What is Market Research & How is It Helpful for a Business?
Market research is a process to discover if the new service or product has any potential to become popular. The manufacturer or owner discovers its values or upsides and downs, which helps in determining the scope for improvement before its official launch.
Moreover, the company gets to know what people are going to think about it and then, estimate how they are likely to behave-whether interested or not.
Various companies either rely on their in-house resources or outsource to any third party that is professionally delivering such services. This is how research & development takes place, preparing the stage for a definite success in the market.
What are the common methods of market research?
Here is a roundup of the most common types of market research methods:
Surveys make qualitative research easy by asking respondents a series of open or close-ended questions via a questionnaire. This can be done in a variety of ways and you can survey any number of topics. For instance, the Gabor Granger pricing method creates surveys and polls to help determine the price of a new product or service. With incredible digital products, it’s way easier to send them and get responses from multiple users in a few minutes. That’s why it’s commonly used.
Why it is so?
Simply put, it’s easy and inexpensive to conduct a market research through surveys. You can pool a lot of information in no time. In addition, the wisely defined and designed questions help in collecting useful information to ensure quick analysis. Even, the responses of open-ended questions are analyzed thoroughly.
These are the most insightful resources, which involves one-on-one conversations with the sampled group. The information collected through these interviews is matchless.
However, the matter gathered via an in-person meeting can be hardly ignored. But sometimes, it’s not feasible. The video-conferencing makes it happen in no time. Regardless of how you conduct, a good interview ensures to draw big-benefits by understanding the target customers’ journey & behavior.
The best thing with these is that you directly interact with the interested customers. This communication helps in connecting emotionally with them because you get all information that can produce an “aha” moment.
- Focus groups
Focus group is a method that ensures conducting a collective round of questions in an interview where six or eight participants of the same background are invited to answer the questions raised by a trained moderator.
Focus groups bring together a carefully selected group of people who fit a company’s target market. A trained moderator leads a conversation surrounding the product, user experience, and/or marketing message to gain deeper insights.
- Customer observation
The most powerful of all research methods is customer observation. It can be taken as an analysis, wherein the analysts closely observe the customer journey and discover some points on an ideal engagement with their product.
What makes it so powerful is its inexpensiveness. Like focus groups, people interact with your product in a natural way. Certainly, it does not involve any kind of influence or pressing force on the customers to “must go” on the product journey.
This very advantage can prove its downside because it may push you in a hot water to determine what’s going on inside of their mind.
Where can the market research take place?
This type of research can be conducted by the company or organization itself. Or, there are some professionals who can be contracted out for researching on your behalf. Typically, these are known as outsourcing third parties that can conduct start-to-finish surveys, product testing, observations and focus groups.
Usually, the testing is compensated with samples or a little bit of payout is credited to their account. The substantial thing is collected data, which are assessed thoroughly for developing some transforming ideas.
What is its purpose in business?
The core purpose of MR in or for any business is to
- verify the need of the product
- foresee possibilities of sustainability
- determine opportunities, and
- keep failure at bay
Nobody wants to experience failure. This kind of efforts helps in understanding the scope of survival in relation to particular goods and services.
The market analysts make it up with the logical pooling of information regarding market segmentation, product differentiation and competition so that the behavior of customers can be analyzed. Once the picture is crystal clear, sufficient efforts are made in the direction of attracting customers. These efforts can be a marketing campaign or online advertisement or any other option that can help to onboard customers.
However, this practice involves a variety of tasks that completes the process of market research. Data collection, web scraping, capturing, migration, cleansing and optimizing datasets are different processes that collectively create a base on the market sector. Any business needs it to see what measures it can take to beat challenges and write a story of success at the end.
Without discovering what customers feel about, you cannot expect overwhelming demand of your products or services. Simply put, it helps in taking decision on how to walk on the way of success.
How related information is collected for research?
There are two types of information that one needs for carrying it out-Primary and Secondary. An advanced and impactful research has a great combination of these two types of data.
- Primary Information
It is crucial information a company directly gathers from the sources or data subjects. It can be related to customers or a business process. Generally, it is categorized into exploratory and specific research data.
Exploratory research data are relatively less structured, which means that you need to optimize and standardize them, at first. It happens due to data extraction from more open-ended questions that a company needs to know for coming across issues being faced by customers. In short, the pain-points of customers are determined through it. On the flip side, Specific research aims at finding answers to the previously identified challenges that often come in the way of customers.
- Secondary Information
This information is collected from outbound resources. The researcher gets it from the outside of the company, which are concerned with a population, government census, trade association and researched documents of another business operation, which is concerned with the similar niche.
What is the example of market research?
Digital marketing is all based on discovering everything about the market and its related components.
For example, many companies come with a business plan, which can be feasible only when it has a support of deep research. Starbucks Coffee Company is its real life example. Even, Apple Inc. relies on it.
More and more people are relying on digital marketing because it has a strong support of analytics tools. These tools can easily show which location has maximized demand for a product and what downsides are keeping its sales low.
It comes with an advanced feature of assessing customer journey, which tells if he is interested or not. This is how one can confidently make feasible decisions accordingly, which show a certainty of truly happening results.
How did MR evolve?
The evolution refers to the development of market research industry. It started off in Germany during 1920s. At the very time, the United States experienced fostering of advertising and the golden age of radio. People discovered demographics and started integrating it with the business promotions. Gradually, it shifted to online. But initially, there were one-on-one interviews taking place, which are still effectively used.
- One-on-One Interviews
The trend of interviewing people on the street is age old. Publication industry has been effectively using it to recognize facts and bring them to a layman.
In the beginning, companies interviewed people to see if they recognize any of the ads or the brands. This idea paid off with the rich information that helps them to sell to the advertising agencies or publishers for publishing in magazines or newspapers.
The details of the interviews were compared with the circulation of published ads to verify how effective that ad was. It clarifies that people were already aware of the vitality of the research.
- Research via Calls
Then, the transition happened and data collection shifted to telephone. The telecallers came into existence, eliminating unnecessary face-to-face contacts, as happened in one-on-one interviews. The caller dials a number to make inbound and outbound calls in a very organized and systematic manner to target focus groups. It ensures quickly organizing the calls and collect data for segmentation.
- Online Market Research
People are in love with their mobile phones, laptops and digital devices because of their internet connectivity. With the changing trends, they have started preferring FB, Whatsapp, Google and other online platforms, which has given an opportunity to entrepreneurs and researchers to collect views or reviews hidden in comments.
The best thing with it is that the researching teams don’t have to make cold calls. Nor do they wander here and there to catch up with the facts. Online surveys have ended this struggle. Just signing up for conducting surveys is enough to figure out what people think about your products.
The market research is the process of determining scope, upsides, downsides and potential of any product or service in the market. It helps small to big enterprises in discovering feasible solutions that can make their customer journey fruitful. The knowledge of demographics, pain-points or challenges helps in finding solutions that eventually leads to winning customers and a ton of opportunities.
Nathan Brown is a sales director incorporated with Eminenture. His hands-on experience in discovering intelligence on customers, products and market reflects that he is truly an asset. He relies on facts to figure out challenges and their solutions in no time. Making sales strategies by integrating results of the research ensures success, which pushes him to keep going on discovering new and advanced solutions for multiplying revenue through a great CX.