How to do Market Research
What is market research?
Market research is the process of gathering information about consumer needs and preferences.
If you are looking for potential customers you would need data collected through primary and secondary market research so that you understand the market size and pain points.
There are many agencies offering the services of market research however you need to research and verify the process of gathering information so that you understand what is possible, how much it will cost and the process involved.
Steps to follow when doing Market Research
Define your buyer personas and target market
The very first thing you should ask yourself is ‘who are my customers?’ If you can’t answer this question, you can’t even begin to interpret their behaviors. This is where buyer personas come into play. Defining your own starts with creating a fictional representation of your ideal customers.
Answer questions such as, ‘how old are they? ‘ ‘where are they located?’ ‘What kinds of jobs and hobbies do they have?’
You get the point, the more specific, the better the results will be. Likewise, it’s okay to have multiple buyer personas too - just make sure to specifically define each of them.
Through your buyer personas, you’ll be able to discover your target audience. Your target audience is the real market you’re reaching. There is a specific audience size and available data you can find through both primary and secondary research on these people.
As we’ll discuss more below, you can directly reach out to these people to engage with them and understand their buying preferences.
Engage with your audience
Now that you’ve defined your target market, it’s time to pull a sample and pick their brain. Through primary research methods like focus groups, online surveys, user interviews and personal interviews, you’ll be able to get common opinions about your products and services. If you’re still in the process of starting your business, reach out to people that fit the common buyer personas you want to have as future customers.
In order to find your sample, there are many different paths you can take. Ideally you’ll want to choose customers who purchased from you recently, as they’ll have a good memory of their experience.
Also, people that almost purchased from you but didn’t in the end, such as abandoned cart shoppers. Other methods include turning to your social media accounts and asking coworkers and their friends. In all, you want to get a large variety of people. The more, the merrier.
While conducting your research, have your goals in mind. Getting to that goal involves having planned questions or conversation topics. For example, you can ask your participants ‘how much are you willing to pay for our products/services?’ ‘do you prefer to purchase online or in person?’ and ‘how will you respond to the new product or service we are launching?’
At the end of your survey, make sure to reward your participants for giving you their valuable time. Offer compensation in the form of money, gifts, food, or something else.
Determine the best methods to meet their needs
This step is pretty straightforward. Now that you have an understanding of your audience and have asked their opinions on your offerings, turn inward to yourself or your marketing geniuses at your company to determine the best methods to meet their needs.
The practice of shaping your marketing efforts to fit your audience's needs is powerful for drawing customers toward your brand, and it lies at the core of an important practice called inbound marketing.
An important thing to consider is your product branding, as the look and personality surrounding your brand will certainly determine your success. Likewise, promotional efforts including social media marketing and email campaigns have big impacts on your selling rate.
Although there are tons of advertisement spaces online and offline, you’ll learn based off of your audience, as well as trial and error, which ones work best for your business.
Research your primary competitors
This begins by classifying your business into one or multiple identifiable industries. Having your industry(s) in mind will allow you to determine who your competitors are. This is because you can download marketing reports for specific industries that list out this key information.
Besides market reports, you can also turn to search engines like Google and social media channels like LinkedIn to search for industries and related companies. Note that the more specific you are about your niche market in the industry (step number one above), the more fluid it will be for you to spot your competition.
Once you have your competitors in mind, the next step is to perform a SWOT analysis on them. A SWOT analysis is where you’ll write out the strengths, weaknesses, opportunities, and threats of each of these businesses. Make sure to address the prices of their offerings, the display of their products and services, and other specific information about their marketing efforts.
After reviewing your customers in depth, you will be able to address how your business can compete with other companies in the field, what advantages you have in the industry, and what trends you should hop onboard with.
Draw conclusions from your findings
So you have tons of data at this point regarding your target market, their buying and decision-making processes, how you plan to reach them, and who your top competitors in your relevant industry are. The last thing you need to do is pull all of these findings together into a formal report.
Most of the time, this marketing report is part of a company’s business plan. That’s the case if you’re just starting out though. If you’ve been established for awhile or are using this information for one particular experiment, you can create an individual marketing research report.
For both cases, you should lay out your background information, the purpose behind creating the report, and a summary of your findings for the four previous parts. Finally, end your report with strategic action items to meet your goals.
Frequently asked questions
What types of market research are available
- Interviews - Interviews are a common type of primary market research that can be either in-depth or as simple as asking a question.
- Focus groups - It is a very famous method used by businesses to observe views of experts from different fields; a focus group involves 6 to 10 people.
- Surveys - With surveys, companies reach out to participants to answer questions.
- Competitive analysis - Competitive analysis is a secondary market research method where a company collects and analyzes information about competitors.
- Market segmentation - When conducting market segmentation studies we're generally asking survey questions aimed at capturing needs, values, attitudes, behaviors and demographics.
- Consumer insights - Consumer insights research does more than tell you about who your customers are and what they do.
- Observation - Observations. In market research, observation refers to the act of studying how consumers actually behave when they shop.
- Brand research - Brand research is a type of market research that focuses on understanding and measuring a brand's performance and strength in the marketplace.
- Customer satisfaction research - Customer satisfaction research is a type of market research that seeks to assess customers' opinions and sentiments toward a particular product or service.
- Desktop research - Desktop research – This can be public domain data from think tanks ... It can also include paid for research from research journals, education institutions.
- Quantitative research - Qualitative market research is also like quantitative type and methods like surveys, focus groups, observation, interviews and poles.
- Competitor research - In-depth competitor analysis allows you to quickly find growth opportunities, by taking a detailed look at what is and isn't working for your rivals.
- Pricing research - Surveys that ask customers to choose between different products with unique features and price point.
- Primary research - Primary research means that the researcher is in direct contact with the targeted customer.
- Product research - Product research goes hand-in-hand with other strands of market research, helping you make informed decisions about what consumers want, and what you can provide.
- Secondary research - Primary market research means you collect the data your business needs, whereas the types of market research known as secondary market is comprised of outside sources like the chamber of commerce, government, media, agencies, etc.
- Advertising testing - Like product testing, tests of your advertising campaigns can save you valuable time and resources.
- Audience research - Audience research involves learning about the demographic, psychographic and behavioural makeup of your audience.
- Telephone surveys - Telephone surveys involve asking respondents a series of questions over the phone. It's a popular survey method as it's convenient.
- Product development - You can conduct market research into how a select group of consumers use and perceive your product – from how they use it through research tests of how well a product is perceived by its intended audience. Sometimes this may incorporate usability testing.
- Brand awareness - Brand Awareness and Reach. By conducting regular, well-designed brand awareness surveys you can keep tabs on how effective your marketing campaigns really are.
- Campaign effectiveness - Campaign effectiveness research is a type of market research that examines the performance of marketing messages and campaigns.
- Data analysis - Analyzing sales data can be a helpful secondary market research method used alongside other methods, such as competitive analysis, to show the relationships.
- Mail surveys - Mail surveys provide exceptional geographical coverage as they can be printed off and sent via the post.
- Qualitative Research - nvolves collecting and analyzing non-numerical data (e.g., text, video, or audio) to understand concepts, opinions, or experiences.
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