How To Do Market Research, Types, And Example

What is Market Research?

Market research is the process of evaluating the feasibility of a new service or product through research conducted directly with potential customers. Market research allows a business to identify a target market and obtain feedback and other opinions from consumers about their interest in a product or service.

The research may be conducted internally or by a third-party market research firm. This can be done through surveys, product tests, interviews and focus groups. Subjects are typically rewarded with product samples or a small fee for their time.

Market research is an important component of the research and development (R&D) phase of introducing a new product or service.

Key Findings:

• Before introducing a new product, companies conduct market research to determine its attractiveness to potential customers.
• Market research tools include focus groups, telephone interviews and questionnaires.
• Market research results inform the design of the final product and determine how it will be positioned in the market.
• Market research generally combines primary information gathered directly from consumers and secondary information available from external sources.

Understand market research

Market research is used to determine the feasibility of a new product or service. The results can be used to revise product design and improve public presentation strategy.

This may include information collected for the purpose of determining market segmentation. It also informs product differentiation, which is used to personalize advertising.

Market research is an important tool that companies use to understand what consumers want, to develop products that these consumers will use, and to maintain a competitive edge over other companies in their industry.

The firm engages in various tasks to complete the market research process. Collects information based on the target market segment of the product. This information is then analyzed and relevant data interpreted to draw conclusions about how the product can be optimally designed and sold to its intended market segment.

Primary vs secondary market research

Market research usually consists of a combination of:

• Primary research collected by the company or a third-party company engaged by it
• Secondary research based on external data sources

Primary market research

Primary research is generally divided into two categories: exploratory research and ad hoc research.

Research studies are less structured and based on open questions. Questions can be asked through focus groups, telephone interviews or questionnaires. This leads to questions or problems that the company faces for the product under development.

Specific research delves into problems or issues identified in exploratory research.

Secondary market research

All market research is based on the findings of other researchers on the needs and wants of consumers. Today, most of these studies can be found online.

Secondary research may include population information from state census data, trade association research reports, survey results, and other companies operating in the same market segment.

An example of market research

Many companies use market research to test new products or to get insights from consumers about the types of products and services they need and don't currently have.

For example, a company considering starting a business may conduct market research to test the viability of their product or service. If market research confirms consumer interest, the company can safely proceed with the implementation of its business plan. Alternatively, the company can use market research findings to make product changes based on customer wishes.

History of market research

Formal market research began in Germany in the 1920s and in the United States began rapidly with the advent of the golden age of radio.

Companies that created advertisements for this new form of entertainment began focusing on the demographics of the audience that listened to each of the radio shows, music shows, and sketch comedy shows featured.

In the past they tried to reach the largest possible audience by putting their messages on billboards or in popular magazines. With the help of broadcasting, they could target rural and urban consumers, teenagers or families and measure the results with subsequent sales figures.

Types of marketing studies

Face-to-face interviews

From the early days, research firms conducted street interviews in the newspapers and magazines they read regularly and asked them if they remembered any advertisements or brands that appeared there. The data collected during these interviews was compared with the circulation of the publications to determine the effectiveness of these advertisements.

Market research and surveys have been adapted from these early methods.

To fully understand your market, you need to understand demand, market size, economic indicators, location, market saturation, and pricing.

discussion groups

A focus group is a small number of representative consumers chosen to try a product or see an advertisement.

The group is then asked to give their opinion on the perception of the product, the company brand or competing products.

Telephone survey

The man-on-the-street interview technique quickly gave way to the telephone interview. A telephone interviewer can gather information more efficiently and cost effectively.

Telephone research has been a favorite tactic of market researchers for years. This has become much more difficult in recent years as landline services have declined and been replaced by less affordable cell phones.

Search by survey

As an alternative to focus groups, surveys are an inexpensive way to determine consumer attitudes without a personal interview. Surveys are sent to consumers, usually accompanied by a coupon or coupons, to encourage participation. These surveys help determine what consumers think about a product, brand, and price.

Online market research

As people spend more time online, market research activities have also moved online. A survey form is always used to collect data. But instead of companies actively seeking members by finding them on the street or calling them on the phone, people can sign up, take surveys, and provide feedback when they have the time.

This makes the process less intrusive and less rushed, as people can participate at their own pace and in their own way.

How to do market research?

The first step to effective market research is defining your research goals. Each study should seek to answer a clear and well-defined problem. For example, a company might be trying to find out consumer preferences, brand awareness, or the comparative effectiveness of different types of advertising campaigns.

After that, the next step is to decide who will be included in the study. Market research is an expensive process and a company cannot waste resources collecting unnecessary data. The business needs to decide in advance what types of consumers will be included in the survey and how the data will be collected. They must also consider the possibility of statistical errors or sampling errors.

The next step is to collect data and analyze the results. If the previous two steps were done correctly, it should be obvious. The researchers will aggregate the study results by tracking each respondent's age, gender, and other relevant data. This is then analyzed in a marketing report explaining the research findings.

The final step is for business leaders to use their market research to make business decisions. Based on the results of their research, they can select a different group of consumers or change the price or certain characteristics of the product.

The results of these changes can finally be measured in the next market study and the process will start again.

The benefits of market research

Market research is essential to develop brand loyalty and customer satisfaction. Since it is unlikely that a product will appeal to all consumers equally, a robust market research program can help identify key demographics and market segments that are most likely to appeal, use a particular product.

Market research is also important in developing a company's advertising efforts. For example, if a company's market research reveals that its consumers are more likely to use Facebook than Twitter, it can target its advertising to one platform. Or, if they decide their target market is value rather than price, they can work to improve the product rather than lower the price.

What are the main types of marketing studies?

The main types of market research are primary and secondary studies. Primary research includes focus groups, polls, and surveys. Secondary research includes academic articles, infographics, and white papers.

Qualitative research provides insight into what customers are feeling and thinking. Quantitative research uses data and statistics such as website visits, social media engagement, and number of followers.

What is Online Market Research?

Online market research uses the same strategies and techniques as traditional primary and secondary market research, but is conducted online. Potential customers may be invited to participate in a survey or to give their opinion on a product. The answers can help researchers build a profile of a potential customer for a new product.

What is Paid Market Research?

Paid market research involves rewarding people who agree to participate in research. They may receive a small fee for their time or a discount coupon in exchange for completing a questionnaire or participating in a focus group.

What is Market Research?

Market research is an analysis of consumer demand for a product or service.

Market research looks at all the factors that influence the demand for a product or service. These include product price, location, competition and substitutes, and general economic factors that can influence the adoption of a new product for better or for worse.

At the end of the line

Market research is a key part of a company's research and development (R&D) phase. This helps companies understand in advance the feasibility of a new product they are developing and see how it could work in the real world.

How to Conduct Market Research | WHAT EVERY COMPANY SHOULD KNOW