- Posted by: vidvox
- Category: Market Research
What is market research?
Market research is the process of gathering information about business’s buyers personas, target audience, and customers to determine how viable and successful a product or service would be among these people.
Market research tells you where customers are conducting their own research about products and services similar to theirs. It also highlights industry trends, customer wants and what is influencing their decisions to convert and buy.
Market research is done to understand reasons consumers will buy products or services. It studies consumer behaviour, including how cultural, social and personal factors influence that behaviour.
Market research is further split into two categories: primary and secondary. Primary research studies customers directly, whereas secondary research studies information that others have gathered. Primary research may include telephone interviews, focus groups, influencer interviews or online polls with random sample selected of target group. Companies also study own sales records to gather primary research. Secondary research comes from reports and data found on websites of other organizations or industry blogs. Companies plan use either type of research or a combination.
The basic questions to answer in your market research include:
Who are your customers? Describe them in terms of age, occupation, income, lifestyle, educational and social status.
What do they buy? Describing their buying habits related to product or service, including how much they buy, favoured suppliers, most popular features and price points.
Why do they buy? This goes into consumer heads. Answers will depend on the product and its uses. Multiple answers emerge from this question including lifestyle, brand or price sensitivities.
What will make them buy? These questions seem difficult, however detailed information about markets, sales figures and consumer buying is available. Tapping into sources to provide answers to as many questions will make the plan more convincing. One can also find companies that sell industry studies to individual companies. Market research is not cheap requiring significant amounts of expertise, resources and technology.
For all companies, the best market research is own research. In-house market research might take the form of telephone interviews with consumers, number crunching from published sources or competitive intelligence gathered on rivals through social media. Gathering detailed research on customers, including likes, dislikes and preferences. Through Facebook and Google Analytics sorting out the numbers from your web visitors. One can gain lot of marketing insight by looking closely at what is going on electronically.
Next, doing due diligence within own industry. When looking at comparable businesses, finding a close match. Comparative purposes can include:
1. Companies of certain size
2. Companies serving same geography. It could be global for a web-based business
3. Companies with a similar ownership. If own business has two partners, look for businesses run by a couple of partners rather than an advisory board of 12.
4. Companies that are relatively new. While one can learn from long-standing businesses, they may be successful because of their 25-year history and reputation.
Use the data gathered to determine how much business one could do and also figure out how it fits into and adapts to the marketplace.
Follow these steps to spending market research budget wisely:
1. Determine what is need-to-know about your market. The more focused the research, the more valuable it will be.
2. Prioritize the results of the first step. You cannot research everything, so concentrate on the information that will give you the best payback.
3. Review less-expensive research alternatives. Small Business Bodies and industry associations can help develop customer surveys.
4. Estimate the cost of performing the research in-house. With internet one can be creative on how much to invest. If considering hiring a consultant or a researcher, do remember the business and not pay for what is not needed.
Next, let’s take a look at Different elements of Primary and Secondary Research..
Primary research is used when segmenting the market and establishing buyer personas, and this research tends to fall into one of two buckets:
Exploratory Research: This kind of primary market research is less concerned with measurable customer trends and more about potential problems that would be worth tackling as a team. It normally takes place as a first step before any specific research has been performed, and can involve open-ended interviews or surveys with a small number of people.
Specific Research: This kind of primary market research often follows exploratory research, and is used to dive into issues or opportunities the business has already identified as important. In specific research, the business can take a smaller or more precise segment of their audience and ask questions aimed at solving a suspected problem.
Secondary research is all the data and public records at your disposal to draw conclusions from. This includes trend reports, market statistics, industry content, and sales data on the business.
Secondary research is particularly useful for analysing competitors. Here are three types of secondary research sources that make this process so beneficial:
Public Sources: These sources are the first and most accessible layer of material when conducting secondary market research. Being free to find, they offer the most bang for your buck. Government statistics are arguably most common public sources.
Commercial Sources: These sources often come in the form of market reports, consisting of industry insight compiled by a research agencies. Because this info is so portable and distributable, it typically costs money to download and obtain.
Internal Sources: Internal sources deserve more credit for supporting market research than they generally get. This is the market data organizations already have in-house. Average revenue per sale, customer retention rates, and other historical data on the health of old and new accounts can all help draw conclusions on what your buyers might want right now.