Market research is the process in the fundamental component of successful business strategies. It encompasses systematically collecting, analyzing, and interpreting data related to a specific market or industry. This process allows companies to comprehend customer preferences, assess market size, and evaluate competition, empowering them to make informed decisions that drive growth and profitability. In this comprehensive guide, we will explore the intricacies of market research, covering essential topics from asking the right research questions to implementing findings and monitoring trends.
1. “The Consumer”: This includes current customers, past customers, non-customers, and influencers.
2. “The Company”: Insights encompass product or service design, promotion, pricing, placement, service, and sales.
3. “The Competitors”: Understanding how competitors' market offerings interact within the market environment.
4. “The Industry Overall”: Assessing whether the industry is growing or moving in a specific direction.
To emphasize the significance of market research, let's revisit the well-known example of the New Coke failure in 1985. Coca-Cola's decision to introduce a new formula was based on extensive surveys of over 200,000 consumers testing the new product's taste. The initial survey results were overwhelmingly positive, leading to the launch of New Coke. However, it was met with widespread disapproval from the general audience. In their survey, Coca-Cola should have assessed people's emotional connection with the original product. This case study serves as a stark reminder of market research's crucial role in understanding the deeper nuances of consumer behavior.
Before diving into market research, it's crucial to establish clear objectives. What are your goals? Do you aim to understand customer preferences, assess market size, or evaluate competition? This article will guide you in articulating clear and actionable research goals.
Segmenting your market is essential for understanding your market. It helps tailor marketing strategies and product features to different customer groups, enhancing brand awareness and market share. Market segmentation aims to identify and target distinct customer segments that share similar needs, preferences, behaviors, or characteristics. By doing so, businesses can tailor their marketing strategies, product offerings, and messaging to meet each segment's unique demands better, ultimately improving their overall marketing effectiveness and customer satisfaction.
Effectively conducting market research hinges on understanding your target audience. As discussed in previous articles, comprehending your shoppers and customers is a crucial aspect known as shopper research. The 6W method is a valuable tool in this endeavor. It explores the essential aspects of consumer behavior and decision-making, adapting to factors such as launching a new product or service. It helps us better target market and customers:
- "Who" delves into demographics and psychographics, helping understand the target audience.
- "What" explores product preferences and choices.
- "Where" investigates shopping channels and locations frequented by customers.
- "When" uncovers the timing and frequency of purchases.
- "Why" provides insights into motivations and influencing factors.
- "How" delves into the process and journey of the shopping experience.
This method provides a holistic framework for conducting shopper research and understanding consumer behavior comprehensively.
Within market research, two critical methods are qualitative and quantitative research. Qualitative research explores consumer opinions and behaviors in depth through open-ended questions. Quantitative research relies on numerical data and statistical analysis to conclude.
Effective market research may require in-depth analysis, especially if you are new to market research or the market is evolving rapidly. This research focuses less on numbers and more on comprehending market dynamics and consumer behavior.
A well-structured market research strategy is essential to guide your research and ensure you obtain the information necessary for your business.
The next step is determining how to gather the necessary data. Market research involves two main types: primary research and secondary research. Primary research entails collecting data directly from research subjects through surveys, interviews, and observation-based research. Secondary research involves analyzing existing data from sources like market reports, market statistics, and third-party market research companies. But you must ensure relevance to fast-changing trends, such as social media.
A great example of a tool to use in primary research: A great example of a primary research tool is a new function on the RealEye platform where it is possible to track live on the website using eye-tracking. When creating a website or a new marketing campaign, you can check where readers' attention is, whether the project meets intended expectations, and whether it is met with an appropriate positive response.
An additional type of market research is Lean Market. This is an entirely different approach to conducting research than primary and secondary research. The lean market research examines the results of the early test "explorations," learns from them, and evolves from them without waiting for the end of the process to express an assessment (which is therefore always open to updates and corrections). This is a faster and more dynamic way to conduct the study.
The choice of research path may depend on the needs and resources of your company.
Market research offers various methods depending on your specific research objectives.
The main types of market research are performed using the following tools:
- “Surveys”: Create structured questionnaires to collect quantitative data. Note that the way questions are phrased can influence responses.
- “Competitive Analysis”: Study your competitors' strategies to gain valuable insights into strengths and weaknesses.
- “Online Tools”: Utilize online tools and analytics for data collection and analysis, including social media demographics.
These are just some of the examples.
Once you've determined your data collection methods, the next step is designing research instruments aligned with your objectives. Develop clear, unbiased, and relevant survey questions, interview guides, and observation protocols.
After preparing your research instruments, it's time to implement them. Learn how to efficiently implement your chosen research method through surveys, interviews, or other means. Consider the advantages of online survey tools or interview software for a streamlined process.
Collecting data is just the beginning; the value lies in effectively analyzing and interpreting it. This chapter explores how to organize and analyze your collected data, covering statistical analysis for quantitative data and thematic analysis for qualitative data.
With insights from your market research results, it's time to make informed decisions. At this moment, market research allows you and your company to implement changes or strategies based on your research findings. Remember, market research is an ongoing process; monitoring market trends, customer preferences, and competition is vital for staying relevant and adapting strategies accordingly.
Market research is a dynamic discipline crucial for businesses of all sizes and industries. Whether avoiding costly mistakes like the New Coke launch or uncovering invaluable insights about your target audience, market research is indispensable in informed decision-making. By following the steps outlined in this comprehensive guide, you can harness the power of market research to drive growth, innovation, and long-term success in the ever-evolving market landscape.
Bibliography:
Qualtrics. (n.d.). Market Research Guide. Retrieved from https://www.qualtrics.com/experience-management/research/market-research-guide/
RealEye. (n.d.). Online Webcam Eye Tracking. Retrieved from https://www.realeye.io/features/online-webcam-eyetracking
The Coca-Cola Company. (n.d.). New Coke: The Most Memorable Marketing Blunder Ever. Retrieved from https://www.coca-colacompany.com/about-us/history/new-coke-the-most-memorable-marketing-blunder-ever
Doxee. (n.d.). How to Conduct a Market Research in 7 Steps. Retrieved from https://www.doxee.com/blog/digital-marketing/how-to-conduct-a-market-research-in-7-steps/
RealEye Blog. (September 4, 2023). Shopper Research 101: Understanding Consumer Behavior and Insights. Retrieved from https://www.realeye.io/blog/post/shopper-research-101-understanding-consumer-behavior-and-insights
