Once you have the objectives for your market research established and the parameters specified, researchers can select which research methodologies you will use to collect data, and there is a wide range of research options available.
When determining how to do customer research, the kind of market research you design will depend on the following factors:
- Whether the information and insights needed already exists in some form (secondary data) or whether it will have to be collected for the research project (primary data)
- Whether the market research objectives involve the collection of facts and figures (quantitative research), opinions and feelings (qualitative research) or both types of marketing research data
- Whether the market research is to gain insights and reactions (exploratory research), describe what is known (descriptive research) or identify a cause and effect relationship (causal research)
- Whether the market research involves discovering a trend (continuous) or the status of the situation at a single point in time (ad hoc)
When researchers answer these questions, it will help them identify the potential data sources for the research information and the methodologies needed to obtain the insights. The sources and types of market analysis can then be compared to the budget and timelines to decide if they are suitable and achievable for the company.
Secondary and primary research
When considering the market research objectives, researchers might realize that a lot of the insights they need can be obtained by using existing company reports, documents and published statistics. This is secondary data.
The process of gathering secondary data is called secondary research or desk research. Secondary research can be gathered from numerous sources, such as:
- a company’s own records and publications
- government publications
- competitors’ websites and publications
- newspapers, journals and magazine articles
Other information might need to be gathered specifically to answer the research objectives. This is primary data, and the process of gathering it is called primary research. Primary data sources include questionnaires, focus groups, interviews, and surveys that are sent out to select participants.
Secondary research is usually faster, easier and less expensive than primary research. For example, secondary research might be as simple as browsing the Internet using carefully selected search terms, whereas primary market research usually involves designing a data-collection tool such as a survey and investing considerable time in contacting customers and obtaining replies from your target market.
Companies often neglect primary research because it is more expensive and time consuming to gather insights on their products, but most research projects should involve some primary research to get customer feedback from your target market through surveys, interviews, or focus groups.
Most small- and medium-sized companies focus on desk research and then move on to primary research if affordable. Larger companies will invest more in primary research because their risk exposure will be higher. It’s often beneficial to combine both secondary and primary research methods to have a well-rounded understanding of the market dynamics.
Choosing the right kind of market research for your products: secondary vs. primary research
It’s essential to weigh the pros and cons of secondary and primary research in the context of your market research objectives and budget. Secondary market research is usually faster, easier and less expensive than primary market research. But primary market research can give you more specific insights on your brand products and services.
Carefully consider the needs of your brand. Do you need insights on your target market? Do you need user testing done on your products? Are you trying to learn about your competitors? The specific insights you are trying to get from your market research can help you decide which types of tools you should use.
Quantitative and qualitative research like interviews, focus groups, and surveys
Researchers must also identify what type of information the market research should obtain. The types of market research you use will depend on whether the research objectives require information that can be measured, categorized or analyzed numerically, or information that indicates customer opinions and motivations.
Quantitative research gathers information that can be analyzed numerically. It can be obtained through secondary research; for example, by obtaining the census records for a population. It can also be obtained through primary research. Such as by conducting a survey and asking questions that have answers that can be measured. For example, a researcher can ask respondents how satisfied they are with their current toothpaste on a scale of 1 to 5. The results can be represented statistically. This type of market research works well for evaluating product features, customer attitudes, and anything else where you need large amounts of data.
Qualitative data is descriptive information and is often transferred verbally or in writing. Among other things, qualitative research enables companies to discover what actions consumers take and why. Researchers can gather information about consumer preferences and purchasing habits and about why consumers have the preferences that they do. The market research team can also gather insights from testing sample products.
There are three main applications for qualitative research:
- To enable researchers to decide what questions to ask in quantitative research
- To answer a specific question
- To help explain the data received in quantitative research
Qualitative data are usually gathered through primary research methods, including interviews, focus groups and observational analysis. Focus groups are informal, guided discussions in which a small group of potential customers are encouraged to share their views and opinions of a company, brand, product or service. Observational analysis involves gathering information about customer actions and preferences through direct or indirect observation, such as CCTV cameras or online tracking.
Incorporating both quantitative and qualitative research into your analysis
A comprehensive market research often involves integrating both quantitative and qualitative methods to garner a holistic understanding of the market. While quantitative data provides a solid foundation of hard facts, qualitative data adds context and depth to these numbers, helping businesses to understand the underlying motivations of their target audience. Utilizing both market research types can help your company gain valuable insights on products, competitors, service features, brand sentiment, and so much more. Online tools such as digital templates and questionnaire forms have made it easier for companies to conduct both quantitative and qualitative research.
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Exploratory, descriptive and causal research
The design of a market research program is also dictated by how much information is already known, as well as the actions the decision makers will take after obtaining the results of the market research.
Exploratory research involves collecting information informally to gain insights into some aspect of marketing or trade. It is helpful in breaking very broad research problem statements into smaller and more manageable statements. For example, researchers might visit a potential international market to investigate consumer attitudes about the products. Exploratory research projects often provide a basis for further research and usually involve gathering qualitative information.
Descriptive research is more structured than exploratory research. This type of market research involves gathering information about a market to explain the current market condition, current demographics or a current business problem. It’s also useful in establishing what is real, rather than what is assumed.
For example, a company considering exporting to Japan might have heard about new regulations regarding wood packaging material. Descriptive research could identify the regulations and any necessary certifications required.
Causal research involves attempting to determine whether one market variable has an impact on another market variable. The aim is to detect cause and effect relationships. For example, a company attempting to break into a new international market and not having much success might wish to carry out causal research to determine whether a lower price will have a significant impact on product sales.
Continuous or ad hoc research
Researchers must also consider whether business intelligence must be collected over a period of time or on one occasion only.
Ad hoc research involves investigating a single problem or opportunity at one point in time. Often, ad hoc research involves gathering information from a range of sources in one specific time frame. This is called cross-sectional research. Cross-sectional research is useful for research objectives that involve knowing the right time to make a business move or whether it is wise to launch a new product.
Continuous research, also known as longitudinal research, involves long term research to monitor trends in customer attitudes and market attitudes.
This involves obtaining information from the same sources or the same consumer groups on several occasions over a defined time period.
Continuous market research is very useful for investigating causal responses. Such as customer purchasing habits in response to changing interest rates, or for following trials of a new product or service.
Maximizing the benefits of each research type
It’s vital to choose the research type that aligns with the objectives of your market research project and best supports your brand needs.
While exploratory research can uncover new ideas, descriptive research provides a clear picture of the situation, and causal research helps in understanding the relationships between different market factors. By selecting the right research type or combining multiple types, you can derive more actionable insights that can guide your business strategies effectively.
Evaluating the long-term vs. short-term research needs
Depending on the nature of the market challenge or opportunity at hand, it might be more beneficial to engage in continuous research to monitor market trends and consumer behaviors over time. On the other hand, ad hoc research could provide a quick, targeted insight into a current market situation and give your immediate results. Balancing long-term and short-term research needs, and possibly integrating both continuous and ad hoc research efforts, could lead to a more robust market understanding and better decision-making for your brands.
The importance of accurate and up-to-date market research
Accurate market research is the cornerstone of informed decision-making within any business. Market research acts as the compass that guides businesses toward a better understanding of their market environment, customer preferences, and the competitive landscape. Here are several reasons why accurate market research is paramount for your brand:
Informed Decision-Making: Accurate market research provides reliable data and insights that are crucial for making informed decisions. Whether it’s entering new markets, launching new products, or setting pricing strategies, having accurate information at hand empowers businesses to make decisions with confidence. The more you learn about your customers the better you’ll be able to serve them.
Identifying Market Opportunities: Through precise market research, companies can identify lucrative opportunities within their customer markets. This could be in the form of unmet customer needs, gaps in the market, or emerging trends that businesses can capitalize on to gain a competitive edge. Market research will help you understand what product features to focus on and what new products to launch.
Understanding Customer Behavior: Accurate market research delves into consumer behavior, preferences, and satisfaction levels. Understanding the customer’s journey, their pain points, and what drives their purchasing decisions is crucial for tailoring products, services, and marketing strategies to meet their needs and expectations.
Competitive Analysis: Accurate market research encompasses a thorough analysis of company competitors, their products, and market positioning. Competitive research is invaluable for carving out a unique value proposition and for staying ahead in the competitive landscape.
Risk Mitigation: Market research helps in identifying potential risks and challenges that might lie ahead for your brand. Accurate research can forecast changes in market dynamics, helping businesses to prepare and strategize to mitigate risks.
Performance Evaluation: By conducting market research, businesses can evaluate the performance of their marketing campaigns, advertising, sales strategies, and customer satisfaction levels. Accurate research provides the metrics needed to measure success and areas of improvement for your company.
Resource Allocation: Accurate market research aids in the effective allocation of resources. By understanding market demands and consumer preferences, companies can allocate their resources more efficiently, ensuring a higher return on investment.
Regulatory Compliance: In certain industries, understanding and adhering to regulatory requirements is crucial. Market research can provide insights into the legal and regulatory landscape, ensuring businesses remain compliant while navigating market complexities.
Whether you are conducting doing groups and interviews or mystery shopping and market segmentation, there are countless benefits of different types of market research. In a rapidly evolving market environment, the accuracy of market research is not merely a desirable attribute but an absolute necessity. Market research is an investment that pays dividends in the form of better decision-making, enhanced competitive advantage, and ultimately, business growth and sustainability.
Thanks for sharing. It gives detail overview of Market research.