In some circles, market research is a general term for asking the industry what it wants. “Do we know what the demand is for this product? Who is looking for our services? Let me do some market research to find out,” someone might say.
But what does that really mean? Here is a simple definition of market research that encompasses all the possible goals of this practice, in less than 100 words:
Definition of market research
Market research is the process of examining an industry’s buyers, what product these buyers want, and where they are currently getting it. By involving the right people and data, a business can use this research to position itself in the market and predict where the market will go in the future. Market research can answer many questions about the state of an industry, but it is hardly a crystal ball that marketers can rely on for information about their customers. Market researchers investigate various areas of the market, and it can take weeks or even months to get an accurate picture of the business landscape. However, researching just one of those areas can make you more intuitive about who your buyers are and how to deliver value that no other company offers them right now. Certainly, you can make sound decisions based on your experience in the industry and your existing customers. However, keep in mind that market research offers benefits beyond just those strategies. There are two things to consider: Your competitors also have people with industry experience and a customer base. It is quite possible that your immediate resources are, in many ways, equal to those of your competition’s immediate resources. Finding a larger sample size for responses may provide a better advantage. Your customers do not represent the attitudes of an entire market. They represent the attitudes of the part of the market that is already attracted to your brand.
<h2>Why is market research important?</h2> Market research allows you to get information from a larger sample size of your target audience, removing biases and assumptions so you can get to the heart of consumer attitudes. As a result, you can make better business decisions if you know the big picture. Here are some examples of insights you can get from market research: Consumer attitudes about a particular topic, pain, product or brand If there is demand for the business initiatives you are investing in Where to advertise or sell ( geographically or online) Unaddressed or neglected customer needs that can turn into leads. Attitudes about the price of a particular product or service. Getting answers to these questions based on real data can help you make sound business decisions and minimize risk.
Types of market research
To give you an idea of how extensive market research can get, consider that it can be qualitative or quantitative in nature, depending on the studies you conduct and what you are trying to learn about your industry. Qualitative research addresses public opinion and explores how the market feels about the products currently available in that market. Quantitative research deals with data and looks for relevant trends in the information that is collected from public records. Let’s talk about four different types of market research studies you can conduct, a potential target of each, and how these studies help you better understand your market.
Interviews are the one-on-one personal conversations you can have with buyers in your industry. You can conduct interviews in person or over the phone. Your interviewees can answer questions about themselves to help you design your buyer personas. These shoppers describe their ideal customer’s age, family size, budget, position, challenges they face at work, and similar aspects of their lifestyle. Having this buyer profile in hand can shape your entire marketing strategy, from the features you add to your product to the content you post on your website.
Focus groups are similar to interviews, but in this case, you are gathering a large group of people for a shared interview. A focus group consists of people who have at least one element of your buyer persona in common – age or job title, for example. This type of market research can give you ideas for product differentiation or the qualities of your product that make it unique in the market. Consider asking your focus group questions (and showing them examples of) your services, and ultimately use the group’s feedback to improve these services.
Surveys are a form of quantitative research, and you can distribute them over the phone, by email, or through an online survey. A survey could serve people who have downloaded content from your website or interacted with a member of your company. A sufficient number of completed surveys can help you determine the level of satisfaction of your customers. This denotes how happy your customers are with what you are selling to them. You can include questions like, “How well did we solve your problem?” and “Would you recommend our product to a friend?”
Interviews, focus groups, and surveys are all primary data sources. Secondary data, on the other hand, is the public information, online and offline, that characterizes your industry. This includes competitor websites, social media business pages, trade magazines, market reports, and even government-published census data. By examining enough secondary data, you can find out how much brand awareness you have in the market compared to companies offering the same product or service as you. Your market research does not have to include all of the information sources described above. The data you collect will depend on the needs of your business and what may interest you most at this time. Editor’s Note: This post was originally published in July 2018 and has been updated for completeness.