Today, consumers possess a far greater hold and power over markets than ever before. Consumers can research services and products from almost any brand, which leads to them making purchasing decisions themselves.
Rather than speaking to a sales representative of a company, consumers, these days prefer asking their friends, colleagues, associates, or other known persons for referrals. Another major advantage that consumers have in the digital era is that they can easily access reviews online on various forums.
Keeping these powers of the consumer in mind, businesses need to develop a marketing strategy that easily adapts to the way customers perceive their data through research. Businesses need to understand their target audience’s behavior and triggering factors behind purchasing decisions.
Even if you are a newcomer to market research, this guide aims to provide readers with a blueprint to conduct a comprehensive study of the market they are in, the audience they target, their competitors, and more.
What is Market Research?
Market research is the process of collecting information about a business’s target audience, customers, behaviors, market trends, competitors, and buyer personas, among many other factors, to determine the success and viability of your service or product.
It is a set of techniques that are used to understand a business’s target market better. Organizations leverage this information to improve their customers’ experience, design better products, tailor marketing strategies that help them garner quality leads, and improve conversion rates.
Why Should You Do Market Research?
To answer this question, consider this: ESOMAR’s global market research report states that about $45 billion is spent around the globe on market research each year (https://www.surveymonkey.com/mp/market-research-ultimate-guide/).
The lion’s share of this amount is utilized to hire the services of market research agencies. These market research agencies procure contracts from organizations and conduct market research for them.
There you have it, a primary reason for you to do your market research yourself. It is a cheaper method of conducting research and faster and not as difficult as you probably think.
Another major reason businesses conduct market research themselves is they know their products, services, and businesses better than anyone else does. Conducting market research on your own also helps businesses understand their functioning in a much better manner and provides them with opportunities they hadn’t noticed before.
Types of Market Research
There are various types of market research, and businesses need to understand the difference between these types before they begin conducting research themselves. Market research is a broad term and can be interpreted differently by different people.
To better understand this, we have listed the four main types of market research, their advantages and disadvantages, and which type you need to use. The four different types of market research are:
- Primary research
- Secondary research
- Qualitative research
- Quantitative research
Primary research is the first-hand collection of new information or the first-time collection of new information. Primary research can be qualitative or quantitative.
Secondary research is the consolidation of information that has already been collected before. It can also be defined as the gathering and summarising of information that already exists.
The main distinguishing factor between these two types of research is that the data has not been collected before, and the research has not been conducted before.
Qualitative research refers to the in-depth study of a particular topic to understand the subject’s thoughts, experiences, and opinions. It collects unstructured information such as images, audio, text, and video to create themes by summarizing the findings. Qualitative research has a smaller sample size, with up to 20 subjects.
Quantitative research uses statistical analysis for the collection of structured and numerical data to understand it. Since this is based on numerical results, quantitative research has a larger sample size.
Qualitative research is exploratory, whereas quantitative research is confirmatory. Qualitative data can be time-consuming and generally difficult to analyze, whereas quantitative data is easier to summarise due to its numerical nature.
Steps to Conduct Market Research
Define Buyer Persona
It is important to find out who your customers are before understanding how they make purchasing decisions. A buyer persona is made up of certain characteristics, some of which are:
- Job title
- Pain points
Buyer personas make it easier for businesses to effectively reach out to and understand more about the actual audience for their industry. Businesses need to optimize and plan their marketing campaigns and content around each specific buyer persona.
Identify a Persona
After finding out the buyer personas for your business, it is time to identify a persona group to conduct market research. This helps in further understanding the actual, real-world characteristics, buying habits, and challenges of a business’s buyer persona.
Prepare Research Medium
This is probably a very obvious area in market research but is also one that most people undermine the importance of. It is important to be thoroughly prepared with questions or discussions for your research.
The questionnaire must be time-bound, with a few open-ended questions in each section to ensure you get the best responses. Market research can be carried out through surveys, questionnaires, individual interviews, focus groups, and telephonic conversations, among other methods.
Market research would be incomplete without studying a business’s primary competition. Identify who your competitors are, understand where they rank higher than you, the areas you rank higher, and the reasons for the difference in rankings.
Now that you’ve collected all of this information and data, it is also necessary to summarise the findings in an easily understandable and implementable way. It is easy to lose sight of what your initial goal was during the process of conducting market research.
It is therefore important to list your goals and the reasons for conducting the research. Your analysis will provide you with glimpses of opportunities that you can take advantage of to get the best out of your brand.
Businesses are advised to conduct at least a quick market research that leads to effective results without necessarily hiring a market research agency. While this may sound difficult to do, it is probably easier than you think. And the best part about it is that it can be performed at any given stage of a product’s lifecycle.