Before starting off any project, business, or a study, one of the most important things to do is research. Every business has its own set of target users. It’s impossible to understand your users, their habits, expectations and behaviours without detailed market research. This article will help you understand everything about efficient market research.
What is market research?
Market research is a process that consists of gathering data and information pertaining to your target audience in a systematic way. It helps in understanding how viable your product or service would be, before even entering the market. It also gives you an overview of what is trending in the industry and what motivates the users to make a decision to convert and buy. Accordingly, you can plan the roadmap for your product or service. Listed below are some of the key benefits of market research:
- Increases efficiency: Quality research helps you understand your customer’s behaviour and habits and tells you the potential focus areas well in advance
- Competitor overview: Market research is the best way to study the market or industry you are targeting. By doing this you can make sure to stay ahead of your competitors by offering varied experience and services
- Cost-efficient: This process does not cost you dollars. You can simply choose to use a survey tool or one-on-one meetings within your reach to start with. Shortly put, this is a low investment, high returns process!
- Productive business investment: Market research is a great investment for any business. It helps the decision-makers to take the right path and achieve the targets that are required
An understanding of market research
Market research begins with collecting data via methods such as surveys, focus groups, interviews, and observation. This data can be both qualitative and quantitative in nature, and can provide insights into many factors including consumer behaviour, market trends, competition, and pricing.
Market research is an essential tool for businesses of all sizes.
Information gathered for market research
Market research can involve gathering various types of information, depending on the objectives of the project. Common types of information gathered in market research include:
- Demographic data: Age, gender, income, education, and occupation
- Psychographic data: Attitudes, values, and lifestyles of the target audience
- Behavioral data: Buying behavior such as purchase frequency, purchase history, and brand loyalty
- Market trends: Information on emerging technologies, new competitors, and shifts in consumer behavior
- Competitor data: Strengths and weaknesses of competitors, like pricing strategy, marketing tactics and products.
- Customer feedback: Customer satisfaction, customer pain points, areas for improvement etc.
Types of market research
By any chance, if you have gotten a chance to read the basics about general research, you know they are divided into primary and secondary research. Let’s do a quick recap here, and learn about the ways to conduct both of them:
The data derived from the primary research is ‘first-hand’. This means that you either collect the data yourself or employ someone you know to conduct research. Often, online surveys, phone interviews etc are the methods used for this. In this type of research, you have control over the entire process and can change the format in between.
Please note: The learnings from this type of research are both qualitative and quantitative.
Ways to conduct primary market research:
- Ethnographic research+observation: This is in-depth research conducted in the natural setting of the object. The idea is to make the respondent totally comfortable in their habitat while the interviewer adapts themselves to their natural environment. This type of research can last from a few days to a month. Every minute detail is studied during the duration.
- Focus groups: Focus group is one of the most commonly used methods for primary research. Here, a group of about 6-10 people is told about a particular release/ idea and all of them share their perceptions, thoughts and views. The best part about this is that it can be conducted remotely and is cost-effective
- One-to-one interview: As the name suggests, this method involves interaction with an individual in the form of an interview. The questions asked to the respondent here are mostly open-ended questions. This is, however, prone to bring in biased responses and the end result of this depends a lot on how the interviewer is putting the questions and their ability to facilitate responses.
- Surveys: Surveys are hugely informative and helpful if conducted the best way. They can be conducted via phone, in person, on paper or via online software. It’s a list of questions crafted in a way that gives you the best possible insight into how a customer feels about your product or service, your brand and the experience you provide. It can be as broad or as specific as you want.
Unlike the primary research methodology, secondary research uses information that is organised by sources like media houses, chambers of commerce, government agencies, private research firms etc. This information is published in different formats and shared with the general public via multiple channels like online forums, websites, newspapers, magazines, events, etc.
Ways to get secondary research results:
Public sources: Public sources such as a library is an awesome way to gather information. The best part is the information is well segregated along with the timelines. However, with the advent of the internet, the visits to the library have come down. It’s always a good idea to visit one if you have enough time to find some unique publications.
Commercial sources: Local newspapers, magazines, journals, TV, radio etc. is what comes under commercial sources. Some of these might get expensive but they are one of the easiest ways to consume information.
Educational institutions: Not very commonly used, this source of collecting data can prove to be useful since a number of researchers are carried out by management and technical institutions which rarely come out.
key objectives of market research
Key objectives of market research include:
- Identifying customer needs and preferences
- Assessing market size and potential
- Evaluating competition
- Developing effective marketing strategies
- Monitoring industry trends
- Mitigating risks
How to Do Market Research
Market research is a process that involves gathering and analyzing information about a target market to help businesses make informed decisions. The process typically involves several steps, including identifying the research objectives, determining the research method, developing the research instrument, collecting data, analyzing the data, and reporting the findings. The data gathered in market research can include demographic data, psychographic data, behavioural data, market trends, competitor data, and customer feedback.
Steps to conduct market research
Now that you know what is market research, its importance and the ways to conduct research, let’s talk about how to do market research in 6 quick steps.
#1 Define your target audience
Before you start understanding how your customers operate, you need to quickly understand who your customers are. Create a buyer persona and keep it handy.
Please note: It’s absolutely okay to have a number of buyer personas!
#2 Understand their behaviour
After knowing well who your target audience is, find out what are the best ways to get in touch with them to get true answers. Evaluate their active hours, tonality, preferences and so on.
#3 Choose a method to get insights
Now is the time to take one of the most important decisions: to choose how to conduct the research. After following step #2, this should get easy. For example, if you find that your target audience opens their mails regularly and responds to them, you can choose to run a survey. However, if you find that the internet penetration to your target audience is very low and they understand their local dialect, then choosing the ethnographic research comes in handy.
#4 Collate the responses
This is where all your efforts come down to. It can be an excel sheet, a google document or a particular software, documenting every fact is a must. Make sure to protect your data and share it only with the relevant people.
#5 Form hypothesis & take actions
After you have a heap of information, it’s time to study the data and build a hypothesis. There might be instances where you will realise that you need to change the entire sign-up flow or change the language or take a different approach. How well you follow this step reflects the success of your business to a large extent.
A Market Research Example
A market research example could be a study conducted to understand consumer preferences and purchasing behavior for a new type of smartphone. The research may involve surveying a representative sample of potential customers to gather insights on features they prioritize, price sensitivity, brand perception, and desired functionalities.
The findings can then guide product development, marketing strategies, and pricing decisions to maximize the chances of success in the market.
History of Market Research
Market research dates back to the early 20th century, evolving from simple surveys to advanced methodologies, leveraging data analytics, technology, and consumer insights to drive business decision-making.
Conducting market research can prove to be an eye-opener and a fact-checker to a number of individuals and organisations. Even if you think you understand your target audience in and out, a detailed study will likely uncover new channels and opportunities for you. It is always the best choice to conduct market research in the initial phase of starting or building anything as it leaves a lot of room for improvement.
Frequently Asked Questions
What Is a Market Study?
A market study is a comprehensive analysis of a specific market, including its size, trends, competition, and consumer behavior, to gain insights for business decision-making.
Why Should You Do Market Research?
Market research is essential to understand customer preferences, market demand, and competition, helping businesses make informed decisions, identify opportunities, and mitigate risks.
When Should You Conduct Market Research?
Market research should be conducted when launching a new product, entering a new market, assessing customer needs, evaluating competitors, or making strategic business decisions.
What are the 4 types of marketing research?
The four types of marketing research are exploratory research (to gather preliminary information), descriptive research (to describe market characteristics), causal research (to understand cause-and-effect relationships), and predictive research (to forecast future trends and outcomes).