What is market research
and what role does it play in market strategy?
According to Oberlo, Market research is a systematic process of collecting, analyzing and interpreting information about a target market, consumers, competitors and the industry as a whole. Market research is the foundation of any successful company and it can be used for a number of different purposes – from identifying a new market to launching a new business.
Market research is a vital part in any strategy, knowledge gained from good quality research leads to clients gaining an in depth understanding of their competition in a particular market. A marketing strategy is all of a company’s marketing goals and objectives combined into a single comprehensive plan. When forming a market research strategy, it’s absolutely necessary to clearly lay out and define the goals and objectives of the research we gather.
We want to get down to the knitty gritty. Who is your clientele? What do they value? What are the demographics of the people consuming your food or product? How do they compare to your competition? Our goals are the structure and tools we need to do the digging. We want to know as much information about your clientele and to know as much as possible about those who could potentially be part of your customer base in future.
Each of our client’s objectives are completely different from the next. These objectives depend on our client’s brand and business model; for example, what exactly their products or services are, and what aims they have set. Through in depth conversation, we at Craft Strategy gain inside knowledge and understanding of our clients existing goals, efforts, failures and successes - then use this knowledge and our expertise in market research to create a market research strategy that will fill in any gaps and work as a catalyst to achieve any goals our client’s feel they aren’t able to reach on their own.
Part of this process is to decide whether the market research project will use quantitative research*, qualitative research*, or a mixture of the two to complete the objectives. This decision is based on which method will be most effective in gaining the required information and insight about the client’s market or consumers. The decision is also down to what kind of research will actually be useful to them.
Quantitative research
This kind of research is used to quantify the problem by way of generating numerical data that can be transformed into useable statistics. Qualitative information helps you gain a better understanding of how people feel about certain topics, what they think and how/why they make choices that they do. The best sources to collect qualitative information include in-depth interviews, focus groups, and direct observations. It is used to quantify attitudes, opinions, behaviors, and other defined variables, and generalize results from a larger sample population. Quantitative research uses measurable data to formulate facts and uncover patterns in research.
Quantitative data collection methods are much more structured; they include various forms of surveys – online surveys, paper surveys, mobile surveys and kiosk surveys, face-to-face interviews, telephone interviews, longitudinal studies, website interceptors, online polls, and systematic observations.
Qualitative research
Qualitative research is often used for exploring. Quantitative information is based on statistics and tends to be more structured. Closed question Questionnaires and surveys fall under this type of information. It helps researchers gain an understanding of underlying reasons, opinions, and motivations. It provides insights into the problem or helps to develop ideas or hypotheses for potential quantitative research.
Qualitative data collection methods vary using unstructured or semi-structured techniques. Common methods include focus groups, individual interviews, observation or immersion, and diary studies. The sample size is typically small, and respondents are selected to fulfill a given quota.
How do businesses use market research?
Market research helps business owners make well-informed decisions, take the guesswork out of innovation and funnel resources into ideas and projects that hold the most potential. Businesses at different stages of growth carry out market research for different reasons. There is a list of ways how businesses can use market research:
To determine the feasibility of a new business: if market research indicates there’s little or no demand for the product or service, the business is unlikely to succeed.
To identify and develop potential new markets.
To keep close tabs on marketing trends and develop strategies on how to stay ahead of the curve or adapt to changing market conditions.
To test demand for new products or features.
To determine optimal product placement – how, when and where should a product enter the market.
To improve and innovate their business – identifying issues with certain business aspects such as customer service early, helps companies overcome costly disruptions later.
To boost the success of their promotional campaigns. By gauging customer sentiment and understanding how their brand is perceived, businesses can better shape their branding and marketing strategies.
How can a business conduct market research?
Before reading any further, keep these three recent statistics about modern buyer behavior:
80% of Instagram users currently follow a business account, according to 2017 data from Instagram.
75% of smartphone owners turn to a search engine first to address immediate needs, according to 2018 data from Google.
Emails that don't display clearly or correctly on mobile devices may be deleted within 3 seconds, according to 2018 data reported by HubSpot.
There are two main types of market research that businesses conduct to collect the most actionable information on their products: primary research and secondary research.
Primary Research
Primary research is the pursuit of firsthand information on your market and its customers. You can use focus groups, online surveys, phone interviews, and more to gather fresh details on the challenges your buyers face and the brand awareness behind your company.
Primary research is useful when segmenting your market and establishing your buyer personas, and this research tends to fall into one of two buckets:
Exploratory Research: This kind of primary market research is less concerned with measurable customer trends and more about potential problems that would be worth tackling as a team. It normally takes place as a first step before any specific research has been performed, and can involve open-ended interviews or surveys with small numbers of people.
Specific Research: This kind of primary market research often follows exploratory research, and is used to dive into issues or opportunities the business has already identified as important. In specific research, the business can take a smaller or more precise segment of their audience and ask questions aimed at solving a suspected problem.
Secondary Research
Secondary research is all the data and public records you have at your disposal to draw conclusions from. This includes trend reports, market statistics, industry content, and sales data you already have on your business.
Secondary research is particularly useful for analyzing your competitors. Here are three types of secondary research sources that make this process so beneficial:
Public Sources: These sources are your first and most accessible layer of material when conducting secondary market research. Being free to find and read -- usually -- they offer the most bang for your buck. Government statistics are arguably your most common public sources, according to Entrepreneur. Two U.S. examples of public market data are the U.S. Census Bureau and the Bureau of Labor & Statistics, both of which offer helpful information on the state of various industries nationwide.
Commercial Sources: These sources often come in the form of market reports, consisting of industry insight compiled by a research agency like Pew, Gartner, or Forrester. Because this info is so portable and distributable, it typically costs money to download and obtain.
Internal Sources: Internal sources deserve more credit for supporting market research than they generally get. Why? This is the market data your organization already has in-house. Average revenue per sale, customer retention rates, and other historical data on the health of old and new accounts can all help you draw conclusions on what your buyers might want right now.