Today, we live in a consumer-driven world, and businesses face cut-throat competition to survive and succeed in the market.
A company cannot succeed without understanding the consumer’s needs and behavior, so it relies on intensive backend market research. Market research not only tells a company what to produce, but it also tells how to present the product to the consumer. Work doesn’t end here. Once the product is out in the market, market research is conducted to gather information about customer feedback so that the company can make necessary changes to increase its reach.
If you’re new to market research, this guide will provide a blueprint for conducting a thorough study of your market, target audience, competition, and more.
What is market research?
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.
Market researchers investigate several areas of the market, and it can take weeks or even months to paint an accurate picture of the business landscape.
What is a market research analyst?
Market research analysts are the backbone of all crucial business strategies. They help companies conduct market research and determine the target consumers for their goods or services. They examine market trends concerning their target audience’s shopping patterns and demographics, and their research work helps companies optimize products, choose advertising channels and determine price points.
Market research analysts typically do the following:
- Monitor and forecast marketing and sales trends
- Measure the effectiveness of marketing programs and strategies
- Devise and evaluate methods for collecting data, such as surveys, questionnaires, and opinion polls
- Gather data on consumers, competitors, and market conditions
- Analyze data using statistical software
- Convert complex data and findings into understandable tables, graphs, and written reports
- Prepare reports and present results to clients and management
Primary vs. Secondary Research
In conducting your market research, you will gather two types of data: primary and secondary. Primary research is information that comes directly from the source (potential customers). You can compile this information yourself or hire someone to gather it via surveys, focus groups, and other methods. Secondary research involves gathering statistics, reports, studies, and other data from organizations such as government agencies, trade associations, and your local chamber of commerce.
While large companies spend huge amounts of money on market research, the good news is that plenty of information is available for free to entrepreneurs on a tight budget.
Qualitative vs. Quantitative Research
Market research can be qualitative or quantitative, depending on the studies conducted and what you’re trying to learn about your industry.
Qualitative research is concerned with public opinion and explores how the market feels about the products currently available in that market. Quantitative research, on the other hand, is concerned with data and looks for relevant trends in the information gathered from public records.
Common Market Research Methods
There are various ways of conducting market research and collecting customer data. Four common market research techniques are surveys, interviews, focus groups, and customer observation. The method you choose may vary based on your business type and research objectives, and you don’t have to limit yourself to just one research method.
Surveys are a form of qualitative research that ask respondents a short series of open- or closed-ended questions. Surveys can be conducted orally but are mostly hand-written or online.
The data gathered through the survey is pretty straightforward to analyze, including open-ended questions whose answers might initially appear difficult to categorize at first sight.
Interviews are one-on-one conversations with members of your target market. It can be conducted face-to-face or through video conferencing. Regardless of the medium, all types of in-depth interviews produce big benefits in understanding your target customers.
By speaking directly with an ideal customer, you’ll gain greater empathy for their experience, and you can follow insightful threads.
3. Focus Groups:
Focus groups bring together a carefully selected group of people who fit a company’s target market. A trained moderator leads a conversation surrounding the product, user experience, and/or marketing message to gain deeper insights. 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.
During a customer observation session, a representative of the company takes notes while they watch an ideal user engage with their product (or a similar product from a competitor).
It’s a less expensive method of marker research and you’ll see people interact with your product in a natural setting without influencing each other. The only downside is that you can’t get inside their heads, so observation is no replacement for customer surveys and interviews.
How to Do Market Research?
The following steps will give you a solid understanding of your users and their expectations from your company.
- Define your buyer persona.
- Identify a persona group to engage.
- Prepare research questions for your market research participants.
- List your primary competitors.
- Summarize your findings.