Market Research Definition
Market research process refers to collecting data about the market itself, the competitors, the offered products or services is collected in a systematic way to get a better undesiring of the demands of the targeted audience. This is one of the most important business strategies.
Market research Analyst
A person who helps a company grow and gain leverage over its competitors by doing research on its competitors, analyzing customers’ reaction to its offered products and services, etc.
Market Research Examples
Market research examples include:
This market research process is basically segmenting the targeted audience into different groups based on their…..
- Demographic characteristics: age, gender, income, religion etc.
- Geographic Difference: region or location.
- Psychographic difference: lifestyle, preferences, values etc.
- Behavioral Characteristics: Usual behavior, purchasing habit, etc.
Movement of Market:
Analyzing the movement of markets at a direction for a certain period of time. This happens to change over the evolving or changing of lifestyle, income or even technology!
- For instance, the more time has gone by, the more technology smart we have become. We tend to use smartphones for almost everything nowadays. We have evolved into a modern era. And as a result, the market demand and supply of smartphones have gone higher than ever before.
- The 90s kids did not grow up with smartphones in their daily lives. But now, they are the generation which uses smartphones the most!
The condition of the Market:
Market research analysts research and analyze the current and estimated future conditions of markets as well. This process includes analyzing the current or upcoming commodities or services available in the market, their process, how they are doing business etc.
Market research analysts work with all these four elements.
Market Research Types
While there are so many market research tools available for you to use, usually two types of data are used to conduct market research & to lock on the target audience.
Primary Market Research:
This type of market research data includes…
- Original information you gain from the first-hand experience or with the help of a firm
- Usually, you collect this type of market research data yourself
Pros of Using Primary Market Research:
- You can collect the data personally
- Hence, you are in full charge of the ways of getting access to the information as well as using it
- You can interpret the data the way you prefer
Cons of Using Primary Market Research:
- It can be time-consuming
- Data is usually of the high cost
- More resources are needed to do bigger research
Types of Primary Market Research:
This type of primary market research concentrates on the problems which are not clearly defined yet. This focuses on investigating the existing problems more carefully to get a better idea of them.
- For example, suppose you have a production line in clothing and you think including t-shirts in your product line will increase the sales. As you don’t know for sure, you conduct exploratory research to find out questions of why and how introducing t-shirts will bring more you revenues. That is exploratory research.
This type of primary market research usually follows after exploratory research.
- This operates by asking the targeted audience very specific questions or polls when collecting primary information.
Methods of Primary Market Research:
Market Research Survey:
This process includes making up very specific questions to target audience or respondents.
- It’s a quantitative method where respondents are asked questions to figure out topics such as current trends in fashion, proffered genres of books by readers, etc.
This process includes a series of questions which are asked to the targeted audience in order to gather information about one topic or more.
- Interviewees are asked the various type of questions which give the interviewers about the interviewee’s experience, recommendations or opinions about something.
- Interviews are usually conducted face to face or by using the telephone as well.
- Focus Groups:
This is a process where people of the same background are chosen to participate in an experiment or research process where they freely share their insights.
- This process is usually used while doing exploratory research.
- Observational Research:
In this process, a chosen person’s behavior is observed when exposed to different situations.
- For example, observing how a customer reacts to the different color/shape of the product he/she usually buys.
Secondary Market Research:
This is the type of market research data which has already been collected by other factors and you’re just going to use them as your source. For example, you can collect these data from….
- Government agency studies
- Surveys were done by NGOs or other organizations
- Reports are done by your competitors
Pros of Using Secondary Market Research:
- Easily accessible
- Data is usually available on low cost or free of cost
- Time effective method
Cons of Using Secondary Market Research:
- Too much irreverent information
- Spotting relevant and important information from this market research data can be quite challenging
- Data can be inaccurate or outdated
Types of Secondary Market Research:
- Nowadays it’s the most common secondary market research method because of its convenience.
- When a market research analyst uses online sources such as Google, Bing, ask, etc. to gather and analyze information, it’s called online research.
- This type of secondary market research refers to a process where different sources of literature such as books, newspapers, journals, etc. are used to gather information.
- Using online books, magazines, journals, etc. are included in this type as well.
- This method is mostly used while proving a hypothesis.
Case Study Research:
This secondary market research process enables the market research analyst to gather information and analyze the situation by reviewing existing case studies of similar situations.
This method is often used by business organizations and health care sectors.
Market Research Steps
Now that you know all about the different market research types, you should know about the steps to follow while doing your market research. This step by step guide will make it so much easier to get the job done.
Define your targeted audience:
In order to start your research, you need to know all about the customers first. Why? Because if you know all about the market audience, you can easily out them in different segments based on their age, gender, social status, region, etc. Putting them in different segments will only help you while planning your strategies to attract them to your product. If you can define them, you can spot who among them are your real customers/ can become your targeted audience! This first step works as a guide to the following ones.
Select a portion of your target audience to work with:
Now that you have spotted who your actual customers are, you need to gather some information from them which will be pretty useful for you. You can select a portion of them (either big or small) to help you in conducting your research.
- This step aims to gather information from the sample such as buying habits, preferences, spending limits, etc.
Select contributors for your market research:
While selecting participants you should remember a few things that would be helpful.
Go for variety when selecting a sample for doing your research. You can select your own customers who buy from you, people who buy from your competitors, people who haven’t bought anything till now or have decided not to.
This way, you can gather a variety of information about how people with different experience or perspective think or decide differently. You can analyze what motivates them to buy from you or to buy from your competitors. On top of that, you get a fresh insight into the point of view from the ones who have decided not to buy at all.
Selecting people who have done business with you recently would be a smart choice. Why? Because they can provide you with their experience, stories, recommendations or even criticism; while all these would be the latest!
Chances are, your customers will give you a more honest opinion than the others. People who have interacted with you recently already know your condition in the market better than any other customers.
Social Media Followers:
There are people in social media who follow a lot of pages and do not buy from all of them. Find out who these people are in your case and talk to them. Chances are, they are potential customers would be willing to buy from you if some differences were there. You can figure out what makes them follow you but not buy from you. This way, you get to know what is stopping them from becoming your customers.
Use the network to your advantage:
Spread words about you conducting market research via your colleagues, subordinates and via official job profiles such as LinkedIn. The more you spared it, the higher the chances of getting more participants to get.
Give an Incentive:
Lure your participants with rewards for helping in the market research process. This will work as an incentive to all of them.
Who doesn’t love reward after doing something, no matter how big or small?
- For instance, you can give rewards like points for every time they participate if you don’t have a generous budget!
Now that you have successfully gained a group of participants to work with, you need to specify and prepare the questions to ask them. It’s smarter to use open-ended questions while preparing research questions as otherwise, yes no questions do not give you a detailed overview of the customer’s opinions.
Start with asking background information such as customers’ personal jobs, how long they have been doing business with your company etc.
Ask them about their reaction or purchasing decision when they faced a problem (realized their need for a product/ service). Ask what options they knew about when they thought of buying that product.
In this step ask the buyers when they first faced that problem how they tried to solve it. Ask them a question such as…
Did they try to solve it via talking to others?
Did they google their solution out of it?
Did they get to know about the solution from social media or vendor website?
And so on.
Ask them questions like these.
How did they finally make the purchasing decision?
What factors influenced them to do so?
Ask for their recommendations to make the purchasing process better. Ask them if they have any questions.
Know your Competitors:
Before entering and while operating in a market, you should always know your competitors. You should know about how they operate, how they are doing currently and so on. The more you know about them, the more chances you get to be ahead of them.
Use search engines, visit their websites, and talk to their customers to gather information about them.
The proverb “knowledge is power” didn’t come out of nowhere, right?!
Know who in the industry is your competitors and see how they are doing in business. There can be many other companies who are working in the same industry as you such as the food industry.
- For instance, if you work for a juice company then soft drinks company is your competitor. If people suddenly start preferring cokes to juice, then your revenues will go down, no?
Companies who offer the same product/ service as you do are your competitors as well.
- For example, if you offer food delivery services, then food-panda is your competitor, not to mention, a strong one!
After you’re done gathering all this information, all you need to do is summarize them and analyze. Market research analyst goes through all this information, analyze and compare them; finally makes decisions.
Doing your market research can be one hell of an experience! You may think you know your audience, then you do the market research.
And Bam! You realize how much you had overlooked before. While the market research process can be time-consuming, it’s definitely an eye-opener. It can take you places, help you grow A LOT!