LEGO introduced a new toy brand called “Friends,” aimed squarely towards girls and women.
Market research informed LEGO’s decision to use primary colors and make the figures relatively large. LEGO was able to take advantage of this to broaden the appeal of its merchandise to girls.