Market research, sometimes also known as marketing research, is research that is conducted to gather information and understand an organization's target market. There are several techniques or methodologies that can be used to conduct market research, and the information gathered thus can be used by businesses in a number of ways, including: developing better products, improving user experience, crafting a marketing strategy that attracts quality leads and improves conversion rates, and/or improving overall business strategy.
In a world that's overflowing with information, extracting insights that are relevant to you can be tough. A market research process provides a way to sift through the clutter, and gather information on your target market and audience. Not just that, analyzing the information collected during business market research leads to a heightened understanding of your industry trends, as well as your industry's social, cultural and economic frameworks which are usually obscured. In this article, let us understand why market research is essential, which techniques of conducting market research will provide a competitive edge, as well as some tools to help you perform market research efficiently. Let's begin.
Why is market research needed in present times?
According to Forbes, market research is an important tool for assessing industry landscapes and gathering customer insights, which can ultimately allow you to make more informed decisions for your business. The more exploratory and specific research is embedded in an organization's strategic plans, the better equipped they are to deal with highly-dynamic markets. But that's not all, market research is needed in present times because it offers a host of benefits to companies. Let's have a look at those:
1. The understanding and perspective gained on the target audience and competition during market research help companies strengthen their position in the market.
2. Market research helps companies minimize any investment risk by evaluating a market, product, concept or idea in which the company may be thinking about allocating budgets.
3. It helps identify and highlight any threats down the road, or any opportunity that otherwise may have been missed.
4. It helps evaluate your strengths and weaknesses, as well as those of your competitors, to help you stay ahead.
5. Market research helps in spotting prevalent or emerging trends in your industry, which can help you capitalize on these trends.
6. It fuels innovation by providing a base for strategic planning and deeper insights that bring about a competitive advantage.
7. It helps companies segment the market, so that they can focus on the segment that matches the organization's profile and provides the highest growth.
8. It helps companies focus on the needs and demands of their target audience. Customer is at the center of your business is important in present times, and market research keeps you attentive as to where you can improve your proposition, customer service or product offering.
9. It helps companies evaluate their business's success against established industry benchmarks for faster growth, greater productivity, and increased business effectiveness.
Now that we have a solid grasp on the importance and need of market research in modern times, let us understand the various techniques used to conduct market research for continuous growth.
Market research techniques to help your company grow
While newer tools to conduct market research have joined the array of market research methods and techniques, and online market research is a major tool to extract insights, traditional methods of market research are still used by other companies, particularly for small business market research. Let us break down market research techniques from the top.
So basically market research can be split into two distinct sections: primary research, and secondary market research, which also encompasses online market research. Primary research is research that a company carries out itself, including running its own focus groups or conducting market research surveys. It is also known as 'field research’, as it involves going out into the field to get data.
Secondary market research is researching information already collected by other people that a company wants to use. This includes studies carried out by researchers, financial data released by companies, or any other information publicly available on the internet.
These sections are further divided into qualitative research and quantitative research. Qualitative research is usually considered to be particularly suitable for exploratory research e.g. before the launch of a product or service. It is primarily used to discover and gain an in-depth understanding of individual experiences, thoughts, opinions, and trends, and to dig deeper into the psyche of the target audience. Quantitative research, on the other hand, is all about numbers and figures. It is used to quantify opinions, attitudes, behaviors, of the target audience with the goal to support or refute hypothesis about a specific phenomenon. It is specific as to what is measured and how it is measured in order to uncover patterns in behavior, motivation, emotion, and cognition, and is thus considered to be much more structured than qualitative methods.
The following methods cover all of these sections as well as subsections of market research. Usage depends on a company's specific aims. Let's have a look.
Market research surveys use open-ended or close-ended questions to elicit responses from a sample of the target audience known as respondents. These questions can be given to respondents in person, over the phone, via email, or through an online form. Surveys are very versatile, and lead to answers that offer a good analysis on customer opinions, preferences and sentiment. They are also cost-effective, and thus good for small businesses on a tight budget. While surveys are a great way to gather real-time, detailed information directly from the target audience, information gathered this way can be unreliable.
A focus group is another time-honored way of collecting market intelligence, in which a set of people are selected carefully to represent a target market. Generally, the participants in focus groups will be chosen based on certain criteria, such as demographics, interests, or occupation. The feedback from this group of people is used to evaluate customer demands and opinions. Feedback from focus groups can provide an organization with insights about which particular area they need to invest more to capture a higher market share. However, answers from focus groups can go off on tangents that organizations may not have thought of.
Social media listening
A newer form of market research, mostly used for small business market research, is social media listening. It is a great way to tap into the psyche of the target audience, as people freely express their opinions, thoughts, pain points and hot takes on social media these days. Organizations use social media listening tools to identify topics of their interest, then analyze relevant social posts. They can track their brand, product or service mentions (or those of their competitors) and what consumers are saying about them. Social media listening churns out vast amounts of unfiltered information which can offer deep actionable insights when analyzed.
Interviews involve speaking directly to the respondents. This type of market research technique is more personal, allowing for communication and clarification, making it good for open-ended questions. Furthermore, interviews enable organizations to go beyond surface-level responses and investigate deeper. They provide valuable and reliable information, and can be used to understand in-depth about a particular topic or a product or service. However, they can be time-intensive and costly.
Experiments or field trials
Field trials are basically experiments conducted on the target audience. For example, a newly launched product is placed in stores. This is done to understand consumer feedback on a new product or service. The feedback from the customers who buy the product will help the company understand if their product will work in the market on a larger scale. It can be considered a form of product testing.
Observational market research involves an organization observing its subjects in either a natural or controlled environment. An example of observation could be a market researcher observing shoppers’ behavior by day of the week, by season, when there are discounts offered, etc. While observation provides very reliable data about consumer behavior and preferences, it only works when the subjects are unaware of the observation. It can also be time-consuming and only offers qualitative data.
Purchasing research reports
A number of large private companies may not have the time or resources to conduct market research in- house. Purchasing research reports conducted by other companies that specialize in market research services seems like a good business idea for such organizations. Purchasing research reports is popular these days because it is a massive time saver, and organizations have a better idea of what they'll be getting from the start. Furthermore, data is presented in a format that makes sense, saving organizations the effort in cleaning and organizing data.
An analysis of your whole competitive landscape is something that should be performed by every organization that takes market research seriously. It is highly strategic and specific, allowing organizations to analyze their competitors. A competitive analysis starts by defining the product, service, or brand, and market segment. Then, different metrics are used to compare your organization with your competitors, for example: market size, types of offerings, pricing structure, PR coverage, social media presence and engagement, as well as strengths, weaknesses, opportunities, and threats. However, the data needed to conduct a competitive analysis sometimes requires some market research of its own.
Sales is a key component of any company, and one which deals with the largest amount of customer and competitor data. An analysis of an organization's sales data can provide some pretty actionable insights, and answer questions about real world customers, potential customers, their buying habits, and how they are changing over time. It helps organizations gain a better perspective of action and consequence.
Market intelligence tools
Market research is nothing but a subset of market intelligence, and thus market intelligence tools can be a very capable form of gathering market research. Market intelligence tools can combine a number of market research techniques like social media listening and competitive analysis, in addition to gathering and analyzing data from the internet, including news, blogs, company websites, social media, regulatory and government portals, industry trade association reports, press releases, job boards, review websites, etc. It is a treasure trove of secondary data that can also act like a centralized local library for intelligence in an organization. With more and more data produced every year, the question about access and curation becomes increasingly prominent, and manually conducting online market research using just search engines becomes near impossible. Market intelligence tools arise to save the day, helping provide not only market research data, but intelligence that can help drive business decisions.
How Contify's market intelligence tools can help you get along with the market
Contify is a market and competitive intelligence tool that helps organizations collect, curate, and share information on their competitors and their target markets, allowing them to compete intelligently, get ahead and succeed in the modern digital markets. Contify’s proprietary machine-learning algorithm filters noise from unstructured web data, transforming it into actionable competitive and market intelligence. This helps businesses track their competitors, industry segments, customers, and their entire competitive landscape with unmatched precision. A regular stream of competitive intelligence and insights ensures that you're not just reacting to your competitors’ strategic moves, but planning your own in advance. Thus, not only it can offer the benefits of market research, but lightyears beyond it.
Every organization needs to decide for themselves which market research technique or method works the best for them. Not all methods will be right for your business situation, some methods are great for small business administration, while others are only suitable for enterprises. Go through this list, and do some research on your own as to which of these market research techniques will be the most suitable for your business. Spend time considering what you want to achieve, what data you’ll need, the pros and cons of each method, the costs of conducting the research, and the cost of analyzing the results. Then, armed with actionable information, take a confident, informed decision. That is the key to success in business, and the key to gaining a competitive edge.