In today's rapidly evolving business landscape, staying ahead of the competition requires more than just a great product or service. It demands a deep understanding of the market, consumer behavior, and emerging trends.
This is where the market research process becomes invaluable.
In this blog post, we will delve more into market research and explore its significance in driving business success.
We will also walk you through each step of the market research process, offering practical examples along the way to illustrate how market research can be applied to real-world scenarios.
What is Market Research?
Market research refers to the systematic process of gathering, analyzing, and interpreting data and information about a particular market, industry, or target audience.
The purpose of conducting market research is to gain insights into consumer behavior, market trends, competitor analysis, and other primary objectives.
Although the overarching goal for many organizations is to make informed decisions with the valuable data and insights collected from their target audience.
Market research involves various methods and techniques, such as:
- Focus groups
- Qualitative recruiting
- Data analysis
The collected data is then analyzed and interpreted to identify patterns, trends, and customer preferences.
Watch the video below to dive deeper into common market research methodologies.
Why Do Companies Conduct Market Research?
Market research plays a crucial role in reducing risks, identifying opportunities, and ensuring business success by providing valuable information about the market and consumer behavior.
As a result, it helps businesses stay competitive and responsive to changing market trends and customer needs. In fact, data-driven organizations are 23 times more likely to acquire customers.
The reasons companies and organizations conduct market research vary.
Although, based on our market research company’s experience working with B2B and B2C brands, the key objectives of market research often include:
Understanding a target audience
Market research helps businesses understand their customers, their needs, preferences, and behaviors. This information enables companies to tailor their products, services, and marketing channels to effectively meet customer demands.
Assessing market potential
By conducting a market analysis, businesses can evaluate the size, growth rate, and profitability of a particular market. This assessment helps in identifying new market opportunities and determining the feasibility of launching new products or entering new market segments.
For instance, Drive Research worked with a liquor store to understand what area of a community would be most beneficial to open a new branch. Read more about their story in the blog post, How to Choose the Right Liquor Store Location.
Analyzing the competition
Market research such as conducting a competitor analysis helps companies gain insights into their competitors, their strengths, weaknesses, strategies, and market positioning.
This knowledge enables businesses to develop effective competitive strategies and differentiate themselves in the market.
Evaluating marketing campaigns
Advertising testing with market research involves testing concepts before launching them into the world.
In doing so, brands can make necessary adjustments based on their audience’s feedback to increase the potential ROI of the marketing campaign.
In addition, market research helps in assessing the effectiveness of marketing campaigns, advertisements, and promotional activities after they've been in the market for some time.
Making informed business decisions
Regardless of what type of market research an organization is conducting, or their reason for doing so, it all steps down to making data-driven decisions.
The insights gained from market research assist businesses in making informed choices regarding product development, pricing strategies, distribution channels, and overall business planning.
What are the Types of Market Research?
There are many types of market research that are often used together to obtain a comprehensive understanding of the market.
Although, market research can be broadly categorized into two main types:
- Primary research: This type of research involves collecting data directly from original sources to address specific research objectives.
- Secondary research: This type of research involves using existing data and information that has been collected by others for purposes other than the current research.
Primary research provides specific and tailored insights, while secondary research offers broader industry trends, benchmarks, and historical data.
Let’s explore each type of market research in more detail.
1. Primary research
Primary research is conducted firsthand and is tailored to the specific needs of a particular study. Common methods used in primary research include:
Surveys involve gathering data through structured questionnaires, either online, over the phone, through email, or in person. They are often conducted with a sample of the target population or the entire population, depending on the research goals.
In-depth interviews (IDIs)
In-depth interviews or IDIs for short, involve one-on-one conversations with individuals or small groups to gather in-depth insights. Interviews can be structured (with predefined questions) or unstructured (allowing for open-ended discussions).
Observations or mobile ethnography involve systematically observing and recording consumer behavior in real-life settings. This method is often used in retail environments, user testing, or ethnographic studies.
Focus groups bring together a small group of individuals (typically 6-10) to discuss specific topics or concepts in a facilitated environment. It allows for interactive discussions and provides exploratory or qualitative insights.
2. Secondary research
This type of research is more cost-effective and time-efficient. Common sources of secondary research include:
Published reports by market research firms, industry associations, and government agencies provide comprehensive data and insights on various markets, industries, and consumer trends.
For example, here are the syndicated reports available on the Drive Research website:
Academic journals, research papers, and dissertations can be valuable sources of information for specific industries or topics.
Publicly available data
Government databases, statistical publications, and public records provide a wealth of data, such as census data, economic indicators, and demographic information.
Internal company data
Companies can leverage their internal data, such as sales figures, customer feedback, and website analytics, to gain insights into their existing customer base and market performance.
What is the Market Research Process?
How market research is conducted will differ from firm to firm and provider to provider, regardless of whether it is a qualitative or quantitative study. However, it typically follows a systematic step-by-step process.
The market research process follows a step-by-step best practice approach including these 6 steps:
- Kickoff meeting to discuss project objectives
- Designing the market research tool
- Testing and fieldwork
- Analysis and reporting
- Develop a strategy for the next steps
- Taking action with the data
Additionally, one of the first considerations you'll have for your business is whether or not to use an outside market research company to assist.
The benefits of using an outside firm include expertise, time savings, honest and reliable feedback, and the ability to benchmark results against others.
Although it's important to choose a market research firm that matches your goals, works well with your team, and delivers on expectations.
If you decide to work with a market research firm, here are the steps of the market research process you can expect.
Step 1: Kickoff meeting to discuss project objectives
The kickoff meeting is the first step in the market research process once the proposal is squared away.
This can be handled internally with your team, on a conference call, or through an in-person meeting with your provider.
Here you will tackle the core objectives of the market research. This includes what you want to learn from the research, what you want to do with the results, and other expectations and action items anticipated from the market research.
Step 2: Designing the market research tool
As we discussed, there are different types of market research so this step will vary. However, it is a core stage in the market research process.
This step involves the design of the survey, moderator's guide, interviewer guide, or other script.
The design is the setup of your instrument. It's crucial that lots of time and attention be spent on this step. If this is not done well it will have trickle effects on every step after.
Additionally, we recommend creating an outline first before building out a full draft.
The outline should reflect those core objectives from the kickoff. Once the structure and outline are agreed upon, it is easier to take the next steps with the full draft.
Step 3: Testing and fieldwork
Once the survey instrument is designed, you'll want to test it.
This could be a test interview with an employee, a mock focus group with colleagues, or sending a link out to a group of people to take the test survey.
Once you ensure everything is working correctly and you have no further edits, you are ready for fieldwork.
Fieldwork is the data collection phase of the market research process.
This is when all of the work is put in to acquire feedback and data points to analyze. This could mean conducting focus groups, conducting in-depth interviews (IDIs), conducting the UX, or running a survey.
Step 4: Analysis and reporting
Once fieldwork is closed, the next step is data quality cleaning. Here you'll want to make sure all of the data collected is of the highest quality.
With qualitative there isn't as much of a concern as the quantitative data.
With qualitative because you are so close to the participants, you know the feedback is honest and real. However, with surveys many cases are submitted that you might not have had a chance to review.
Here are some quick data quality-checking tips.
After the data is cleaned, it's time to create a topline or comprehensive market research report.
You'll want to ensure the report tells a story. This means taking all of the data and turning it into digestible tidbits and themes. This works well for an executive summary.
The market research firm would also provide benchmarks or context, recommendations, action items, an infographic, a customer persona, and an appendix with more detailed data.
But, if you are completing this in-house, your report should reflect this as well.
Step 5: Develop a strategy for the next steps
After you create your report, you'll want to schedule a debrief with your core team and possibly your management team.
Because no one is closer to the data than you or your market research firm, you'll want to supply the management team with your interpretations, assumptions, and takeaways.
These debrief meetings help an outsider take away the key points rather than forcing him or her to read the full report on their own.
A market research firm's report may be upwards of 100+ pages. Therefore, not everyone will have the time to read through it. It is important to walk them through the highlights.
Step 6: Taking action with the data
The final step is laying out action items and changes from the market research. It's one thing to do the research but another to then make changes with it.
Particularly if it was a customer survey or an employee survey, those respondents are expecting your business to take action with the results.
If it is any other type of study, changes, and improvements are suggested as well.
Market Research Examples
The market research process can be applied to many different scenarios.
From identifying customer needs to evaluating the competition and assessing market potential, market research empowers companies to navigate the dynamic marketplace with confidence.
For instance, here are 4 different examples of how market research can be used in the real world:
1. Measuring customer satisfaction
A company in the telecommunications industry wants to understand customer satisfaction levels and identify areas for improvement.
They work with a customer satisfaction survey company to distribute a questionnaire to their existing customer base.
The survey collects feedback on aspects such as:
- Service quality
- Customer support
- Likelihood to recommend (NPS)
- Overall experience
The survey data helps the company gain insights into customer preferences, pain points, and satisfaction drivers, allowing them to make informed decisions to enhance their offerings and retain more customers.
2. Evaluating the competition
A fashion retailer aims to gain a competitive edge in the market by understanding their competitors' strategies, strengths, and weaknesses.
They work with a competitive assessment company to analyze competitor websites, product offerings, pricing, promotional activities, and customer reviews.
This example of market research helps the retailer…
- Identify gaps in the market
- Differentiate their brand
- Refine pricing strategies
- Develop marketing campaigns that highlight their unique selling points
3. Improving new products
An electronics company is planning to introduce a new line of smartphones.
Before investing in the development process, they conduct new product development market research to understand consumer preferences, needs, and trends.
They work with a focus group company to host group interviews with their target audience, seeking feedback on features, design, pricing, and potential demand.
These focus groups help guide the electronics company in developing a smartphone that aligns with customer expectations, ensuring a higher chance of success in the market.
4. Evaluating advertising and marketing campaigns
A software-as-a-service (SaaS) startup wants to optimize its marketing campaigns to attract more leads and increase conversions.
The startup follows the market research process to gain insights into its target audience, including their demographics, preferences, and buying behavior.
Through campaign evaluation surveys and data analysis, they identify the most effective marketing channels, messaging strategies, and customer touchpoints.
As a result, the SaaS team can tailor their marketing campaigns to resonate with their audience. This leads to improved engagement, higher conversions, and increased customer acquisition.
The market research process follows a step-by-step best practice approach. This starts with a proposal from a market research provider followed by a kickoff meeting, research instrument design, testing and fieldwork, analysis and reporting, and a final debrief.
Whether you're a business owner, a marketing professional, or simply someone curious about understanding market demand, this guide has now equipped you with the knowledge to unlock the power of market research.
If you are interested in working with a third-party company to execute the market research process, contact Drive Research today.
Drive Research is a full-service market research company specializing in various qualitative and quantitative methodologies. Our team helps clients execute the market research process from kickoff to reporting.
If you are interested in learning more about our market research services, contact us today.
- Message us on our website
- Email us at [email protected]
- Call us at 888-725-DATA
- Text us at 315-303-2040
A SUNY Cortland graduate, Emily has taken her passion for social and content marketing to Drive Research as the Marketing Manager. She has earned certificates for both Google Analytics and Google AdWords.
Learn more about Emily, here.