The Hustler's Digest StaffMarket Research is the process to get to know the targeted market for the businesses. It is crucial for small or new businesses and for the established ones to get information about their customers so that they can make well-informed decisions to thrive.
In the changing nature of businesses around the world, it has been a necessary call for companies to remain updated with changing business trends and new avenues to explore in order to keep a persistent pace in growing their businesses. Market research is such a process in that regard that informs companies of new trends by getting direct information about their current and potential customers. In this regard, it is important to know how to do market research in a proper manner to get accurate results that can help businesses to make progress in the right direction. This article is a guide for all of you who are looking for the right directions in market research and its importance for your business.
What is Market Research?
In order to get to know them first-hand knowledge of potential customers, market research is the essential way to gather the information. It is the type of research conducted directly with the customers in order to get the first-hand experience of them with a new product. It allows companies to ascertain customers, competitors, and industry. In a world of increasing competition among businesses, it is very crucial to know emerging trends and preferences of the consumers where companies know where do they lag behind and what improvements they need to adopt so that they can compete more rigorously.
Market research allows companies to discover their target market and get the feedback and opinions of the consumers for their goods and services. Usually, when companies launch a new product, they conduct this type of research to gauge the viability of their new product via directly communicating with their potential customers.
It can be conducted directly by the company or with the help of agencies that provide expertise in Market research. The information gathered through the research will greatly help companies to tailor marketing or advertising activities or bring improvements in the product or services themselves.
Types of Market Research
The end goal of market research is to determine purchasing power and the viability of their product to be consumed. Depending on the different tools and methods required, the following are the major types of market research.
Primary research
In the primary research, the organization or the outsource agencies directly reach out to the target market using a variety of methods including focus groups, one-to-one interviews, surveys, or ethnographic research where the participant adapts to the environment of the particular sample that can be of the city or a village. Qualitative methods are used to conduct structured market research using online surveys, polls, and questionnaires that provide nonnumerical and numerical data which dictate the informed decisions by the organization.
Companies or organizations own this data because they physically get involved in the process that is why compared to other types of Market research, this is more costly but the end result is the most authentic at the end.
Secondary Research
Secondary research is the process of collecting data that is gathered by outside sources and organization is not involved in conducting the research. Outside sources include governments, media, or certain ministries that organize the data and publish it in newspapers, magazines, official websites, books, etc.
Public sources like libraries and commercial sources like journals, magazines, newspapers, or media agencies are highly consulted for gathering secondary data. Educational sources can also be of some help as universities conduct more research regarding changing trends of businesses around.
Quantitative Research
In order to get specific insight into the market trends, quantitative research type provides a way to get accurate statistics about the target market. In this research, both primary and secondary sources are consulted through a variety of methods including polls, surveys, web statistics, financial records, and desk research.
Qualitative Research
Through more participant methods including ethnographic research, focus groups, surveys, and interviews, qualitative research serves the purpose of providing a more in-depth analysis of the target market. The data here is also collected through primary and secondary resources which are non-numerical mostly based upon the insights and perceptions of the targeted audience.
Branding Research
This research is conducted to know if the targeted brand of the company is performing well to other competitors, the areas where there are changes to be made, and ways in which the company can enhance things about their brand. The research can be conducted through multiple methods including interviews and surveys where the focus of the questions would be related to brand positioning, brand perception, brand identity, and brand value among the audience.
Customer Research
The aim of this type of research is to know your customer inside out and to learn how to hook them up for a consistent time. The focus of this research is to determine customer satisfaction and customer loyalty by exploring what made them happy and satisfying to choose them again and again. Relevant desk research can be conducted to figure out historic purchase records, customer segmentation, customer journey mapping, persona templates, and demographics.
Competitor Research
This type of research is conducted to know about the competitors in the market by exploring their strengths and weaknesses. The aim of the research is to find out ways that can determine your organization to stand out by applying the new trends of the market. Through both primary and secondary research methods, one can get a SWOT analysis of his own company and the competitors’.
Product Research
Among all other types, product research is the most crucial market research type which gives the knowledge of the product to the organization and how it is being perceived by the customers. The research is focused on product branding, product feature testing, product design thinking, and product marketing. This will help in providing an overview of customers’ perception of the product and whether the organization is going in the right direction in its production. Also, they get to know what changes the target market is expecting from the company.
How to do Market Research
As crucial as it is to consistently do market research for knowing the contemporary trends out there, equal importance should be given to having the knowledge of conducting the research in the right way. For that, comprehensive homework is needed to direct your efforts in the right direction. Following are the steps that can help businesses, big or small, to acquire in-depth insight into the market and get the idea of bringing improvements in their work.
Step #1: Defining the problem
In order to get accurate results, the essential thing is to remain clear about what you want to find out in your research. There must be a clarity of thought on the questions such as:
- What do you want to know about your customer, market, or competitor?
- What is the primary information you intend to get through your research?
- What is the focus of your research?
Having clarity of the objectives on such questions will make your research more effective and targeted. For instance, if you want to know how satisfied your customers are with your project will they be willing to accept your new product or services.
Make sure that your questionnaires are easy to understand by your audience. The research objectives should be written in a comprehensive and precise way so that every participant can get an idea of what has been asked.
Step #2: Select Right Sample Group
The result of your research is largely based on the audience that you choose to conduct the research. For that, picking up the right sample of the population is crucial. If you want to get accurate findings, get involved with the people who are directly related to your products or services, for example, the consumers. The larger the group of samples is the more certainty in your findings and you will be able to get to know the opinions of the targeted market about your products.
Step #3: Data Collection
There are a variety of sources for the data collection that can be used to get accurate results. For data collection, the researcher should focus on organizing easy-to-understand questions that ask the audience about their opinion. Following are the effective tools for data collection that can be used to get first-hand information:
- Interviews
- Questionnaires
- Checklists
- Surveys
- Case studies
- Observations and records
- Online analytics tools
- Focus group discussions
Step #4: Analyzing Data
Here you will find out what your research has uncovered or what it is telling you. Having collected your data, organize the results in lists, tables, diagrams, and mind maps. This way you can identify major trends or strengths, weaknesses, opportunities, and threats (SWOT). Proper data analysis will lead you to the right solutions.
Step #5: Draw Conclusions and Make Decisions
The thorough research is going to give the researcher an insight into consumer purchase intentions, their positive or negative opinions about their products and services. This feedback can help companies to navigate their decisions in a certain direction. On the basis of these results review that:
- Your predefined objectives are addressed properly
- Your research results are not biased
- There are no gaps in your data
- Your research will dictate the new tactics to make up your market mix
Ensure that the results of your research benefit you in understanding your products or services more and what changes are needed to bring informing the larger strategies for the growth of your business.
Market Research for a Business Plan
The larger goal of conducting market research is to find out ways to grow your business but for that, there are many elements that you should know working on which can ultimately lead you to achieve the larger goal. Market research, therefore, is important in helping you to gauge these elements. Following are the benefits of conducting effective market research:
Gain Accurate Information
Without having any idea about what your consumers are thinking about your products and services, it is almost impossible to bring necessary changes in your business that can ensure its growth. Market research helps you to reach first-hand information about the direct audience and their feedback allows the company to prevent you from making wrong decisions.
It also directs you about your competitors in the market which makes it more crucial to invest more in conducting frequent research so that you don’t miss out on the chance of continuously upgrading your business to contemporary demands.
Determine the Market Size
The research result gives you insight into the population of your consumers which can help you determine the current market size. Also, using that information you can make strategies to grow the number of your consumers.
Make Well-Informed Decisions
As they say, if you do what you have been used to doing, you will get what you have been used to getting. If the decisions are not backed by the right information they are bound to be proven as flawed ones. So in the matter of businesses too, well-informed decisions are crucial to be taken in order to gain the desired results.
The growth of the organization is largely based on the right decisions of the management. Using the market techniques to acquire thorough information about the products and services of the company, the management can take decisions that will prove to be in favor of the growth of the organization.
Upgrade Sales System
In the changing technological ways of transformations, the research can help you to choose a sales system according to what the market is asking for. Having to have this information, you can position your products or services in the market accordingly.
Get the Feedback of Customers About Your Brand
As the growth of a company largely depends on the satisfaction of its consumers, market research helps the organizations to get to know their feedback about the company or the brand so that they can take necessary action to meet their demands.
Know the Preferences of the Customers
Companies should be consistent in their conduct of research. This way they will be able to know how the preferences or tastes of their clients keep on changing so that they can satisfy their preferences, purchase habits, and income level. With changing preferences, companies will know what changes they should bring in manufacturing the products and what can satisfy their customers’ changing demands. They have to remain updated with the ever-changing trends of the market.
Determine Customer Communication Methods
Research results can facilitate companies to find out new and easy ways to approach their customers and also help them to figure out extend their communication to current and potential customers.
Productive Business Investment
Conducting primary research is an expensive way and requires a lot of effort to get accurate results but as for other tasks, it is a great investment in the end because it ensures the growth of the company hence serving one of the crucial purposes of any business.
Importance of Market Research
In ever-growing trends in businesses around the world, accurate market research has become an essential way for companies to take the lead. It goes for both established and new businesses to conduct frequent market research in order to gain information about their customers and competitors. For small businesses, it is more important to know if their business idea is viable or how the market is responding to their new products or services. It will help them to make informed decisions firsthand without falling short on new trends.
Following are the reasons why Market research is important especially for new businesses or beginners.
Spotting Business Opportunities
The efficient market research will provide you with insight into the geographical density of your customers and how you can reach them. By knowing the geographical proximity, you will be in a better position to spot new business opportunities which can extend your reach to current and potential clients for your products or services. For instance, knowing about the geographical and demographic location of your target market, you can come to know about other small businesses with which you can have a joint promotion that will result in mutual benefits.
Learning about your customers’ preferences about your brand and what they tend to buy can help you launch some add-ons, product bundles that can increase your overall sales.
Lower Business Risks
There are so many popular brands that have gone extinct with time telling that if the companies don’t upgrade their products according to the preferences of their customers they can easily lose ground. Persistent market research saves you from this greater loss and makes you stand firm that you are still meeting the needs and demands of your customers.
With market research, you can test your new designs before launching them for the whole of your audience. Before doing an all-in on dramatic changes in your brand, you can first test it with your more frequent buyers to check whether they like the change or not. This will give you the idea of bringing necessary changes to your brand and lower the risks of greater loss if you launch it without having it tested before.
As it helps you to find new customers, market research can also tell you the reasons why some of your customers are not coming back. It can be that your product quality has declined or it is too expensive for a certain cluster of population or there are some glitches in your online store. In that case, you can strategize how to get those customers back before denting your business for a longer run.
Create Relative Promotional Material
Marketing or advertising your brand can make a whole difference when it comes to your business growth. The market research gives you this insight of using appropriate language, colors, themes, and stories to add when you plan for the advertisement of your brand. Since the customers express what they love and hate about your product, now you know exactly what to add and what to omit in your marketing strategies.
The research also informs you about the demographics of your target market which will give you a better idea of whom you are addressing in your advertisements. For sure the language you will use to address your audience will be different if you know if the audience is retired baby boomers or young professionals.
Know Where to Advertise
For smaller businesses, managing a limited budget is a crucial task. They can benefit from market research in a way that if they can locate their target audience, they will use only those platforms to extend their advertisement. For instance, if the results inform that the target audience is more on Instagram and rarely uses Twitter, they will direct their social media ad budget to Instagram and not on Twitter. In terms of their physical presence, they will only direct their advertisement to specific places.
For instance, university students will place bulletin boards beside their campus or at places where they frequently gather. This targeted advertisement can be beneficial for both new businesses and established ones. But for that consistent market research is necessary.
Outsell Competitors
One of the ways to outsell your competitor is to know your customers even more. If you know your customer more than your competitors’ there are high chances that you stand out by satisfying their demands on time with satisfactory measures. You can do this by your market research results by coming to know about the dissatisfied audience of your competitors by directly asking your customers or reading their reviews about why they are dissatisfied with your competitor’s product or services.
Also, your market research can tell you about a segment of a market that your competitor has neglected or they have not addressed certain pertaining demands of the customers which you can strategize to reach fulfill. Hence addressing these grievances can help you to direct that segment of the market to your side.
Set Better Goals for Your Business
Marketing managers of every business focus on making strategies that can grow the company’s sales and acquire more and more customers. But without market research, this goal can hardly be achieved. The results of the research provide pertinent information about the size of the customer and potential buyers of the product. Through proper research, they can know if they would be able to double the size of their customers in a year or if they need to target the other audience to direct them to their product or services.
This and many other decisions can be well informed by market research which will allow businesses to set better goals for the future of their company.
Conclusion
In the age of advancement where everyone is trying to take the lead in their business or professions, there is an ever-increasing need to opt for the right approach to excel in particular fields. For a business to grow there is a crucial demand to know the changing business trends, market preferences, and customers’ demands. For that, market research is an important method that can be used to get insight into what the customers out there want from the products and services. Moreover, for businesses to grow and prosper companies need to conduct frequent market research in order to better understand their clients and dig down more and more opportunities to thrive their business while satisfying the demands of the larger audiences.
There is a proper way of conducting market research and what tools can be used to acquire more precise and accurate results to reach the right conclusion. With these methods in mind, businesses can grow in the proper manner and companies can make well-informed decisions based on qualitative and quantitative data from the target market.
