The definition of market research
Market research (also referred to as marketing research) is the process of collecting information about a company’s target market in order to adjust the company’s strategies to the observed tendencies and processes. You can use this data to develop new products or services, verify the success of those already launched, improve customer satisfaction by acting upon feedback gathered, or to shape customers’ perception of your brand. Market research allows you to evaluate a wide variety of business aspects and draw conclusions that can help you deliver value and be more alert to changing market trends, which can contribute to boosting your operational activity.
The benefits of market research
Good research is the key to success in many endeavors. Business is no different — if you want your company to be prosperous, you need to collect data that will provide you with actionable insights. In an attempt to answer the question of why do market research, the following arguments seem to be of particular importance:
Maintaining customer centricity
Focusing on the customer to get a solid understanding of what they expect of you is one of the top priorities of today’s business. The rule is simple: if you want to win a client, you need to understand them so that you can cater for their needs and live up to their expectations. Thanks to the market research process, you are more likely to predict certain behaviors, understand preferences and pain points, react to indications of poor interest in a given product or service, and by this, get a real chance to be one step ahead of your competitors.
Reaching the right audience
Data collection can also help you reach your customers by adjusting your marketing strategy and campaign to the needs and requirements of your target audience. In order to connect with your customers effectively, you need to pay attention to the channels you are using for marketing purposes as well as the content you decide to share. Both aspects are powerful ingredients of your success, as they can determine whether people will be attracted to your offer or not.
Exploring your potential
Market research can be an effective tool by means of which you get a chance to spot niches and identify new opportunities for your business development. Carefully reviewing the data collected may lead to remarkable growth-enhancing discoveries. For example, if you come across the audience you haven’t reached so far, you can try to improve your service or decide which product features need to be modified to make your offer more appealing to your new potential target group. You can also consider expanding your business by joining forces with a business partner that has already unlocked its potential in the area that is also of interest to you.
Thanks to data collection, you can evaluate if there’s a demand for your freshly devised product or new service. This is of great significance when it comes to minimizing risks and preventing failure that often results from spontaneous decisions based on hunch rather than knowledge. Testing your ideas before actually launching them helps make valid and accurate predictions about how successful they can turn out to be. Market research is then a means through which you can make more informed decisions concerning the choice of products, advertising methods, consumer bases, and many more.
Obviously, you are not alone in the marketplace. Severe competition is precisely why you need to spend some time devising a good brand strategy. Market research allows you not only to dive deeper into your current business experience, but also gain insights into your competitors and pinpoint gaps in customer satisfaction. As a result, you can come up with solutions that may be better tailored to the needs and desires of the target consumers.
Types of research
In order to address the issue of how to conduct market research, it is vital to differentiate between two major categories of obtaining market research data, namely primary and secondary research. What is more, a distinction between qualitative data and quantitative information needs to be drawn for the sake of better understanding.
Primary research, or field research, is about collecting first-hand information concerning your market and the customers within it. It is particularly useful during the process of determining who your buyer personas are and dividing your market into relatively homogeneous consumer groups. Primary research can fit into one of the two categories: exploratory and specific research.
This kind of research usually involves interviews and surveys composed of open-ended questions that relate mainly to potential problems that may be worth handling.
This type of research is more concerned about finding answers and solutions to problems and issues that have already been identified as a result of exploratory research.
Secondary market research can be defined as all the data that has been gathered and analyzed by others (e.g. industry experts) so that it is available and serves as an arsenal of information about the market and your competitors. You may want to have a look at market reports, government statistics or other publications containing relevant content. As this type of research can broaden your understanding of market trends, it tends to precede conducting primary research.
Qualitative vs. quantitative research
Research can also vary depending on its nature. In simple terms, qualitative research deals with meanings and is expressed in words, so it helps probe into public opinion about products and services. Quantitative research, in turn, is concerned with numbers and statistics, so it generally helps establish measurable facts.
Carrying out market research — 4 common methods
Companies use a wide range of methods with the aim of collecting customer data and learning from it. The most popular ones include:
Surveys remain one of the most commonly used tool for gathering information, mainly due to the fact that they are relatively straightforward, easy and cheap to conduct, and they offer a considerable amount of data in a short time. Participants receive and answer questions (open-ended or close-ended) that can be delivered online or asked in person or over the phone.
These are one-on-one conversations with customers that can be conducted in person or via a video conferencing tool. Interviews are an extremely valuable and insightful way of getting feedback as they provide you with an opportunity to speak to your customers directly, observe all non-verbal signs and react to them instantaneously.
Another way to collect customer data is through focus groups, e.g. a thoroughly selected group of consumers engaged in a conversation with a market researcher or some trained professional. The main aim of this person is to find out what the consumers think about a given product so that valuable ideas for product improvement or differentiation can be generated and put into practice.
This method involves observing how consumers behave when interacting with a particular product and noting down the results of this observation. One of the benefits of this observation-based research is the fact that it is less costly than other methods and that you are given a chance to watch people in a natural setting, without being influenced by one another. However, you don’t know what is happening in the consumers’ heads, so for the sake of more reliable results, you may still need to consider conducting a survey.
The power of market research
As you can see, carrying out your own market research may benefit your business in various ways. Adopting suitable methods and paying careful attention to the proper conduct of your research process can help you get deep and illuminating insights into your customers’ buying decisions, increase their loyalty, shape brand perception, as well as exploit your company’s full potential and improve its financial performance.