Topics covered ✅
- Types of market research: primary and secondary
- Market research examples
- What are the main types of market research?
- Successful market research examples
What's one thing that every business plan needs? Market research! The research process helps businesses gather data about customers' needs and preferences. This information is then used to build perfect products for the target audience.
1. Exceeding Competitors
Today's marketing teams have a lot to keep track of. Not only do they have to work on the best ways to reach their target customers and present attractive (and often innovative) offerings, but they also have to compete with other companies that are doing the same thing.
With so much information going around, it can be hard to know where to begin. When it comes to getting started and building an ongoing practice, primary market research, secondary market research, online surveys, and other types of surveys for research are the different types of market research methods that can be used to better understand target customers and competitors.
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2. The Importance of Research in Marketing
Market research is the key to determining what a target market looks like and how it can be reached. Primary, secondary, and exploratory research, as well as different types of surveys, are the most effective methods of marketing research.
Brands around the world are changing the way they do market research because people's behaviors and preferences are constantly evolving. Being well-informed and sourcing information across your organization is essential to aggregate a holistic understanding of solutions being received. For these reasons, brand perception research has become an essential type of market research, as well.
Accomplishing this is easier said than done, but doing ongoing market research is more than worth the time investment because it can help identify gaps before they become costly, avoid mistakes in business, approach strategic business decisions with perspective, and of course, profit!
3. What is Market Research?
Market research is a process that helps companies understand the needs and desires of their customers, determine how to meet those needs in a way that is unique to the company's brand, and then communicate that message to customers.
Doing market research helps businesses gain a better understanding of the overall market, customers, and competitors so that they can develop a marketing strategy. It focuses on gathering data from potential customers through surveys and focus groups. The data is analyzed using statistical methods, such as regression analysis or factor analysis. Ultimately, marketing messages are developed based on this information, helping to influence customer buying habits.
4. Market Research Methods
Market research can be conducted in various ways. The types of market research chosen depend on the business's goals, the type of information they're looking for, and what resources they have available.
Market research methods include (but are not limited to):
- Online surveys (where people answer questions about their buying habits)
- Focus groups (where people discuss their experiences with products)
- Interviews with customers in person or over the phone (where people discuss their experiences with products)
5. Target Markets: You should know who you're marketing to
In general, there are two types of markets: primary markets and secondary markets.
Primary markets consist of direct sales. This market is where securities are created and (initially) issued by a corporation. Once investors buy the securities, they're traded amongst each other through the secondary market.
Primary market transactions include initial public offerings (IPOs), bonus and rights issues, private placements, and preferential allotments.
The secondary market is where investors buy and sell securities from other investors (think of stock exchanges). For example, if you want to buy Apple stock, you can do so by purchasing the stock from someone who already owns it, rather than directly from Apple.
Secondary market transactions include most stock exchanges, such as the New York Stock Exchange, the Bombay Stock Exchange, and the Tokyo Stock Exchange.
6. Types of Market Research
There are four main types of market research:
Primary Market Research
Primary market research refers to surveys conducted by a company itself—or more specifically by a third-party firm hired by the said company—to get feedback directly from consumers on what they want or need right now.
This type of research takes place when someone from a company talks directly with customers or potential customers, to find out what they like about the product or service. It involves gathering data directly from customers through surveys or focus groups.
Focus groups are a type of primary market research that involves talking with a group of people about something specific—like a new food product—to get feedback from them. Primary market research can involve many activities, including:
- Asking survey questions
- Analyzing social media posts
- Conducting focus groups
- Interviewing people individually or in groups
- Sending out free samples of a product or service
Primary market research can help companies determine what products or services are needed in the marketplace, why people buy goods and services from one company over another, and how companies should communicate with potential customers in order to attract them as clients.
In addition, primary market research is used when creating a new product or service. Businesses need to understand the buying habits of their potential customers in order to figure out how to communicate ideas and tell their stories. This type of research will also help determine whether there's a need for their product in the marketplace, which can be crucial if they want their company to thrive and succeed over time.
Online surveys are one of the most common forms of primary market research today because they're easy to set up and inexpensive (usually free). They also allow researchers to understand customer loyalty and what keeps customers interested in the product or service. Surveys can help companies find market research data by studying what people spend their money on and what qualities they look for in a product or service.
Secondary Market Research
Secondary market research involves analyzing data from previous studies or other sources (like government statistics) to determine what consumers want or need at this point in time. When businesses do this, they review the information that has already been gathered by other companies (such as survey results), in order to gain insights into how they approach marketing and what they've discovered about the market.
Secondary market research is typically done after a product or service has been developed and launched into the marketplace. It helps companies learn more about their competitors' marketing efforts so they can tailor their own accordingly—for instance, if they discover that one competitor has been using certain messaging strategies that seem to be working well for them, it may make sense for another company in their field to do something similar (or vice versa).
Methods for conducting secondary market research include surveys online or phone calls; focus groups; interviews with experts in various fields (such as healthcare professionals); questionnaires distributed through magazines or newspapers; focus groups at trade shows; or review websites like Yelp! where people can leave reviews on their experience with the product or service and rate it on a star rating scale.
Exploratory Market Research
Exploratory market research is another method of research used by companies who want more information about their target audience before they develop their marketing efforts or make large purchases (like building new factories). It involves investigating potential target markets before deciding on which ones will be most successful for their business model.
Quantitative Market Research
Quantitative market research is another category of market research that is more statistical in nature. It answers questions by generating numerical data through online and mail surveys.
You can also consider audience research tools for quantitative market research.
7. How Is Quantitative Market Research Different?
It is important to note that quantitative market research is different from qualitative market research.
Quantitative market research is:
- Aimed at answering objectives using numerical data
- Allows your target audience to provide statistical data through their answers to customer satisfaction surveys
Qualitative market research is:
- Aimed at studying the reasons, motivations, and opinions of a customer
- Allows your target audience to answer key branding research questions about their experiences with your product, such as how it made them feel and what they like about it
8. Following the Steps of Market Research
Step 1. Find Your Target Customer
One of the most important things about market research is understanding who the target customer is—is it men? Women? Young adults? Old adults? Once a business has determined who its target customer is, then it can begin developing a marketing strategy that will appeal to that specific audience.
Step 2. Develop a Competitive Advantage
Once they have an idea of who their target customers are and what appeals to them, then it's time for a business to develop a competitive advantage over other brands competing for those same customers' attention. This competitive advantage may be based on price (lower prices mean more sales) or quality (better quality means fewer returns).
Step 3. Communicate with Potential Customers
Next, talk to potential customers. Why? Although it can be intimidating, physically communicating with people will help a business gain insight into customers' home and work environments, and will help them learn about their buying decisions. Based on these factors, they'll gain a better idea of which demographics can sustain their business model. This is the extra mile that will put them above their competition, as most people skip this step.
Step 4. Gather Research
Once the target market has been identified, businesses can do some research to figure out if that market is big enough to support their business. They'll need to figure out how many people meet their criteria (men, women, young adults, old adults, etc.). In many cases, they can do this by conducting product testing market research around how many people buy current existing products or services that serve similar purposes to theirs.
Step 5. Document Your Research Findings
Finally, businesses must document their findings by communicating with others in the business world. If sharing the findings of their market research with their business partners, it's okay to communicate informally. However, if pitching to potential investors, they should create a formal market analysis.
9. Answering Customer Questions
After a business determines its target markets and chooses which type of market research it'd like to use, it'll need to determine what methods will be most effective for collecting the most accurate information. Businesses should also ask questions to determine what information they want to learn from their target customers:
- What are their buying habits?
- What would they like to see changed?
- How can the business create a competitive advantage relative to other companies in their field?
Once these questions have been answered, it's time to create a marketing strategy based on the information gathered, so that it aligns with what customers want and how they'll use it.
10. Marketing Products
When planning a marketing campaign, businesses have to consider all aspects of the customer's lives. That's why market research is so important: it helps them figure out who our customers are and what they need.
Once they know who their customers are and what their needs are, businesses can start developing a marketing strategy that will appeal to them specifically and hopefully turn them into longtime customers!