Market research is essential for the success of a service or product. It is a type of systematic process that involves analyzing, interpreting and collecting information. Companies can use the information for a variety of things, such as target markets, competitors, consumers or the industry that they are targeting. This research is helpful for many things, from launching a new business to identifying a new market.
To ensure successful market research, there are certain methods that help you to collect the needed data. With this information, you can do many things related to your business, including:
- Developing and discovering potential new markets
- Making sure to place products properly
- Increasing promotional campaign success
- Determining if a new business is feasible
- Tracking market trends
- Business innovation and improvement
When you are performing market research, you will use two types of data, including primary and secondary. The primary type describes data from original sources that is collected firsthand. With this data type, you have full control over the process.
Secondary data is available to the public via offline and online sources. Someone else collected it and made it available. For example, reports that you find in journals or reports would qualify as secondary data.
This research method is a good choice when you are seeking expert advice. To perform it, you will conduct one-on-one discussions to obtain qualitative data. You can choose to conduct these interviews in several ways, including face-to-face, video, telephone or via a conference. When you perform this type of interview, it helps you to get a detailed look at the insights associated with your target audience.
Ideally, you want to interview 25 to 75 people. The process will take 10 to 30 minutes, depending on the depth that you hope to obtain from what your interviewees have to say. If you need to get information about topics that are highly sensitive or complex, this market research method is a good choice.
Questionnaires are a good research method to get further details regarding the likes and dislikes of your customer base and target audience. These differ from surveys because a questionnaire allows people to write in information in their own words, making it easier to get more targeted information.
It is important that you focus your questions and make them easy to answer. Ideally, you also want fewer questions because questionnaires that have over 10 questions have a lower response rate.
Using surveys for market research are ideal for learning more about satisfaction and loyalty analysis, market segmentation, brand awareness and pricing research. This is one of the most commonly used methods for market research because it is relatively easy to carry out and it is cost effective. You also have a lot of control over the data that you obtain.
When you are using surveys, you are able to better understand what your target audience wants. Surveys also let you obtain table from a large sample size so that you can see what more of your customers are wanting or expecting from you.
4. User Groups
Users groups are a good choice when you want to get feedback on UX, web design and feature testing. You will get a group of users together in a central location for this type of market research.
It is ideal to have your user groups meet regularly so that they can talk amongst each other to discuss their experiences with a service or a product. When the users in the group are talking, there are researchers in the room with them taking notes about what they have to say.
5. Focus Groups
Many companies use focus groups for advertising concepts, price testing and messaging and product testing. These groups allow companies to work on their strategies, the services and products that they offer and to improve how they research out to the target audience.
A focus group is made up of people who are purposely chosen to be a part of the group. Ideally, you want to have five to 12 people as part of your focus group. It is imperative that your focus group is comprised of diverse individuals who have a wide variety of opinions. Look at your market and make sure to include people from all of the segments.
It is best to have your focus group meet together in person to get the most comprehensive and realistic data. However, you might also consider using video conferencing technology if they do not live near each other. What is important is that the members of your focus group are able to interact with one another in real-time.
When your focus group meets with each other, you want to ensure that you are asking the right questions. You should have these available in advance so that the group can focus on the topics that you need information about.
6. Competitor Benchmarks
This type of market research is a good choice for better understanding your churn, sales, burn rate, revenue, operating costs and profit margin. It is a type of secondary research method that is widely used by companies all over the world. Use this method to measure key performance indicators or specific growth metrics in comparison to other companies that are a similar size within your industry.
When you are working on your business strategy, this form of market research is among the most important. It helps you to learn what other similar companies are doing and if what they are doing is working or not. Compare this information to your current strategy to see if it has a chance at helping or hurting your business.
It is ideal to look at several companies within your industry that are close to the same size as your business. Look for trends in what the companies are doing so that you can look to adopt the strategies that are helping them to find the most success. While you do not want to completely copy another company’s strategy, you can take the relevant elements and replicate them for your business.
7. Test Markets
When you have a new marketing campaign, it is important to determine how people will respond before you launch it. This is where the test markets research method comes into play.
These types of market essentially represent a bigger market. You will use both a control group and a test group for this type of research. For example, if you adopt a new messaging copy, landing page or CTA button, this marketing strategy can help you determine how people will respond to it. By getting the opinions of your test market, you can determine if you are ready to launch or if tweaks are needed first.
Seeing how people interact with your service or product in real life is an ideal way to learn more about consumer shopping patterns and usage habits. You can obtain this type of data in several ways, such as videotaping people at work, when they are in a store shopping or when they are at home.
Review the tapes and look for trends in the behaviors of your consumers. For example, if you sell a blender and you observe that multiple users have difficulty using the buttons, this tells you that you might consider a redesign in the future that is more user-friendly.
With this method, there is no need to survey or communicate with consumers. Observing their habits and behaviors is enough to gain valuable information.
9. Sales Data
This type of market research is a solid option when you want to learn about where you put your marketing efforts. It can also aid you in better understanding your target audience.
Take your internal sales data and use it to segment customer trends and to determine profitability. This helps you to determine where changes can be made to improve your numbers. In addition, you can use it to ensure that you are capturing the full market potential for your service or product.
It is best to look at sales data for at least a full 12 months. If the service or product is under a year old, look at the data since you launched it to get this information.
10. Field Trials
If you want to get information about the potential success of a service or product, this is a market research method that will provide you with this information. To perform this, you will put your service or product into select stores. Pay attention to how consumers respond. They are exploring what you have to offer under real-life conditions, so the data can tell you how your service or product will perform once you do the full launch. You can also use the information to determine if any changes need to be made to the price, the product itself or its packaging.
With this knowledge of market research methods, you can analyze your business and determine which ones will be the most successful for you. Ideally, you want to use a variety of research methods so that you get the most diverse data to work with.