Market research is the process of conducting thorough analysis, exploration and interpreting information to gain a better understanding of the needs and preferences of customers or users.
Market research is a vital part of business planning; it aids businesses to gain insightful information about their industry, customers and competition and allows the business to make strategic decisions that can lead to positive outcomes.
Market research can give business opportunities to:
At the beginning of a start-ups journey, market research is about validating the idea and testing the market for a response to see if a product/market fit can be achieved. As the business progresses, market research starts to become more about gaining insights that can help shape business decisions such as marketing strategy.
As the barriers for entry across many industries is at its lowest ever - the importance of market research has never been more important to ensure your business has a USP (unique selling point). Having a clear understanding of why a customer would prefer your business over your more established competitor is absolutely key.
However, good market research can produce positive results for any business at any stage. Without the use of market research, we can only act, and plan based on instinct, previous knowledge and assumptions which may not always be accurate - they can be clouded by our own bias.
For smaller businesses, their agileness is a major competitive advantage compared to larger businesses. We all know too well the stories of Blockbuster going bust as they were not able to foresee Netflix in time, and same with MySpace due to Facebook.
Netflix and Facebook at the time were smaller businesses who were better able to react to user needs by providing a better-suited product for changing user behaviours.
Market research isn’t a one-time thing, it should be an ongoing activity whereby you're continuously learning about your industry and market. Every metric about your customers is an opportunity to try and gain an advantage - eg. even knowing how customers view your website (on a mobile device or a computer) can help you gain an advantage if your competitors have not reacted to this. If more and more customers are shifting to mobile (which is very common) then a website with a good mobile experience is likely to rank higher on Google and potentially lead to higher sales.
Continuous market research will improve the success rate of your products as your business decisions are then tailored around customer preferences.
Market research is broken into primary and secondary research in terms of data source, and qualitative and quantitative research in terms of data category.
This is knowledge gained directly first-hand from the source, for example gaining data from a potential client. Data/information is gained either by yourself or somebody you hired. Primary research is always gathered to gain knowledge for a specific purpose. Types of primary research include:
Typically, the most common form of research, secondary research is the collection of data/information that has already been published. This can be reports, media sources, newsletters, census data, search engines and more. Due to data/information has not been researched for your specific purpose it may not always be 100% accurate to your situation. It is always worth interrogating the data source and trying to corroborate multiple sources for validation and accuracy.
Qualitative research is where the data obtained isn't in the form of numbers - ie. it is more descriptive. It can use primary research methods such as surveys and questionnaires enabling you to gather more information through explanatory answers. Qualitative research can handle feelings, opinions and thoughts, giving a deeper insight into buyers’ perception and behaviour.
Quantitative research is the gathering of numerical data. This can be data such as market size, customer satisfaction out of 10, the number of individuals interested in your product etc. This data can be collated using primary or secondary research. This method makes it easier enabling patterns and trends to be discovered.
Typically for a lot of businesses, market research will be heavily focused on desktop research - you keep googling and drilling down on results till you find the answers you are looking for. You may in the process come across large data sets which are too complex to understand, or you might not even be able to access some of the other valuable data sets as they aren't available to the public.
Market research is difficult and cumbersome, but it doesn't have to be!
&facts brings data together from a library of trusted data sources, helping you search and discover analysis, trends and the answers to your questions quicker than ever.
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