In a world where every market is flooded with competition, getting into the market is a fairly easy job, but remaining relevant is a tough nut to crack.
This is because customer preference and experience of your product determine how your market will go.
And having a deep understanding about the market makes your work easier.
What is Market Research?
Market research also known as “marketing research” is the systematic process by which companies and service providers gather data and information about their customers, the product or service and target market to make better decisions about operations, strategies and customer base.
Market research is usually done to determine the viability of a product or service before its production and also its acceptance rate after production so as to make improvements..
For example, if you have an electronics store, you will need constant feedback on which products and brands to import based on your buyers preference thereby optimizing revenue.
Importance of Market Research
Having a clear and concise understanding of how the market goes a long way in minimizing failure. Here are some of the importance market researches offer companies, business owners and service providers:
Ability to predict the market
Having information about how past and current products and services did in the market helps in making decisions about bringing in a new product or service.
Gives room for innovation
market research helps in determining how to optimize the conversion rates of products and services by knowing where to make all the necessary improvements.
Advantage over competition
Market research helps you understand your competitions and how you can perform better than them.
Improve user experience
Market research gives you feedback about how your customers feel about your product/service so you can make it as amazing as possible
Types of Market Research
Market research can be conducted in different ways depending on what information you are trying to gather, the kind of business you own and your available resources.
There are generally two types of market research and these are discussed in detail.
1. Primary Research
Primary market research is research you carry out by personally or with the help of a firm or someone that specializes in market research.
This is research tailored specifically to your needs and requirements so you can control it.
Primary research has two forms:
Qualitative Research
This is a collection of non-numerical data usually obtained from open-ending questions. This research can be done in several ways such as surveys, one-on-one interviews and focus groups.
Quantitative Research
These are numerical or statistical data which can be counted, measured or quantified in some way. This kind of data can be gotten through questionnaires, polls and website data.
2. Secondary Research
Secondary market research is research that has already been done by a different body either online or on printed documents which you pull and use based on your needs.
The following are forms by which secondary research comes in:
Public Sources
This includes data from libraries, either physical or virtual, government registries such as the national statistics board of the country and other public infrastructures and educational institutions.
Commercial sources
These are sources that attach prices to the information they give. This includes information from journals, academic papers, newspapers, magazines, survey websites etc.
The Market Research Process
As stated earlier, market research is a systematic approach, hence there is a right way of doing it. Here is a general framework for carrying out market research for your business.
1. Requirement specification
This is the first step you should take when conducting research.
This stage involves defining the problem you are trying to solve and the specific information you need to get.
It is always a good practice to clearly write down these points and ensure you tick as they are being solved or as the required data or information is obtained.
This is also where you set your budget and all the expenses you will incur during your research.
2. Define your research hypothesis
A research hypothesis is an assumption you have about a particular event or in this case product/service which you would use your finding to prove right or wrong.
For example, if you made beauty products for females and want to expand to males, you might have a hypothesis that men might not like it, so you set out to get data that proves this point.
3. Plan the research
In this phase, you decide the research method that meets your requirements and budget, this is where you define the criteria for the method being used, prepare the questions which are tailored to your requirements and time constraints.
4. Conduct the research
This is the data collection phase where you execute your research plans by going into the field and applying the research methods chosen.
Oftentimes the plan has to be iterated if the expected outcome is not achieved so as to meet the research requirements.
5. Analyze the data
The data collected from research is rarely meaningful at first glance, it is usually raw data that is scattered and makes no sense.
The next step is to analyze the data so it can be used to tell a story.
Data analysis involves cleaning the data to remove the irrelevant parts and polishing the relevant part to make it understandable.
6. Report the result and make conclusions
The last step is to document the findings of the research and make conclusions off of it.
This documentation or report is used to make decisions for the business, it is also saved for future reference.
The results may also indicate the need for different research which can be seen as an advantage because it is helping optimize the business.
Common Marketing Research Techniques
These are the methods used to conduct research, the choice of method depends on the research needs, budget and target audience. The most popular ones are discussed here.
➜ Customer surveys
This could be in person, over the phone or online, it involves asking questions which are tailored to understanding how the customer interacts and feel about products and services
➜ Observation
This involves watching the activities or your customers to see how they interact with your product, it might involve cold reading the customers reaction to a product or getting website reports.
➜ Focus groups
This involves having a controlled selection of customers who are asked survey questions to get their opinion on the products and services being rendered.
➜ Interviews
This involves having a one-on-one discussion with your customers on their specific needs and getting their honest opinion on products and services you offer and how they actually feel about them.
➜ Questionnaires
These are a set of questions which serve as feedback usually short and concise which customers fill regarding your product/service.
➜ Polls
This is statistical data which is gotten from votes regarding specific issues regarding a product or service.
➜ Review scores
These are point grades assigned to products/services which buyers’ grade usually from 1-5 and can be used to gauge performance and efficiency.
Challenges in Marketing Research
With all the perks research brings to the table, it has its limitations and a lot of the time you as the researcher are powerless against these challenges, here we discuss the most common ones.
➜ Sampling bias
This is one of the most common problems that drastically reduce the accuracy of research results, sampling bias occurs where the population sampled for the research are not properly distributed and this would lead to getting similar opinions.
➜ Data quality
While obtaining relevant and accurate data is essential, it is also very difficult because you cannot guarantee the seriousness of your participants.
The best you can do is to provide guidelines for participation and urge them to answer as honestly as they can and hope they do so.
➜ Difficulty accessing certain groups of people
This is particularly applicable to large businesses that span large geographical locations as it is difficult to sample from them.
Research methods such as one-on-one interviews might be impossible in this scenario so one might have to settle for other methods which might be ineffective.
Market Research Tools And Software
Technology has brought a lot of innovations to simplify the market research process using third party applications and tools.
These tools can either be free or paid depending on the services they render. Here are a few of the popular ones widely used.
This is a free market research tool made by Google and it presents data in the form of trend lines from all over the internet. The process is fairly easy, you enter a term and it gives you an accurate representation of how trendy that term is and a score out of 100.
➜ Qualaroo
This is one of the best market research tools for conducting surveys. It helps you develop user personas through advanced targeting which helps you better understand the users.
Qualaroo is not free so this might be a disadvantage.
This is also a paid market survey tool that helps you create questions and target the right audience based on the criteria you specify.
Then the results are collected and presented to you in a form of report.
➜ Statista
is another paid tool that specializes in data visualization and market research by using data from reputable reports on the internet and simplifying them so they are easily read, understood and acted upon.
The Future of Market Research
Looking at how far the field of market research has come and with how technology is growing exponentially, it is safe to say the ease of conducting market research is just getting started.
Perhaps in the future more seamless means of market research will be invented but the possibilities are limitless.