With 72% of customers expecting companies to meet their unique needs, market research is more critical than ever. Your consumers have a lot of power. After all, without customers, your business won’t survive. You must adapt your marketing strategy to complement how today’s consumers research, shop, and buy products and services.
You need a deep understanding of buyer personas, influences, and behavior. How do you manage such a feat? With core market research methods.
What Is Market Research and Why Is It Important?
Market research involves gathering information about your target market to understand how to produce, advertise, and sell new or existing products. Market research can also offer valuable insight into customers’ perceptions of how well your brand delivers what consumers value most.
Market research is crucial at every stage of the product life cycle and will ensure businesses adapt and survive in competitive and ever-changing markets. As the world becomes more complex and more companies emerge stronger from the pandemic, you need to do more to capture your target market’s attention. Understanding your buyer’s pain points and offering desired solutions will help you better compete for greater market share.
Market research provides valuable insight into:
- Customer Journey Mapping: How do customers research products?
- Industry trends and buyer preferences.
- Target market demographics, including challenges, attitudes, and influences.
- What drives conversion rates among your target audience?
Primary vs. Secondary Research
We can divide market research methods into two categories: primary and secondary research.
Primary research pursues first-hand information, focusing on broad exploratory to solve specific research goals. It’s helpful to segment and establish buyer personas as a way to focus primary research efforts
- Exploratory primary research: The first step of primary research often uncovers potential consumer problems or pains. Getting to know perceptions and attitudes within the context of the category your brand competes in is a helpful initial step. This can be done with longer interviews, focus groups, Zoom sessions, or creatively done online research using open-ended questions.
- Quantitative primary research: Following the exploratory approach, quantitative research is typically used to prioritize and validate hypotheses uncovered in exploratory research. While exploratory research goes deeper with far fewer people, quantitative research is conducted with 100-1500 people.
Secondary research uses second-hand data and public records to draw conclusions about your target market. You might analyze pre-existing trend reports, market statistics, industry content, and sales data that you find online. Secondary research is primarily helpful for assessing your competitor’s consumer-facing brand communications. Your main secondary research resources will likely include:
- Public sources: Free and easily accessible, public sources might consist of government statistics, census data, and many things you can find online, and research from the Bureau of Labor & Statistics.
- Commercial sources: You’ll find industry-specific data from commercial researchers. You might have to pay to download and use it.
- Internal sources: Your business will have valuable internal data on average sales revenue, customer retention rate, and other vital statistics that can inform your current marketing strategy.
11 Types of Market Research
Businesses might conduct the market research process through numerous avenues. Typically, the information you’re trying to gather will dictate your market research strategy. Here are some market research tools you might use.
- Interviews: An excellent chance to conduct face-to-face research (in-person or virtually) and encourage a natural conversation while watching body language. Build buyer personas by gathering interviewee details about age, family size, budget, occupation, attitudes, behaviors, challenges, interests, mindsets, and lifestyle.
- Focus Groups: With a handful of carefully selected people, test your product to gather feedback and answers to specific structured questions. Focus groups can uncover ideas for product and brand differentiation and unique selling points. Focus groups can be conducted on-site, in context, in facilities, or virtually.
- Product or Service Usage Research: To find out how and why your customers use your product or service, ask your customers specific questions about the usage and product features. This is a great way to learn what people love about your product and what barriers to future usage might be.
- Observation-Based Research: Watch how to target customers engage with the category your products compete in, gaining insights into user experience and challenges. This is a great way to understand
- Buyer Persona Research: Learn which demographics and mindsets make up your target audience and what they need from your brand. You should also seek to understand their product preferences and challenges.
- Market Segmentation Research: Categorize your target audience into groups based on defining characteristics. Market segmentation allows you to identify groups if individuals that are distinctive from one another and will generate the highest revenue potential for your brand. You will be able to establish marketing and communications that speak to these distinctive groups in more compelling and relevant ways.
- Price Research: Understand what a customer is willing or expects to pay for your product. Compare pricing to competitor products and services.
- Competitive Analysis Research: Gain broad and deep insights into your industry and how to beat the competition.
- Customer Satisfaction and Loyalty Research: What are the most effective ways to turn customers into repeat customers?
- Brand Awareness Research: Discover how much your target audience knows about your brand and whether their perception aligns with your brand intent.
- Campaign Research: Gain insights into marketing efforts to determine what works best, and how to improve future strategies.
How to Do Market Research: Five Steps
So, how do you go about researching your target market? Here are the steps to conduct market research and improve your brand.
- Determine your primary competitors: Identify core competitors
- Identify which persona group to engage: Select a representative sample of your target customers to research characteristics, challenges, and buying habits. They should be people who either recently made a purchase or purposefully did not. Make sure they are also purchasing from your core competitors. You can learn a lot from customers that cross-purchase.
- Define your ideal buyer personas: To understand how your ideal target customers make decisions, you first need to know who they are and what makes them tick. A buyer persona is a generalized and fictionalized representation of your ideal audience types.
- Prepare market research questions: Create a comprehensive discussion guide to effectively use your time (and your customer’s time). Ensure you use open-ended questions and avoid biased ways of asking questions.
- Summarize your conclusions: Analyze your findings and save them for future use. Add quotes and diagrams to make the data easily digestible.
Market Research Examples
Market research can ensure your brand or product launch is successful. All successful brands conduct thorough research. They conduct consumer research early and often. Here are a few examples of market research in action.
The Walt Disney Company’s primary audiences are children. The media giant must understand what makes a character tick to produce one successful kids’ movie after another. Regularly, each year, Disney will meet with young children in kid-friendly focus groups.
As children are Disney’s biggest audience demographic, it makes sense that the company pilots its content with them first. It doesn’t matter whether parents enjoy it. Disney cares about the opinions and feedback from kids.
KFC is well-known for its meat-centric menu. However, before breaking into the vegetarian and vegan market, KFC trialed its meatless chicken in select Atlanta, Georgia stores in 2019.
It was a practical and straightforward way to test the product. If people in Atlanta enjoyed the meatless chicken, KFC would sell it on a broader scale. However, if the product didn’t sell, they would have to adapt without losing too many resources.
Market Research Core Methods
Market research is a vital part of ensuring brand success. You cannot meet your buyers’ needs without understanding what makes your buyers tick. If you fail to offer the right solutions, your customers will go elsewhere. With the right tools, market research can place your brand on a high growth trajectory.