Table of Contents
- What is Meant by Market Research?
- Why Should You Conduct Market Research?
- What are the Various Market Research Methods?
- 3 Proven Market Research Methods
- Key Takeaways
In today’s market, consumers have the power and knowledge to research your product before making a critical purchase decision. They are so informed and connected that they no longer get carried away by clever sales talk. They would instead rely on the recommendations of family and friends. Consequently, your marketing efforts might be in vain if you don’t use market research methods that are appropriate.
One of the best market research methods is to deploy a marketing strategy that complements the customers’ research methods for shopping and buying. It is essential to have a clear understanding of your buyer persona, the specific market catering to them, the behavior of the prospective buyers, and what influences their purchase decisions.
What Is Meant by Market Research?
Companies launching a new product will first collect information about their target audience to ensure a successful launch. If you plan to communicate your brand’s value effectively, you must first have your team iterate on an existing product to perceive your brand better.
It is possible to gain valuable insights into the state of an industry by applying tested market research methods, but this may not be sufficient to gain an insight into how your customers think and act. Marketing research methods help you scrutinize several dimensions of the market, and it may be months before you get a fair picture of the business landscape.
Using the appropriate marketing research methods gives you a fair idea of who your prospective buyers are and how you can provide better value to them than what others in the business are offering.
The insights and experience you gain through using such market research techniques offer some key benefits, especially two, in particular, which are:
- Your competitors are already in the market and must have their customer base. Even though you may have similar resources and wherewithal that your competitor has, using the insights gathered by using market research methods helps you get an edge over your competitor.
- Your customers represent a niche, and you have identified the buyer persona before determining your target audience. However, you must keep in mind that your customers do not represent the entire market out there. They represent only a tiny percentage of the market that may already be aware of your brand.
Did you know that the global market research services market is set to grow from the current $75.66 billion to $90.79 billion by 2025?
Why Should You Conduct Market Research?
Conducting market research before entering the market helps you meet your buyers in their turf. It is critical to understand your buyer’s pain points to offer the best solutions. Understanding your customers’ pain points helps you design a product that automatically appeals to them.
Proven market research methods help you gain valuable insights into several crucial factors that can affect your bottom line such as:
- What your target audience is doing now, and how they research the market before buying a product or service?
- Whether your prospective customers are looking at your competitors’ products, and if so, which competitors are they looking at?
- What your prospective customers feel that’s currently trending in the market?
- Who your target audience is, and what challenges are they facing currently?
- What are the factors influencing your prospective customers’ purchase decisions?
- How the consumers react to a specific brand, and what are their pain points?
- What are the shortcomings in the customers’ expectations presenting a selling opportunity?
- What are the customer reactions to the pricing of a specific product or service?
It is the marketing research techniques you adopt that get you vital information about your target audience. It helps you leave out the assumed biases to get an accurate picture of customer attitudes.
What Are the Various Market Research Methods?
As you delve deeper into market research, you’ll start learning the nuances of primary and secondary research. Here’s a glance into both.
A primary research study gathers first-hand information about what is happening in the market and who makes up its customers. Primary research helps you segment the market and arrive at your buyer persona, ultimately determining your target audience. Primary market research is split further into two: exploratory and specific.
- Exploratory Primary Research
This type of research is more concerned with potential problems that could arise in the future and is less concerned with measurable metrics, especially customer trends. It is the first step in the market research process before conducting detailed research in specific areas. It involves surveys and open-ended interviews with a selected number of people.
- Specific Primary Research
Exploratory primary research is often followed by specific primary research and delves into opportunities already pinpointed as being crucial. Using such specific marketing research techniques helps the business target a sample segment of its target audience with questions to resolve identified pain points for its customers.
Secondary Market Research
Secondary market research is a compilation of market statistics, trend reviews, industry-specific content, and the existing sales data available with the business. It’s derived from the data and public records that let you make decisions. Secondary market research is crucial for understanding what your competitors are up to. Secondary market research is split into three critical sections:
- Public Sources
As the name signifies, these are public sources available to a researcher while conducting secondary market research. Such resources are available freely and add strength to your efforts. The most common type of public sources include statistics released by the government bodies; two good examples in the US are the US Census Bureau and the Bureau of Labour & Statistics, a goldmine of information on several industries spread across the country.
- Commercial Sources
These sources are generally available as market reports and may contain industry-specific insights gathered by a reputed market research agency like Nielsen, Gartner, or Pew. These reports are expensive but available to be downloaded by any company.
- Internal Sources
Internal sources, as the name implies, are the resources you already have in your organization. If you delve deeper into your data, you can uncover insights like revenue on sales, customer retention rates, account information, etc., that can help you determine what buyers expect from you and how to meet their needs.
3 Proven Market Research Methods
Each organization conducts market research of a specific type. Here are three such methods:
1. Interview-Based Market Research
There is nothing like a direct contact and a face-to-face meeting (mostly remote due to the pandemic) that helps break the ice and discuss freely. Specific body language helps drive home some vital points and often holds important clues, both for the interviewer and the interviewee.
Interviewees warm up to you and open up pretty quickly, provided your approach is appropriate. It helps you decide the buyer’s persona, a critical finding that enables you to determine your target audience. Typically, a buyer’s persona includes age, family details, purchasing power, budget, pain points, and other lifestyle aspects. Once you have these details, it is easy for you to shape your marketing strategy, which may include the new features you must add to your product, the appropriate content you must create, and the redesigning of the landing page of your website.
2. Focus Groups Based Market Research
Focus groups are nothing but a predetermined group of handpicked people you have selected to try your product on. They may have to spend some time watching product demos, giving valuable feedback, and filling out questionnaires you present.
This type of market research gives you insights into product discrimination or the unique qualities that make your product so special in the marketplace. Research also involves shooting questions about the services you provide and getting instant feedback to enhance the service to match their expectations.
3. Product or Service Based Market Research
It is necessary to conduct market research to learn why your customers use your products or services and what features impressed them the most. This is one of the best market research methods that give you the perfect idea about the product’s usability to a niche audience.
- Market research methods are crucial to understanding the behavior and reaction of prospective customers.
- It helps you identify your buyer persona, which is crucial for determining the target audience.
- Doing market research before entering the market helps you meet your buyers in their turf.
- Different types of market research apply to different situations, and the success depends on choosing the appropriate ones.
- There are two types of market research, primary and secondary, and each of them is also further split.
Conducting market research is crucial for any organization for a successful product or service. Designing a marketing strategy without conducting research is like sailing a rudderless ship, which gets you nowhere. Armed with the knowledge of some of the successful marketing research methods and how important they are, you are already in a better place, to begin with.
You have to adopt proven market research methods to conduct market research successfully. For instance, you must always define your buyer’s persona first before determining your target audience. It would be ideal to identify a persona group you can engage with. You must prepare a market research questionnaire to use as one of your marketing research methods. Then, make a list of your main competitors before summarising your findings.
Different companies adopt different market research methods. However, most of them focus on any of five fundamental research methods – observation, field research, market research, interviewing, and focus groups. It all depends on the type of data you are looking for and the size of your budget, which are crucial in determining the techniques you can utilize for your business.
Generally, data can be grouped according to the methods used for its collection. Some of the most popular methods are experimental, simulative, derived, and observational. Experimental data can be collected by a researcher using an active intervention approach. However, the observational method uses the observation of a behavior or activity, like human observation, surveys, etc. The simulative data is obtained by the sheer imitation of a process with the help of computer test models. You need to use the existing data points compiled from different sources to create compiled or derived data.
Research methodology involves using specific techniques and procedures to pinpoint, pick, process, and scrutinize the information on any given topic. The methodology part allows the researcher to assess the study critically and determine how valid and reliable the data is.
Market research helps in assessing key trends to anticipate the changes in the market. This is an important step to identify new market segments, develop new products, and choose your target market. When done well, it helps you plan your strategy better.