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Every business inherently incorporates a degree of risk and uncertainty, making it difficult to account for decision-making processes.
An organization’s executive leadership requires solid data backed by quantifiable consumer preferences and market perceptions obtained through market research.
There are different methods for collecting data, but the procedures and processes determine the level of accuracy and relevance followed to identify which market research methodology should be used to answer which market research problem.
Once the organization deploys the ideal market research technique for a pool of customer respondents, it can be easier to identify solutions for marketing problems and executive-level decision-making by analyzing and interpreting the findings to develop organizational strategy and direction.
What Is Market Research?
Market research is the process of collecting information related to current and potential customers and target markets to evaluate the potential and feasibility of launching a new product or service into the market.
Conducting effective market research requires a large scope, and it is important for developing the organization’s business strategy while maintaining competitiveness.
This method involves using quantitative and qualitative techniques to identify target markets and assess their needs, market size, and competition while collecting and documenting relevant information to assist decision-making.
Market research is important for developing short-term and long-term strategies by understanding customer sentiments and improving customer retention so businesses can grow and expand profitably.
Market Research Methods
There is an array of market research methods available at every organization’s disposal so they can find customized solutions to any fundamental questions posed by the business or its associated consumers. Drawing meaningful conclusions about consumer purchase behaviors, anticipated responses for product launches, and other insight-yielding questions require different research approaches, the two major categories being primary and secondary market research.
Primary Market Research
Primary market research involves a combination of both quantitative and qualitative research conducted by the organization. They get in touch with the end consumer to assess the perception of their product offerings and branding. Under this method, the information collected can be categorized into exploratory and specific.
Exploratory research involves going in-depth into consumer responses and features open-ended questions. In contrast, specific research focuses on extracting definite answers by incorporating close-ended questions derived from analyzing exploratory research responses.
Some commonly used primary market research methods are:
Focus groups are a qualitative research method that collects data from a small group of people ranging from 6 to 10 participants who can either be subject matter experts or potential and existing customers.
This method takes into consideration different customer experiences and includes open-ended questions related to a specific topic.
This method is especially beneficial for understanding thinking patterns and customer behaviors while yielding complex information through in-person or online group sessions.
Interviews are a qualitative research method that involves either a one-to-one session or a small group question and answers session, which can be conducted face to face or over the phone.
This method is beneficial for collecting large amounts of information from a small subject sample.
The researcher poses open-ended questions to the interviewee, making the process highly personal, and the results obtained from the respondents is highly dependent on the skills and experience of the interviewer along with the ability to ask relevant follow-up questions.
Ethnographic research is a qualitative method that produces in-depth research through observation and interaction with participants in their real-life environments.
This requires the interviewer to take into consideration environmental cues to understand consumer behavior in specific settings, and this research requires an extensive process that can range from a few days to years before it can yield actionable information.
Market surveys are widely used for conducting market research as they are easy to develop and don't require a lot of time from respondents.
The information gathered can be both qualitative and quantitative, and it can feature both open-ended and closed-ended questions for gauging customer opinions about your research question along with additional information about demographics and financial backgrounds.
Secondary Market Research
Secondary market research is pre-existing information from credible agencies such as the government or other accredited bodies that publish their findings. The scope of this market research is vast, considering the resources and tools available to these large organizations.
Secondary research can be conducted before or after primary research. If this research is conducted before, the insights obtained from the outsourced information can help your organization better frame the research question, while secondary research conducted after the primary research process can provide additional support to your findings.
Some commonly used secondary market research methods are:
Public sources such as libraries, government and non-government agencies that publish their data and research on their respective websites can provide information regarding:
- economic landscapes, and other pertinent areas for market research.
Commercial information sources include online research libraries like LexisNexis, media outlets such as:
- and TV stations,
The specialized research provides first-hand information on political and economic developments along with other relevant sectors for market research.
Educational institutions are important sources of secondary market research as universities and colleges have dedicated research departments with experienced faculty members capable of conducting in-depth research into specific fields.
This information can be beneficial for supplementing your primary research.
Guide for Conducting Market Research
When selecting a research methodology, the process of conducting market research should be properly evaluated so there is complete synergy between the method and market research goals.
The first requirement is to identify the main purpose behind the market research.
Problem definition involves asking the right questions that are based on understanding target consumer concerns and market preferences.
The question should be easy to comprehend, and researchers should evaluate whether the question can yield relevant results.
Market research requires incorporating sampling techniques to have a representative sample to ensure the results can be generalized to a larger population.
There are two methods for achieving a representative sample.
This involves random selection, so each member of the target population has the same probability of being included in the sample group.
The sample group is extracted from the entire population; therefore, it requires a larger and exhaustive population pool compared to other methods.
This method does not involve a random selection process as researchers typically establish criteria which does not provide each member with an equal chance of participating in the study.
This method is used for exploratory studies or in cases when it is impossible to conduct random probability sampling due to cost or time considerations.
Data collection is conducted through the relevant qualitative and quantitative methodologies related to your research requirements.
Once the data is collected, an in-depth analysis must be conducted to extract the maximum insights from the information shared by respondents.
The information should be evaluated by using data analysis techniques such as statistical analysis so meaningful interpretations can be gauged from raw data.
The findings from the analysis state should be presented in the form of a research report that incorporates a simplified method of explaining any information making it easy to understand at different organization levels.
The insights from the report can then be used by executives to implement a decision-making strategy for the organization.
Benefits of Market Research
Market research can provide valuable insights while assisting with:
- Allowing companies to improve their decision-making processes. The information from market research can create new opportunities and assess the growth potential of any new product or services introductions into the market. Therefore, organizations can be more certain about their profit-generating potential and assign relevant budgets to marketing, sales, and advertising to ensure they can maximize the return from product launches and other strategies.
- Assessing the market size. The information obtained from different market research methods can help researchers evaluate the market size by identifying the target group interested in buying products and services.
- Obtaining accurate information. Market research is conducted with actual or potential customers. It establishes a direct line of information from the target audience, which can help assess customer preferences regarding the competitive landscape the business is operating in.
- Assessing customer perceptions and communication methods. Organizations need to adapt to change, and do you evaluate their position every once in a while to cater to changing customer preferences, including incomes and purchasing behavior. Market research can also help them understand communication touchpoints for our customers, so the organization can target their marketing efforts on different platforms.
Jenn Whaley is Senior VP of Solutions & Strategy at OvationMR, where she heads up both sales and marketing. She posts regularly on The Standard Ovation.
OvationMR is a global provider of first-party data for those seeking solutions that require information for informed business decisions.
OvationMR is a leader in delivering insights and reliable results across a variety of industry sectors around the globe consistently for market research professionals and management consultants.
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