Market research provides critical insight about your target market, audience, current and potential competitors, and the industry as a whole. It blends consumer behavior and economic trends to help you identify whether an idea is viable or how to improve it before moving forward. By conducting market research, you can also identify challenges or barriers, how you’ll overcome them and mitigate potential risks.
It’s important to note that market research and marketing research are different. Market research helps you understand your market and business landscape, while marketing research can be used to do things like test ads and messaging. However, market research can (and definitely should) inform your marketing strategy, which makes them intertwined in a lot of ways.
Read on to understand what market research entails, how to conduct it and how to leverage the results to improve your business.
What Is Market Research?
Market research is the process of collecting and analyzing measurable data about a specific market. There are different types of market research, including product/services use, buyer persona, market segmentation, competitive analysis, customer satisfaction and loyalty, and brand awareness, to name a few.
For example, a regional hospital might conduct market research to define the buyer persona for their new “Heart Smart” program, designed to help people make lifestyle choices that reduce their risk of heart disease. To start out, they might leverage existing data from organizations like the American Heart Association to determine the prevalence of coronary heart disease in people based on their age and gender. Based on that data, they find that older men (ages 60-80+) have higher rates of coronary heart disease than women. However, through further research, they discover that 78 percent of women consider themselves to be the primary healthcare decision-maker for their household. As a result of this research, the regional hospital’s marketing team might develop personas for both senior females as the primary target audience and senior males as the secondary audience. Further research would be required to determine the interests, problems and pain points, and desired solutions for each audience. They could then take that information and determine how they’ll align their “Heart Smart” program with those needs.
Primary vs. Secondary Market Research
There are many ways to collect information used in market research. Each of these methods falls underneath one of two categories: Primary or secondary market research.
Primary market research is first-hand information that you (or an agency you hire) collects about your market and consumers. This is original data versus existing data. This type of research is helpful when you’re trying to establish your target audience and the personas that fall underneath it. Secondary market research is second-hand information that has already been gathered by another source, such as a government agency (e.g. U.S. Census Bureau).
Methods of Primary Market Research
Some example sources of primary market research include:
- Surveys/questionnaires/polls: You might send out a survey or poll to get feedback directly from your target audience. If you need insight quickly, you could conduct a quick audience poll that can help you make an informed decision. For example, maybe you’re sending out an eblast for your natural gas company and contemplating which benefits to focus on. You might conduct a quick Facebook poll to ask your audience: Which do you consider to be the greatest benefit of natural gas? a) Clean, b) Cost effective, c) Safe. To encourage participation, you might run a Facebook ad and include an incentive for survey participants. You can also decide how long you want the survey and ad to run, which gives you control over how quickly you get the results back.
- Interviews: These are typically one-on-one interviews with vetted members of your target audience. They can be held in-person or virtually and allow for a more natural flow of conversation and candid insight. For example, many of our clients utilize existing customer bases to assess the current customer service experience, including strengths, weaknesses and areas of opportunity. During an interview, you might discover a trend that most customers complain about the long wait times on the phone. Based on that feedback, you might set a goal for customer service representatives to leave people on hold no longer than one minute.
- Focus Groups: Gauge consumer perception with a focus group. This allows you to go right to the source to get feedback from key audience members on a new product, service or idea. Maybe your company just revitalized the downtown area in your local community. You’re now tasked with creating live experiences to help drive foot traffic to the rennovated area. You might run some of the ideas (light shows, car shows, live music events) by a focus group to see which experiences would entice them to drive downtown for the event and shop.
Methods of Secondary Market Research
Some example sources of secondary market research include:
When you conduct market research, it can be primary or secondary research only or a combination of both. Depending on your goals, you might want to leverage both to tell a fuller picture.
Why Market Research is Important
Guesswork and gut instincts are not enough to make strategic business moves. You need market research to understand the potential demand for your products/services, market size, saturation, and how other economic factors may influence buying decisions (such as income range and employment rate).
Market research can also help you:
- Define and reach your audience. Hone in on who you’re trying to reach, including gender, age, location, income, and interests.
- Measure brand awareness. When people are weighing their opinions for products/services, does your brand name come up? You can also determine whether people recognize your logo and know what you do as a company. If they do, you might ask how they learned about your company, which can help you gauge the effectiveness of your brand reach and marketing efforts.
- Gauge public perception. What do people think of your brand? You won’t know until you ask. This can help you identify any misconceptions that could be impacting potential buyers’ decisions, which you could then address through a tailored marketing campaign.
- Get feedback on a new or existing service line. Ask members of your target audience what they think of a new potential service before you pursue it. You could also send a quick survey to existing customers right after they receive a current service asking, “How did we do today?”
- Evaluate the competition and identify opportunities. What does your competitive landscape look like? Identify your competitors and the unique value proposition (UVP) for each one. A UVP is what one brand does better than any other. It’s the reason people choose it when weighing their options. Do you know your business’ UVP? If not, you could survey existing customers to find out why they chose you, which could help guide that answer.
- Solve challenges and mitigate risk. By taking a step back and looking at your market, you might notice potential challenges on the horizon. This gives you the luxury of time to think through them versus having to react quickly after the fact. Additionally, getting feedback from customers before you release an idea to market can help you realize pitfalls you didn’t see before. This helps to mitigate risks, allowing you to refine a product or service line, as opposed to retroactively fixing an issue after you receive a negative review publicly.
Market research is a critical step to making informed decisions, but many businesses just don’t have the time or the resources to allocate to it. MTN, Inc. can help you determine the information you need, the vehicles through which to obtain it, facilitate each initiative, and report the results back to you. The resulting data allows you to feel confident in your decision-making, shining a light on the right path forward. Learn more about our market research services.