Have you ever wondered how, why, and when to apply market research? Do you want to know how to attract your consumers to buy products? Or maybe you have the desire to launch a new product or service but don’t know what your consumers want.

The answer to these questions is through your consumers. But how is the data collected? That’s simple for any business, market research will provide all the answers you need. 

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What is Market Research?

Market research is about evaluating the feasibility of a product or service through research that involves potential consumers. This method allows businesses to find their target market, collect and document opinions and make decisions. Market research can be conducted internally or outsourced to agencies that specialise in market research. Many choose to use surveys, interviews, and interaction with a group of people known as a sample to conduct market research.

The primary purpose of market research is to understand the market associated with a particular product or service and help decide how the audience will react to the product or service. The information collected can be seen as a guide for marketing or advertising activities purposes.   

Objectives of Market Research 

Market research has three main objectives: 

  1. Administrative: Helps businesses plan and organise things for proper development. 
  2. Social: Deals with satisfying consumer needs through products or services. The product or service should apply to the consumer’s requirements and preferences. 
  3. Economic: It can determine whether the business will be a success economically, while introducing products and services to a new market.

The Importance of Market Research 

Being able to do market research will help businesses to achieve consumer satisfaction, reduce customer churn (consumers no longer purchase or interact with a particular business) and elevate the business. There are some reasons why market research is important. Businesses should consider:

  • Valuable Information: Gives information and opportunities about existing and new products. It also helps with business and strategic planning. 
  • Competitive Advantage: Stay ahead of your competitors. Market research is a vital tool in carrying out comparative studies. With a proper study, businesses will be able to continuously be ahead of their competitors.
  • Consumer-centric: You will get to know the consumer’s needs and wants. Marketing is known to be consumer-centric, and understanding their needs will help businesses design products and services that will suit them. 
  • Forecast: This is about understanding the needs and wants of consumers that can forecast their production and sales. Market research can also determine the optimum inventory stock. 

Types of Market Research 

If a business wants to know the purchase behaviour or likelihood of consumers paying a certain amount for a service or product. The best way to figure out the answers is through market research, as it will help conduct meaningful conclusions. Depending on the task, methods, and tools needed, the following should be considered: 

Primary Market Research 

Primary market research involves a combination of qualitative and quantitative research. It is about the way the business gets in touch with the end consumers or employs a third party to collect relevant data.

While conducting primary market research, you can get two types of information: exploratory or specific.

Exploratory is open-ended and involves a detailed interview. The interview consists of a small group of people known as a sample. Often, sample data is no more than 6-12 people.

In contrast, specific research is more to the point. That’s because its aim is to solve problems that are identified by exploratory research. 

As mentioned, primary market research involves either quantitative or qualitative research. Qualitative research can include either semi-structured or unstructured data collection. Commonly used qualitative research methods are:

Focus Groups: this method is commonly used and includes a small group of participants (6-12) who normally respond through surveys that are sent to them. Focus groups’ responses can be collected remotely and can be done without personal interaction.

One-on-One Interviews: refers to personal interaction in the form of an interview. A researcher asks a series of questions to an interviewee to collect information on a particular topic. Most questions are open-ended and asked in a way to facilitate a discussion. 

Secondary Market Research 

Secondary market research uses information that has already been collected from government sources or media outlets. The information is published in print such as magazines, books or newspapers. Secondary sources make use of the following:

Public Sources: The library is a great way to gather free information. One gets to read various books on different topics and seek different perspectives that are credible. 

Commercial Sources: This can be expensive, but local newspapers, magazines and television media are a great way to collect information. 

Educational Institutions: Many tertiary institutions are wealthy with good sources for getting information as many research projects are carried out. 

How To Conduct Market Research 

With the technological advancements of today, market research has evolved to become a survey software that helps provide comprehensive data collection. The platform gives insightful information much faster with fewer problems. Here are some steps to conduct market research.

Step 1: Define The Problem 

Find out what the issue is and define the subject in research. This can help the researcher identify what kind of questions they should ask. The questions should be directed toward solving the various identified problems. Make sure the questions are clear and that the participants understand them. As the researcher, you can also identify research objectives that should be included in a brief description of how you will achieve these objectives. 

Step 2: Define The Sample

Researchers need a representative sample from where they will collect the information needed for the research. A representative sample is a small group that accurately reflects a large group. 

There are two types of sampling: 

  •  Non-probability Sampling: This type of sampling refers to obtaining a more balanced sample. It is carried out by observation and is used commonly for qualitative research. Non-probability is a sample method that does not include all members of the population, unlike probability sampling. 
  •  Probability Sampling: For this method, the researcher chooses the sample from a larger population based on probability theory. All the participants have an equal chance of getting selected. Probability sampling uses statistical theory to randomly select a small group of people. 

Sample size has a great importance, but does not guarantee accuracy. 

 Step 3: Data Collection

This step is important, and robust techniques are critical. Make sure participants will provide information to all points of interest. Otherwise, if your participants don’t answer your survey in full, then this will cause errors in your research. Having the right data collection will avoid this from happening. 

Step 4: Analyse the Data

After the data is collected, the next step is to analyse the findings. An in-depth analysis that does not leave any loose ends will be effective in solving solutions.   

Step 5: Make the Research Report

During the presentation of findings, the researcher must be clear on what they are trying to accomplish with the report. Moreover, they cannot assume the survey’s structure was the most appropriate for their analysis.

During the presentation, researchers should not report the findings in the same way they did their survey questions. Here, the presentation should follow an inverted pyramid style. Therefore, begin with conclusions and give them fundamentals instead of stating the evidence. 

Step 6: Make Decisions 

Don’t ask ‘why do market research?’ Just do it for the greater good of the business. It gives a wide range of information that can be beneficial for any business. It can also provide valuable information on purchase intentions, and give feedback about growth in the target market and estimated price for products or services.

Benefits of Market Research 

  • Strengthens the position of a business: Making use of market research will help you gain a broader perspective and understanding of your target audience. This would allow you to stay ahead of any potential competition.   
  • Identifies threats and opportunities: the use of primary (practical work) and secondary (desk work) research can help with insurance policies against any type of danger on the road, for instance, a car accident. With the right use of probing you will get the opportunity to know any warning signs that are on the road.  
  • Facilitates strategic planning:The evidence found from the research will allow you to achieve your business goals successfully.  
  • Learn more about consumer preference:  There are reasons why you should make your consumers the focus, they are resourceful and reachable through telephone surveys, in-depth interviews and focus groups

Closing Remarks

Market research should be applied to every business, big or small. It should focus on consumer satisfaction and the products or services of the business. To ensure proper market research, be sure to consider the process to ensure success. After all, market research gives a wide range of information that can benefit the business. 

About the author

EWOR is a school conceived by Europe’s top professors, entrepreneurs, and industry leaders. We educate and mentor young innovators to launch successful businesses.

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