What is Market Research?

What is Market Research? 

Market research is a systematic method of collecting crucial information pertaining to a particular industry and assessing it using proven research methodologies. The result of the analysis enables industry leaders to make informed growth and investment related decisions. A comprehensive market research report comprises of pivotal data associated with aspects such as forecasts, historical records, product pricing, key players, geographical landscape, product pricing segment analysis, target consumers, and general economic activities. Industry research can either be directly conducted by enterprises or can be outsourced to the firms (market research companies) which have significant expertise pertaining to this vertical.  

Organizations further use these assessment tactics to discover the target industry and acquire feedbacks and opinions from consumers regarding their interests on a particular product or service. It is crucial for a company to understand their niche market on various levels and perspectives to identify the potential threats and recognize ideal growth prospects. For instance, if a beverage company is making its entry in the sparkling water vertical, it should have a comprehensive knowledge about the ongoing market trends, target audience, prime regions, restraints, competitors, and opportunities, just to name a few.  

History of market research 

The first ever market research activity was conducted in 1920 by an American psychologist named Daniel Starch. Initially, he formulated a theory which stated that any advertisement aimed at product promotion must be widely seen, read, believed, remembered, and acted upon by the target audience/customers. This theory further pushed him to start his own research company named Daniel Starch and Staff in Cambridge. 

The early 1930s marked the entry of George Gallup in this vertical. He is regarded as a pioneer in the field of scientific polling techniques which was later successfully integrated in market research activities. Initially Gallup used this technique to predict the result of 1936 US electrics. His projection based on public survey regarding Franklin Roosevelt’s win took the entire nation in storm. Most of the well-known journals including The Literacy Digest predicted Alfred Landon’s win but Gallup’s self-surveyed results were correct. He became a household name, and his survey methods were adopted across numerous sectors including industry analysis. 

Post that, many well-known professionals such as Paul Lazarsfeld, Ernest Dichter, Paul Green, and Jerry Yoram Wind, just to name a few developed various market research tactics and theories.  The emergence of the world wide web brought about path breaking changes in the field of market research. The advent of web log analysis software in 1995 allowed concerned bodies to count website visitors and page views. Moreover, these websites and tools further facilitated the online monitoring of consumer behaviour. Initially, the access to these data were limited to computer scientists, but with time they could be procured by marketing teams as well. This paved profitable prospects for the market research vertical to prosper. 

Later, the launch of the net promotor score, increasing smartphone usage, arrival of on-demand insights, along with high end marketing research and analysis tools further fuelled the progression of this sector.  

Objectives of market research  

• To identify and understand

  - To sell a product/service, it is crucial for the key company to identify its target consumers. Not everyone can be interested in everything. For instance, a vegan individual will not be drawn by an advertisement which is promoting a chicken nuggets range launched by a particular brand. Therefore, every organization needs to have an in-depth understanding about the buying behaviour of their target customers. Proper marketing survey not only allows them to identify and segregate their potential buyers but also enable them to formulate effecting promotional strategies to hook their buyers.  

• To analyse the impact of promotional efforts

  - Now that the company has identified its potential buyers, designed its promotional strategy, and implemented the needful, it is now time to know if all these efforts were worth it. It is evident that every consumer has their own preferences and not every promotional strategy can drive them to purchase a product/service. With the help of certain market research tactics, enterprises can get insights on whether their promotional strategies were fruitful. Based on the results, it can rework on its marketing strategy to gain maximum success.  

• Knowing consumer response

  - Almost every alert company wants to know the reactions of its key consumers regarding their products or services. Therefore, it uses the market product testing strategy to deeply analyse consumer response. The degree of customer satisfaction or dissatisfaction generated by the particular product/service is thoroughly assessed by enterprises. This enables them to make suitable changes in their sellable entities in terms of quality, design, size, colour, appearance, packing, packaging materials, and distribution methods, just to name a few. 

• To understand market costs and profits

  - Due to a wide array of factors, marketing costs have skyrocketed which in turn has posed severe challenges in terms of cost optimization for various companies. Therefore, conducting efficient research about the total marketing costs along with their break-ups enables enterprises to formulating cost-effective strategies that can be profitable to them as well as their consumers. Proper cost analysis further paves a way for profit analysis. This allows companies to make suitable changes or adjustments in product/service promotion, pricing, and overall distribution.   

• To master the external forces

  - The growth trajectory any firm is primarily impacted by internal controllable forces and external uncontrollable factors. Therefore, it is necessary for them to get a 360-degree outlook of some of the pivotal aspects related to their prime competitors. Getting actionable insights on a competitor’s business centric moves, garnered revenue, technological changes, product/service portfolio, and geographic expansions, among others, through competitor analysis enables a company to curate favourable strategies to stay ahead in the curve.  

Types of market research  

Primary Market Research 

This form of market research is conducted directly by an organization. It involves direct communication with a primary source mostly customers in the target market. The responses obtained through this research are mostly relevant to the present-day market and consumers, thereby ensuring accuracy and timeliness. It incorporates interviews, questionnaires, surveys, visit to competitor’s locations, and focus groups, among others. It is known to provide conclusive results and helps firms to- 

• Determine industry challenges 
• Project future trends 
• Optimize product/service portfolio 

Secondary Market Research 

It refers to the use of pre-research data published by any third party of collected using secondary sources. Also known as desk-based research, it predominantly includes data collection from government reports, company based annual reports, authorized websites, along with related books. This method is less time-consuming and affordable in nature and therefore is widely adopted by market research agencies as well as the companies.  

It also makes it easier for the analysts to access the gathered data since it is already compiled in an easily understandable format.  

Qualitative Market Research 

This market research type mainly deals with the study of various factors that influence consumer behaviour within a market vertical. It predominantly emphasizes on the reasons and motivations driving the behaviours, desires, expectations, and opinions of the customers. They are mostly conducted using open ended questions or direct conversations including in depth interviews, focus groups, and online bulletin boards, among others.  

Quantitative Market Research 

This market research form involves the mathematical analysis or the obtained numerical data to acquire crucial industry-based statistics and identify the profit and loss-based factors. Here, a large amount of data is gathered via polling, surveys, and close ended questionnaires. It enables the business owners to get a generalized view of their target demographic in real time.  

Brand Market Research 

This market research is conducted by companies to get actionable consumer insights about a brand. It in turn enables them to analyse the positive and negative factors pertaining to their brands and formulate effective strategies to enhance their brand position if required. This research can be carried out through surveys, focus groups, and questionnaires. Brand research allows users to understand the growth trajectory of their brands in comparison to their key competitors.   

Consumer Behaviour Research 

Consumer behaviour research enables enterprises to understand the perception of their existing and potential customers about their business, thereby allowing them to identify gaps in overall customer expectations.  It predominantly involves the assessment pertaining to how consumers purchase, use, or dispose goods, ideas, or services according to their requirements. This research helps various organizations to decode the actions of consumers within the industry vertical and accurately identify the underlying reasons or motives fuelling these actions. It can be conducted through surveys and focus groups.  

Competitor Research 

This form of research is undertaken by firms to determine their prime competitors, assess their strengths and weaknesses, while gathering other pivotal data about them.  It allows businesses to formulate stronger business strategies, capture substantial market share, and stay ahead of their competitors in various aspects. Competitors analysis also enables them to identify market gaps, unveil industry trends, and enhance their product/service promotional strategies. 

Criteria to select a research report 

Every business needs granular insights on the ongoing and potential trends pertaining to their marketplace. Therefore, they are always on a lookout for market research survey reports that can provide them with actionable insights, thereby enables them to formulate robust business centric strategies. 

But identifying a quality market research report can be quite complex. Hence, we have jolted down some of the important criteria you need to consider before procuring a report- 

Proper research objective-  Market research firms should have the ability to grasp the core business objectives pertaining to their client company. The development of research methodologies and the direction of the study cannot be accurately formulated without the inclusion of firm research objectives. A market research company should have efficient analysts who can identify the exact research gaps and make a robust market survey accordingly.  

Correct research methodologies- It should be ensured that the market research agency adopts proven methodologies to conduct their research. If correct methodologies are not put in place, the entire data collection and analysis procedure will be negatively impacted. 

Experience- Before procuring a business intelligence report, a firm should do some background investigation on the selected market research services provider to ensure its credibility. It is recommended to find out its past working experience and success rates before finalizing the deal.  

Real Time Delivery- As the saying goes, ‘time and tide wait for none’ it is crucial for clients to ensure that they get their deliverables within the promised timeframe. If a market research agency fails to deliver their reports on time, a business might lose out on a lot because industry trends keep on changing frequently and everyone wants to get their hands on the current market dynamics.  

Pricing- Comprehensive research reports cost a fortune since they are integrated with high end data and requires diligent efforts. As a buyer, you need to ensure that the report you are procuring should be worth your money and the pricing is set as per the industry’s ongoing norms.  

Data and content quality- Just imagine that the report you just procured using your hard-earned money is filled with data and language-based errors! You don’t want this to happen even in your worst nightmares. Therefore, it is advisable for firms to go through some of the pre-existing works of the selected market research agency to check its quality.  

Research Methods 

There are various methods used by market researchers to effectively collect data from target industry and audiences. These techniques are designed using structured methodologies to cater to the overall research requirements of an organization. 

Some of the widely adopted market research methods are listed below: 

Focus Group 

Focus group is defined as a market research method involving feedback collection regarding a product/service from a group of 6-10 people. These participants are selected based on their demographics, purchase history, behaviour, and psychographics. They are provided with a list of 10-12 related questions with an aim to get actionable responses. It is fast paced and affordable data collection method that can be conducted using flexible techniques.  

With rapid digital advancements, the online focus groups method is gaining immense traction wherein the participants need to virtually fill the required set of questionaries.  

Surveys 

Surveys is a qualitative market research method where the participants are given with a set of both open ended and close ended questions depending on the nature of the research. This facilitates easy, cost effective, and quite data collection. Also, the data obtained from market survey questions are quite straightforward and can be easy to analyse. 

Interviews 

Interviews can be regarded as one of the most insightful methods of data collection. Responses are collected through one-on-one conversations with the selected members of the target market. The data gathered via this method is quite extensive and unique in nature as the participants can speak their hearts out about the product/service or the entire industry vertical they are asked about. Most of their replies are straight to point and brutally honest making it easy for the analysts to category and thoroughly evaluate the data.  

Experiments and Field Trials 

Experiments and field trials generally involve scientific testing of the product in the participant’s environment i.e., real life setting. The data is obtained on the basis of certain dependent and independent variables which is controlled by the research. It is always quantitative in nature.  

Let’s say a cosmetic company recently launched its vegan foundation range. To test the growth potential of the product, it delivers some of the products to limited test market stores. Now the company will decide the fate of this product depending on its sales performance in the test market stores.  

Observation 

Observational research method involves a wide range of techniques used by enterprises to gather actionable insights about the performance of their brands by directly or indirectly observing consumer behaviour in planned or natural environments. The information collected via this method is highly reliable since it represents the actual buying behaviour of target consumers. Market researchers can further use the obtained data to formulate effective brand improvement strategies for the associated enterprise. 

Benefits of market research 

• It helps businesses strengthen their position 
• It minimises any investment risk 
• It identifies potential threats and opportunities 
• It helps companies to discover the strengths and weaknesses of their competitors 
• It aids strategic planning 
• It helps in determining emerging trends 
• It offers revenue projections 
• It focuses on customer needs and demands 
• It helps to assess the success of a business against benchmarks 

How to develop an effective Market Research Plan? 

• Conduct a comprehensive situation analysis 
• Develop clear marketing objectives 
• Make a financial plan 
• Identify your target audience 
• List your research methods 
• Fix a timeline 
• Enlist and acknowledge ethical concerns 

How is data collected? 

The collection of correct and reliable data is one of the primary steps in market research. Thus, we have listed down some of the most relevant data collection methods that can be used by researchers- 

• Focus Groups 
• Depth Interviews 
• Case Studies 
• Online Surveys 
• Observations 
• Others 

What aspects are used for Market Research 

There are four main aspects focused on when it comes to market research.  

Know what questions you want answers for 

When starting a new research project, organizations should focus on identifying the gaps they need to fill rather than researching topics they believe will best fit their needs. This way, they can be sure to take into account the full range of information available, instead of limiting themselves to a pre-defined set of criteria.  

Recognize your customer’s point of view  

When you conduct market research, it is essential that you ensure your needs are not disregarded. As a customer, you should stay vigilant and make sure that the company you contact provides the data that you are looking for. Do not let them give you the wrong information; you know exactly what you need, so do not let your needs go unmet. 

The Voice of the Customer is essential to achieving success in market research projects. Organizations should be sure to work with a company that is willing to go the extra mile and consider every possible method – surveys, interviews, observation or focus groups – to ensure all customer needs, wants, and requirements are met. By doing so, companies can no doubt foster customer loyalty. 

Know the source 

It is imperative that when collecting data for important business decisions, you ensure that the sources are reliable and authoritative. Gathering information from any source is acceptable, but it is essential to confirm its accuracy in order to make sound and successful decisions. 

Know where you’re going 

Knowing what your ultimate goal is one of the most important parts of market research, even though it is abstract. Conducting research without a purpose is not only costly, but also futile. The data you obtain must be able to inform your business decisions in order to be useful. Therefore, what is essential is getting the data that will help you reach your objectives. 

Top-Down and Bottom-Up analysis 

Top-down analysis 

Top-down analysis is a decision-making strategy that starts with looking at the overall picture and breaking it down into smaller parts. This approach looks at the large-scale factors that impact a situation and works its way down to the details. By understanding the big picture, it is easier to make informed decisions that account for the various components and associated risks. The top-down approach helps identify the necessary steps to reach the desired outcome. 

An analyst with a top-down perspective wants to understand how macro-level factors influence an outcome. In corporate finance, this can include looking at large-scale trends that impact the whole industry. In goal setting, budgeting, and forecasting, the same perspective can be used to account for and manage macro-level factors. 

Bottom-up analysis 

In contrast to top-down analysis, bottom-up investing focuses on micro attributes of individual elements, rather than the overall market. The goal of bottom-up investing is to identify profitable opportunities by evaluating a company's particular characteristics and its valuations relative to the market. This approach takes a more detailed look at individual elements and their sector-by-sector fundamentals to determine investment potential. 

In bottom-up analysis, the research starts at the company level but is not limited to it. Consideration is given to company fundamentals, the sector it operates in and microeconomic factors. This approach can be broadly applied across an industry or focused on identifying specific attributes. 

Primary And Secondary Market Research 

Primary Market Research 

Market research can be divided into two categories: primary and secondary. Primary research entails conducting one's own investigations (or hiring someone to do so) by seeking out information directly from sources in one's target market, like customers and potential customers.  

Primary research examples include conducting interviews (either by telephone or in-person), administering surveys (either online or through the mail), distributing market research questionnaires (either online or through the mail), organizing focus group marketing, visiting competitors' locations, and observing customer behavior. 

Primary research involves gathering two main types of information: Exploratory and Specific. Exploratory research is usually more general and open-ended, using interviews with an individual or small group. Specific research, on the other hand, is more precise and is used to address a problem found during exploratory research. This type of research involves more structured and formal interviews. 

Secondary Market Research 

Research that has already been collected, arranged, and published by others is known as secondary research. It can include reports from government agencies, trade associations or other organizations in the same industry. Secondary research is often the go-to for small businesses with limited resources, since it is usually cheaper and easier to access than primary research. It can also be called as online market research and analysis, and is market research for small business. 

By entering key words and phrases into the Web, one can access a great deal of secondary research. Additionally, one can find such research by reading articles in magazines, trade journals, and industry publications, visiting a reference library, and speaking with industry associations or trade organizations. 

Government agencies are an excellent source of secondary research data, which is often available free of charge. Conversely, obtaining data published by private companies may require permission and could incur a fee. 

How PRs and RDs are associated with Market Research 

Press releases are essential for communicating the results of the market research to the customers. They are the go-to source for organizations, decision-makers, and other researchers to learn about the most recent developments. By disseminating press releases and the stories they generate, the customer is kept abreast of the progress made in the market research. 

A market research document is essentially a report that provides detailed insights into the characteristics, buying habits, and needs of your ideal customers, as well as the value that your product or service can bring to them and the list of your top competitors. A marketing research document can be used to gain an understanding of the current market landscape, including what products and services are currently available and which ones have the greatest potential for success.  

Additionally, it can provide information on consumer intelligence, attitudes and preferences, enabling companies to better understand their target customer base and how to best meet their needs. Moreover, it can reveal any gaps in the market that can be filled with new products or services, thereby providing an opportunity for companies to gain an edge over competitors. All of this information can be used to create effective marketing strategies to successfully launch and promote new products or services. 

What is Data Analysis and how it is done during Market research? 

In a market research project, the data analysis stage involves combining qualitative and/or quantitative data and closely examining it to draw conclusions and gain insightful knowledge. These conclusions are vital for producing research reports and presentations. 

The goal of analyzing data in research is to uncover meaningful information and insights from a collection of data. Large amounts of data must be condensed and presented in a manner that effectively conveys the most salient points and findings. 

Data analysis in research projects that involve quantitative methods often utilize similar techniques, such as ascertaining the frequency of variables and determining the differences between variables. Additionally, statistical testing is regularly performed to assess the significance of any outcomes and ascertain that the results were not due to chance. 

Content analysis, a form of data analysis in research, involves creating bespoke coding methods in order to identify the similarities and differences between responses in projects that include qualitative methods. This type of market research analysis is necessary, as systems for pre-coding qualitative data are limited. 

Data collection and analysis are essential if you want your product or service to be successful. If you don't feel confident conducting data analysis yourself, delegate the work to someone else. There are many excellent market research consultants and top market research companies that will be willing to do the job for you, although it may be expensive depending on the amount of data and your industry. However, the effort will be well worth it! 

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Conclusion 

Without market research, companies are left to make key decisions based on instinct or outdated data, rather than the valuable insights gained from market research which can fuel their business. 

With BrandEssence Market Research, companies can revolutionize the way they conduct market research. No longer will they have to invest in costly, time-consuming researching. Our innovative methods provide the most up-to-date information available, allowing for tracking of competitors in all aspects and comparison of results with unparalleled accuracy. Try us out and see what answers you can find to your next big market research question!