Market research is the systematic study of how consumers define, understand, and respond to brands and products. It aims to better understand consumer psychology. This article discusses market research, market research examples, and techniques you can use to gain valuable insights into consumer behavior.
What Is Market Research?
Market research is a process that analyzes, collects, tests, and evaluates information about consumers’ buying, opinions, and other behavioral patterns. The research and analysis is carried out through various means, such as focus groups, polls and surveys.
Market research is one of the most essential steps in any business. It helps you determine what steps should be taken to make a product or service available for buying. The market research process analyzes the current status and the effects of a product or service.
Importance of Market Research
Market research involves various steps that help companies develop a plan to make a product or service more appealing to the target market. The market research process includes the research synthesis, followed by the data analysis.
Market research is vital for the following reasons:
- It helps companies know about current markets and trends.
- Enables businesses to determine whether a new product or service is valuable and feasible.
- It helps companies understand how to position a given product or service in a competitive landscape.
- Enables businesses to understand consumer perception of a product, needs, and preferences.
- Aids in conducting market analysis and identification of new business opportunities.
- It helps in assessing future markets for the given product or service.
- Market research aids the understanding of demand patterns and preferences of a target audience within a specific region.
Market Research Examples
Market research is the process of collecting and analyzing information about the target market. There are two main types of market research: primary and secondary. The popular market research examples are discussed below.
1. Primary Market Research
Primary market research involves direct interaction with the target market. It is carried out directly by a company or individual on behalf of the company. The primary researcher defines the pertinent issue and conducts a study to learn more about it. For example, a researcher may ask people what they think of a company’s product.
Primary market research examples include:
Interviews are an essential aspect of primary market research. The interview process consists of the interviewer asking a series of questions in a one-to-one, or group setting.
Interviews are commonly used to gather information about the comparative product or service. It also allows for gathering anecdotal or quantitative observations about the consumers and the industry as a whole. Although time-consuming, this type of primary market research yields the most valuable information.
B. Focus Groups
A focus group is a group of people invited to meet with a researcher and discuss a specific product. The participants might a sample of the target audience and can be of varying age groups or other demographic characteristics. These groups provide organizations with a clearer understanding of how their target audience will perceive a particular product or service.
For example, an organization might ask the focus group of five female teens how they feel about a new product. The information received will give the organization an idea of how the totality of their target audience will perceive the product.
Companies commonly use questionnaires to inquire from existing customers or prospects about their product or service. They may be sent through email or given to customers that visit the store to fill out.
Questionnaires require the respondent to answer open-ended, multiple-choice, or check-yes-or-no questions. An example of a question that a questionnaire might include is “What are the benefits of this product to you?”
Surveys are often used to collect information from target audiences based on their demographics, preferences, and other factors that influence their purchase. It is best to define the problem you are trying to solve and identify the questions important to your business before creating a survey.
For example, a company might create a survey when it wants to improve a specific feature on a product. Haven established the problem, you can formulate and ask the right questions to help you address the issue.
2. Secondary Market Research
Secondary market research involves assessing existing data from other sources to obtain information about a particular issue, or product. Businesses may research a topic by reading reports, checking social media, looking at earnings statements of others, and observing trends. This type of market research is used when there’s already a lot of data about the topic.
Secondary market research examples include:
- Conducting an online search.
- Reading reports or trade journals.
- Using a reference library.
- Contacting other organizations and asking questions on a topic.
How Is Market Research Conducted?
Knowing how to conduct market research is vital for the growth and sustenance of your business over time. The following are steps to follow when running market research.
1. Highlight the Problem
What problem are you trying to solve with your research? What information are you seeking? The first step to conducting market research is to highlight the problem you want to solve.
2. Choose an Appropriate Method
Haven identified the problem your research seeks to solve, assess which strategies will be most beneficial. To find the suitable approach, brainstorm several different options then narrow them down to a few strategies that best suit your needs.
For example, focus groups provide insights into consumer behavior and opinion. Questionnaires are most helpful when obtaining numerical, quantitative data from individuals. In-depth interviews are used to find out a customer’s perception of a product.
3. Data Collection
The next thing to do is to carry out the research. This involves a process of making careful observations and then recording quantifiable results. Use your chosen method (i.e., interviews, focus groups, questionnaires, or surveys). Whatever the form used, the key is to gather information and knowledge about the topics at hand.
4. Analyze the Data Collected
The main reason for carrying out market research is to get data to analyze. Analyzing and interpreting the data is to generate a broader significance to the collected data. Once the previous steps outlined are done perfectly, it will be easy to analyze the collected data.
5. Generate Report Based on the Data Analysis
Most importantly, market research delivers insight into your product or service. These might be direct, indirect, behavioral, or descriptive insights as long as they matter. This could be as detailed as a report analyzing a specific market and segment or as general as a findings report. Market research allows you to validate your hypothesis, uncover new insights, drive business strategies, or avoid bad decisions.
6. Finalize Your Findings
The final step is making decisions based on the report generated. Market research should include researching the market as well as analyzing it, identifying areas that need improvement, and evaluating strengths.
Market research plays an integral part in the sum of the decisions in your business. Understanding the market can help you decide on the action to take to help your business run smoothly and successfully.
Two broad types of market research are secondary and primary market research. Secondary research is the most cost-effective method, but it is challenging to get accurate information. Primary research is more time-intensive, but it is worth it because it is more precise and authentic. The best research method for you is one that is specific to your needs.
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