The purpose of marketing research is to determine and evaluate how shifting aspects of the marketing mix affect consumer behavior. Through this article, you can understand the meaning of market research, or in some ways known as marketing research, and learn how to do marketing research by knowing what the market research process is and looking at its examples.
What is Market Research?
Many people may present various definitions of market research but the practice of evaluating the feasibility of a proposed service or product through a study done personally with prospective customers is known as market research. This explanation may often be even used for the definition of “marketing research.” Market research enables a business to identify the potential market and obtain consumer comments and other input regarding their enthusiasm towards the good or service.
This kind of research could be carried out internally, by the business itself, or by an outside market research firm. One of the features of marketing research is to choose an appropriate tool to collect information, such as questionnaires, product testing, and focus group discussions which are all viable methods. Typically, test subjects receive free product samples or a small stipend in exchange for their time. Developing a new product or service requires extensive research and development (R&D).
Understanding Market Research
Market research is an activity in which the plan is to study the market linked with a particular service or commodity to establish how the audience would receive it. This can involve gathering data for product differentiation and market segmentation that can be used to target advertising campaigns or figure out which characteristics customers value most.
If you were to ask what a market research process is and how to finish it, a company must perform several tasks. Depending on the market segment being looked at, information must be gathered. The firm must analyze and understand the generated data to find any patterns or pertinent data points that it may utilize in the decision-making procedure.
Primary information is one that the business or their employed person has obtained, while secondary information is that which has been collected from a third-party source. These two types of information are combined in market research.
In order to develop products that consumers would utilize and to keep a competitive edge over other businesses in their field, market research is a crucial tool for businesses.
Primary data is information that a corporation has directly gathered or which has been gathered by an individual or company that has been paid to do the research. Exploratory and focused research are the two main subcategories of this type of information.
Exploratory research, which is less structured and uses more open-ended inquiries, produces problems or concerns that the business may have to tackle. Exploratory research frequently draws attention to specific research issues by providing solutions.
Secondary data is information that an outside party has already obtained. This can include demographic data from official census records, research studies published by trade associations, or findings from another company engaged in the same industry.
Example of Market Research
Many businesses utilize market research to experiment with new items or to learn what kinds of goods and services people want but don’t already have.
For instance, a business that is thinking about opening up a shop may carry out market research to gauge the viability of its good or service. If consumer interest is supported by market research, the company can confidently move forward with the business strategy. If not, the business should use the market research findings to modify the product to align it with consumer preferences.
History of Market Research
The history of marketing research starts from Germany where the formal market research first appeared in the 1920s. Since the Golden Age of Radio’s advertising boom, market research in the USA began to take off at about the same time. Companies that ran radio commercials started to comprehend the demographics that various radio shows’ sponsors revealed.
Types of Market Research
From there, businesses were created that would talk to individuals on the streets about the magazines and newspapers they read and ask them whether they recognized any of the advertisements or the brands contained inside the advertisements. The effectiveness of this advertising was determined by comparing the information from these interviews with the publication’s circulation. These early methods were modified to create market research and surveys.
Tip: Comprehending demand, size of the market, economic data, area, competitive pressure, and price can help you gain a solid understanding of your market.
A focus group comprises a select group of people who are asked to test out a product or view an advertisement. The group is then asked for input on how they feel about the product, the company’s brand, or rival items.
Data was then gathered over the phone, negating the need for in-person interactions. A phone operator could collect data or plan focus groups sooner, more efficiently, and in a more incredible fashion. This technique significantly enhanced the market research model.
Market surveys could be defined as an assessment of the marketplace for a specific good or service, along with a study of consumer demands and preferences. Surveys are a more affordable option than focus groups for finding out what consumers think without having to do in-person interviews. Consumers frequently receive questionnaires in the email, along with a discount or coupon to encourage participation. These polls aid in understanding how customers feel about a given item, brand, and purchase price.
Online Market Research
Many market research operations have moved online as individuals spend more time online. Even if the medium might already have evolved, surveys are still frequently used to collect data. But people have the option to register and answer surveys and provide thoughts when they have time, rather than firms aggressively recruiting participants by contacting them mainly on the streets or through cold calling individuals on the phone. As a result, the process is far less invasive and hurried because people can participate at their own pace and will.
How to Do Market Research
Establishing the study’s objectives is the first stage of effective market research. Each analysis should aim to resolve a specific, well-defined issue. For instance, a business might look for consumer preferences, brand familiarity, or the relative efficacy of several ad campaigns.
The next task is to decide who will be a part of the research after that. Because market research is a costly procedure, a business cannot squander resources by gathering pointless information. The company should establish in advance which consumer groups will be examined in the study, as well as how the information will be collected. They should also take into account the likelihood of statistical mistakes or bias in sampling.
The next stage is to gather the information and examine the findings. This should be simple if the first two steps were correctly carried out. The researchers will collect the survey results and record each respondent’s age, gender, and other pertinent information. The outcomes of their research are then explained in a marketing report that analyses this.
The final step involves business decisions being made by firm executives based on their market research. Depending on the findings of their study, they can decide to focus on a different kind of consumer, alter their product’s pricing point, or adjust other characteristics. The outcomes of these adjustments may be evaluated in additional market research, and the procedure will start afresh.
Benefits of Market Research
Market research is crucial to increase brand loyalty and consumer happiness. A comprehensive market research study can aid in identifying the main demographics and market groups. These would indicate who would be most likely to purchase a particular product; it is doubtful that a product will appeal to every consumer equally.
Market research is also crucial to creating a company’s advertising initiatives. The business can direct its adverts to one network rather than another if market research shows that its clients are more inclined to have used Facebook than Twitter. They could also focus on upgrading the products instead of lowering pricing if they find that their target group is more value-sensitive than price-sensitive.
Market Research FAQs
Some questions about market research are often brought up frequently when the concept is explained, hence, some of the most recurring questions are mentioned below.
What Are the Main Types of Market Research?
The four main categories of market research are
- Primary research, which includes focus groups, surveys, and polls
- Secondary market research which involves graphics, articles, and white papers
- Qualitative research, which sheds light on how consumers experience and think
- Quantitative research, which uses data and statistics like website views, social media engagement, and subscribers.
What Is Online Market Research?
Online market research is simply market research that is carried out online. The format of both primary and secondary market research methods is the same for online market research, which can be qualitative or quantitative.
What Are Paid Market Research Surveys?
A group of people in paid market research are actually given money to participate in a research study in paid market research. This may entail participating in research panels, group studies, questionnaires, and other activities. Typically, the people are already chosen, and they receive financial compensation for their work and time.
What Is a Market Study?
The proactive examination of the consumer’s demand for a product or service is known as a market study. The meaning of a market analysis is to examines every element of the market that affects the need for that good or service. Price, location, rivalry, clones, and overall economic activity are all included in this.
Companies can use market research to determine the demand for, viability, and potential performance of their product. Primary and secondary information, each of which gives distinctive insights into a company’s offering, is used in market research. Market research is a crucial feature of an organization’s research and development (R&D) phase and a critical factor for its success and expansion. While this article aimed to explain what marketing research is and what do you mean by market research in business, there are still more nuances to be explored in this domain than just the purpose of marketing research or the steps to conduct it listed above.