There have always been timeless human truths. What people like, what they dislike, what they value, what they need and so on. But how we target audiences has grown increasingly sophisticated (and targeted), and with it, so has the need to understand these audiences in greater detail so that brands and institutions can better serve them.
Today’s business leaders face an endless stream of decisions around target markets, pricing, promotion, distribution channels, and product features and benefits. Without the proper knowledge, it can be an impossible feat leading a new product line, service, and more. For each unique decision that must account for a variety of factors, there are market research studies and methodologies strategically designed to capture meaningful data to inform these decisions.
What is market research?
Market research is the action or activity of gathering information about market needs and preferences. This affects every aspect of the business – including brand, product, customer service, marketing and sales. By understanding how your audience feels and behaves, you can then take steps to meet those needs and mitigate the risk of an experience gap – which is what your audience expects you deliver versus what you actually deliver.
Market research helps marketers look like rock stars by helping them avoid mistakes, stay on message, and predict customer needs. It’s marketing’s job to leverage research to reach the best possible solution based on the research available. Then, they must implement the solution, modify the solution, and successfully deliver that solution to the market.
Market research often focuses on understanding:
- The customer (purchasers, consumers, influencers)
- The company (product design, promotion, pricing, placement, service, sales)
- The competitors (and how their market offerings interact in the market environment)
Traditionally there have been people very good at undertaking this research, and a reliance from businesses on their ability to do it. And this will always be the case in some capacity, as brands are guided by their internal capacity, expertise and budgets. However, this model meant that brands struggled to keep up with the pace of change and customers would suffer because their needs were not being wholly met with point-in-time market research.
- Who are my consumers, and how should I segment and prioritize them?
- What are they looking for within my category?
- How much are they buying, and what are their purchase triggers, barriers, and buying habits?
- Will my marketing and communications efforts resonate?
- Is my brand healthy?
- What product features matter most?
- Is my product ready for launch?
- Are my pricing and packaging plans optimized?
These were all questions that brands wanted answered, but many found the process of data collection daunting, time-consuming and expensive. The hardest battle was often knowing where to begin and short-term demands often overruled a long investment.
Market research is better than ever
Today however, the industry is making huge strides, driven by quickening product cycles, tighter competition and business imperatives around more data-driven decision making. With the emergence of simple, easy to use tools, market research is now seen as essential, with fewer excuses not to use data to inform your decisions. With greater accessibility to such software, everyone can be an expert regardless of level or experience.
How is this possible?
The art of research hasn’t gone away, it is still a complex job and the volume of data that needs to be analyzed is huge. However with the right tools and partners such as Qualtrics Research Services, sophisticated research can look very simple – allowing you to focus on taking action on what matters.
If you’re not smart on market research, now is the time to start.
Why is market research important?
The emergence of tools and partners, gives brands more control over the studies run and how the data is used. This also increases the speed in which they operate, with minimal lead time allowing brands to be responsive to business conditions and take an agile approach. Partners have an important role here, particularly giving access to additional expertise, helping you find respondents, fielding surveys and reporting on results.
Best Practices: Discover how to gain ROI on your market research.
Without research, business decisions are based at best on past consumer behavior and at worst on gut feel. The aim of market research is to remove subjective opinions when making business decisions. You may be thinking back to a time when the phrase “I like it or I don’t like it” was used to approve a new campaign idea or feature. Except you are not the consumer. As a brand you are there to serve the audience. You are far more likely to be successful if you maintain that difference, and market research will help you to do that by ensuring the decisions you make are insight-driven.
Take product development for example – just because a feature was a hit in your last product, how can you be sure it will be in the next one? And how are you supposed to take the product to the next level, if you’re not asking the people that use the product? A lack of data and context can create an echo chamber, and this is where mistakes happen and opportunities are missed.
Carrying out market research allows you to use data to answer those questions. By identifying and gathering feedback from your target customers, you can understand how they feel about your products and services, your brand, and your communication before you go to market.
And you can react accordingly, helping you to continuously improve things – giving you a higher chance of success in the short term, and long.
Outcomes of good market research
Market researchers often conduct survey research that uses sampling and statistics. Different types of surveys focus on a specific area of research and involve the development of conceptual models that predict or explain a specific type of behavior.
Good research delivers 4 key outcomes:
- Clarity. Simple explanations of relationships and interactions
- Objectivity. Telling the truth without bias
- Communication. Helping all team members understand the problem and its solution
- Improvement. Provoking change through insights
How do you measure success?
Success is defined by how you meet your business goals. The insights gathered from market research are there to help you meet these goals. Every department will have their own objectives that work towards the company strategy so have a look at how market research can help you meet your goals, but towards the bigger picture too. This data is beneficial to the whole business, so collaborate across teams and share the insights that you gather.
Regardless of the function you work within, understanding the consumer is the goal of any market research. To do this, we have to understand what their needs are in order to effectively meet them. If we do that, we are more likely to drive customer satisfaction, and in turn, increase customer retention. But how do we do that? Read our Introduction to Customer Needs Analysis Surveys here.
When to use Market Research
You can use market research for almost anything. If you want to find something out from your target audience, it’s likely market research is the answer.
Here are a few of the most common uses:
The secret to great product development is research and testing.
Conducting market research into how a select group of consumers use and perceive your product – from how they use it through to what they like and dislike about it – is essential to lasting success. Evaluating your strengths and weaknesses early on allows you to focus resources on ideas with the most potential.
Chobani’s yogurt pouches are a product optimized through great market research. Using product concept testing, Chobani identified packaging could negatively impact consumer purchase decisions. Inspired by this insight, the brand made a subtle change ensuring the item satisfied the needs of consumers. This ability to constantly refine its products for customer needs and preferences has helped Chobani become Australia’s #1 yogurt brand and increase market share.
But a great product is nothing if no-one will buy it.
Market research provides businesses with insights to guide pricing decisions too. One of the most powerful tools available to market researchers is conjoint analysis, which uses choice modeling to help brands identify the perfect package and price for customers.
Platforms like Qualtrics enable businesses to capture important market research data, like conjoint analysis, and undertake instant analysis and action to ensure success.
Brand tracking studies
Your brand is one of your most important assets. But unlike other metrics like product sales, it’s not a tangible measure you can simply pull from your system. Regular market research that tracks consumer perceptions of your brand allows you to monitor and optimize your brand strategy in real time, then respond to consumer feedback to help maintain or build your brand with your target audience.
The best marketing teams view awareness and performance data from a single marketing research dashboard. Being able to view your brand’s vital signs from one place increases the speed at which you can unlock insights – a key competitive advantage in today’s markets.
Buyer segmentation and profiling
Buyer personas help you develop products and communications that are right for your different audiences. By understanding your buyers and potential customers, including their motivations, needs, and pain points, you can optimize everything from your marketing communications to your products to make sure the right people get the right message, at the right time, and via the right channel.
Advertising and communications testing
Advertising campaigns can be expensive, and without pre-testing, they carry risk of falling flat with your target audience. By testing your campaigns, whether it’s the message or the creative, you can understand how consumers respond to your communications before you deploy them so you can make changes in response to consumer feedback before you go live.
Finder, which is one of the world’s fastest-growing online comparison websites, is an example of a brand using market research to inject some analytical rigor into the business. Fueled by great market research, the business lifted brand awareness by 23 percent, boosted NPS by 8 points, and scored record profits – all within 10 weeks.
Another key part of developing the right product and communications is understanding your competitors and how consumers perceive them. You may have looked at their websites and tried out their products, but unless you know how consumers perceive them, you won’t have an accurate view of where you stack up in comparison. Understanding their position in the market allows you to identify the strengths you can exploit, as well as any weaknesses you can address to help you compete better.
Types of market research
Although there are many kinds of market research, all methods can be sorted into one of two categories: primary and secondary. There is a distinct difference in what these are, and how they are used.
In the past, this has been a daunting concept for brands because they don’t quite know where to begin, or how to handle vast volumes of data. Now, the emergence of technology has meant that brands have access to simple, easy to use tools to help with exactly that problem. As a result, brands are more confident about their own projects and data with the added benefit of seeing the insights that come out of this in real-time.
This type of research has another advantage in that it is fresh, unused data, giving you a perspective that is current or perhaps extra confidence when confirming hypotheses you already had. It can also be very targeted to your exact needs. Primary information can be extremely valuable.
Secondary research is the use of data that has already been collected, analyzed and published (and therefore you do not own this data). It can also be used to support the use of primary research.
This type of research can be beneficial to small businesses because it is sometimes easier to obtain, often through research companies (although the rise of primary research tools are challenging this) and a cheaper alternative for businesses with lower budgets.
Both primary and secondary research has its advantages, but they are best used when paired together, giving you the confidence to act knowing that the hypothesis you have is robust.
Different types of primary research
If you’ve decided to conduct your own primary research, there are many different data collection methods that you may consider. For example:
- Focus groups
Think carefully about what you’re trying to accomplish before picking the data collection method(s) you’re going to use. Each one has its pros and cons. Asking someone a simple, multiple-choice survey question will generate different data than an in-depth interview. Determine if your primary research is exploratory or specific, and if you’ll need qualitative research, quantitative research, or both.
Exploratory vs specific
If you simply don’t know what you don’t know, exploratory research is likely the right approach. It can give you broad insights about your customers, product, brand, etc. If you want to directly answer a defined question, then you’re conducing specific research.
- Exploratory. This research is general and open-ended, and typically involves lengthy interviews with an individual or small group.
- Specific. This research is more precise, and is used to solve a problem identified in exploratory research. It involves more structured, formal interviews to dive down deeper into a certain topic or issue.
Exploratory primary research is generally conducted by collecting qualitative data. Specific research usually finds its insights through quantitative data.
Qualitative vs quantitative
Qualitative research is the collection of data that is non-numerical in nature. It summarizes and infers, rather than pin-points an exact truth. And so because of that, it is explanatory and can lead to the generation of a hypothesis.
Research methods that would gather qualitative data include:
- Interviews (face to face / telephone)
- Focus groups
- Open-ended survey questions
Researchers use these method types because it can add more depth to the data. So for example, rather than the answer being “no” to a certain question, you can start to understand, anecdotally, why that response is a no.
Quantitative research is the collection of data that is numerical in nature, and is much more black and white in comparison to qualitative data.
Quantitative researchers often start with a hypothesis and then collect data which can be used to determine whether empirical evidence to support that hypothesis exists.
Quantitative research methods include:
How to conduct primary research
What research methods are included in this?
- Focus groups
Step 1: Identify your research topic
How brands control certain research topics may vary depending on the size and team structure across the organization. For example, smaller marketing teams may oversee everything, whereas larger organizations may split topics up into smaller teams. These research areas could be anything from:
- Product features
- Product launch
- Understanding a new target audience (or updating an existing audience)
- Brand identity
- Marketing campaign concepts
- Customer experience
Step 2: Draft a research hypothesis to be answered through your research.
What do you want to find out from the data? How will the responses you get help you understand your consumers better and meet your business goals? Do you want information from varying demographics?
You may want to understand what motivates your audience, how they feel about a new feature or even how much they’re likely to spend on a particular product.
Step 3: Determine which research methods are most effective
If you’re just starting out, you may want to take a broad approach using surveys, interviews and focus groups to get a mix of qualitative and quantitative data. There will be other factors involved in deciding this, such as budget and how quickly you need to turn around the study.
Step 4: Design a plan for carrying out your study
You’ll need to establish answers to the following questions:
- What is the timeframe?
- What is your required sample size?
- Who is your target audience for this research? These will be your consumers.
This is often where people can get stuck, having never undertaken primary research before as it can be difficult to know where to start. Which is not surprising, as traditionally it felt like a daunting task.
Products such as Qualtrics CoreXM make collecting, analyzing and acting on that data as easy as possible, so you never have that blank page fear again.
Step 5: Determine how you will collect and analyze your data.
Primary research can generate a huge amount of data, and when the goal is to uncover actionable insight, it can be difficult to know where to begin or what to pay attention to.
The rise in brands taking their market research and data analysis in-house has coincided with the rise of technology simplifying the process. These tools pull through large volumes of data and outline significant information that will help you make the most important decisions.
Step 6: Conduct your research!
This is how you can run your research on Qualtrics CoreXM
Pre-launch – Here you want to ensure that the survey/ other research methods conform to the project specifications (what you want to achieve/research)
Soft launch – Collect a small fraction of the total data before you fully launch. This means you can check that everything is working as it should and you can correct any data quality issues.
Full launch – You’ve done the hard work to get to this point. If you’re using a tool, you can sit back and relax, or if you get curious you can check on the data in your account.
Review – review your data for any issues or low-quality responses. You may need to remove this in order not to impact the analysis of the data.
A helping hand
If you are missing the skills, capacity or inclination to manage your research internally, Qualtrics Research Services can help. From design, to writing the survey based on your needs, to help with survey programming, to handling the reporting, research services acts as an extension of the team and can help wherever necessary.
Step 7: Close the Loop
The work isn’t finished here. Survey, analyze and now act. What is the data saying? What insight or trends can you see that will impact your behavior or decision making?
Free Ebook: Discover the newest trends in market research.
Now, how are you going to act on this?
Share the insights out between your team, and assign actions to ensure you are closing the loop – and using the data to impact your business outcomes.
It may be that secondary research is needed to further support your primary research.
How to source/apply secondary research
Secondary research can be taken from a variety of places. Some data is completely free to access – other secondary information could end up costing hundreds of thousands of dollars to get your hands on. There are three broad categories of secondary research sources:
- Public sources – these sources are accessible to anyone who asks for them. Public sources of secondary research are often provided by the government in the form of census data, library catalogs, and more. Other organizations may also put out free data from time to time with the goal of advancing a cause, or catching people’s attention.
- Internal sources – sometimes the most valuable sources of data already exist somewhere within your organization. Internal sources can be preferable for secondary research on account of their price (free) and unique findings. Since internal sources are not accessible by competitors, using them can provide a distinct competitive advantage.
- Commercial sources – if you have money for it, the easiest way to acquire secondary market research is to simply buy it. Many organizations exist for the sole purpose of doing market research and can provide reliable, in-depth, industry-specific reports.
No matter where you research is coming from, it is important to ensure that the source is reputable and reliable so you can be confident in the conclusions you draw from it.
How do you know if a source is reliable?
Use established and well-known research publishers, such as the XM Institute, Forrester and Mckinsey. Government websites also publish research and this is free of charge. By taking the information directly from the source (rather than a third party) you are minimizing the risk of the data being mistreated and the message or insights being mistaken.
How to apply secondary research
The purpose and application of secondary research will vary depending on your circumstances. In an ideal state, secondary research is used to support primary research and therefore give you greater confidence in your conclusions. However, there may be circumstances that prevent this – such as the timeframe and budgets of the project.
Secondary research is also sometimes preferred because there is a misunderstanding of the feasibility of primary research. Traditionally, it has been expensive and slow to do with research only reflecting a moment in time. But thanks to advancements in technology, brands have far greater accessibility to primary research, and resources available to help them in their journey. This isn’t always known, so secondary research is the desired option.
Keep an open mind when collecting all the relevant research so that there isn’t any collection bias. Then begin analyzing the conclusions formed to see if any trends start to appear. This will help you to draw a consensus from the secondary research overall.
Communicating your market research findings
Market research success is defined by the impact it has. Make sure it’s not discarded or ignored with these six easy steps:
- Less is more – Preface your report with executive summaries that highlight your key discoveries and their implications
- Give people only what they need – Share the top 4-5 recommendations in bullet-point form, rather than pages of analysis and data
- Model the impact – Provide examples and model the impact of any changes you put in place based on your findings
- Show, don’t tell – Add illustrative examples that relate directly to the research findings and emphasize specific points
- Speed is of the essence – Make data available in real-time so it can be rapidly incorporated into strategies and acted upon to maximize value
- Work with experts – Make sure you’ve access to a dedicated team of experts ready to help you design and launch successful projects
One platform for all your market research
Trusted by 8,500 brands for everything from product testing to competitor analysis, Core XM is the world’s most powerful and flexible research platform. With over 100 question types and advanced logic, you can build out your surveys and see real-time data you can share across the organization. Plus, you’ll be able to turn data into insights with iQ, our predictive intelligence engine that runs complicated analysis at the click of a button.