What Is Marketing Research?
Today’s consumers are compelling. They can do their research on your products or services and decide whether to buy them. Additionally, they are more likely to read online reviews or ask their networks for recommendations than they are to interact with one of your sales reps.
Have you adjusted your marketing strategy in light of this to account for the way that people shop, research, and make purchases today? You must first comprehend your target audience, your niche market, and the factors influencing your target market’s behaviour and purchasing decisions.
Whether new to market research or not, this book will provide a step-by-step process for a thorough analysis of your market, target audience, competitors, and more.
What is market research?
While market research can answer many questions about the state of an industry, it is by no means a panacea on which marketers can rely for customer insights. Market analysts may take weeks or even months to accurately depict the competitive landscape after exploring a range of market segments.
However, focusing on only one of those areas could make you more discerning about your customers and how to offer value that no other company is currently offering.
You can make wise decisions based on your knowledge of the market and your current customers’ opinions. But remember that there are benefits to market research that go beyond those strategies. There are two considerations:
- Competitors of yours also have a customer base and experience in the market. Your current resources could be comparable to your rivals in many aspects. A benefit is to aim for a bigger sample size of responses.
- The opinions of the entire market are not reflected in your clientele. They exhibit the mindset of the consumer group already drawn to your brand.
As 2022 approaches, there is a significant interest in market research, as evidenced by the market for market research services, which is multiplying. The market is expected to rise from roughly $75 billion in 2021 to $90.79 billion in 2025 at a compound annual growth rate of 5%.
Why do market research?
By conducting market research, you may reach your customer where they are. As our world (both digital and analogue) gets busier and demands more of our attention, this is becoming more and more beneficial. By comprehending your customer’s difficulties, pain points, and desired solutions, you can naturally design your product or service to appeal to them.
Additionally, market research sheds light on a variety of elements that have an impact on your bottom line, including:
- Where do your target market and existing clients go to research your goods or services?
- Which of your rivals does your target market turn to for information, choices, or purchases?
- What is popular with your customers and in your industry?
- Who is in your market, and what problems do they face?
- What elements affect the purchases and conversions of your target audience?
- Consumer opinions about a particular issue, ailment, item, or brand.
- Whether or whether there is a market for the business efforts you are funding.
- Unmet or unfulfilled client needs that present a sales opportunity.
- Pricing philosophies for a particular commodity or service.
Finally, market research enables you to collect data from a larger sample size of your target demographic, do away with preconceived notions, and get to the core of customer attitudes. Knowing the big picture enables you to make better business decisions.
What is the importance of marketing research?
The most significant threats to your business can be found using market research. It also gives you a clear picture of the chances for higher ROI, or returns on investment, for your business investments.
You can make informed, data-driven decisions by having a thorough understanding of your niche market from a variety of angles and multiple levels. The process may involve several steps. Your efforts will be rewarded if you adopt a systematic strategy and use a market research template.
What are the benefits of market research?
Market research is essential for boosting customer satisfaction and brand loyalty. A strong market research programme can help identify the key demographics and market segments most likely to purchase a particular product because it is unlikely that a product will appeal to every consumer equally.
Additionally, market research is required to create an organisation’s advertising initiatives. The business can target its advertisements to one platform rather than the other if market research reveals that its customers favour Facebook over Twitter. Instead, they can concentrate on improving the product rather than lowering prices if they find that their target market is value-sensitive rather than price-sensitive.
What is marketing research used for?
To understand why marketing research is used, let’s examine its many goals:
1. To identify new products or services.
A product or service might employ marketing research to understand the market better and uncover new target audiences.
2. To establish the most competitive price for a good or service
Marketing research is a helpful technique when determining the best price for a new good or service since it includes all pricing research operations.
3. To create plans
One of the most crucial roles of marketing research is to give businesses a framework for creating marketing strategies and procedures. The outcomes of a well-planned organisation will be better.
4. Identifying and Evaluating External Factors
Marketing research helps businesses learn crucial information about the outside factors influencing them. This includes the many impacts of the government, laws and regulations, global markets, competitors, and consumer income.
5. To Conduct Competitor Analysis
Marketing research refers to various procedures followed to understand the rivals better. For effective future planning, it could be essential to comprehend competitors and their strategies.
6. Better Market Understanding
Gathering enormous amounts of market data is a critical component of marketing research. This gives businesses a thorough understanding of the market, enabling them to make wiser decisions.
How does market research collect the information?
To do market research, a corporation or its employees must collect primary and secondary information from other sources.
1. Primary Information Sources
Primary data are facts that the firm or a person or company hired to conduct the study directly acquired. Exploratory and specialised research are the two categories into which this information is split.
Exploratory research is a less organised approach that uses more open-ended questions to identify potential problems or concerns for the company. Experimental research usually reveals issues addressed by specific studies to find solutions.
2. Secondary Information Sources
Information that a third party has already acquired is secondary data. This might include demographic data from official censuses, research conducted by trade associations, or studies provided by another business operating in the same market.
What are the various types of market research?
1. Interviews
Interviews provide face-to-face communication (both physically and virtually), allowing you to see your interviewer’s body language and a natural flow of speech.
By responding to questions about themselves, your interviewees could assist you in developing buyer personas. These buyer personas describe the age, family size, spending capacity, occupation, problems at work, and other characteristics of your ideal consumer. Using this buyer profile as a guide, you may create your whole marketing strategy, from product features to website content.
2. Focus Groups
Focus groups enable you to work with a small, highly vetted group of individuals to test your product, watch a demo, get feedback, and respond to specific questions.
This kind of market research might provide you with concepts for product differentiation or details about your product that make it stand out in the marketplace. Please consider asking your focus group questions regarding your services and utilising the group’s feedback to enhance them.
3. Product/Service Use Research
Research on how and why your target client uses your product or service and specific characteristics of that thing may be found in studies on creation or service utilisation. This market research indicates how well your target market will accept a product or service.
According to respondents in a 2020 study, usability testing is the most effective method for learning about users (rating it 8.7 out of 10). User surveys earned a rating of 6.4, while digital analytics received a rating of 7.7.
4. Observation-Based research
You may see how your target audience members use your product or service, what functions effectively in terms of UX, what obstacles they run into, and which parts of it they would find easier to use and implement through observation-based research.
5. Buyer Persona Research
Buyer persona research gives you a realistic picture of your target market’s characteristics, including who they are, their challenges, why they need your product or service, what they expect from your company and brand, and more.
6. Market Segmentation Research
By dividing your target market into groups based on specific and distinctive characteristics, market segmentation research enables you to develop efficient ways to meet their needs, comprehend their pain points and expectations, discover their goals, and more.
7. Pricing Research
Pricing research helps you determine what similar goods or services in your market are selling for, how much your target market is ready to pay, and what price you should set for the good or service you’re offering. You’ll need all of this information to create your pricing plan.
8. Competitive Analysis
Competitive studies are beneficial because they thoroughly understand the rivalry in your market and industry. You could discover what’s doing well in your industry, what your target market wants in terms of comparable products, who of your competitors you should seek to stay up with and surpass, and how to set yourself out from the pack.
9. Customer Satisfaction and Loyalty Research
Studies on customer satisfaction and loyalty offer insight into how to urge current customers to make additional purchases from you and what will motivate them to do so (e.g. loyalty programs, rewards, remarkable customer service). You may use this study’s information to determine the best ways to please customers.
10. Brand Awareness Research
The results of brand awareness research show what your target market is aware of and knows about your company. It enlightens you about your target market’s associations while considering your business and what they take you to stand for.
11. Campaign Research
Reviewing prior initiatives and evaluating their effectiveness with your target audience and current customers constitutes campaign research. Experimenting before deep diving into what worked and resonated with your audience is essential. This will allow you to keep those elements in mind for future campaigns and focus on the parts of what you do that are most significant to those people.
How is market research beneficial for a business?
A corporation may gain from marketing research by learning more about its customers’ likes, dislikes, and desires. These perceptions, which may be found in quantitative and qualitative forms, may be critical in assisting a business in making decisions.
Marketers are crucial in the collection and evaluation of data for marketing research. In most businesses, the marketing division has a pulse on the clientele (typically in conjunction with sales). Marketers are in an excellent position to reach the people who need to do market research.
In general, marketing knows to comprehend the information collected through market research. Any size business will hire a qualified researcher or analyst to assist in preparing marketing research, ensuring that outcomes are proactive rather than reactive.
How can you do adequate market research?
1. Make wise business decisions.
You have a more significant chance of success when you base your business decisions on organised facts and consider all relevant factors than when you depend on assumptions and gut feelings.
If you’ve been in business for a while, you understand the market’s size, the variety of available products, and consumer demand. You are, however, looking at the market from a particular viewpoint. Thus you must be aware of your blind spots. You may better understand your industry by conducting market research. You may compare and analyse your market more accurately by looking at the statistics.
What does this glimpse like in real life? When building a new product and deciding which features to include, for instance, research information may help you figure out how many existing products with comparable features and how popular they are with consumers. It will reveal, among other things, if customers are willing to pay a higher price and, thus, whether you can create your pricing structure. Can the additional funds generate enough cash to cover the cost of providing the feature, and is there a strong enough demand for it? The data from market research is what you need to respond to your questions.
2. Recognize your target market’s size and demographics.
Here’s another justification for basing decisions on relevant research findings. Start by identifying the traits your target market has in standard and the shared need that your product satisfies.
Let’s say you sell a range of vibrant, dazzling cosmetics. Most of the people in your target market are women who like to stand out. They are probably younger than 40, and they use Instagram frequently. A professionally compiled data set will reveal the truth and use statistics to reject or support your claim.
3. Decide on the most effective marketing and sales strategy.
You may also find that market research helps you choose the optimal location for your advertising. After analysing the data, you’ll know which of your target market uses social media platforms. You could discover, for instance, that members of your target market prefer particular fashion brands, a particular movie genre, or anything else that could serve as the basis for marketing campaigns.
The data about your target market will also reveal how they shop. You may learn about buying patterns, such as how long and how many encounters it takes the typical customer to make a purchase decision or what kinds of advertisements your target market responds to the most favourably.
4. Utilise the knowledge you have gained from the opponents.
Your rivals will provide the vast bulk of your relevant data. Learn from the losses and triumphs of others if you wish to deliver something new to you but already on the market. Gather data from competitors and contrast it with your own if you want to evaluate and optimise. Consider what works for them, their areas of weakness, and how you might strengthen those areas.
5. Compile data on customer preferences
Market research is the best way to learn things that aren’t always clear to you but might significantly influence your business. Think about it: Just because no one has complained about your services doesn’t mean everyone is happy with them. You won’t understand until you dig into it since many individuals will keep their criticism to themselves. Even if your discount or free trial period generates substantial leads, that doesn’t always mean it’s the wisest course of action. Unless you perform research and analysis, you won’t know.
6. Follow a template and be systematic.
You must adhere to a process and record your findings for your study to yield results that can be put into practice. Thankfully, there are templates that you may modify to meet your unique requirements to make the process go more quickly. Utilising market research templates enables you to methodically tackle an often time- and money-consuming process.
Final words
Businesses may use market research to determine the demand for, viability, and potential performance of their product in the real world. Market research is conducted utilising primary or secondary data, offering unique insights into a firm’s offerings. A firm’s research and development (R&D) phase and its success and growth depend heavily on market research.
