Market research is the process of gathering, evaluating, and interpreting information for your business.
What Is Market Research?
Market research is the process of gathering, evaluating, and interpreting information for your business. The information can be about elements like the target market, customers, or the industry as a whole. Market research serves as the foundation of successful companies. From identifying an untapped market to launching a new business, the research has several purposes.
Businesses are able to make informed decisions based on market research. The information takes the guesswork out of the equation and channels resources into ideas that hold more potential for growth. Companies of all sizes and at different stages perform market research for various reasons. Below is a breakdown of ways an entrepreneur can use market research:
How to Conduct Market Research?
There are two kinds of market research data: primary data and secondary data.
Primary information is the data gathered firsthand from different sources. You can collect this data yourself or have someone do it for you. The main point is that you can control the success from A to Z.
Secondary information is the data gathered by others and available publicly online or offline. Secondary data is found in newspapers, journals, or reports. The downside is that everyone can access this information and refine their business according to it.
The information you gather using these two methods will be “qualitative” and/or “quantitative” in nature.
Qualitative data: This information lets you better understand what an audience feels about a specific topic. Ask what goes into their buying decision or what their opinion is about a specific product or service. You can gather qualitative information via interviews, observations, and focus groups.
Quantitative data: Data made up of numbers and statistics is known as quantities data. Closed questions in a form and surveys are commonly used to gather this kind of information.
Sources of Primary Market Research
Primary research is more expensive for a business and requires more time as well. But in the end, it is your best shot at gathering first-hand information your company needs. The popular tools of primary research are:
Surveys are a list of questions created to give you the best possible insights on how the customer feels about your product offerings and service. You can keep them as broad or as specific as you like. Surveys conducted via phone, in person, or using survey software are typically informative and enlightening.
Taken either face-to-face or by phone, in-depth interviews give you the chance to ask more pressing questions. You can also work on follow-ups with an interviewee when needed to ask more specific questions.
You watch or video-record how consumers engage with your product or service in a natural setting. Although it is a time-consuming method, it gives you the benefit of doing unbiased research. This is because customers are not under any pressure to answer specific questions and act freely.
It is an organized session of 6-8 people who share some common characteristics. The traits include age, buying habits, etc. Participants in a focus group discuss a predefined topic led by a moderator. Focus groups are expensive but a good method of gaining feedback on big updates, product features, and new product offerings.
Sources of Secondary Market Research
It is also referred to as ‘desk research.’ This type of research is more suitable for gaining broad insights into market trends. You can predict or analyze a situation in terms of its competition. The most popular sources of secondary research are:
Marketing Research Process: Step-by-Step Breakdown
Although not all research processes need to follow the same pattern or path. Yet, there is a generalized pattern in marketing research which can be broken down into the following steps:
- Identifying a problem
- Statement of research objectives
- Planning the research design
- Sample planning
- Data collection methods
- Data analysis
- Formulation conclusion and preparing the report
Market research is an exercise that may take many forms, but a systemic inquiry is a common occurrence in the process.
Identifying the Problem
The research begins by identifying a problem that the company is currently facing. The clearly defined problem statement might not be available at this stage because often, only some symptoms of the issue are clear at this point. After some explanatory steps, a clear definition of the problem becomes inevitable. A clear problem statement helps in all subsequent research efforts like setting objectives, determination of techniques, and the extent of information collected.
Coming Up With Statement of Research Objectives
After identifying the problem with or without the help of explanatory research, the researchers will note down a formal research objectives statement. The objectives can be stated in qualitative or quantitative terms and expressed as questions, hypotheses, or statements.
Planning the Research Design
After clearly defining a problem and noting down the formal statement of objectives, the researcher will create a research design. Research designs are like master plans, specifying the process for collecting and analyzing required information. It acts as a framework for the plan of action. Objectives of the study are included in the research design to ensure that the data is relevant to the objectives. At this stage, you must also determine the type of sources you will need, the data collection method, sampling technology, and the timing and cost of performing the research.
Sampling requires a process that takes a small part of the population to make conclusions about the ‘population’. Important questions to ask yourself in this stage are: who is the right representation of a sample? What is our target ‘population’? What should be the sample size? How to select units to define a sample?
Data collection requires collecting facts that will be useful in solving a problem. So, methods of market research are methods of data collection. The data can be secondary or primary, as mentioned above. You can use internal or external sources for data collection.
Analyzing and Processing Data
Once you have the data with you, it needs to be converted into a format that answers the questions asked in the initial problem statement. Data processing starts with the editing of data in hand and coding. Editing involves data inspection – like collecting the forms, checking the legibility and consistency of classification.
You need to categorize responses into meaningful categories before tabulation. The rules that guide categorizing, recording, or transferring of data-to-data storage media are called codes. If computer analysis is involved, data can be key-punched and verified.
Analyzing data represents applying logic to the understanding of data you collect about a subject. In the simplest form, analysis can involve determining consistent patterns and summarizing important details. The analytical techniques you choose will depend on the informational requirements of a problem, the characteristics of the research design, and the nature of the data you gather. Statistical analysis can range from immediate analysis to complex multivariate analysis.
Preparing and Presenting a Report
The final step of the market research process is to interpret the information you collected and draw a conclusion for usage. The research report should communicate the research findings and does not have to include a complex statement about the technical side of the research study and its methods.
The management will mostly not be interested in the details of a research design and statistical steps involved but will focus on the concrete findings of the research. If required, the researcher can bring out their appropriate recommendations or suggestions on a topic. Researchers should make the report technically accurate, useful, and understandable for general audiences.