Are you interested to know what market research is and why it is significant to apply? Do you want to know how and when to use it? Are you planning to develop a new product but are confused about your customers’ needs? If you are answering yes to the previous questions, you will require your customers’ help. Before that, you will need to gather the data. In such cases or any other relevant situation in the business, market research helps you gain the answers you need.
We will discuss in detail what market research is, its benefits, and some examples.
By definition market research is the process of evaluating the viability of a new product or service after conducting direct research with the target customers. With this method, firms or businesses can discover potential customers and know their opinions to make relevant decisions. The purpose of conducting market research is to analyze a market-linked with a specific product, to decide how the customers will react to that particular product or service. The information in the market research report helps dictate the requirements to suit the audience’s needs.
Three Significant Objectives of Market Research
Market research is vital to attain the following three objectives:
- Basic to proper planning
To initiate the marketing plans and policies successfully, market research is a dire need.
- Lowering Marketing Costs
Market research is critical as it provides businesses with ways to reduce distribution and advertisement costs.
- Finding New Market for the Products or Service
Market research is significant to discover new markets for the product and maintain the existing ones simultaneously.
Why Market Research is Important?
If you want to satisfy the customers and upgrade your business, this is the best way to take a step towards the same. The focus should be on turning one-time-purchasers into permanent clients and this is where market research helps you.
Improving User Experience
Customers will keep your business taking off with high colors. You should look for ways to engage them that drive better traffic to your business. With market research, you get to know about their experiences and make amendments as necessary to meet up their expectations.
Planning the Right Strategy
Strong market research helps provide you with information about what the customer is thinking and why they are thinking that way. You get an idea about their expectations, preferences, and the price they are willing to spend on a particular product or service. Having a clear conception of these pointers, helps you strategize accordingly.
Coming out of ‘Guess Work’
An alarming side in business is people often tend to get away with bad ideas resulting from mere guesses or assumptions! That’s so not done! Complete market research helps you get the right insight about the purchasers, and you don’t end up making a disastrous decision. Rather with the aid of the available data, you make marketing plans and execute the same.
Market Research Types
Depending on the methods and tool requirements, market research types are as follow:
1. Primary Market Research
Primary market research is a combination of both qualitative market research as well as quantitative market research. It is the process of data collection through direct communication with the customers like surveys, interviews, etc. It involves data that isn’t pre-existing and comes directly from the customers. Primary research develops two types of information:
- Exploratory: it involves open-ended or straightforward questions to gain lengthy responses from the answerers, and is conducted through a detailed interview primarily with a small group to address problems.
- Specific: it is exactly to the point and used to address particular issues after being identified through exploratory research.
2. Secondary Market Research
Secondary market research involves the data already existing in the market and the researcher can use it free of cost or at a much lower price. The data comes from various public sources, education sectors, and commercial sectors. Secondary research has a limitation. It might not fit the actual requirement the researcher is looking for.
Market Research Methods
The market research methods aren’t limited to a few ways. But here we will include the most common and comprehensive ones. The methods might vary for each business type. A skincare business will have different goals compared to a digital marketing firm. Again, a design firm will aim for something different than a SaaS company. So the methods are goal-based and depend on the type of data you want to gather from the customers.
Market research surveys are a qualitative research method that the respondent undertakes to answer a short series of market research questions. The questions can be either open-ended or closed-ended or so. Surveys seek answers via direct market research questionnaires or emails and Google forms. Undoubtedly, surveys are the most common technique in market research.
Surveys are an inexpensive and comprehensive research method that helps you with lots of meaningful data in a short time. Moreover, the data is easy to analyze and you get to plan accordingly.
Direct one-to-one communication with your target customer via interviews is the best technique in market research. You have the chance of in-depth research and get further insights from the respondent’s expressions as well! Video conferencing is a great option if there’s a problem with the face-to-face meeting. Irrespective of the conducting mode, interviews are a significant tool to understand your potential customers in the best possible way.
After having a direct conversation with the customer, you have a transparent idea about his experience with your product or service.
Focus groups constitute a group of selective people who fit the firm’s target market. The conversation is the responsibility of an expert moderator here. He carries out discussions related to the product, user experience, and expectations, marketing techniques to gather better insight. This research method is a bit expensive and might not suit newbies. A minor mistake can lead to major errors. There are scopes of dominance bias i.e., a stubborn participant trying to influence the group, and moderator style bias where different moderators will develop dissimilar results from the same study. There are a lot of ways through which the focus group data can get messy.
The qualitative research method where the researcher minutely observes the customer (subject) in a natural setting is observational market research. This process is much like being a silent guest in a room full of people. It is like observing everybody minutely and analyzing afterward. In this research type, subjects are mostly tension-free and behave spontaneously. However, if they are conscious of the observation, their behavior might differ.
For example, during a discount tenure, the researcher can take a look at the customers like how they are reacting to the situation, what they are buying, how much they are willing to spend, and so on. However, the observational research process is time-consuming. It might not always work out in the right direction, as researchers can’t control the environment.
One of the most strategic and particular market research forms is competitive analysis. It is not only interesting but allows you to discover innovative perspectives for your product or service. Let’s take an example of a content writing firm. While comparing with the competitor, you can address issues like total content delivered in a month, type of content offered, SEO analysis, search ranking, social media presence, etc. After a thorough analysis of these critical pointers, you can question yourself. Is there anything that your service lacks? If yes, what’s that, and how to solve it? If not, great! Think of how you could make your business more engaging to drive more traffic.
Examining Sales Data
A noteworthy point for market research methodologies is sales data evaluation. The sales data can help reveal the entire picture of the market research insights. If you are pairing it with other market research data, sales data will be significant for the researcher to track the scenario of action and results. Moreover, it is vital to understand the potential customers, their expectations, preferences that even change with time or environment, and buying habits.
How is Market Research Conducted?
Now that you know the significance and methods of market research, let’s take a look at how to conduct successful market research.
1: Defining the Problem
Market research without a research objective is like running an airplane without a pilot. Make your subject of research clear in the beginning so the researcher knows what answers he exactly is looking for. The market research questions need to be straightforward to understand. Before the research, the researcher can conduct a demo with a small group to understand if the market research questions are comprehensive to understand and if those will serve the purpose of the research objective. The research objective needs to be clear and crisp. The organization must know, “why are we conducting this research?”
2: Defining the Sample
A representative sample is a must to carry out market research. It is nothing but a small group of people reflecting as perfectly as possible, a bigger group. There are scopes of error if the sample isn’t representative. If researchers desire to have a representative sample of 200 employees, the number of men and women should be similar. Despite not guaranteeing accuracy, the sample size is crucial.
3: Conducting Data Collection
A data collection tool is a need of the hour while gathering data from surveys or any other research process. There will be scenarios where people give an incomplete answer to a survey or don’t answer it at all. Errors are likely to develop in such cases. With the data collection tool, the gathering will be easier preventing any major mistakes.
4: Evaluating the Results
All the steps have connections among themselves. A mistake in any one of the steps will end up ruining the research. After a nice execution of the steps above, you will need to do a market research analysis of the data accurately. Dive into the information gathered, and try figuring out what to plan next? How to make the next move? Do your study well to understand if there are further areas of consideration.
5: Preparing the Market Research Report
Now, as you are done with the research and minute scrutiny of the results, it’s time to make the research report. The report should be clear, concise, and engaging other than being in the questionnaire format. The report should sound more like storytelling. Start answering the primary questions like what led to conducting the research, how many people took the survey, and the array of responses.
6: Final Move
Market research is over. Data collection, analysis, and market research report preparation are over. Now is the time to make a move! Here comes the time to modify the marketing plans and develop better strategies. You know the customer responses and have an idea regarding their expectations and the ongoing trends in the market. It’s time to take the right decision to surprise your customers with something innovative and brilliant!
Advantages of Proficient Market Research
Let us list the significant advantages of efficient market research.
- Making knowledgeable decisions
Management plays a critical part in an organization’s growth. With the market research tools, the management can take suitable business decisions according to the results obtained. Having a thorough idea of the market trend and customer preferences needs efficient market research techniques.
- Acquiring correct information
Businesses gather accurate information through market research. It can prepare for the future accordingly and be ready for any mishap that might take place. Proper knowledge about the market and ongoing trends helps the organization to stand ahead of its competitors.
- Dictating the market size
A researcher can assess the market size that should be covered to sell a particular product or service to make profits.
- Picking the perfect sales system
With market research, it is possible to choose an appropriate sales system as per the market need. Accordingly, the product is placed on the market.
- Examining customer communication processes
Market research acts as the bridge of communication with existing potential customers.
- Fruitful Business Investment
Indeed, it is a superb investment for any business. The precious information obtained through market research helps the firms proceed in the right direction and gain profitable sales.
5 Vital Market Research Tips for Businesses
1: Define the Research Objective
It doesn’t matter whether you are conducting market research for small businesses or large ones, before you start conducting the research, it is significant to have a goal first. Ask yourself a few questions. Do you want your one-time clients to be regular customers? Or are you planning to engage more traffic to your site? Or, do you want to upgrade the sales? Having a particular objective will help in conducting smooth research. It will be also helpful in gathering the relevant information.
2: Learn about your potential customers
The primary thing in business is satisfying customers. You must remember that your product or service is serving a particular set of customers. You need to find out how to present the service before them and ways to communicate to convince them. Above all. You must have an idea about the products that suit their needs. Defining your customers’ tastes and preferences is a key task to be done before setting out for market research.
3: Learn About the Non-Targeted Customers too
This point is very interesting. You must be sure of the customer base, whom you do not serve anything. Having this idea helps you focus perfectly on the target customers. If you can not identify the core customers for your business and try to satisfy everyone, you will only confuse yourself. Therefore, it is vital to have a clear conception of whom you are targeting and who are not on the list. It will be helpful in conducting in-depth research.
4: Examine the Competitors
Here comes a healthy part of market research. You can keep an eye on your competitors’ performance or even visit their offices. For example, if you run a digital marketing agency, visit the other nearest hub in your locality. Take a look at things, and try to understand how things are being carried out. In this way, you can address some areas of improvement in your own business and make the modifications accordingly.
5: Direct Communication with Target Customers
The most valuable tool is the market research survey answered by your customers. It will help you understand what’s going on inside them or how they are reacting to your products or services. Even in case of rude feedback, try to stay calm and handle the same with patience. You can simply create a survey and put market research questions like:
- What do the customers think about the service
- If they are enjoying it
- Anything they think can be improved
- Anything new that they would like to see
The answers to these questions guide you to strategize accordingly.
Significance of Market Research in Every Business
As evident from the above discussion, market research is a valuable way to get an insight into the customer’s thoughts. The goal is simple: to prepare your organization or business with the right strategy.
- Competition: A market research report from Business Insider suggests, that 72% of small businesses are interested in increasing revenues. Market research will help you to understand the competitor’s behavior and their areas of expertise. By examining the positives and negatives of the competitors, you will know how to place your product and draw customer attention.
- Customers: Market research is insightful to help you understand the customer’s buying habits. You can make a list and analyze their preferences and how much they are desiring to spend. Most significantly, you will be able to know what exactly will make them buy your products.
- Opportunities: Market research even helps you to identify potential opportunities. Generally, the taste and preferences of the customers change with time or situation. Through research, you can find ideas for producing something new that can meet the consumers’ needs. It can open the door to new opportunities for your business.
- Forecast: The national or local economy puts a significant effect on the businesses. Through research it is possible to know what the customers are thinking and if they are optimistic regarding the economic direction. Keeping pace with the situation, things can be adjusted. Suppose, you are about to launch a new product but postpone it owing to the then economic scenario which is emerging to be negative.
Now you know what market research is, what makes it so significant and what are the market research methods. But, not every research process will suit you; neither do you need all of those! Yes, it depends on your business, the service it is offering, and the particular issue you have been worrying about for a long time. That’s all for this blog, see you in the next one where some more interesting things are coming up!