Are you interested in knowing what, how and when to conduct market research? Are you interested in finding out why consumers aren’t purchasing your product? Are you thinking of launching a new product or service, or perhaps an entirely new marketing campaign but aren’t sure what your customers are looking for?
It is necessary to get help from your customers to answer these questions. How do you gather the data? In this instance and many other instances in your company, conducting market research will be your best way to collect all the required data.
In this comprehensive guide to the market, discover the definition, benefits, and the different kinds of market research and some case studies to assist you to comprehend this kind of research.
Market research is the process of testing the viability of a product or service using research conducted with prospective customers. This technique allows companies or companies to find their intended market, gather and record opinions, and then make informed choices.
Research on market trends can be carried out directly by businesses or organisations or outsourced to agencies who have experience in this area.
Market research is carried out by conducting interviews and surveys with a sample of individuals called”the samples”.
The principal reason for market research is to comprehend or study the market associated with a particular item or service to determine what people will feel about a specific product or service. The results of market research could be used to improve marketing and advertising strategies or to determine the features, priorities or service need (if there is any) of the consumers.
Three main goals of market research:
The market research project can typically comprise three distinct kinds of goals.
Administrative Assistance to the company or business develops through an organised and efficient plan of action and both material and human control of resources and meets each individual’s needs in the marketplace at an appropriate moment.
Social: Respond to customers’ needs by providing an appropriate product or service. The product must meet the demands and preferences of the consumer as they consume it.
Economical Find out the financial degree of success or failure that a company may experience when it is brand new to the market or introducing new products or services, which gives certainty to any actions that need to be taken.
Why is market research necessary?
Conducting research is among the most effective ways to increase customers satisfaction, lower customer churn and improve the performance of your business. Here are some reasons why market research is vital and must be taken into consideration for any business:
Valuable information: It offers knowledge about the worth of new and existing products, thereby helping businesses plan accordingly.
Customer-centricity: It aids to identify what the customers require and desire. Marketing is about customer service, and knowing the customer and their requirements can assist businesses in creating items or products that are most suitable for their needs.
Forecasts: Businesses can estimate their production and sales by analysing what customers want. Market research can also aid in determining the optimal inventory.
Competitive advantage: In order to stay ahead of the competition, market research is crucial. Businesses can develop business strategies that will help them remain ahead of their competition.
Types of Market Research: Market Research Examples and Methods
Suppose an organisation or company wants to know consumers’ buying habits or the possibility of customers paying a particular price for the product. In that case, market research can help come to meaningful conclusions:
1. Primary Market Research
(A combination of both Qualitative and Quantitative Research) This form of research allows businesses or organisations to communicate with customers or an external entity to conduct pertinent studies that collect information. The information collected could be either qualitative (non-numerical) or quantifiable (numerical and statistical) information.
In conducting this research, you can collect two kinds of data: Specific and Exploratory. Exploratory research is open-ended, where a topic is analysed through open-ended questions in the form of a thorough interview generally with a small number of people, sometimes referred to as a sample. The sampling size is limited to 6-10 people. However, the specific research can be more focused and can be utilised to address the issues identified through exploratory research.
As previously mentioned, this research combines qualitative market research with quantitative research. A qualitative research study includes semi-structured or unstructured information that is collected using a variety of frequently used qualitative research techniques like:
2. Secondary Market Research
Secondary research utilises information gathered from outside sources, such as media, government agencies, chambers of commerce etc. The data is available in magazines, newspapers, books, company websites, free government and non-government organisations, and other sources. The second source is based on the following sources:
Sources for public information: Public libraries, such as libraries, are an excellent source of free information. Libraries run by the government usually provide services at no cost researchers can make a list of available data.
Commercial sources: Although they are trustworthy, they are costly. Local publications, magazines, journals, and television are excellent commercial sources to gather information.
Educational institutions: They are more reputable than any business industry.
Methods of Market Research
Focus groups: One of the most commonly employed qualitative analysis methods is the focus group. A focus group is a smaller group of individuals (6-10) who usually answer online questionnaires. The most appealing aspect of the focus group is that data can be gathered from a distance and without engaging with members of the group. But, it is more costly because it’s used to collect complex data.
One-to-one interviews: As the name implies, it involves individual interaction in shape in the form of an interview. The researcher asks a sequence of questions to gather data or information from people taking part. The questions are generally open-ended and asked to encourage responses. This technique is heavily dependent on the skill and experience of the interviewer to pose questions that prompt responses.
An ethnographic study: This form of research is in-depth and conducted in the natural surroundings of the participants. This technique requires the interviewer to adjust themselves to the participants’ natural surroundings, which might be an urban area or an isolated village. The geographical constraints could be a barrier to conducting this type of study. The duration of ethnographic research ranges from a few hours to several years.
Organisations commission qualitative research methods to conduct market research in a structured manner through web-based surveys, survey questionnaires, and polls to gain insights from statistics for making informed choices.
This technique was previously carried out using a pencil and paper. The method has changed to providing online surveys structured to the participants to collect valuable data. Researchers are more likely to utilise modern and technologically-oriented platforms to design and structure their survey to generate a maximal response from the people who take part.
Data can be easily gathered and reported using a well-structured system, and the appropriate actions can be taken based on all the data available in real-time.
Stages for Conducting Market Research
Being prepared for the various scenarios that may arise in the investigation can make the researcher more efficient and help avoid issues. Today’s most successful companies use advanced market research software that allows them to conduct extensive research using the umbrella of a single platform. This will enable them to deliver actionable results faster with fewer issues.
The following steps will help you to conduct effective market research.
Stage 1: Define the Problem
A well-defined topic of study will assist researchers in asking questions. These questions should be geared at solving problems and must be customised to the specific project. Be sure that the questions are clearly written and that those asked to answer them comprehend the questions.
Researchers can run tests with a smaller group to determine if those who answer can comprehend the questions, the questions asked are understandable and if they are enough to provide an understanding of the conclusions.
Research goals should be written clearly and include an explanation of the data required and the method of obtaining it. The research objectives should consist of answers to the question, “why are we doing the research? “
Stage 2: Define the Sample
To conduct a market study, scientists require an appropriate sample taken using one of the various sampling methods. The term “representative sample” refers to a tiny number of people who represent an entire group as precisely as possible.
A company shouldn’t waste resources in collecting data from the wrong people. The population’s demographics should reflect those that are important to researchers, and they must be investigated to ensure they qualify.
Take into consideration that marketers are always susceptible to an unbalanced sampling since there are always people who can’t answer the questionnaire. They’re busy or respond to the survey in a way that is not complete, and researchers might not get the necessary data.
Concerning what size the sampling is, the bigger it is, the more likely it will be to be representative of the general populace. A more representative sample will give the researcher more confidence that the people they have included are the people they want to include and can also lower the possibility of bias. So, if they wish to reduce the chance of errors in our surveys, they must be able to draw a balanced and representative sample.
Two methods to get a representative sample from your Market Research participants:
The probability sampling method: In the case of probability sampling, the selection of the sample is randomly chosen, which ensures that every member of the population will enjoy the same selection as well as inclusion into the group of a sample. Researchers must make sure that they have up-to-date data on the people from whom they draw their sample and then conduct a survey of the majority of the population to determine the level of representativeness.
Non-probability sampling: In non-probability sampling, various types of people seek a more balanced and representative sample. Knowing the demographics of our sample will assist in limiting the demographics of the desired sample. It will also help identify the variables that are important to researchers, including the gender of an individual, their age, area of residence, etc. Understanding this, researchers will be able to be in control of creating an appropriate sample that will benefit us before obtaining the data.
If a population isn’t representative, there could be an error margin. If researchers are looking to get an appropriate sampling of 100 people, they must select a comparable number of females and males.
The sample size is crucial; however, it doesn’t guarantee the accuracy of the sample. Beyond size, the notion of representativeness is a function of the sampling frame, which is the set of chosen people.
Stage 3: Carry out data collection
The first step is to develop an instrument for collecting data should be created. The issue that they don’t complete a survey or respond incompletely will result in mistakes in research. A good collection of data will stop this.
Stage 4: Analyse the results.
Each of the various aspects of market research is linked to each other. If the above steps are performed correctly, but there isn’t an accurate analysis of the results, the final decisions will not be good. A thorough analysis without leaving any loose ends behind can be beneficial in finding solutions. The analysis of data will be recorded in a report. The report must be clearly written to ensure that the most effective decision-making can be made.
How can researchers assess the results they have obtained? The only data that can be gathered is age, sex, occupation, and the number of interviewees since the rest of the data are feelings and experiences passed to us through the interaction. To help with this, there’s an instrument known as an empathy map. It allows us to put ourselves in our clients’ shoes to discover the characteristics that enable us to adapt better between our services or products and their requirements or preferences.
If the research is meticulously planned, The hypotheses have been appropriately defined, and the appropriate collection method is used. The interpretation process is typically completed efficiently and effectively. What happens following the conduct of market research?
Stage 5: Make the Research Report
Researchers must focus on what they hope to achieve with this report when presenting their findings. Also, when answering this question, they shouldn’t assume that their survey format will be the ideal method of analysis. One of the biggest mistakes that researchers make is to report their findings in the same way as the questions they ask and fail to recognise the value of storytelling.
To write effective reports, the best analysts offer the following suggestions: use the inverted pyramid method to present the findings and begin by answering the most critical questions about the business that prompted the investigation. Begin with the conclusion and provide them with the basics instead of building evidence. Then, the researchers can provide more details to those interested.
Stage 6: Make Decisions
Market research can help researchers understand the vast array of data like the consumer’s purchasing habits or feedback on the development of the market that they want to target. Researchers can also find helpful information to aid in estimating the cost of their service or product and determining an equilibrium that is beneficial to them and the customers.
Benefits of an Effective Market Research
Make informed decisions: The success of an organisation is contingent on the method in which decisions are made by management. Utilising market research methods, managers will be able to make business decisions based on the results that support their understanding and knowledge. Market research can help you understand the market’s trends and regularly conduct it to learn about the clients in-depth.
Get accurate data: Market research offers exact and reliable data that can prepare a company for any issues that might occur in the near future. When conducting a thorough study of the market, a company will indeed be taking a significant step forward and thus benefiting from its current competition.
Find the market size: Researchers can assess the market size that needs to be covered when selling a service or product to earn profits.
Select a suitable sales method: Choose a specific sales method based on what consumers want. Based on this, the product or service can be placed on the market.
Find out about customers’ preferences: It’s helpful to know what the preferences of customers (and preferences) alter to ensure that the company can meet their preferences as well as purchasing habits and income level. Researchers can establish the kind of product that should be made or sold depending on the consumer’s needs.
Get customer opinions of the company: Apart from producing data, market research can help researchers understand how customers view the business or the brand.
Effective business investment: It is ideal for every business since it provides valuable information. It teaches researchers how to take the correct path to achieve the level of sales needed.
5 Pointers for Businesses and any Market Research Agency
Pointer 1: Define the purpose of your study.
Before you embark on conducting your research, be aware of what you’re hoping to achieve. Are you trying to boost the amount of traffic to your establishment? Increase sales? Convert customers from once-buyers to regulars? Knowing your goal will allow you to customise the remainder of your research and the marketing materials you will use in the future. Setting a plan for your research will let you flesh out the information you need to gather.
Pointer 2: Learn About Your Target Customers.
One of the most crucial things to consider is that your company serves one specific client. Defining your customer’s particular needs offers many benefits, such as making it easier to determine the language you should employ when creating your marketing materials and how you can build connections with your clients. If you spend the time identifying your ideal customer, you can locate the most effective products and services you can sell to them.
You must learn as much as you possibly can regarding your ideal customer. You can collect this information by observation and then research the type of customers that frequent your particular business.
The first things to consider are their income and age. What are they doing to earn money? What are their marital status and educational levels?
Pointer 3: Knowing whom you represent helps determine whom you don’t.
It’s okay to determine who’s not a segment of your potential customers. In fact, for smaller enterprises, knowing the people you don’t serve is crucial to help you expand your business. Why? Simple, if you’re tiny, your advantage is the ability to get in touch with a specific part of your market. It is important to focus all your effort on the ideal buyer who is already compelled to buy your product.
You’ll only weaken your message if you’re spreading yourself too thin, trying to be everything to everyone. Instead, it would help if you focused on the people you want to serve. Find them, dig deep, and you’ll be in a position to determine what you can do to best offer them the products or services you offer.
Pointer 4: Learn from your competitors.
This applies to brick and mortar companies and online companies since it lets you put yourself in the shoes of your client and get an entirely different perspective on your business. Explore the web and in your neighbourhood. If you are able, go to the shops of your competitors.
When you look at your business from a customer view, you should look at where things are going correctly and what’s not.
Are you able to identify areas that require more attention or improvements? What are your processes against the competition? What is the quality of their products and service? Are their customers satisfied? Could you take a closer look at their market? Who else is buying from their company? Is it the same kind of customers who make purchases with you? If you ask these questions and conduct research in person, you will be able to find lots of data to help you determine your distinct selling proposition and make even better offers for your clients.
Pointer 5: Ask your prospective customers to be open and talk to you about everything.
A well-designed customer survey is among the most valuable instruments for market research since it lets you get into the mind of your customers. But, be aware that feedback from customers can be negative, so use criticism as a tool to guide you in the proper direction.
The process of creating a survey is straightforward. Ask questions regarding what your client believes you’re doing well and what you could do to improve. Also, you can ask customers to let you know what kind of products and services they’d like you to offer, which will give you great insights into how you can monetise your business to the maximum extent possible. Many customers will be thrilled to provide their feedback. You could even offer people who take surveys a reward like coupons the next time they shop.
An insight and research repository provides a comprehensive research management system that can provide information about past and ongoing market research. With this tool, you can leverage the results of previous research to make decisions quicker, use previous market research, draw trends, use methods of research that have been successful previously, and so on.
Why Does Every Business Need Market Research?
Market research is among the most effective methods to better understand your customers, competitors, and the general market. It is guaranteed to give you and your company the data you require to make educated choices.
Market research for small businesses is especially imperative as they need to determine if a business concept is feasible and if they want to expand into the market of a different type or launch an innovative product or service.
If you are possibly looking to conduct your own market research studies with a reputable market research agency, or even just to participate, check out more of our website!