example of a market research strategy

How to Do Market Research: The Complete Guide

Learn how to do market research with this step-by-step guide, complete with templates, tools and real-world examples.

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What are your customers’ needs? How does your product compare to the competition? What are the emerging trends and opportunities in your industry? If these questions keep you up at night, it’s time to conduct market research.

Market research plays a pivotal role in your ability to stay competitive and relevant, helping you anticipate shifts in consumer behavior and industry dynamics. It involves gathering these insights using a wide range of techniques, from surveys and interviews to data analysis and observational studies.

In this guide, we’ll explore why market research is crucial, the various types of market research, the methods used in data collection, and how to effectively conduct market research to drive informed decision-making and success.

What is market research?

Market research is the systematic process of gathering, analyzing and interpreting information about a specific market or industry. The purpose of market research is to offer valuable insight into the preferences and behaviors of your target audience, and anticipate shifts in market trends and the competitive landscape. This information helps you make data-driven decisions, develop effective strategies for your business, and maximize your chances of long-term growth.

Why is market research important? 

By understanding the significance of market research, you can make sure you’re asking the right questions and using the process to your advantage. Some of the benefits of market research include:

• Informed decision-making: Market research provides you with the data and insights you need to make smart decisions for your business. It helps you identify opportunities, assess risks and tailor your strategies to meet the demands of the market. Without market research, decisions are often based on assumptions or guesswork, leading to costly mistakes.
• Customer-centric approach: A cornerstone of market research involves developing a deep understanding of customer needs and preferences. This gives you valuable insights into your target audience, helping you develop products, services and marketing campaigns that resonate with your customers.
• Competitive advantage: By conducting market research, you’ll gain a competitive edge. You’ll be able to identify gaps in the market, analyze competitor strengths and weaknesses, and position your business strategically. This enables you to create unique value propositions, differentiate yourself from competitors, and seize opportunities that others may overlook.
• Risk mitigation: Market research helps you anticipate market shifts and potential challenges. By identifying threats early, you can proactively adjust their strategies to mitigate risks and respond effectively to changing circumstances. This proactive approach is particularly valuable in volatile industries.
• Resource optimization: Conducting market research allows organizations to allocate their time, money and resources more efficiently. It ensures that investments are made in areas with the highest potential return on investment, reducing wasted resources and improving overall business performance.
• Adaptation to market trends: Markets evolve rapidly, driven by technological advancements, cultural shifts and changing consumer attitudes. Market research ensures that you stay ahead of these trends and adapt your offerings accordingly so you can avoid becoming obsolete. 

As you can see, market research empowers businesses to make data-driven decisions, cater to customer needs, outperform competitors, mitigate risks, optimize resources and stay agile in a dynamic marketplace. These benefits make it a huge industry; the global market research services market is expected to grow from $76.37 billion in 2021 to $108.57 billion in 2026 . Now, let’s dig into the different types of market research that can help you achieve these benefits.

Types of market research 

• Qualitative research
• Quantitative research
• Exploratory research
• Descriptive research
• Causal research
• Cross-sectional research
• Longitudinal research

Despite its advantages, 23% of organizations don’t have a clear market research strategy. Part of developing a strategy involves choosing the right type of market research for your business goals. The most commonly used approaches include:

1. Qualitative research

Qualitative research focuses on understanding the underlying motivations, attitudes and perceptions of individuals or groups. It is typically conducted through techniques like in-depth interviews, focus groups and content analysis — methods we’ll discuss further in the sections below. Qualitative research provides rich, nuanced insights that can inform product development, marketing strategies and brand positioning.

2. Quantitative research

Quantitative research, in contrast to qualitative research, involves the collection and analysis of numerical data, often through surveys, experiments and structured questionnaires. This approach allows for statistical analysis and the measurement of trends, making it suitable for large-scale market studies and hypothesis testing. While it’s worthwhile using a mix of qualitative and quantitative research, most businesses prioritize the latter because it is scientific, measurable and easily replicated across different experiments.

3. Exploratory research

Whether you’re conducting qualitative or quantitative research or a mix of both, exploratory research is often the first step. Its primary goal is to help you understand a market or problem so you can gain insights and identify potential issues or opportunities. This type of market research is less structured and is typically conducted through open-ended interviews, focus groups or secondary data analysis. Exploratory research is valuable when entering new markets or exploring new product ideas.

4. Descriptive research

As its name implies, descriptive research seeks to describe a market, population or phenomenon in detail. It involves collecting and summarizing data to answer questions about audience demographics and behaviors, market size, and current trends. Surveys, observational studies and content analysis are common methods used in descriptive research. 

5. Causal research

Causal research aims to establish cause-and-effect relationships between variables. It investigates whether changes in one variable result in changes in another. Experimental designs, A/B testing and regression analysis are common causal research methods. This sheds light on how specific marketing strategies or product changes impact consumer behavior.

6. Cross-sectional research

Cross-sectional market research involves collecting data from a sample of the population at a single point in time. It is used to analyze differences, relationships or trends among various groups within a population. Cross-sectional studies are helpful for market segmentation, identifying target audiences and assessing market trends at a specific moment.

7. Longitudinal research

Longitudinal research, in contrast to cross-sectional research, collects data from the same subjects over an extended period. This allows for the analysis of trends, changes and developments over time. Longitudinal studies are useful for tracking long-term developments in consumer preferences, brand loyalty and market dynamics.

Each type of market research has its strengths and weaknesses, and the method you choose depends on your specific research goals and the depth of understanding you’re aiming to achieve. In the following sections, we’ll delve into primary and secondary research approaches and specific research methods.

Primary vs. secondary market research

Market research of all types can be broadly categorized into two main approaches: primary research and secondary research. By understanding the differences between these approaches, you can better determine the most appropriate research method for your specific goals.

Primary market research 

Primary research involves the collection of original data straight from the source. Typically, this involves communicating directly with your target audience — through surveys, interviews, focus groups and more — to gather information. Here are some key attributes of primary market research:

• Customized data: Primary research provides data that is tailored to your research needs. You design a custom research study and gather information specific to your goals.
• Up-to-date insights: Because primary research involves communicating with customers, the data you collect reflects the most current market conditions and consumer behaviors.
• Time-consuming and resource-intensive: Despite its advantages, primary research can be labor-intensive and costly, especially when dealing with large sample sizes or complex study designs. Whether you hire a market research consultant, agency or use an in-house team, primary research studies consume a large amount of resources and time.

Secondary market research 

Secondary research, on the other hand, involves analyzing data that has already been compiled by third-party sources, such as online research tools, databases, news sites, industry reports and academic studies.

Here are the main characteristics of secondary market research:

• Cost-effective: Secondary research is generally more cost-effective than primary research since it doesn’t require building a research plan from scratch. You and your team can look at databases, websites and publications on an ongoing basis, without needing to design a custom experiment or hire a consultant. 
• Leverages multiple sources: Data tools and software extract data from multiple places across the web, and then consolidate that information within a single platform. This means you’ll get a greater amount of data and a wider scope from secondary research.
• Quick to access: You can access a wide range of information rapidly — often in seconds — if you’re using online research tools and databases. Because of this, you can act on insights sooner, rather than taking the time to develop an experiment. 

So, when should you use primary vs. secondary research? In practice, many market research projects incorporate both primary and secondary research to take advantage of the strengths of each approach.

One rule of thumb is to focus on secondary research to obtain background information, market trends or industry benchmarks. It is especially valuable for conducting preliminary research, competitor analysis, or when time and budget constraints are tight. Then, if you still have knowledge gaps or need to answer specific questions unique to your business model, use primary research to create a custom experiment. 

Market research methods

• Surveys and questionnaires
• Focus groups
• Observational research
• Online research tools
• Experiments
• Content analysis
• Ethnographic research

How do primary and secondary research approaches translate into specific research methods? Let’s take a look at the different ways you can gather data: 

1. Surveys and questionnaires

Surveys and questionnaires are popular methods for collecting structured data from a large number of respondents. They involve a set of predetermined questions that participants answer. Surveys can be conducted through various channels, including online tools, telephone interviews and in-person or online questionnaires. They are useful for gathering quantitative data and assessing customer demographics, opinions, preferences and needs. On average, customer surveys have a 33% response rate , so keep that in mind as you consider your sample size.

2. Interviews

Interviews are in-depth conversations with individuals or groups to gather qualitative insights. They can be structured (with predefined questions) or unstructured (with open-ended discussions). Interviews are valuable for exploring complex topics, uncovering motivations and obtaining detailed feedback. 

3. Focus groups

The most common primary research methods are in-depth webcam interviews and focus groups. Focus groups are a small gathering of participants who discuss a specific topic or product under the guidance of a moderator. These discussions are valuable for primary market research because they reveal insights into consumer attitudes, perceptions and emotions. Focus groups are especially useful for idea generation, concept testing and understanding group dynamics within your target audience.

4. Observational research

Observational research involves observing and recording participant behavior in a natural setting. This method is particularly valuable when studying consumer behavior in physical spaces, such as retail stores or public places. In some types of observational research, participants are aware you’re watching them; in other cases, you discreetly watch consumers without their knowledge, as they use your product. Either way, observational research provides firsthand insights into how people interact with products or environments.

5. Online research tools

You and your team can do your own secondary market research using online tools. These tools include data prospecting platforms and databases, as well as online surveys, social media listening, web analytics and sentiment analysis platforms. They help you gather data from online sources, monitor industry trends, track competitors, understand consumer preferences and keep tabs on online behavior. We’ll talk more about choosing the right market research tools in the sections that follow.

6. Experiments

Market research experiments are controlled tests of variables to determine causal relationships. While experiments are often associated with scientific research, they are also used in market research to assess the impact of specific marketing strategies, product features, or pricing and packaging changes.

7. Content analysis

Content analysis involves the systematic examination of textual, visual or audio content to identify patterns, themes and trends. It’s commonly applied to customer reviews, social media posts and other forms of online content to analyze consumer opinions and sentiments.

8. Ethnographic research

Ethnographic research immerses researchers into the daily lives of consumers to understand their behavior and culture. This method is particularly valuable when studying niche markets or exploring the cultural context of consumer choices.

How to do market research

• Set clear objectives
• Identify your target audience
• Choose your research methods
• Use the right market research tools
• Collect data
• Analyze data 
• Interpret your findings
• Identify opportunities and challenges
• Make informed business decisions
• Monitor and adapt

Now that you have gained insights into the various market research methods at your disposal, let’s delve into the practical aspects of how to conduct market research effectively. Here’s a quick step-by-step overview, from defining objectives to monitoring market shifts.

1. Set clear objectives

When you set clear and specific goals, you’re essentially creating a compass to guide your research questions and methodology. Start by precisely defining what you want to achieve. Are you launching a new product and want to understand its viability in the market? Are you evaluating customer satisfaction with a product redesign? 

Start by creating SMART goals — objectives that are specific, measurable, achievable, relevant and time-bound. Not only will this clarify your research focus from the outset, but it will also help you track progress and benchmark your success throughout the process. 

You should also consult with key stakeholders and team members to ensure alignment on your research objectives before diving into data collecting. This will help you gain diverse perspectives and insights that will shape your research approach.

2. Identify your target audience

Next, you’ll need to pinpoint your target audience to determine who should be included in your research. Begin by creating detailed buyer personas or stakeholder profiles. Consider demographic factors like age, gender, income and location, but also delve into psychographics, such as interests, values and pain points.

The more specific your target audience, the more accurate and actionable your research will be. Additionally, segment your audience if your research objectives involve studying different groups, such as current customers and potential leads.

If you already have existing customers, you can also hold conversations with them to better understand your target market. From there, you can refine your buyer personas and tailor your research methods accordingly.

3. Choose your research methods

Selecting the right research methods is crucial for gathering high-quality data. Start by considering the nature of your research objectives. If you’re exploring consumer preferences, surveys and interviews can provide valuable insights. For in-depth understanding, focus groups or observational research might be suitable. Consider using a mix of quantitative and qualitative methods to gain a well-rounded perspective. 

You’ll also need to consider your budget. Think about what you can realistically achieve using the time and resources available to you. If you have a fairly generous budget, you may want to try a mix of primary and secondary research approaches. If you’re doing market research for a startup , on the other hand, chances are your budget is somewhat limited. If that’s the case, try addressing your goals with secondary research tools before investing time and effort in a primary research study. 

4. Use the right market research tools

Whether you’re conducting primary or secondary research, you’ll need to choose the right tools. These can help you do anything from sending surveys to customers to monitoring trends and analyzing data. Here are some examples of popular market research tools:

• Market research software: Crunchbase is a platform that provides best-in-class company data, making it valuable for market research on growing companies and industries. You can use Crunchbase to access trusted, first-party funding data, revenue data, news and firmographics, enabling you to monitor industry trends and understand customer needs.

• Survey and questionnaire tools: SurveyMonkey is a widely used online survey platform that allows you to create, distribute and analyze surveys. Google Forms is a free tool that lets you create surveys and collect responses through Google Drive.
• Data analysis software: Microsoft Excel and Google Sheets are useful for conducting statistical analyses. SPSS is a powerful statistical analysis software used for data processing, analysis and reporting.
• Social listening tools: Brandwatch is a social listening and analytics platform that helps you monitor social media conversations, track sentiment and analyze trends. Mention is a media monitoring tool that allows you to track mentions of your brand, competitors and keywords across various online sources.
• Data visualization platforms: Tableau is a data visualization tool that helps you create interactive and shareable dashboards and reports. Power BI by Microsoft is a business analytics tool for creating interactive visualizations and reports.

5. Collect data

There’s an infinite amount of data you could be collecting using these tools, so you’ll need to be intentional about going after the data that aligns with your research goals. Implement your chosen research methods, whether it’s distributing surveys, conducting interviews or pulling from secondary research platforms. Pay close attention to data quality and accuracy, and stick to a standardized process to streamline data capture and reduce errors. 

6. Analyze data

Once data is collected, you’ll need to analyze it systematically. Use statistical software or analysis tools to identify patterns, trends and correlations. For qualitative data, employ thematic analysis to extract common themes and insights. Visualize your findings with charts, graphs and tables to make complex data more understandable.

If you’re not proficient in data analysis, consider outsourcing or collaborating with a data analyst who can assist in processing and interpreting your data accurately.

7. Interpret your findings

Interpreting your market research findings involves understanding what the data means in the context of your objectives. Are there significant trends that uncover the answers to your initial research questions? Consider the implications of your findings on your business strategy. It’s essential to move beyond raw data and extract actionable insights that inform decision-making.

Hold a cross-functional meeting or workshop with relevant team members to collectively interpret the findings. Different perspectives can lead to more comprehensive insights and innovative solutions.

8. Identify opportunities and challenges

Use your research findings to identify potential growth opportunities and challenges within your market. What segments of your audience are underserved or overlooked? Are there emerging trends you can capitalize on? Conversely, what obstacles or competitors could hinder your progress?

Lay out this information in a clear and organized way by conducting a SWOT analysis, which stands for strengths, weaknesses, opportunities and threats. Jot down notes for each of these areas to provide a structured overview of gaps and hurdles in the market.

9. Make informed business decisions

Market research is only valuable if it leads to informed decisions for your company. Based on your insights, devise actionable strategies and initiatives that align with your research objectives. Whether it’s refining your product, targeting new customer segments or adjusting pricing, ensure your decisions are rooted in the data.

At this point, it’s also crucial to keep your team aligned and accountable. Create an action plan that outlines specific steps, responsibilities and timelines for implementing the recommendations derived from your research. 

10. Monitor and adapt

Market research isn’t a one-time activity; it’s an ongoing process. Continuously monitor market conditions, customer behaviors and industry trends. Set up mechanisms to collect real-time data and feedback. As you gather new information, be prepared to adapt your strategies and tactics accordingly. Regularly revisiting your research ensures your business remains agile and reflects changing market dynamics and consumer preferences.

Online market research sources

As you go through the steps above, you’ll want to turn to trusted, reputable sources to gather your data. Here’s a list to get you started:

• Crunchbase: As mentioned above, Crunchbase is an online platform with an extensive dataset, allowing you to access in-depth insights on market trends, consumer behavior and competitive analysis. You can also customize your search options to tailor your research to specific industries, geographic regions or customer personas.

• Academic databases: Academic databases, such as ProQuest and JSTOR , are treasure troves of scholarly research papers, studies and academic journals. They offer in-depth analyses of various subjects, including market trends, consumer preferences and industry-specific insights. Researchers can access a wealth of peer-reviewed publications to gain a deeper understanding of their research topics.
• Government and NGO databases: Government agencies, nongovernmental organizations and other institutions frequently maintain databases containing valuable economic, demographic and industry-related data. These sources offer credible statistics and reports on a wide range of topics, making them essential for market researchers. Examples include the U.S. Census Bureau , the Bureau of Labor Statistics and the Pew Research Center .
• Industry reports: Industry reports and market studies are comprehensive documents prepared by research firms, industry associations and consulting companies. They provide in-depth insights into specific markets, including market size, trends, competitive analysis and consumer behavior. You can find this information by looking at relevant industry association databases; examples include the American Marketing Association and the National Retail Federation .
• Social media and online communities: Social media platforms like LinkedIn or Twitter (X) , forums such as Reddit and Quora , and review platforms such as G2 can provide real-time insights into consumer sentiment, opinions and trends. 

Market research examples

At this point, you have market research tools and data sources — but how do you act on the data you gather? Let’s go over some real-world examples that illustrate the practical application of market research across various industries. These examples showcase how market research can lead to smart decision-making and successful business decisions.

Example 1: Apple’s iPhone launch

Apple ’s iconic iPhone launch in 2007 serves as a prime example of market research driving product innovation in tech. Before the iPhone’s release, Apple conducted extensive market research to understand consumer preferences, pain points and unmet needs in the mobile phone industry. This research led to the development of a touchscreen smartphone with a user-friendly interface, addressing consumer demands for a more intuitive and versatile device. The result was a revolutionary product that disrupted the market and redefined the smartphone industry.

Example 2: McDonald’s global expansion

McDonald’s successful global expansion strategy demonstrates the importance of market research when expanding into new territories. Before entering a new market, McDonald’s conducts thorough research to understand local tastes, preferences and cultural nuances. This research informs menu customization, marketing strategies and store design. For instance, in India, McDonald’s offers a menu tailored to local preferences, including vegetarian options. This market-specific approach has enabled McDonald’s to adapt and thrive in diverse global markets.

Example 3: Organic and sustainable farming

The shift toward organic and sustainable farming practices in the food industry is driven by market research that indicates increased consumer demand for healthier and environmentally friendly food options. As a result, food producers and retailers invest in sustainable sourcing and organic product lines — such as with these sustainable seafood startups — to align with this shift in consumer values. 

The bottom line? Market research has multiple use cases and is a critical practice for any industry. Whether it’s launching groundbreaking products, entering new markets or responding to changing consumer preferences, you can use market research to shape successful strategies and outcomes.

Market research templates

You finally have a strong understanding of how to do market research and apply it in the real world. Before we wrap up, here are some market research templates that you can use as a starting point for your projects:

• Smartsheet competitive analysis templates : These spreadsheets can serve as a framework for gathering information about the competitive landscape and obtaining valuable lessons to apply to your business strategy.
• SurveyMonkey product survey template : Customize the questions on this survey based on what you want to learn from your target customers.
• HubSpot templates : HubSpot offers a wide range of free templates you can use for market research, business planning and more.
• SCORE templates : SCORE is a nonprofit organization that provides templates for business plans, market analysis and financial projections.
• SBA.gov : The U.S. Small Business Administration offers templates for every aspect of your business, including market research, and is particularly valuable for new startups. 

Strengthen your business with market research

When conducted effectively, market research is like a guiding star. Equipped with the right tools and techniques, you can uncover valuable insights, stay competitive, foster innovation and navigate the complexities of your industry.

Throughout this guide, we’ve discussed the definition of market research, different research methods, and how to conduct it effectively. We’ve also explored various types of market research and shared practical insights and templates for getting started. 

Now, it’s time to start the research process. Trust in data, listen to the market and make informed decisions that guide your company toward lasting success.

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Market Research: A How-To Guide and Template

Discover the different types of market research, how to conduct your own market research, and use a free template to help you along the way.

MARKET RESEARCH KIT

5 Research and Planning Templates + a Free Guide on How to Use Them in Your Market Research

Updated: 02/21/24

Published: 02/21/24

Today's consumers have a lot of power. As a business, you must have a deep understanding of who your buyers are and what influences their purchase decisions.

Enter: Market Research.

Whether you're new to market research or not, I created this guide to help you conduct a thorough study of your market, target audience, competition, and more. Let’s dive in.

Table of Contents

What is market research?

Primary vs. secondary research, types of market research, how to do market research, market research report template, market research examples.

Market research is the process of gathering information about your target market and customers to verify the success of a new product, help your team iterate on an existing product, or understand brand perception to ensure your team is effectively communicating your company's value effectively.

Market research can answer various questions about the state of an industry. But if you ask me, it's hardly a crystal ball that marketers can rely on for insights on their customers.

Market researchers investigate several areas of the market, and it can take weeks or even months to paint an accurate picture of the business landscape.

However, researching just one of those areas can make you more intuitive to who your buyers are and how to deliver value that no other business is offering them right now.

How? Consider these two things:

• Your competitors also have experienced individuals in the industry and a customer base. It‘s very possible that your immediate resources are, in many ways, equal to those of your competition’s immediate resources. Seeking a larger sample size for answers can provide a better edge.
• Your customers don't represent the attitudes of an entire market. They represent the attitudes of the part of the market that is already drawn to your brand.

The market research services market is growing rapidly, which signifies a strong interest in market research as we enter 2024. The market is expected to grow from roughly $75 billion in 2021 to $90.79 billion in 2025 .

Free Market Research Kit

• SWOT Analysis Template
• Survey Template
• Focus Group Template

Download Free

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Click this link to access this resource at any time.

Why do market research?

Market research allows you to meet your buyer where they are.

As our world becomes louder and demands more of our attention, this proves invaluable.

By understanding your buyer's problems, pain points, and desired solutions, you can aptly craft your product or service to naturally appeal to them.

Market research also provides insight into the following:

• Where your target audience and current customers conduct their product or service research
• Which of your competitors your target audience looks to for information, options, or purchases
• What's trending in your industry and in the eyes of your buyer
• Who makes up your market and what their challenges are
• What influences purchases and conversions among your target audience
• Consumer attitudes about a particular topic, pain, product, or brand
• Whether there‘s demand for the business initiatives you’re investing in
• Unaddressed or underserved customer needs that can be flipped into selling opportunity
• Attitudes about pricing for a particular product or service

Ultimately, market research allows you to get information from a larger sample size of your target audience, eliminating bias and assumptions so that you can get to the heart of consumer attitudes.

As a result, you can make better business decisions.

To give you an idea of how extensive market research can get , consider that it can either be qualitative or quantitative in nature — depending on the studies you conduct and what you're trying to learn about your industry.

Qualitative research is concerned with public opinion, and explores how the market feels about the products currently available in that market.

Quantitative research is concerned with data, and looks for relevant trends in the information that's gathered from public records.

That said, there are two main types of market research that your business can conduct to collect actionable information on your products: primary research and secondary research.

Primary Research

Primary research is the pursuit of first-hand information about your market and the customers within your market.

It's useful when segmenting your market and establishing your buyer personas.

Primary market research tends to fall into one of two buckets:

• Exploratory Primary Research: This kind of primary market research normally takes place as a first step — before any specific research has been performed — and may involve open-ended interviews or surveys with small numbers of people.
• Specific Primary Research: This type of research often follows exploratory research. In specific research, you take a smaller or more precise segment of your audience and ask questions aimed at solving a suspected problem.

Secondary Research

Secondary research is all the data and public records you have at your disposal to draw conclusions from (e.g. trend reports, market statistics, industry content, and sales data you already have on your business).

Secondary research is particularly useful for analyzing your competitors . The main buckets your secondary market research will fall into include:

• Public Sources: These sources are your first and most-accessible layer of material when conducting secondary market research. They're often free to find and review — like government statistics (e.g., from the U.S. Census Bureau ).
• Commercial Sources: These sources often come in the form of pay-to-access market reports, consisting of industry insight compiled by a research agency like Pew , Gartner , or Forrester .
• Internal Sources: This is the market data your organization already has like average revenue per sale, customer retention rates, and other historical data that can help you draw conclusions on buyer needs.
• Focus Groups
• Product/ Service Use Research
• Observation-Based Research
• Buyer Persona Research
• Market Segmentation Research
• Pricing Research
• Competitive Analysis Research
• Customer Satisfaction and Loyalty Research
• Brand Awareness Research
• Campaign Research

1. Interviews

Interviews allow for face-to-face discussions so you can allow for a natural flow of conversation. Your interviewees can answer questions about themselves to help you design your buyer personas and shape your entire marketing strategy.

2. Focus Groups

Focus groups provide you with a handful of carefully-selected people that can test out your product and provide feedback. This type of market research can give you ideas for product differentiation.

3. Product/Service Use Research

Product or service use research offers insight into how and why your audience uses your product or service. This type of market research also gives you an idea of the product or service's usability for your target audience.

4. Observation-Based Research

Observation-based research allows you to sit back and watch the ways in which your target audience members go about using your product or service, what works well in terms of UX , and which aspects of it could be improved.

5. Buyer Persona Research

Buyer persona research gives you a realistic look at who makes up your target audience, what their challenges are, why they want your product or service, and what they need from your business or brand.

6. Market Segmentation Research

Market segmentation research allows you to categorize your target audience into different groups (or segments) based on specific and defining characteristics. This way, you can determine effective ways to meet their needs.

7. Pricing Research

Pricing research helps you define your pricing strategy . It gives you an idea of what similar products or services in your market sell for and what your target audience is willing to pay.

8. Competitive Analysis

Competitive analyses give you a deep understanding of the competition in your market and industry. You can learn about what's doing well in your industry and how you can separate yourself from the competition .

9. Customer Satisfaction and Loyalty Research

Customer satisfaction and loyalty research gives you a look into how you can get current customers to return for more business and what will motivate them to do so (e.g., loyalty programs , rewards, remarkable customer service).

10. Brand Awareness Research

Brand awareness research tells you what your target audience knows about and recognizes from your brand. It tells you about the associations people make when they think about your business.

11. Campaign Research

Campaign research entails looking into your past campaigns and analyzing their success among your target audience and current customers. The goal is to use these learnings to inform future campaigns.

• Define your buyer persona.
• Identify a persona group to engage.
• Prepare research questions for your market research participants.
• List your primary competitors.
• Summarize your findings.

1. Define your buyer persona.

You have to understand who your customers are and how customers in your industry make buying decisions.

This is where your buyer personas come in handy. Buyer personas — sometimes referred to as marketing personas — are fictional, generalized representations of your ideal customers.

Use a free tool to create a buyer persona that your entire company can use to market, sell, and serve better.

Don't forget to share this post!

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The Ultimate Guide to Market Research: Types, Benefits, and Real-World Examples

Team Fratzke

Today's consumers hold a lot of power when making purchase decisions. With a quick inquiry in a search engine or search bar within a social media platform, they can access genuine reviews from their peers without relying on sales reps.

Considering this shift in consumer behavior, adjusting your marketing strategy so it caters to the modern-day buying process is essential . To achieve this, you must thoroughly understand your target audience, the market you operate in, and the factors influencing their decision-making.

This is where market research can be leveraged so you stay current with your audience and industry. 

Article Overview

In this article, we’ll walk you through everything you need to know about how to conduct market research, including:

• Why market research is essential for understanding your target audience, the market you operate in, and factors influencing decision-making
• What are the different types of market research, such as primary and secondary market research
• How to collect information about your customers and target market to determine the success of a new or existing product, improve your brand, and communicate your company's value
• Real-world examples of companies leveraging market research

What is market research?

Market research is a necessary process that involves collecting and documenting information about your target market and customers. This helps you determine the success of a new product, improve an existing one, or understand how your brand is perceived. You can then turn this research into profits by  developing marketing strategies and campaigns to effectively communicate your company's value .

While market research can provide insights into various aspects of an industry, it is not a crystal ball that can predict everything about your customers. Market researchers typically explore multiple areas of the market, which can take several weeks or even months to get a complete picture of the business landscape.

Even by researching just one of those areas, you can gain better insights into who your buyers are and what unique value proposition you can offer them that no other business currently provides.

Of course, you can simply use your industry experience and existing customer insights to make sound judgment calls. However, it's important to note that market research provides additional benefits beyond these strategies. There are two things to consider:

• Your competitors also have experienced individuals in the industry and a customer base. Your immediate resources may equal those of your competition's immediate resources. Seeking a larger sample size for answers can provide a better edge.
• Your brand's customers do not represent the entire market's attitudes, only those who are attracted to your brand.

The market research services industry is experiencing rapid growth , indicating a strong interest in market research as we enter 2024. The market is expected to grow from approximately $75 billion in 2021 to $90.79 billion in 2025, with a compound annual growth rate of 5%. 

Your competitors have highly skilled individuals within the industry, meaning your available personnel resources are likely similar to those of your competitors. So what are you going to do to get ahead?

You’re going to do thorough market research, which is why seeking answers from a larger sample size is essential. Remember that your customers represent only a portion of the market already attracted to your brand, and their attitudes may not necessarily reflect those of the entire market. You could be leaving money on the table by leaving out untapped customers .

Why do market research?

Market research helps you meet your buyers where they are. Understanding your buyer's problems, pain points, and desired outcomes is invaluable as our world becomes increasingly noisy and demanding. This knowledge will help you tailor your product or service to appeal to them naturally. 

What’s even better is when you're ready to grow your business, market research can also guide you in developing an effective market expansion strategy.

Market research provides valuable insights into factors that impact your profits and can help you to :

• Identify where your target audience and current customers are conducting their product or service research
• Determine which competitors your target audience looks to for information, options, or purchases
• Keep up with the latest trends in your industry and understand what your buyers are interested in
• Understand who makes up your market and what challenges they are facing
• Determine what influences purchases and conversions among your target audience
• Analyze consumer attitudes about a particular topic, pain, product, or brand
• Assess the demand for the business initiatives you're investing in
• Identify unaddressed or underserved customer needs that can be turned into selling opportunities
• Understand consumer attitudes about pricing for your product or service.

Market research provides valuable information from a larger sample size of your target audience, enabling you to obtain accurate consumer attitudes. By eliminating any bias or assumptions you have about your target audience, you can make better business decisions based on the bigger picture. 

As you delve deeper into your market research, you will come across two types of research: primary and secondary market research . Simply put, think of two umbrellas beneath market research - one for primary and one for secondary research. In the next section, we will discuss the difference between these two types of research. That way, if you work with a market who wants to use them, you’ll be ready with an understanding of how they can each benefit your business.

Primary vs. Secondary Research

Both primary and secondary research are conducted to collect actionable information on your product. That information can then be divided into two types: qualitative and quantitative research. Qualitative research focuses on public opinion and aims to determine how the market feels about the products currently available. On the other hand, quantitative research seeks to identify relevant trends in the data gathered from public records. 

Let's take a closer look at these two types.

Primary Research

Primary research involves gathering first-hand information about your market and its customers. It can be leveraged to segment your market and create focused buyer personas . Generally, primary market research can be categorized into exploratory and specific studies.

Exploratory Primary Research

This type of primary market research is not focused on measuring customer trends; instead, it is focused on identifying potential problems worth addressing as a team. It is usually conducted as an initial step before any specific research is done and may involve conducting open-ended interviews or surveys with a small group of people.

Specific Primary Research

After conducting exploratory research, businesses may conduct specific primary research to explore issues or opportunities they have identified as necessary. Specific research involves targeting a smaller or more precise audience segment and asking questions aimed at solving a suspected problem. Specific primary research reveals problems that are unique to your audience so you can then offer a unique (and valuable) solution.

Secondary Research

Secondary research refers to collecting and analyzing data that has already been published or made available in public records. This may include market statistics, trend reports, sales data, and industry content you already can access. Secondary research really shines when you go to your competitors . The most commonly used sources of secondary market research include:

• Public sources
• Commercial sources
• Internal sources

Public Sources

When conducting secondary market research, the first and most accessible sources of information are usually free . That’s right–these public sources are free and at your fingertips so there’s no reason for you to not be checking them out and leveraging them for your own gain.

One of the most common types of public sources is government statistics. According to Entrepreneur, two examples of public market data in the United States are the U.S. Census Bureau and the Bureau of Labor & Statistics. These sources offer helpful information about the state of various industries nationwide including:

Commercial Sources

Research agencies such as Pew, Fratzke, Gartner, or Forrester often provide market reports containing industry insights from their own in-depth studies . These reports usually come at a cost if you want to download and obtain the information, but these agencies are experts at what they do, so the research is most likely valuable.

Internal Sources

Internal sources of market data can include average revenue per sale, customer retention rates, and other data on the health of old and new accounts. They are often overlooked when it comes to conducting market research because of how specific the data is; however, these sources can be valuable as they provide information on the organization's historical data.

By analyzing this information, you can gain insights into what your customers want now . In addition to these broad categories, there are various ways to conduct market research. Let’s talk about them.  

Types of Market Research

• Interviews (in-person or remote)

Focus Groups

• Product/ Service Use Research

Observation-Based Research

Buyer persona research, market segmentation research, pricing research.

• Competitive Analysis Research

Customer Satisfaction and Loyalty Research

Brand awareness research, campaign research.

Interviews can be conducted face-to-face or virtually, allowing for a natural conversation flow while observing the interviewee's body language. By asking questions about themselves, the interviewee can help you create buyer personas , which are made by using information about the ideal customer, such as:

• Family size 
• Challenges faced at work or in life 

And other aspects of their lifestyle. This buyer profile can shape your entire marketing strategy , from the features you add to your product to the content you publish on your website. Your target audience will feel that the marketing was made just for them and will be drawn to your product or service.

Focus groups are market research involving a few carefully selected individuals who can test your product, watch a demonstration, offer feedback, and answer specific questions. This research can inspire ideas for product differentiation or highlight the unique features of your product or brand that set it apart from others in the market.  This is a great market research option to gain specific feedback, which you can use to improve your services .

Product/Service Use Research

Product or service usage research provides valuable insights into how and why your target audience uses your product or service.  This research can help in various ways including:

•  Identifying specific features of your offering that appeal to your audience. 
• Allowing you to assess the usability of your product or service for your target audience. 

According to a report published in 2020, usability testing was rated the most effective method for discovering user insights, with a score of 8.7 out of 10. In comparison, digital analytics scored 7.7, and user surveys scored 6.4.

Observation-based research is a process that involves observing how your target audience members use your product or service. The way that you intended your product or service to be used may not be the actual way that it is used. Observation-based research helps you understand what works well in terms of customer experience (CX) and user experience (UX), what problems they face, and which aspects of your product or service can be improved to make it easier for them to use.

To better understand how your potential customers make purchasing decisions in your industry, it is essential to know who they are. This is where buyer persona research comes in handy. Buyer or marketing personas are fictional yet generalized representations of your ideal customers. They give you someone to whom you want your marketing efforts to empathize and move, even though they don’t really exist. 

Gathering survey data and additional research to correctly identify your buyer personas will help you to visualize your audience so you can streamline your communications and inform marketing strategy . Key characteristics to include in a buyer persona are:

• Job title(s)
• Family size
• Major challenges

Market segmentation research enables you to classify your target audience into various groups or segments based on specific and defining characteristics. This method allows you to understand their needs, pain points, expectations, and goals more effectively.

Pricing research can provide valuable insights about the prices of similar products or services in your market. It can help you understand what your target audience expects to pay for your offerings and what would be a reasonable price for you to set. Correct pricing is important because if you set it too high, consumers will go to your cheaper competitor; but if you set it too low, your consumers may become suspicious of your product or service and still end up with your competitor. This information allows you to develop a solid pricing strategy aligning with your business goals and objectives. 

Competitive Analysis

Competitive analyses are incredibly valuable as they provide a deep understanding of your market and industry competition. Through these analyses, you can gain insights like: 

• What works well in your industry 
• What your target audience is already interested in regarding products like yours
• Which competitors you should work to keep up with and surpass 
• How you can differentiate yourself from the competition

Understanding customer satisfaction and loyalty is crucial to encouraging repeat business and identifying what drives customers to return (such as loyalty programs, rewards, and exceptional customer service). Researching this area will help you determine the most effective methods to keep your customers coming back again and again. If you have a CRM system, consider further utilizing automated customer feedback surveys to improve your understanding of their needs and preferences.

Brand awareness research helps you understand the level of familiarity your target audience has with your brand. It provides insights into your audience members' perceptions and associations when they think about your business.This type of research reveals what they believe your brand represents. This information is valuable for developing effective marketing strategies, improving your brand's reputation, and increasing customer loyalty .

To improve your marketing campaigns, you need to research by analyzing the success of your past campaigns among your target audience and current customers. This requires experimentation and thoroughly examining the elements that resonate with your audience. By doing so, you can identify the aspects of your campaigns that matter most to your audience and use them as a guide for future campaigns. 

Now that you understand the different market research categories and types let's look at how to conduct your market research.  Using our expertise and experience, we’ve created a step-by-step guide to conducting market research.

How to Do Market Research (Detailed Roadmap)

• Define the problem or objective of the research. 
• Determine the type of data needed. 
• Identify the sources of data. 
• Collect the data. 
• Analyze the data. 
• Interpret the results. 
• Report the findings. 
• Take action based on the findings.

1. Define the problem or objective of the research

Defining the problem or objective of the research is the first step in conducting market research. This involves identifying the specific issue that the research is trying to address. It is essential to be clear and specific about the research problem or objective, as it will guide the entire research process.

2. Determine the type of data needed

After defining the research problem or objective, the next step is determining the data type needed to address the issue. This involves deciding whether to collect primary or secondary data. Primary data is collected directly from the source, while secondary data is collected from existing sources such as government reports or market research studies.

3. Identify the sources of data

Once the data type has been determined, the next step is identifying the data sources. This involves identifying potential sources of primary and secondary data that can be used to address the research problem or objective. Primary data sources can include surveys, focus groups, and interviews, while secondary data sources can include government reports, industry publications, and academic journals.

4. Collect the data

After identifying the data sources, the next step is to collect the data. This involves designing and implementing a data collection plan consistent with the research problem or objective. The data collection plan should specify the methods and procedures for collecting data, sample size, and sampling method.

5. Analyze the data

Once the data has been collected, the next step is to analyze the data. This involves organizing, summarizing, and interpreting the data to identify patterns, relationships, and trends. The research problem or objective should guide the data analysis process and be conducted using appropriate statistical methods and software.

6. Interpret the results

After analyzing the data, the next step is to interpret the results. This involves drawing conclusions from the data analysis and using the results to address the research problem or objective. It is essential to analyze the results objectively and to avoid making assumptions or drawing conclusions that are not supported by the data.

7. Report the findings

Try identifying common themes to create a story and action items.To make the process easier, use your favorite presentation software to create a report, as it will make it easy to add quotes, diagrams, or call clips.

Feel free to add your flair, but the following outline should help you craft a clear summary:

• Background: What are your goals, and why did you conduct this study?
• Participants: Who you talked to? A table works well to break groups down by persona and customer/prospect.
• Executive Summary: What were the most exciting things you learned? What do you plan to do about it?
• Key Findings: Identify the key findings using data visualizations and emphasize key points.
• Recommendations + Action Plan: Your analysis will uncover actionable insights to fuel strategies and campaigns you can run to get your brand in front of buyers earlier and more effectively. Provide your list of priorities, action items , a timeline, and its impact on your business.

8. Take action based on the findings

The final step in conducting market research is to take action based on the findings. This involves using the results to make informed decisions about the marketing strategy, product development, or other business decisions. It is important to use the findings to drive action and to monitor and evaluate the effectiveness of the action taken continuously.

How to Prepare for Market Research Projects

Identify a persona group to engage, prepare research questions for your market research participants, list your primary competitors.

The idea is to use your persona as a reference point for understanding and reaching out to your industry's audience members. Your business might cater to more than one persona, and that's completely acceptable! However, you must be mindful of each persona while strategizing and planning your content and campaigns. 

How to Identify the Right People to Engage for Market Research

When selecting a group on which to conduct market research , it is essential to consider individuals with the same characteristics as your target audience. 

If you need to research multiple target audiences, recruit separate groups for each one. Select people who have recently interacted with you by looking through social media for post interactions or seeing if they’ve made recent purchases from you.

If you are planning to conduct an evaluation, it is recommended that you focus on people who have completed it within the last six months. However, if you have a longer sales cycle or a specific market, you can extend the period up to a year. It is crucial to ask detailed questions during the evaluation, so the participants' experience must be fresh.

Gather a mix of participants

If you want to expand your customer base, you’re going to want to get viewpoints of your product or service from every angle. Consider getting this mix by recruiting individuals who have already purchased your product, those who have bought a competitor's product, and those who haven't purchased anything. While targeting your existing customers may be the easiest option, gathering information from non-customers can help you gain a more balanced market perspective .

We recommend taking the following steps to select a mix of participants:

• Create a list of customers who made a recent purchase . This is usually the most accessible group to recruit. If you have a CRM system with list segmentation capabilities, run a report of deals that closed within the past six months and filter it for the characteristics you're looking for. Otherwise, work with your sales team to get them a list of appropriate accounts.
• Create a list of customers who were in an active evaluation but didn't make a purchase. You should get a mix of buyers who either purchased from a competitor or decided not to purchase. Again, you can obtain this list from your CRM or your Sales team's system to track deals.
• Use social media to call for participants. Try reaching out to people who follow you on social media but decided not to buy from you. Some may be willing to talk to you and explain why they did not purchase your product.
• Leverage your network . Spread the word that you're conducting a study to your coworkers, former colleagues, and LinkedIn connections. Even if your direct connections don't qualify, some will likely have a coworker, friend, or family member who does.
• Choose an incentive to motivate participants to spend time on your study. If you're on a tight budget , you can reward participants for free by giving them exclusive access to content. 

Related Resources:

• Digital Marketing Strategy: Keep It Simple
• 5 Marketing Predictions for the Looming Recession
• Recession Proof Marketing Strategies for Your Business
• Marketing Operations Framework - The Five Ps
• Biggest Marketing Challenges Leaders Face
• Digital Marketing Benchmarks & KPIs - How To Compare Your Performance

Preparation is key when conducting research in hopes of gaining productive and informative conversations. This involves creating a discussion guide, whether it is for a focus group, an online survey, or a phone interview. The guide should help you cover all the relevant topics and manage your time efficiently.

The discussion guide should be in an outline format, with an allocated time and open-ended questions for each section. All the questions must be open-ended, as asking closed questions may lead the interviewee to respond with a simple "yes" or "no" answer. You may need more detailed answers to make informed decisions, so be sure to ask follow-up questions as necessary.  Also leave out any leading questions as they may unintentionally influence the interviewee's response, skewing your research results.

It's essential to identify your competitors accurately and you may even have some hidden in plain sight.  There are some instances where your company's business division might compete with your main product or service, even though that company's brand might have a different focus. Take a look at Apple:  the company is known primarily for its laptops and mobile devices, but Apple Music competes with Spotify over its music streaming service.

From a content perspective, you might compete with a blog, YouTube channel, or similar publication for inbound website visitors — even though their products don't overlap with yours. An example of this is when a toothpaste company might compete with publications like Health.com or Prevention on specific blog topics related to health and hygiene, even though the magazines don't sell oral care products.

Here are a few ways to build your competitor list:

• Check your industry quadrant on G2 Crowd: This is a significant first step for secondary market research in some industries. G2 Crowd aggregates user ratings and social data to create "quadrants" that show companies as contenders, leaders, niche players, or high performers in their respective industries. G2 Crowd specializes in digital content, IT services, HR, e-commerce, and related business services.
• Download a market report: Companies like Forrester and Gartner offer free and gated market forecasts yearly on the vendors leading their industry. On Forrester's website, for example, you can select "Latest Research" from the navigation bar and browse Forrester's latest material using a variety of criteria to narrow your search. These reports are good assets to save on your computer.
• Use social media : Social networks can be excellent company directories if you use the search bar correctly. On LinkedIn, for example, select the search bar and enter the name of the industry you're pursuing. Then, under "More," select "Companies" to narrow your results to the businesses that include this or a similar industry term on their LinkedIn profile.

Identifying Content Competitors

Search engines can be beneficial when it comes to secondary market research . To identify the online publications competing with your business, start with the overarching industry term you identified earlier, and then come up with more specific industry terms that are related to your company . For example, if you run a catering business, you might consider yourself a "food service" company, as well as a vendor in "event catering," "cake catering," "baked goods," and so on.

Once you have this list, follow these steps:

• Google it: Running a search on Google for the industry terms that describe your company can be very beneficial. You may come across a mix of product developers, blogs, magazines, and other websites.
• Compare your search results against your buyer persona: Remember the persona you created during the primary research stage? You can use it to evaluate whether a publication you found through Google could steal website traffic from you. If the website's content aligns with what your buyer persona would want to see, it is a potential competitor and should be added to your list of competitors.

After a series of similar Google searches for the industry terms you identify with, look for repetition in the website domains that have come up.

When searching, examine the first two or three pages of results. These websites are considered reputable sources of content in your industry and should be monitored closely as you create your collection of videos, reports, web pages, and blog posts.

Market Research Examples

Mcdonald's focus on customer feedback and profiling.

McDonald's invests in developing a detailed consumer profile to attract and retain customers, including parents of young children who appreciate the family-friendly atmosphere and menus. The brand seeks feedback from customers through surveys and questionnaires in stores, social media, and its mobile app. It also monitors customer feedback on digital channels.

Nike's Extensive Research and Collaboration for Running Shoes Development

Nike invests heavily in creating running shoes that cater to the needs of its customers, which it determines through extensive market research and customer surveys. The brand goes to great lengths to understand its customers' preferences, such as the type of running surface, the distance they run, and their running style, to develop shoes that meet their specific needs.

In addition to customer surveys, Nike also collaborates with athletes to develop shoes that cater to their specific requirements. This research helps Nike improve its existing running shoe models and innovate new ones, ensuring that the brand stays ahead of the competition.

Disney employs focus groups that specifically cater to children to test out their new characters and ideas.

The Walt Disney Company invests millions of dollars in creating captivating stories tested for their effectiveness with children, the intended audience. Disney executives hold focus groups with preschoolers and kindergartners several times a year to gather their opinions and feedback on TV episodes, Disney characters, and more. 

This market research strategy is effective because children are the ultimate audience that Disney aims to please. The collected feedback helps the company improve existing content to meet the preferences of its audience and ensure continued success as a multi-billion dollar enterprise.

KFC tested its meatless product in specific markets before launching it nationwide.

In 2019, KFC began developing and testing a meatless version of its famous chicken. However, instead of immediately launching the product nationwide, they decided to test it in select stores in the Atlanta, Georgia area. 

This is an innovative and practical approach to market research, as it allows the company to determine the product's sales performance on a smaller scale before committing too many resources to it. If the meatless chicken fails to gain popularity in Georgia, KFC can make the necessary changes to the product before introducing it to the broader market.

Yamaha conducted a survey to determine whether to use knobs or sliding faders on the Montage keyboard.

Yamaha is a Japanese corporation that produces various products, from motorcycles to golf cars to musical instruments. When it began developing its new Montage keyboard, the team was unsure whether to use knobs or sliding faders on the product. 

To address this dilemma, Yamaha used Qualtrics to send a survey to their customers. Within just a few hours , they received 400 responses. By using survey feedback, Yamaha ensured that it was designing a product that would perfectly meet the preferences of its audiences.

The Body Shop used social listening to determine how to reposition brand campaigns based on customer feedback.

The Body Shop is a well-known brand that offers ethically sourced and natural products. They take pride in their core value of sustainability. The Body Shop team tracked conversations to understand the sustainability subtopics that were most important to their audiences. 

They found that their customers cared a lot about refills. Based on this information, the Body Shop team confidently relaunched their Refill Program across 400 stores globally in 2021, with plans to add another 400 in 2022. Market research confirmed that their refill concept was on the right track and also highlighted the need for increased efforts to demonstrate how much the Body Shop cares about its customers' values .

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The takeaway.

Fratzke Consulting offers a comprehensive suite of market research services to help brands gain valuable insights into their target market, competitors, and industry trends. Our expert team utilizes various primary and secondary research methods to gather accurate and unbiased data, including surveys, competitive research, and industry reports. With Fratzke Consulting, you'll have the tools to succeed in today's rapidly evolving business landscape.

Interested in learning more? Book a free audit consultation today.

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How to do market research in 4 steps: a lean approach to marketing research

From pinpointing your target audience and assessing your competitive advantage, to ongoing product development and customer satisfaction efforts, market research is a practice your business can only benefit from.

Learn how to conduct quick and effective market research using a lean approach in this article full of strategies and practical examples. 

Last updated

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A comprehensive (and successful) business strategy is not complete without some form of market research—you can’t make informed and profitable business decisions without truly understanding your customer base and the current market trends that drive your business.

In this article, you’ll learn how to conduct quick, effective market research  using an approach called 'lean market research'. It’s easier than you might think, and it can be done at any stage in a product’s lifecycle.

How to conduct lean market research in 4 steps

What is market research, why is market research so valuable, advantages of lean market research, 4 common market research methods, 5 common market research questions, market research faqs.

We’ll jump right into our 4-step approach to lean market research. To show you how it’s done in the real world, each step includes a practical example from Smallpdf , a Swiss company that used lean market research to reduce their tool’s error rate by 75% and boost their Net Promoter Score® (NPS) by 1%.

Research your market the lean way...

From on-page surveys to user interviews, Hotjar has the tools to help you scope out your market and get to know your customers—without breaking the bank.

The following four steps and practical examples will give you a solid market research plan for understanding who your users are and what they want from a company like yours.

1. Create simple user personas

A user persona is a semi-fictional character based on psychographic and demographic data from people who use websites and products similar to your own. Start by defining broad user categories, then elaborate on them later to further segment your customer base and determine your ideal customer profile .

How to get the data: use on-page or emailed surveys and interviews to understand your users and what drives them to your business.

How to do it right: whatever survey or interview questions you ask, they should answer the following questions about the customer:

Who are they?

What is their main goal?

What is their main barrier to achieving this goal?

Pitfalls to avoid:

Don’t ask too many questions! Keep it to five or less, otherwise you’ll inundate them and they’ll stop answering thoughtfully.

Don’t worry too much about typical demographic questions like age or background. Instead, focus on the role these people play (as it relates to your product) and their goals.

How Smallpdf did it: Smallpdf ran an on-page survey for a couple of weeks and received 1,000 replies. They learned that many of their users were administrative assistants, students, and teachers.

Next, they used the survey results to create simple user personas like this one for admins:

Who are they? Administrative Assistants.

What is their main goal? Creating Word documents from a scanned, hard-copy document or a PDF where the source file was lost.

What is their main barrier to achieving it? Converting a scanned PDF doc to a Word file.

💡Pro tip: Smallpdf used Hotjar Surveys to run their user persona survey. Our survey tool helped them avoid the pitfalls of guesswork and find out who their users really are, in their own words. 

You can design a survey and start running it in minutes with our easy-to-use drag and drop builder. Customize your survey to fit your needs, from a sleek one-question pop-up survey to a fully branded questionnaire sent via email. 

We've also created 40+ free survey templates that you can start collecting data with, including a user persona survey like the one Smallpdf used.

2. Conduct observational research

Observational research involves taking notes while watching someone use your product (or a similar product).

Overt vs. covert observation

Overt observation involves asking customers if they’ll let you watch them use your product. This method is often used for user testing and it provides a great opportunity for collecting live product or customer feedback .

Covert observation means studying users ‘in the wild’ without them knowing. This method works well if you sell a type of product that people use regularly, and it offers the purest observational data because people often behave differently when they know they’re being watched. 

Tips to do it right:

Record an entry in your field notes, along with a timestamp, each time an action or event occurs.

Make note of the users' workflow, capturing the ‘what,’ ‘why,’ and ‘for whom’ of each action.

Don’t record identifiable video or audio data without consent. If recording people using your product is helpful for achieving your research goal, make sure all participants are informed and agree to the terms.

Don’t forget to explain why you’d like to observe them (for overt observation). People are more likely to cooperate if you tell them you want to improve the product.

💡Pro tip: while conducting field research out in the wild can wield rewarding results, you can also conduct observational research remotely. Hotjar Recordings is a tool that lets you capture anonymized user sessions of real people interacting with your website. 

Observe how customers navigate your pages and products to gain an inside look into their user behavior . This method is great for conducting exploratory research with the purpose of identifying more specific issues to investigate further, like pain points along the customer journey and opportunities for optimizing conversion .

With Hotjar Recordings you can observe real people using your site without capturing their sensitive information

How Smallpdf did it: here’s how Smallpdf observed two different user personas both covertly and overtly.

Observing students (covert): Kristina Wagner, Principle Product Manager at Smallpdf, went to cafes and libraries at two local universities and waited until she saw students doing PDF-related activities. Then she watched and took notes from a distance. One thing that struck her was the difference between how students self-reported their activities vs. how they behaved (i.e, the self-reporting bias). Students, she found, spent hours talking, listening to music, or simply staring at a blank screen rather than working. When she did find students who were working, she recorded the task they were performing and the software they were using (if she recognized it).

Observing administrative assistants (overt): Kristina sent emails to admins explaining that she’d like to observe them at work, and she asked those who agreed to try to batch their PDF work for her observation day. While watching admins work, she learned that they frequently needed to scan documents into PDF-format and then convert those PDFs into Word docs. By observing the challenges admins faced, Smallpdf knew which products to target for improvement.

“Data is really good for discovery and validation, but there is a bit in the middle where you have to go and find the human.”

3. Conduct individual interviews

Interviews are one-on-one conversations with members of your target market. They allow you to dig deep and explore their concerns, which can lead to all sorts of revelations.

Listen more, talk less. Be curious.

Act like a journalist, not a salesperson. Rather than trying to talk your company up, ask people about their lives, their needs, their frustrations, and how a product like yours could help.

Ask "why?" so you can dig deeper. Get into the specifics and learn about their past behavior.

Record the conversation. Focus on the conversation and avoid relying solely on notes by recording the interview. There are plenty of services that will transcribe recorded conversations for a good price (including Hotjar!).

Avoid asking leading questions , which reveal bias on your part and pushes respondents to answer in a certain direction (e.g. “Have you taken advantage of the amazing new features we just released?).

Don't ask loaded questions , which sneak in an assumption which, if untrue, would make it impossible to answer honestly. For example, we can’t ask you, “What did you find most useful about this article?” without asking whether you found the article useful in the first place.

Be cautious when asking opinions about the future (or predictions of future behavior). Studies suggest that people aren’t very good at predicting their future behavior. This is due to several cognitive biases, from the misguided exceptionalism bias (we’re good at guessing what others will do, but we somehow think we’re different), to the optimism bias (which makes us see things with rose-colored glasses), to the ‘illusion of control’ (which makes us forget the role of randomness in future events).

How Smallpdf did it: Kristina explored her teacher user persona by speaking with university professors at a local graduate school. She learned that the school was mostly paperless and rarely used PDFs, so for the sake of time, she moved on to the admins.

A bit of a letdown? Sure. But this story highlights an important lesson: sometimes you follow a lead and come up short, so you have to make adjustments on the fly. Lean market research is about getting solid, actionable insights quickly so you can tweak things and see what works.

💡Pro tip: to save even more time, conduct remote interviews using an online user research service like Hotjar Engage , which automates the entire interview process, from recruitment and scheduling to hosting and recording.

You can interview your own customers or connect with people from our diverse pool of 200,000+ participants from 130+ countries and 25 industries. And no need to fret about taking meticulous notes—Engage will automatically transcribe the interview for you.

4. Analyze the data (without drowning in it)

The following techniques will help you wrap your head around the market data you collect without losing yourself in it. Remember, the point of lean market research is to find quick, actionable insights.

A flow model is a diagram that tracks the flow of information within a system. By creating a simple visual representation of how users interact with your product and each other, you can better assess their needs.

You’ll notice that admins are at the center of Smallpdf’s flow model, which represents the flow of PDF-related documents throughout a school. This flow model shows the challenges that admins face as they work to satisfy their own internal and external customers.

Affinity diagram

An affinity diagram is a way of sorting large amounts of data into groups to better understand the big picture. For example, if you ask your users about their profession, you’ll notice some general themes start to form, even though the individual responses differ. Depending on your needs, you could group them by profession, or more generally by industry.

We wrote a guide about how to analyze open-ended questions to help you sort through and categorize large volumes of response data. You can also do this by hand by clipping up survey responses or interview notes and grouping them (which is what Kristina does).

“For an interview, you will have somewhere between 30 and 60 notes, and those notes are usually direct phrases. And when you literally cut them up into separate pieces of paper and group them, they should make sense by themselves.”

Pro tip: if you’re conducting an online survey with Hotjar, keep your team in the loop by sharing survey responses automatically via our Slack and Microsoft Team integrations. Reading answers as they come in lets you digest the data in pieces and can help prepare you for identifying common themes when it comes time for analysis.

Hotjar lets you easily share survey responses with your team

Customer journey map

A customer journey map is a diagram that shows the way a typical prospect becomes a paying customer. It outlines their first interaction with your brand and every step in the sales cycle, from awareness to repurchase (and hopefully advocacy).

The above  customer journey map , created by our team at Hotjar, shows many ways a customer might engage with our tool. Your map will be based on your own data and business model.

📚 Read more: if you’re new to customer journey maps, we wrote this step-by-step guide to creating your first customer journey map in 2 and 1/2 days with free templates you can download and start using immediately.

Next steps: from research to results

So, how do you turn market research insights into tangible business results? Let’s look at the actions Smallpdf took after conducting their lean market research: first they implemented changes, then measured the impact.

Implement changes

Based on what Smallpdf learned about the challenges that one key user segment (admins) face when trying to convert PDFs into Word files, they improved their ‘PDF to Word’ conversion tool.

We won’t go into the details here because it involves a lot of technical jargon, but they made the entire process simpler and more straightforward for users. Plus, they made it so that their system recognized when you drop a PDF file into their ‘Word to PDF’ converter instead of the ‘PDF to Word’ converter, so users wouldn’t have to redo the task when they made that mistake. 

In other words: simple market segmentation for admins showed a business need that had to be accounted for, and customers are happier overall after Smallpdf implemented an informed change to their product.

Measure results

According to the Lean UX model, product and UX changes aren’t retained unless they achieve results.

Smallpdf’s changes produced:

A 75% reduction in error rate for the ‘PDF to Word’ converter

A 1% increase in NPS

Greater confidence in the team’s marketing efforts

"With all the changes said and done, we've cut our original error rate in four, which is huge. We increased our NPS by +1%, which isn't huge, but it means that of the users who received a file, they were still slightly happier than before, even if they didn't notice that anything special happened at all.”

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Market research (or marketing research) is any set of techniques used to gather information and better understand a company’s target market. This might include primary research on brand awareness and customer satisfaction or secondary market research on market size and competitive analysis. Businesses use this information to design better products, improve user experience, and craft a marketing strategy that attracts quality leads and improves conversion rates.

David Darmanin, one of Hotjar’s founders, launched two startups before Hotjar took off—but both companies crashed and burned. Each time, he and his team spent months trying to design an amazing new product and user experience, but they failed because they didn’t have a clear understanding of what the market demanded.

With Hotjar, they did things differently . Long story short, they conducted market research in the early stages to figure out what consumers really wanted, and the team made (and continues to make) constant improvements based on market and user research.

Without market research, it’s impossible to understand your users. Sure, you might have a general idea of who they are and what they need, but you have to dig deep if you want to win their loyalty.

Here’s why research matters:

Obsessing over your users is the only way to win. If you don’t care deeply about them, you’ll lose potential customers to someone who does.

Analytics gives you the ‘what’, while research gives you the ‘why’. Big data, user analytics , and dashboards can tell you what people do at scale, but only research can tell you what they’re thinking and why they do what they do. For example, analytics can tell you that customers leave when they reach your pricing page, but only research can explain why.

Research beats assumptions, trends, and so-called best practices. Have you ever watched your colleagues rally behind a terrible decision? Bad ideas are often the result of guesswork, emotional reasoning, death by best practices , and defaulting to the Highest Paid Person’s Opinion (HiPPO). By listening to your users and focusing on their customer experience , you’re less likely to get pulled in the wrong direction.

Research keeps you from planning in a vacuum. Your team might be amazing, but you and your colleagues simply can’t experience your product the way your customers do. Customers might use your product in a way that surprises you, and product features that seem obvious to you might confuse them. Over-planning and refusing to test your assumptions is a waste of time, money, and effort because you’ll likely need to make changes once your untested business plan gets put into practice.

Lean User Experience (UX) design is a model for continuous improvement that relies on quick, efficient research to understand customer needs and test new product features.

Lean market research can help you become more...

Efficient: it gets you closer to your customers, faster.

Cost-effective: no need to hire an expensive marketing firm to get things started.

Competitive: quick, powerful insights can place your products on the cutting edge.

As a small business or sole proprietor, conducting lean market research is an attractive option when investing in a full-blown research project might seem out of scope or budget.

There are lots of different ways you could conduct market research and collect customer data, but you don’t have to limit yourself to just one research method. Four common types of market research techniques include surveys, interviews, focus groups, and customer observation.

Which method you use may vary based on your business type: ecommerce business owners have different goals from SaaS businesses, so it’s typically prudent to mix and match these methods based on your particular goals and what you need to know.

1. Surveys: the most commonly used

Surveys are a form of qualitative research that ask respondents a short series of open- or closed-ended questions, which can be delivered as an on-screen questionnaire or via email. When we asked 2,000 Customer Experience (CX) professionals about their company’s approach to research , surveys proved to be the most commonly used market research technique.

What makes online surveys so popular?  

They’re easy and inexpensive to conduct, and you can do a lot of data collection quickly. Plus, the data is pretty straightforward to analyze, even when you have to analyze open-ended questions whose answers might initially appear difficult to categorize.

We've built a number of survey templates ready and waiting for you. Grab a template and share with your customers in just a few clicks.

💡 Pro tip: you can also get started with Hotjar AI for Surveys to create a survey in mere seconds . Just enter your market research goal and watch as the AI generates a survey and populates it with relevant questions. 

Once you’re ready for data analysis, the AI will prepare an automated research report that succinctly summarizes key findings, quotes, and suggested next steps.

An example research report generated by Hotjar AI for Surveys

2. Interviews: the most insightful

Interviews are one-on-one conversations with members of your target market. Nothing beats a face-to-face interview for diving deep (and reading non-verbal cues), but if an in-person meeting isn’t possible, video conferencing is a solid second choice.

Regardless of how you conduct it, any type of in-depth interview will produce big benefits in understanding your target customers.

What makes interviews so insightful?

By speaking directly with an ideal customer, you’ll gain greater empathy for their experience , and you can follow insightful threads that can produce plenty of 'Aha!' moments.

3. Focus groups: the most unreliable

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, or marketing message to gain deeper insights.

What makes focus groups so unreliable?

If you’re new to market research, we wouldn’t recommend starting with focus groups. Doing it right is expensive , and if you cut corners, your research could fall victim to all kinds of errors. Dominance bias (when a forceful participant influences the group) and moderator style bias (when different moderator personalities bring about different results in the same study) are two of the many ways your focus group data could get skewed.

4. Observation: the most powerful

During a customer observation session, someone from the company takes notes while they watch an ideal user engage with their product (or a similar product from a competitor).

What makes observation so clever and powerful?

‘Fly-on-the-wall’ observation is a great alternative to focus groups. It’s not only less expensive, but you’ll see people interact with your product in a natural setting without influencing each other. The only downside is that you can’t get inside their heads, so observation still isn't a recommended replacement for customer surveys and interviews.

The following questions will help you get to know your users on a deeper level when you interview them. They’re general questions, of course, so don’t be afraid to make them your own.

1. Who are you and what do you do?

How you ask this question, and what you want to know, will vary depending on your business model (e.g. business-to-business marketing is usually more focused on someone’s profession than business-to-consumer marketing).

It’s a great question to start with, and it’ll help you understand what’s relevant about your user demographics (age, race, gender, profession, education, etc.), but it’s not the be-all-end-all of market research. The more specific questions come later.

2. What does your day look like?

This question helps you understand your users’ day-to-day life and the challenges they face. It will help you gain empathy for them, and you may stumble across something relevant to their buying habits.

3. Do you ever purchase [product/service type]?

This is a ‘yes or no’ question. A ‘yes’ will lead you to the next question.

4. What problem were you trying to solve or what goal were you trying to achieve?

This question strikes to the core of what someone’s trying to accomplish and why they might be willing to pay for your solution.

5. Take me back to the day when you first decided you needed to solve this kind of problem or achieve this goal.

This is the golden question, and it comes from Adele Revella, Founder and CEO of Buyer Persona Institute . It helps you get in the heads of your users and figure out what they were thinking the day they decided to spend money to solve a problem.

If you take your time with this question, digging deeper where it makes sense, you should be able to answer all the relevant information you need to understand their perspective.

“The only scripted question I want you to ask them is this one: take me back to the day when you first decided that you needed to solve this kind of problem or achieve this kind of a goal. Not to buy my product, that’s not the day. We want to go back to the day that when you thought it was urgent and compelling to go spend money to solve a particular problem or achieve a goal. Just tell me what happened.”

— Adele Revella , Founder/CEO at Buyer Persona Institute

Bonus question: is there anything else you’d like to tell me?

This question isn’t just a nice way to wrap it up—it might just give participants the opportunity they need to tell you something you really need to know.

That’s why Sarah Doody, author of UX Notebook , adds it to the end of her written surveys.

“I always have a last question, which is just open-ended: “Is there anything else you would like to tell me?” And sometimes, that’s where you get four paragraphs of amazing content that you would never have gotten if it was just a Net Promoter Score [survey] or something like that.”

What is the difference between qualitative and quantitative research?

Qualitative research asks questions that can’t be reduced to a number, such as, “What is your job title?” or “What did you like most about your customer service experience?” 

Quantitative research asks questions that can be answered with a numeric value, such as, “What is your annual salary?” or “How was your customer service experience on a scale of 1-5?”

 → Read more about the differences between qualitative and quantitative user research .

How do I do my own market research?

You can do your own quick and effective market research by 

Surveying your customers

Building user personas

Studying your users through interviews and observation

Wrapping your head around your data with tools like flow models, affinity diagrams, and customer journey maps

What is the difference between market research and user research?

Market research takes a broad look at potential customers—what problems they’re trying to solve, their buying experience, and overall demand. User research, on the other hand, is more narrowly focused on the use (and usability ) of specific products.

What are the main criticisms of market research?

Many marketing professionals are critical of market research because it can be expensive and time-consuming. It’s often easier to convince your CEO or CMO to let you do lean market research rather than something more extensive because you can do it yourself. It also gives you quick answers so you can stay ahead of the competition.

Do I need a market research firm to get reliable data?

Absolutely not! In fact, we recommend that you start small and do it yourself in the beginning. By following a lean market research strategy, you can uncover some solid insights about your clients. Then you can make changes, test them out, and see whether the results are positive. This is an excellent strategy for making quick changes and remaining competitive.

Net Promoter, Net Promoter System, Net Promoter Score, NPS, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld, and Satmetrix Systems, Inc.

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The Ultimate Guide to Market Research [+Free Templates]

A comprehensive guide on Market Research with tools, examples of brands winning with research, and templates for surveys, focus groups + presentation template.

Rakefet is the CMO at Mayple. She manages all things marketing and leads our community of experts through live events, workshops, and expert interviews. MBA, 1 dog + 2 cats, and has an extensive collection of Chinese teas.

Learn about our

Natalie is a content writer and manager who is passionate about using her craft to empower others. She thrives on team dynamic, great coffee, and excellent content. One of these days, she might even get to her own content ideas.

Updated February 26, 2024.

Before you do anything in business you have to have a good grasp of the market. What’s the market like? Who are your competitors? And what are the pain points and challenges of your ideal customer? And how can you solve them? Once you have the answers to those questions then you are ready to move forward with a marketing plan and/or hire a digital marketing agency to execute it.

In this guide we break down what market research is, the different types of market research, and provide you with some of the best templates, tools, and examples, to help you execute it on your own.

Excited to learn?

Let’s dive in.

What is market research?

Market research is the process of gathering information about your target market and customers to determine the success of your product or service, make changes to your existing product, or understand the perception of your brand in the market.

“Research is formalized curiosity, it is poking and prying with a purpose.” - Zora Neale Hurston

We hear the phrase "product-market fit" all the time and that just means that a product solves a customer's need in the market. And it's very hard to get there without proper market research. Now, I know what you're going to say. Why not get actionable insights from your existing customers? Why not do some customer research?

The problem with customer research is two-fold:

• You have a very limited amount of data as your current customers don't represent the entire market.
• Customer research can introduce a lot of bias into the process.

So the real way to solve these issues is by going broader and conducting some market research.

Why do market research?

There are many benefits of doing market research for your company. Here are a few of them:

• Understand how much demand exists in the market, the market size
• Discover who your competitors are and where they are falling short.
• Better understand the needs of your target customers and the problems and pain points your product solves.
• Learn what your potential customers feel about your brand.
• Identify potential partners and new markets and opportunities.
• Determine which product features you should develop next.
• Find out what your ideal customer is thinking and feeling.
• Use these findings to improve your brand strategy and marketing campaigns.

“The goal is to transform data into information, and information into insight.” - Carly Fiorina

Market research allows you to make better business decisions at every stage of your business and helps you launch better products and services for your customers.

Primary vs secondary research

There are two main types of market research - primary and secondary research.

Primary research

Primary market research is when researchers collect information directly, instead of relying on outside sources of information. It could be done through interviews, online surveys, or focus groups and the advantage here is that the company owns that information. The disadvantage of using primary sources of information is that it's usually more expensive and time-consuming than secondary market research.

Secondary research

Secondary market research involves using existing data that is summarized and collected by third parties. Secondary sources could be commercial sources or public sources like libraries, other websites, blogs , government agencies, and existing surveys. It's data that's more readily available and it's usually much cheaper than conducting primary research.

Qualitative vs quantitative research

Qualitative research is about gathering qualitative data like the market sentiment about the products currently available on the market (read: words and meanings). Quantitative research deals with numbers and statistics. It's data that is numbers-based, countable, and measurable.

Types of market research

1. competitive analysis.

Every business needs to know its own strengths and weaknesses and how they compare with its largest competitors in the market. It helps brands identify gaps in the market, develop new products and services, uncover market trends, improve brand positioning , and increase their market share. A SWOT analysis is a good framework to use for this type of research.

2. Consumer insights

It's also equally important to know what consumers are thinking, what the most common problems are and what products they are purchasing. Consumer research can be done through social listening which involves tracking consumer conversations on social media. It could also include analyzing audiences of brands , online communities, and influencers, and analyzing trends in the market.

3. Brand awareness research

Brand awareness is a super important metric for understanding how well your target audience knows your brand. It's used to assess brand performance and the marketing effectiveness of a brand. It tells you about the associations consumers make when they think of your brand and what they believe you're all about.

4. Customer satisfaction research

 Customer satisfaction and loyalty are two really important levers for any business and you don't have to conduct in-depth interviews to get that information. There is a wide range of automated methods to get that kind of data including customer surveys such as NPS surveys, customer effort score (CES) surveys, and regularly asking your customers about their experience with your brand.

5. Customer segmentation research

 Customer segmentation research involves figuring out what buckets consumers fall into based on common characteristics such as - demographics, interests, purchasing behavior, and more. Market segmentation is super helpful for advertising campaigns, product launches, and customer journey mapping.

6. Interviews

Customer interviews are one of the most effective market research methods out there. It's a great way for business owners to get first-party data from their customers and get insights into how they are doing in real time.

7. Focus groups

Focus groups are a great way to get data on a specific demographic. It's one of the most well-known data collection methods and it involves taking a sample size of people and asking them some open-ended questions. It's a great way to get actionable insights from your target market.

8. Pricing research

 Pricing strategy has a huge influence on business growth and it's critical for any business to know how they compare with the leading brands in their niche. It can help you understand what your target customer is willing to pay for your product and at what price you should be selling it.

To start, get automated software to track your competitors' pricing . Then, summarize your research into a report and group the results based on product attributes and other factors. You can use quadrants to make it easier to read visually.

9. Campaign research

It's also important for a brand to research its past marketing campaigns to determine the results and analyze their success. It takes a lot of experimentation to nail the various aspects of a campaign and it's crucial for business leaders to continuously analyze and iterate.

10. Product/service use research

Product or user research gives you an idea of why and how an audience uses a product and gives you data about specific features. Studies show that usability testing is ranked among the most useful ways to discover user insights (8.7 out of 10), above digital analytics and user surveys. So it's a very effective way to measure the usability of a product.

Now that you know the different types of market research let's go through a step-by-step process of setting up your study.

How to conduct a market research study

Looking for your next business idea? Want to check which niche markets are going to be best for it? if it's going to Here's a pretty simple process for conducting

1. Define your buyer persona

The first step in market research is to understand who your buyers are. For that, you need a buyer persona (sometimes called a marketing persona) which is a fictional generalized description of your target customer. You could (and should) have several buyer personas to work with.

Key characteristics to include in your buyer personas are:

• Job title(s)
• Family size
• Major challenges

Now that you've got your customer personas it's time to decide who to work with for your research.

2. Identify the right people to engage with

It's critical that you pick the right group of people to research. This could make or break your market research study. It's important to pick a representative sample that most closely resembles your target customer. That way you'll be able to identify their actual characteristics, challenges, pain points, and buying behavior.

Here are a few strategies that will help you pick the right people:

• Select people who have recently interacted with you
• Pull a list of participants who made a recent purchase
• Call for participants on social media
• Leverage your own network
• Gather a mix of participants
• Offer an incentive (gift card, product access, content upgrades)

3. Pick your data collection method(s)

Here's a quick breakdown of all the different ways you could collect data for your market research study.

Surveys are by far the fastest method of gathering data. You could launch them on your site or send them in an email and automate the whole process. Regular surveys can also help brands improve their customer service so they help kill two birds with one stone.

Interviews take a little longer and require a detailed set of interview questions. Never go into an interview without a clear idea of what you're going to be asking. It's also a little more difficult to schedule time and to get your potential or current customers on the phone or on Zoom.

Focus group

Focus groups are controlled interviews with groups of people led by facilitators. Participants in focus groups are selected based on a set of predetermined criteria such as location, age, social status, income, and more.

Online tracking

Online tracking is done through digital analytics tools like HotJar or Google Analytics. Tracking user behavior on your site gets you an accurate analysis of who your demographic is and what are the types of products or content that they engage with.

The problem here is that you never get to find out the 'why' - the reason behind their behavior - and that's why you need to combine digital analytics with other data collection methods like surveys and usability/product testing.

Marketing analysis

Another great way to collect data is to analyze your marketing campaigns which gives you a great idea of who clicked on your ads, how often, and which device they used. It's a more focused way of using tracking to zero in on a specific marketing campaign.

Social media monitoring

We've talked about this one before. Social monitoring or listening is when you track online conversations on social media platforms. You can use a simple social listening tool to get all the data you need by searching for specific keywords, hashtags, or topics.

Subscription and registration data

Another great way to collect data is to look at your existing audience. That might include your email list, rewards program, or existing customers. Depending on the size of your list, it could give you some broad insights into the type of customers/users you have and what they are most interested in.

Monitoring in-store traffic

Conduct a customer observation session to monitor your actual customers and how they behave in your store (physically or online). Observation is a market research technique where highly-trained market researchers observe how people or consumers interact with products/services in a natural setting.

4. Prepare your research questions

Write down your research questions before you conduct the research. Make sure you cover all the topics that you are trying to gain clarity on and include open-ended questions. The type of questions you use will vary depending on your data collection approach from the last step.

If you're doing a survey or an in-person interview then here are some of the best questions to ask.

The awareness stage

• How did you know that something in this product category could help you?
• Think back to the time you first realized you needed [product category]. What was your challenge?
• How familiar were you with different options on the market?

The consideration stage

• Where did you go to find out the information?
• What was the first thing you did to research potential solutions?
• Did you search on Google? What specifically did you search for? Which keywords did you use?
• Which vendor sites did you visit?
• What did you find helpful? What turned you off?

The decision stage

• Which criteria did you use to compare different vendors?
• What vendors made it to the shortlist and what were the pros/cons of each?
• Who else was involved in the final decision?
• Allow time for further questions on their end.
• Don't forget to thank them for their time and confirm their email/address to receive the incentive you offered

If you noticed, the progression of these questions follows the stages of the buyer's journey which helps you to gain actionable insights into the entire customer experience.

5. List your primary competitors

There are two kinds of competitors - industry competitors and content competitors. Industry competitors compete with you on the actual product or service they sell. Content competitors compete with you in terms of the content they publish - whether that's on specific keywords or they rank higher on topics that you want to be ranked for.

It's important to write a list of all of your competitors and compare their strengths, weaknesses, competitive advantages, and the type of content they publish.

There are different ways to find your competitors. You can look on sites like G2 Crowd and check their industry quadrants.

You could also download a market report from Forrester or Gartner . And you could also search on social media or market research tools like SimilarWeb .

6. Summarize your findings

Now that you've done your research it's time to summarize your findings. Look for common themes in your research and try to present them in the simplest way possible. Use your favorite presentation software to document it and add it to your company database.

Here's a quick research outline you could use:

Background - your goals and why you conducted this study

Participants - who you've talked to. Break down the type of personas and/or customers you've spoken with.

Executive summary - what was the most interesting stuff you've learned? What do you plan to do about it?

Customer journey map - map out the specific motivations and behavioral insights you've gained from each stage of the customer journey (awareness, consideration, and decision).

Action plan - describe what action steps you're going to take to address the issues you've uncovered in your research and how you are going to promote your product/service to your target audience more effectively.

Market research template

Not sure where to begin? Need some templates to help you get started? We got them for you.

1. Market survey template

First and foremost, you need a template to run your market survey. In this template, you will find all the types of questions you should be asking - demographic, product, pricing, and brand questions. They can be used for market surveys, individual interviews, and focus groups.

We also present a variety of question formats for you to use:

• true/false questions
• multiple choice questions
• open response questions

2. SWOT analysis template

A strength, weakness, opportunities, and threats (SWOT) analysis is one of the best ways to do competitor research. It's a really simple analysis. There are four squares and you write down all four of these attributes for each of your competitors.

3. Focus group template

Not sure how to conduct focus groups? Here is a comprehensive template that will help you to take better notes and record your findings during the focus group meeting.

4. Marketing strategy template

The plan of action from your market research should become a vital part of your marketing strategy. We've actually created a marketing strategy template that you could download and use to update your marketing personas, your SWOT analysis, and your marketing channel strategies.

Market research examples

Here are some examples of the good, the bad, and the ugly in market research. Some brands thrive on research and some ignore it completely. Take a look.

McDonald's

McDonald’s sells its food in 97 countries around the world. Their secret? They do a lot of market research before they launch anything. The company uses four key questions in their research process:

• Which products are performing well?
• What prices are most affordable to customers?
• What are consumers reading and watching?
• What content do they consume?
• Which restaurants are most attended, and why?

They also extensively use customer feedback to improve their products. They even put some products up for a vote to see which ones are most loved by their customers.

The iconic coffee brand is valued at almost $30 billion and has over 30,000 coffee shops around the world and part of that success comes from their obsession with customer service. They launched a brilliant idea called “My Starbucks Idea” to try and make the customer feel a part of the journey.

It was an open innovation platform where customers could post their idea for a new coffee drink or food item and if it was good a company representative would actually reach out to them. It had a leaderboard and every year the company would develop some of these ideas.

In 2012, Starbucks launched 73 coffee products from ideas they received from customers. Cake pops and pumpkin spice lattes were born out of this platform, all thanks to market research. Can you imagine a world without pumpkin spice lattes?

For all its innovation Facebook had an epic market research failure. In 2013, Facebook partnered with HTC to launch a smartphone called First. It had Facebook’s interface on its home screen and that was a really jarring change for most people. Instead of taking you to a home screen with your favorite apps, Facebook really took center stage.

To be fair, you could turn it off and get a regular Android home window but that would be missing the entire reason you bought the phone in the first place. So it was a complete mismatch to consumers’ wants and the phone flopped.

Turns out, that nobody wanted to see Facebook when they first opened their phone 😅.

Bloom & Wild

Bloom & Wild is a UK flower delivery brand that was looking for their next campaign. They did some research and found out that people think red roses are cliche and prefer to buy something else as a gift on Valentine’s Day. So the brand chose not to sell roses for Valentine’s Day 2021 and made it into a “No Roses Campaign”.

The results - they saw a 51% increase in press coverage year after year.

Top tools used for market research

Here are some of the top market research and digital analytics tools you should try out for your next research project.

Answer the Public

Answer the public is a free market research tool that helps marketers figure out what questions people ask online. It's really easy to use. You put in a keyword or topic and it spits out a whole variety of questions and subtopics.

Spyfu is a search engine analytics platform that gives you data on where your competitors get their traffic from. It provides info on the kind of both organic traffic and PPC channels down to the specific keywords people used to find each site. It's a great tool to use to map the competitive landscape.

Think with Google

This is an online publication from Google's team where they publish consumer insights from real-time data and their own insights. It uses Google Analytics but presents it to you as a library of information. You can find industry data on a whole array of businesses from educational institutions to counseling services.

Want to do the most extensive market research possible? Use SimilarWeb. It's a competitive analysis and data tool that provides you with literally everything you need.

It has data on:

• Digital marketing data - SEO, traffic, advertising
• Economic trends - economic indicators like annual growth rate, audience, benchmarking
• eCommerce, investing, and even sales data

BuzzSumo is a great tool to use to get actionable insights from social media and content marketing. It aggregates data from various social media channels and shows you the type of content that users engage with and share on their pages.

Typeform is a survey tool that can help you make surveys and fun interactive forms. It's a great tool to use to make your forms more engaging for your audience. The tool has a bunch of easy templates and a ton of integrations to help you visualize that data and share it with your team.

Latana is a brand research tool that helps you understand consumer perception of your brand over time. It helps you answer some key questions about the type of values your customers have, and the type of audiences your competitors are targeting and helps you to focus your campaigns on the right audience for your business.

Statista is one of the most popular consumer data platforms around. It has a wealth of information about consumer markets, business conditions, and industry trends around the world. It's easier to use than most business publications because it aggregates all the data you need in one place. The downside is that it's a little pricy but perfect for teams that have the budget for it.

Dimensions.ai

Dimensions is a search engine for academic publications. It is a great resource if you're looking for deeper insights into things like psychology, micro and macroeconomics, and business trends. A lot of the articles are free to view just make sure you select the " All OA " option which stands for Open Access research.

Otter is an AI-powered transcription software for interviews and meetings. It sits in the background and transcribes your meeting for you and then provides you with a digitized conversation that can be stored, search for specific keywords, and analyzed. It's a great tool to use for doing interviews.

Yelp is a search engine for reviews of local businesses. It's one of the best sources of opinions about a whole variety of products and services. It's a great place to get ideas about the kind of interview questions you want to ask, to find out the pain points of your ideal customer, and to find deeper insights into your target audience.

You have to conduct your market research regularly if you want to see significant results. Try the different methods that we’ve outlined, see what works for you, and remember to keep your team’s focus on the customer. The more knowledgeable they are of your target customer’s needs and wants the better your targeting and marketing strategy will be.

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How To Do Market Research: Definition, Types, Methods

Jan 2, 2024

11 min. read

Market research isn’t just collecting data. It’s a strategic tool that allows businesses to gain a competitive advantage while making the best use of their resources. Research reveals valuable insights into your target audience about their preferences, buying habits, and emerging demands — all of which help you unlock new opportunities to grow your business.

When done correctly, market research can minimize risks and losses, spur growth, and position you as a leader in your industry. 

Let’s explore the basic building blocks of market research and how to collect and use data to move your company forward:

Table of Contents

What Is Market Research?

Why is market research important, market analysis example, 5 types of market research, what are common market research questions, what are the limitations of market research, how to do market research, improving your market research with radarly.

Market Research Definition: The process of gathering, analyzing, and interpreting information about a market or audience.

Market research studies consumer behavior to better understand how they perceive products or services. These insights help businesses identify ways to grow their current offering, create new products or services, and improve brand trust and brand recognition .

You might also hear market research referred to as market analysis or consumer research .

Traditionally, market research has taken the form of focus groups, surveys, interviews, and even competitor analysis . But with modern analytics and research tools, businesses can now capture deeper insights from a wider variety of sources, including social media, online reviews, and customer interactions. These extra layers of intel can help companies gain a more comprehensive understanding of their audience.

With consumer preferences and markets evolving at breakneck speeds, businesses need a way to stay in touch with what people need and want. That’s why the importance of market research cannot be overstated.

Market research offers a proactive way to identify these trends and make adjustments to product development, marketing strategies , and overall operations. This proactive approach can help businesses stay ahead of the curve and remain agile as markets shift.

Market research examples abound — given the number of ways companies can get inside the minds of their customers, simply skimming through your business’s social media comments can be a form of market research.

A restaurant chain might use market research methods to learn more about consumers’ evolving dining habits. These insights might be used to offer new menu items, re-examine their pricing strategies, or even open new locations in different markets, for example.

A consumer electronics company might use market research for similar purposes. For instance, market research may reveal how consumers are using their smart devices so they can develop innovative features.

Market research can be applied to a wide range of use cases, including:

• Testing new product ideas
• Improve existing products
• Entering new markets
• Right-sizing their physical footprints
• Improving brand image and awareness
• Gaining insights into competitors via competitive intelligence

Ultimately, companies can lean on market research techniques to stay ahead of trends and competitors while improving the lives of their customers.

Market research methods take different forms, and you don’t have to limit yourself to just one. Let’s review the most common market research techniques and the insights they deliver.

1. Interviews

3. Focus Groups

4. Observations

5. AI-Driven Market Research

One-on-one interviews are one of the most common market research techniques. Beyond asking direct questions, skilled interviewers can uncover deeper motivations and emotions that drive purchasing decisions. Researchers can elicit more detailed and nuanced responses they might not receive via other methods, such as self-guided surveys.

Interviews also create the opportunity to build rapport with customers and prospects. Establishing a connection with interviewees can encourage them to open up and share their candid thoughts, which can enrich your findings. Researchers also have the opportunity to ask clarifying questions and dig deeper based on individual responses.

Market research surveys provide an easy entry into the consumer psyche. They’re cost-effective to produce and allow researchers to reach lots of people in a short time. They’re also user-friendly for consumers, which allows companies to capture more responses from more people.

Big data and data analytics are making traditional surveys more valuable. Researchers can apply these tools to elicit a deeper understanding from responses and uncover hidden patterns and correlations within survey data that were previously undetectable.

The ways in which surveys are conducted are also changing. With the rise of social media and other online channels, brands and consumers alike have more ways to engage with each other, lending to a continuous approach to market research surveys.

3. Focus groups

Focus groups are “group interviews” designed to gain collective insights. This interactive setting allows participants to express their thoughts and feelings openly, giving researchers richer insights beyond yes-or-no responses.

One of the key benefits of using focus groups is the opportunity for participants to interact with one another. They spark discussions while sharing diverse viewpoints. These sessions can uncover underlying motivations and attitudes that may not be easily expressed through other research methods.

Observing your customers “in the wild” might feel informal, but it can be one of the most revealing market research techniques of all. That’s because you might not always know the right questions to ask. By simply observing, you can surface insights you might not have known to look for otherwise.

This method also delivers raw, authentic, unfiltered data. There’s no room for bias and no potential for participants to accidentally skew the data. Researchers can also pick up on non-verbal cues and gestures that other research methods may fail to capture.

5. AI-driven market research

One of the newer methods of market research is the use of AI-driven market research tools to collect and analyze insights on your behalf. AI customer intelligence tools and consumer insights software like Meltwater Radarly take an always-on approach by going wherever your audience is and continuously predicting behaviors based on current behaviors.

By leveraging advanced algorithms, machine learning, and big data analysis , AI enables companies to uncover deep-seated patterns and correlations within large datasets that would be near impossible for human researchers to identify. This not only leads to more accurate and reliable findings but also allows businesses to make informed decisions with greater confidence.

Tip: Learn how to use Meltwater as a research tool , how Meltwater uses AI , and learn more about consumer insights and about consumer insights in the fashion industry .

No matter the market research methods you use, market research’s effectiveness lies in the questions you ask. These questions should be designed to elicit honest responses that will help you reach your goals.

Examples of common market research questions include:

Demographic market research questions

• What is your age range?
• What is your occupation?
• What is your household income level?
• What is your educational background?
• What is your gender?

Product or service usage market research questions

• How long have you been using [product/service]?
• How frequently do you use [product/service]?
• What do you like most about [product/service]?
• Have you experienced any problems using [product/service]?
• How could we improve [product/service]?
• Why did you choose [product/service] over a competitor’s [product/service]?

Brand perception market research questions

• How familiar are you with our brand?
• What words do you associate with our brand?
• How do you feel about our brand?
• What makes you trust our brand?
• What sets our brand apart from competitors?
• What would make you recommend our brand to others?

Buying behavior market research questions

• What do you look for in a [product/service]?
• What features in a [product/service] are important to you?
• How much time do you need to choose a [product/service]?
• How do you discover new products like [product/service]?
• Do you prefer to purchase [product/service] online or in-store?
• How do you research [product/service] before making a purchase?
• How often do you buy [product/service]?
• How important is pricing when buying [product/service]?
• What would make you switch to another brand of [product/service]?

Customer satisfaction market research questions

• How happy have you been with [product/service]?
• What would make you more satisfied with [product/service]?
• How likely are you to continue using [product/service]?

Bonus Tip: Compiling these questions into a market research template can streamline your efforts.

Market research can offer powerful insights, but it also has some limitations. One key limitation is the potential for bias. Researchers may unconsciously skew results based on their own preconceptions or desires, which can make your findings inaccurate.

• Depending on your market research methods, your findings may be outdated by the time you sit down to analyze and act on them. Some methods struggle to account for rapidly changing consumer preferences and behaviors.
• There’s also the risk of self-reported data (common in online surveys). Consumers might not always accurately convey their true feelings or intentions. They might provide answers they think researchers are looking for or misunderstand the question altogether.
• There’s also the potential to miss emerging or untapped markets . Researchers are digging deeper into what (or who) they already know. This means you might be leaving out a key part of the story without realizing it.

Still, the benefits of market research cannot be understated, especially when you supplement traditional market research methods with modern tools and technology.

Let’s put it all together and explore how to do market research step-by-step to help you leverage all its benefits.

Step 1: Define your objectives

You’ll get more from your market research when you hone in on a specific goal : What do you want to know, and how will this knowledge help your business?

This step will also help you define your target audience. You’ll need to ask the right people the right questions to collect the information you want. Understand the characteristics of the audience and what gives them authority to answer your questions.

Step 2: Select your market research methods

Choose one or more of the market research methods (interviews, surveys, focus groups, observations, and/or AI-driven tools) to fuel your research strategy.

Certain methods might work better than others for specific goals . For example, if you want basic feedback from customers about a product, a simple survey might suffice. If you want to hone in on serious pain points to develop a new product, a focus group or interview might work best.

You can also source secondary research ( complementary research ) via secondary research companies , such as industry reports or analyses from large market research firms. These can help you gather preliminary information and inform your approach.

Step 3: Develop your research tools

Prior to working with participants, you’ll need to craft your survey or interview questions, interview guides, and other tools. These tools will help you capture the right information , weed out non-qualifying participants, and keep your information organized.

You should also have a system for recording responses to ensure data accuracy and privacy. Test your processes before speaking with participants so you can spot and fix inefficiencies or errors.

Step 4: Conduct the market research

With a system in place, you can start looking for candidates to contribute to your market research. This might include distributing surveys to current customers or recruiting participants who fit a specific profile, for example.

Set a time frame for conducting your research. You might collect responses over the course of a few days, weeks, or even months. If you’re using AI tools to gather data, choose a data range for your data to focus on the most relevant information.

Step 5: Analyze and apply your findings

Review your findings while looking for trends and patterns. AI tools can come in handy in this phase by analyzing large amounts of data on your behalf.

Compile your findings into an easy-to-read report and highlight key takeaways and next steps. Reports aren’t useful unless the reader can understand and act on them.

Tip: Learn more about trend forecasting , trend detection , and trendspotting .

Meltwater’s Radarly consumer intelligence suite helps you reap the benefits of market research on an ongoing basis. Using a combination of AI, data science, and market research expertise, Radarly scans multiple global data sources to learn what people are talking about, the actions they’re taking, and how they’re feeling about specific brands.

Our tools are created by market research experts and designed to help researchers uncover what they want to know (and what they don’t know they want to know). Get data-driven insights at scale with information that’s always relevant, always accurate, and always tailored to your organization’s needs.

Learn more when you request a demo by filling out the form below:

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Market Intelligence 101: What It Is & How To Use It

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What Is Market Research?

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• Primary vs. Secondary
• How to Conduct Research

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How to Do Market Research, Types, and Example

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Market research examines consumer behavior and trends in the economy to help a business develop and fine-tune its business idea and strategy. It helps a business understand its target market by gathering and analyzing data.

Market research is the process of evaluating the viability of a new service or product through research conducted directly with potential customers. It allows a company to define its target market and get opinions and other feedback from consumers about their interest in a product or service.

Research may be conducted in-house or by a third party that specializes in market research. It can be done through surveys and focus groups, among other ways. Test subjects are usually compensated with product samples or a small stipend for their time.

Key Takeaways

• Companies conduct market research before introducing new products to determine their appeal to potential customers.
• Tools include focus groups, telephone interviews, and questionnaires.
• The results of market research inform the final design of the product and determine how it will be positioned in the marketplace.
• Market research usually combines primary information, gathered directly from consumers, and secondary information, which is data available from external sources.

Market Research

How market research works.

Market research is used to determine the viability of a new product or service. The results may be used to revise the product design and fine-tune the strategy for introducing it to the public. This can include information gathered for the purpose of determining market segmentation . It also informs product differentiation , which is used to tailor advertising.

A business engages in various tasks to complete the market research process. It gathers information based on the market sector being targeted by the product. This information is then analyzed and relevant data points are interpreted to draw conclusions about how the product may be optimally designed and marketed to the market segment for which it is intended.

It is a critical component in the research and development (R&D) phase of a new product or service introduction. Market research can be conducted in many different ways, including surveys, product testing, interviews, and focus groups.

Market research is a critical tool that companies use to understand what consumers want, develop products that those consumers will use, and maintain a competitive advantage over other companies in their industry.

Primary Market Research vs. Secondary Market Research

Market research usually consists of a combination of:

• Primary research, gathered by the company or by an outside company that it hires
• Secondary research, which draws on external sources of data

Primary Market Research

Primary research generally falls into two categories: exploratory and specific research.

• Exploratory research is less structured and functions via open-ended questions. The questions may be posed in a focus group setting, telephone interviews, or questionnaires. It results in questions or issues that the company needs to address about a product that it has under development.
• Specific research delves more deeply into the problems or issues identified in exploratory research.

Secondary Market Research

All market research is informed by the findings of other researchers about the needs and wants of consumers. Today, much of this research can be found online.

Secondary research can include population information from government census data , trade association research reports , polling results, and research from other businesses operating in the same market sector.

History of Market Research

Formal market research began in Germany during the 1920s. In the United States, it soon took off with the advent of the Golden Age of Radio.

Companies that created advertisements for this new entertainment medium began to look at the demographics of the audiences who listened to each of the radio plays, music programs, and comedy skits that were presented.

They had once tried to reach the widest possible audience by placing their messages on billboards or in the most popular magazines. With radio programming, they had the chance to target rural or urban consumers, teenagers or families, and judge the results by the sales numbers that followed.

Types of Market Research

Face-to-face interviews.

From their earliest days, market research companies would interview people on the street about the newspapers and magazines that they read regularly and ask whether they recalled any of the ads or brands that were published in them. Data collected from these interviews were compared to the circulation of the publication to determine the effectiveness of those ads.

Market research and surveys were adapted from these early techniques.

To get a strong understanding of your market, it’s essential to understand demand, market size, economic indicators, location, market saturation, and pricing.

Focus Groups

A focus group is a small number of representative consumers chosen to try a product or watch an advertisement.

Afterward, the group is asked for feedback on their perceptions of the product, the company’s brand, or competing products. The company then takes that information and makes decisions about what to do with the product or service, whether that's releasing it, making changes, or abandoning it altogether.

Phone Research

The man-on-the-street interview technique soon gave way to the telephone interview. A telephone interviewer could collect information in a more efficient and cost-effective fashion.

Telephone research was a preferred tactic of market researchers for many years. It has become much more difficult in recent years as landline phone service dwindles and is replaced by less accessible mobile phones.

Survey Research

As an alternative to focus groups, surveys represent a cost-effective way to determine consumer attitudes without having to interview anyone in person. Consumers are sent surveys in the mail, usually with a coupon or voucher to incentivize participation. These surveys help determine how consumers feel about the product, brand, and price point.

Online Market Research

With people spending more time online, market research activities have shifted online as well. Data collection still uses a survey-style form. But instead of companies actively seeking participants by finding them on the street or cold calling them on the phone, people can choose to sign up, take surveys, and offer opinions when they have time.

This makes the process far less intrusive and less rushed, since people can participate on their own time and of their own volition.

How to Conduct Market Research

The first step to effective market research is to determine the goals of the study. Each study should seek to answer a clear, well-defined problem. For example, a company might seek to identify consumer preferences, brand recognition, or the comparative effectiveness of different types of ad campaigns.

After that, the next step is to determine who will be included in the research. Market research is an expensive process, and a company cannot waste resources collecting unnecessary data. The firm should decide in advance which types of consumers will be included in the research, and how the data will be collected. They should also account for the probability of statistical errors or sampling bias .

The next step is to collect the data and analyze the results. If the two previous steps have been completed accurately, this should be straightforward. The researchers will collect the results of their study, keeping track of the ages, gender, and other relevant data of each respondent. This is then analyzed in a marketing report that explains the results of their research.

The last step is for company executives to use their market research to make business decisions. Depending on the results of their research, they may choose to target a different group of consumers, or they may change their price point or some product features.

The results of these changes may eventually be measured in further market research, and the process will begin all over again.

Benefits of Market Research

Market research is essential for developing brand loyalty and customer satisfaction. Since it is unlikely for a product to appeal equally to every consumer, a strong market research program can help identify the key demographics and market segments that are most likely to use a given product.

Market research is also important for developing a company’s advertising efforts. For example, if a company’s market research determines that its consumers are more likely to use Facebook than X (formerly Twitter), it can then target its advertisements to one platform instead of another. Or, if they determine that their target market is value-sensitive rather than price-sensitive, they can work on improving the product rather than reducing their prices.

Market research only works when subjects are honest and open to participating.

Example of Market Research

Many companies use market research to test new products or get information from consumers about what kinds of products or services they need and don’t currently have.

For example, a company that’s considering starting a business might conduct market research to test the viability of its product or service. If the market research confirms consumer interest, the business can proceed confidently with its business plan . If not, the company can use the results of the market research to make adjustments to the product to bring it in line with customer desires.

What Are the Main Types of Market Research?

The main types of market research are primary research and secondary research. Primary research includes focus groups, polls, and surveys. Secondary research includes academic articles, infographics, and white papers.

Qualitative research gives insights into how customers feel and think. Quantitative research uses data and statistics such as website views, social media engagement, and subscriber numbers.

What Is Online Market Research?

Online market research uses the same strategies and techniques as traditional primary and secondary market research, but it is conducted on the Internet. Potential customers may be asked to participate in a survey or give feedback on a product. The responses may help the researchers create a profile of the likely customer for a new product.

What Are Paid Market Research Surveys?

Paid market research involves rewarding individuals who agree to participate in a study. They may be offered a small payment for their time or a discount coupon in return for filling out a questionnaire or participating in a focus group.

What Is a Market Study?

A market study is an analysis of consumer demand for a product or service. It looks at all of the factors that influence demand for a product or service. These include the product’s price, location, competition, and substitutes as well as general economic factors that could influence the new product’s adoption, for better or worse.

Market research is a key component of a company’s research and development (R&D) stage. It helps companies understand in advance the viability of a new product that they have in development and to see how it might perform in the real world.

Britannica Money. “ Market Research .”

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Published October 17 th 2023

10 Essential Methods for Effective Consumer and Market Research

When it comes to understanding the world around you, market research is an essential step.

We live in a world that’s overflowing with information. Sifting through all the noise to extract the most relevant insights on a certain market or audience can be tough.

That’s where market research comes in – it’s a way for brands and researchers to collect information from target markets and audiences.

Once reliant on traditional methods like focus groups or surveys, market research is now at a crossroads. Newer tools for extracting insights, like social listening tools, have joined the array of market research techniques available.

Here, we break down what market research is and the different methods you can choose from to make the most of it.

What is market research, and why is it critical for you as a marketer?

Market research involves collecting and analyzing data about a specific industry, market, or audience to inform strategic decision-making. It offers marketers valuable insights into the industry, market trends, consumer preferences, competition, and opportunities, enabling businesses to refine their strategies effectively.

By conducting market research, organizations can identify unmet needs, assess product demands, enhance value propositions, and create marketing campaigns that resonate with their target audience. 

This practice serves as a compass, guiding businesses in making data-driven decisions for successful product launches, improved customer relationships, and a stronger positioning in the business landscape. 

For marketers and insights professionals, market research is an indispensable tool. It helps them make smarter decisions and achieve growth and success in the market.

These 10 market research methods form the backbone of effective market research strategies. 

Continue reading or jump directly to each method by tapping the link below.

• Focus groups
• Consumer research with social media listening
• Experiments and field trials
• Observation
• Competitive analysis
• Public domain data
• Buy research
• Analyze sales data

Use of primary vs secondary market research

Market research can be split into two distinct sections: primary and secondary. These are the two main types of market research.

They can also be known as field and desk, respectively (although this terminology feels out of date, as plenty of primary research can be carried out from your desk).

Primary (field) research

Primary market research is research you carry out yourself. Examples of primary market research methods include running your own focus groups or conducting surveys. These are some of the key methods of consumer research. The ‘field’ part refers to going out into the field to get data.

Secondary (desk) research

Secondary market research is research carried out by other people that you want to use. Examples of secondary market research methods include studies carried out by researchers or financial data released by companies.

10 effective methods to do market research

The methods in this list cover both areas. Which ones you want to use will depend on your goals. Have a browse through and see what fits.

1. Focus groups

It’s a simple concept but one that can be hard to put into practice.

You bring together a group of individuals into a room, record their discussions, and ask them questions about various topics you are researching. For some, it’ll be new product ideas. For others, it might be views on a political candidate.

From these discussions, the organizer will try to pull out some insights or use them to judge the wider society’s view on something. The participants will generally be chosen based on certain criteria, such as demographics, interests, or occupations.

A focus group’s strength is in the natural conversation and discussion that can take place between participants (if they’re done right).

Compared to a questionnaire or survey with a rigid set of questions, a focus group can go off on tangents the organizer could not have predicted (and therefore not planned questions for). This can be good in that unexpected topics can arise; or bad if the aims of the research are to answer a very particular set of questions.

The nature of the discussion is important to recognize as a potential factor that skews the resulting data. Focus groups can encourage participants to talk about things they might not have otherwise, and others might impact the group. This can also affect unstructured one-on-one interviews.

In survey research, survey questions are given to respondents (in person, over the phone, by email, or via an online form). Questions can be close-ended or open-ended. As far as close-ended questions go, there are many different types:

• Dichotomous (two choices, such as ‘yes’ or ‘no’)
• Multiple choice
• Rating scale
• Likert scale (common version is five options between ‘strongly agree’ and ‘strongly disagree’)
• Matrix (options presented on a grid)
• Demographic (asking for information such as gender, age, or occupation)

Surveys are massively versatile because of the range of question formats. Knowing how to mix and match them to get what you need takes consideration and thought. Different questions need the right setup.

It’s also about how you ask. Good questions lead to good analysis. Writing clear, concise questions that abstain from vague expressions and don’t lead respondents down a certain path can help your results reflect the true colors of respondents.

There are a ton of different ways to conduct surveys as well, from creating your own from scratch or using tools that do lots of the heavy lifting for you.

3. Consumer research with social media listening

Social media has reached a point where it is seamlessly integrated into our lives. And because it is a digital extension of ourselves, people freely express their opinions, thoughts, and hot takes on social media.

Because people share so much content on social media and the sharing is so instant, social media is a treasure trove for market research. There is plenty of data to monitor , tap into, and dissect.

By using a social listening tool, like Consumer Research , researchers can identify topics of interest and then analyze relevant social posts. For example, they can track brand mentions and what consumers are saying about the products owned by that brand. These are real-world consumer research examples.

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Social media listening democratizes insights, and is especially useful for market research because of the vast amount of unfiltered information available. Because it’s unprompted, you can be fairly sure that what’s shared is an accurate account of what the person really cares about and thinks (as opposed to them being given a subject to dwell on in the presence of a researcher).

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Your complete social listening guide.

Learn how to get started with social listening

4. Interviews

In interviews, the interviewer speaks directly with the respondent. This type of market research method is more personal, allowing for communication and clarification, making it good for open-ended questions. Furthermore, interviews enable the interviewer to go beyond surface-level responses and investigate deeper.

However, the drawback is that interviews can be time-intensive and costly. Those who opt for this method will need to figure out how to allocate their resources effectively. You also need to be careful with leading or poor questions that lead to useless results. Here’s a good introduction to leading questions .

5. Experiments and field trials

Field experiments are conducted in the participants’ environment. They rely on the independent variable and the dependent variable – the researcher controls the independent variable in order to test its impact on the dependent variable. The key here is to establish whether there’s causality.

For example, take Hofling’s experiment that tested obedience, conducted in a hospital setting. The point was to test if nurses followed authority figures (doctors) and if the authority figures’ rules violated standards (The dependent variable being the nurses, the independent variable being a fake doctor calling up and ordering the nurses to administer treatment.)

According to Simply Psychology , there are key strengths and limitations to this method.

The assessment reads:

• Strength: Behavior in a field experiment is more likely to reflect real life because of its natural setting, i.e., higher ecological validity than a lab experiment.
• Strength: There is less likelihood of demand characteristics affecting the results, as participants may not know they are being studied. This occurs when the study is covert.
• Limitation: There is less control over extraneous variables that might bias the results. This makes it difficult for another researcher to replicate the study in exactly the same way.

There are also massive ethical implications for these kinds of experiments and experiments in general (especially if people are unaware of their involvement). Don’t take this lightly, and be sure to read up on all the guidelines that apply to the region where you’re based.

6. Observation

Observational market research is a qualitative research method where the researcher observes their subjects in a natural or controlled environment. This method is much like being a fly on the wall, but the fly takes notes and analyzes them later. In observational market research, subjects are likely to behave naturally, which reveals their true selves. 

They are not under much pressure. However, if they’re aware of the observation, they can act differently.

This type of research applies well to retail, where the researcher can observe shoppers’ behavior by day of the week, by season, when discounts are offered, and more. However, observational research can be time-consuming, and researchers have no control over the environments they research.

7. Competitive analysis

Competitive analysis is a highly strategic and specific form of market research in which the researchers analyze their company’s competitors. It is critical to see how your brand stacks up to rivals. 

Competitive analysis starts by defining the product, service, brand, and market segment. There are different topics to compare your firm with your competitors. It could be from a marketing perspective: content produced, SEO structure, PR coverage, and social media presence and engagement. It can also be from a product perspective: types of offerings, pricing structure. SWOT analysis is key in assessing strengths, weaknesses, opportunities, and threats.

We’ve written a whole blog post on this tactic, which you can read here .

8. Public domain data

The internet is a wondrous place. Public data exists for those strapped for resources or simply seeking to support their research with more data.  With more and more data produced every year, the question about access and curation becomes increasingly prominent – that’s why researchers and librarians are keen on open data.

Plenty of different types of open data are useful for market research: government databases, polling data, “fact tanks” like Pew Research Center, and more. 

Furthermore, APIs grant developers programmatic access to applications. A lot of this data is free, which is a real bonus.

9. Buy research

Money can’t buy everything, but it can buy research. Subscriptions exist for those who want to buy relevant industry and research reports. Sites like Euromonitor, Statista, Mintel, and BCC Research host a litany of reports for purchase, oftentimes with the option of a single-user license or a subscription.

This can be a massive time saver, and you’ll have a better idea of what you’re getting from the very beginning. You’ll also get all your data in a format that makes sense, saving you effort in cleaning and organizing.

10. Analyze sales data

Sales data is like a puzzle piece that can help reveal the full picture of market research insights. Essentially, it indicates the results. Paired with other market research data, sales data helps researchers better understand actions and consequences. Understanding your customers, their buying habits, and how they change over time is important.

This research will be limited to customers, and it’s important to keep that in mind. Nevertheless, the value of this data should not be underestimated. If you’re not already tracking customer data, there’s no time like the present.

Choosing the right market research method for your strategy

Not all methods will be right for your situation or your business. Once you’ve looked through the list and seen some that take your fancy, spend more time researching each option.You’ll want to consider what you want to achieve, what data you’ll need, the pros and cons of each method, the costs of conducting the research, and the cost of analyzing the results.

Get it right, and it’ll be worth all the effort.

Former Brandwatch Employee

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Comprehensive Guide to Market Research: Strategies, Methods, and Implementation

Introduction:

Market research is the process in the fundamental component of successful business strategies. It encompasses systematically collecting, analyzing, and interpreting data related to a specific market or industry. This process allows companies to comprehend customer preferences, assess market size, and evaluate competition, empowering them to make informed decisions that drive growth and profitability. In this comprehensive guide, we will explore the intricacies of market research, covering essential topics from asking the right research questions to implementing findings and monitoring trends.

Market research primarily revolves around understanding:

1. “The Consumer”: This includes current customers, past customers, non-customers, and influencers.

2. “The Company”: Insights encompass product or service design, promotion, pricing, placement, service, and sales.

3. “The Competitors”: Understanding how competitors' market offerings interact within the market environment.

4. “The Industry Overall”: Assessing whether the industry is growing or moving in a specific direction.

The New Coke Flop:

To emphasize the significance of market research, let's revisit the well-known example of the New Coke failure in 1985. Coca-Cola's decision to introduce a new formula was based on extensive surveys of over 200,000 consumers testing the new product's taste. The initial survey results were overwhelmingly positive, leading to the launch of New Coke. However, it was met with widespread disapproval from the general audience. In their survey, Coca-Cola should have assessed people's emotional connection with the original product. This case study serves as a stark reminder of market research's crucial role in understanding the deeper nuances of consumer behavior.

Conducting Your Market Research:

Defining your market research objectives:.

Before diving into market research, it's crucial to establish clear objectives. What are your goals? Do you aim to understand customer preferences, assess market size, or evaluate competition? This article will guide you in articulating clear and actionable research goals.

Identifying Your Target Audience:

Market segmentation:.

Segmenting your market is essential for understanding your market. It helps tailor marketing strategies and product features to different customer groups, enhancing brand awareness and market share. Market segmentation aims to identify and target distinct customer segments that share similar needs, preferences, behaviors, or characteristics. By doing so, businesses can tailor their marketing strategies, product offerings, and messaging to meet each segment's unique demands better, ultimately improving their overall marketing effectiveness and customer satisfaction.

Types of Segmentation:

• Demographic Segmentation: Dividing the market based on demographic factors like age, gender, income, education, and family size.
• Psychographic Segmentation: Grouping customers based on their lifestyle, values, interests, and personality traits.
• Geographic Segmentation: Segmenting the market by geographic location, region, city size, or climate.
• Behavioral Segmentation: Dividing customers based on their behaviors, such as purchase history, product usage, loyalty, or brand interactions.
• Benefit Segmentation: Grouping customers based on the specific benefits they seek from a product or service.

Shopper Research: The 6W Method

Effectively conducting market research hinges on understanding your target audience. As discussed in previous articles, comprehending your shoppers and customers is a crucial aspect known as shopper research. The 6W method is a valuable tool in this endeavor. It explores the essential aspects of consumer behavior and decision-making, adapting to factors such as launching a new product or service. It helps us better target market and customers:

- "Who" delves into demographics and psychographics, helping understand the target audience.

- "What" explores product preferences and choices.

- "Where" investigates shopping channels and locations frequented by customers.

- "When" uncovers the timing and frequency of purchases.

- "Why" provides insights into motivations and influencing factors.

- "How" delves into the process and journey of the shopping experience.

This method provides a holistic framework for conducting shopper research and understanding consumer behavior comprehensively.

Key Elements of Effective Market Research:

Qualitative and quantitative research:.

Within market research, two critical methods are qualitative and quantitative research. Qualitative research explores consumer opinions and behaviors in depth through open-ended questions. Quantitative research relies on numerical data and statistical analysis to conclude.

Adapting to Market Dynamics:

Effective market research may require in-depth analysis, especially if you are new to market research or the market is evolving rapidly. This research focuses less on numbers and more on comprehending market dynamics and consumer behavior.

Structured Market Research Strategy:

A well-structured market research strategy is essential to guide your research and ensure you obtain the information necessary for your business.

Data Collection Methods:

The next step is determining how to gather the necessary data. Market research involves two main types: primary research and secondary research. Primary research entails collecting data directly from research subjects through surveys, interviews, and observation-based research. Secondary research involves analyzing existing data from sources like market reports, market statistics, and third-party market research companies. But you must ensure relevance to fast-changing trends, such as social media.

A great example of a tool to use in primary research: A great example of a primary research tool is a new function on the RealEye platform where it is possible to track live on the website using eye-tracking . When creating a website or a new marketing campaign, you can check where readers' attention is, whether the project meets intended expectations, and whether it is met with an appropriate positive response. 

An additional type of market research is Lean Market. This is an entirely different approach to conducting research than primary and secondary research. The lean market research examines the results of the early test "explorations," learns from them, and evolves from them without waiting for the end of the process to express an assessment (which is therefore always open to updates and corrections). This is a faster and more dynamic way to conduct the study.

The choice of research path may depend on the needs and resources of your company.

Market Research Methods:

Market research offers various methods depending on your specific research objectives. 

The main types of market research are performed using the following tools:

- “Surveys”: Create structured questionnaires to collect quantitative data. Note that the way questions are phrased can influence responses.

- “Competitive Analysis”: Study your competitors' strategies to gain valuable insights into strengths and weaknesses.

- “Online Tools”: Utilize online tools and analytics for data collection and analysis, including social media demographics.

These are just some of the examples.

Designing and Executing the Research:

Once you've determined your data collection methods, the next step is designing research instruments aligned with your objectives. Develop clear, unbiased, and relevant survey questions, interview guides, and observation protocols.

Implementation of Research:

After preparing your research instruments, it's time to implement them. Learn how to efficiently implement your chosen research method through surveys, interviews, or other means. Consider the advantages of online survey tools or interview software for a streamlined process.

Data Analysis and Interpretation:

Making sense of data:.

Collecting data is just the beginning; the value lies in effectively analyzing and interpreting it. This chapter explores how to organize and analyze your collected data, covering statistical analysis for quantitative data and thematic analysis for qualitative data.

Applying Findings and Monitoring Trends:

Turning insights into action:.

With insights from your market research results, it's time to make informed decisions. At this moment, market research allows you and your company to implement changes or strategies based on your research findings . Remember, market research is an ongoing process; monitoring market trends, customer preferences, and competition is vital for staying relevant and adapting strategies accordingly.

Conclusion:

Market research is a dynamic discipline crucial for businesses of all sizes and industries. Whether avoiding costly mistakes like the New Coke launch or uncovering invaluable insights about your target audience, market research is indispensable in informed decision-making. By following the steps outlined in this comprehensive guide, you can harness the power of market research to drive growth, innovation, and long-term success in the ever-evolving market landscape.

Bibliography:

Qualtrics. (n.d.). Market Research Guide. Retrieved from https://www.qualtrics.com/experience-management/research/market-research-guide/  

RealEye. (n.d.). Online Webcam Eye Tracking. Retrieved from https://www.realeye.io/features/online-webcam-eyetracking

The Coca-Cola Company. (n.d.). New Coke: The Most Memorable Marketing Blunder Ever. Retrieved from https://www.coca-colacompany.com/about-us/history/new-coke-the-most-memorable-marketing-blunder-ever  

Doxee. (n.d.). How to Conduct a Market Research in 7 Steps. Retrieved from https://www.doxee.com/blog/digital-marketing/how-to-conduct-a-market-research-in-7-steps/ 

RealEye Blog. (September 4, 2023). Shopper Research 101: Understanding Consumer Behavior and Insights. Retrieved from https://www.realeye.io/blog/post/shopper-research-101-understanding-consumer-behavior-and-insights 

Other Blog Posts:

RealEye for Kaunas University of Technology

Exploring the Depths of Market Research with Julius Augustine: A Journey from Fieldwork to AI

Use Mockup testing to improve usability of your projects - build better apps and websites

Webcam online eye-tracking @Universities

• Free Resources

14 Market Research Examples

This article was originally published in the MarketingSherpa email newsletter .

Example #1: National bank’s A/B testing

You can learn what customers want by conducting experiments on real-life customer decisions using A/B testing. When you ensure your tests do not have any validity threats, the information you garner can offer very reliable insights into customer behavior.

Here’s an example from Flint McGlaughlin, CEO of MarketingSherpa and MECLABS Institute, and the creator of its  online marketing course .

A national bank was working with MECLABS to discover how to increase the number of sign-ups for new checking accounts.

Customers who were interested in checking accounts could click on an “Open in Minutes” link on the bank’s homepage.

Creative Sample #1: Anonymized bank homepage

After clicking on the homepage link, visitors were taken to a four-question checking account selector tool.

Creative Sample #2: Original checking account landing page — account recommendation selector tool

After filling out the selector tool, visitors were taken to a results page that included a suggested package (“Best Choice”) along with a secondary option (“Second Choice”). The results page had several calls to action (CTAs). Website visitors were able to select an account and begin pre-registration (“Open Now”) or find out more information about the account (“Learn More”), go back and change their answers (“Go back and change answers”), or manually browse other checking options (“Other Checking Options”).

Creative Sample #3: Original checking account landing page — account recommendation selector tool results page

After going through the experience, the MECLABS team hypothesized that the selector tool wasn’t really delivering on the expectation the customer had after clicking on the “Open in Minutes” CTA. They created two treatments (new versions) and tested them against the control experience.

In the first treatment, the checking selector tool was removed, and instead, customers were directly presented with three account options in tabs from which customers could select.

Creative Sample #4: Checking account landing page Treatment #1

The second treatment’s landing page focused on a single product and had only one CTA. The call-to-action was similar to the CTA customers clicked on the homepage to get to this page — “Open Now.”

Creative Sample #5: Checking account landing page Treatment #2

Both treatments increased account applications compared to the control landing page experience, with Treatment #2 generating 65% more applicants at a 98% level of confidence.

Creative Sample #6: Results of bank experiment that used A/B testing

You’ll note the Level of Confidence in the results. With any research tactic or tool you use to learn about customers, you have to consider whether the information you’re getting really represents most customers, or if you’re just seeing outliers or random chance.

With a high Level of Confidence like this, it is more likely the results actually represent a true difference between the control and treatment landing pages and that the results aren’t just a random event.

The other factor to consider is — testing in and of itself will not produce results. You have to use testing as research to actually learn about the customer and then make changes to better serve the customer.

In the video How to Discover Exactly What the Customer Wants to See on the Next Click: 3 critical skills every marketer must master , McGlaughlin discussed this national bank experiment and explained how to use prioritization, identification and deduction to discover what your customers want.

This example was originally published in Marketing Research: 5 examples of discovering what customers want .

Example #2: Consumer Reports’ market intelligence research from third-party sources

The first example covers A/B testing. But keep in mind, ill-informed A/B testing isn’t market research, it’s just hoping for insights from random guesses.

In other words, A/B testing in a vacuum does not provide valuable information about customers. What you are testing is crucial, and then A/B testing is a means to help better understand whether insights you have about the customer are either validated or refuted by actual customer behavior. So it’s important to start with some research into potential customers and competitors to inform your A/B tests.

For example, when MECLABS and MarketingExperiments (sister publisher to MarketingSherpa) worked with Consumer Reports on a public, crowdsourced A/B test, we provided a market intelligence report to our audience to help inform their test suggestions.

Every successful marketing test should confirm or deny an assumption about the customer. You need enough knowledge about the customer to create marketing messages you think will be effective.

For this public experiment to help marketers improve their split testing abilities, we had a real customer to work with — donors to Consumer Reports.

To help our audience better understand the customer, the MECLABS Marketing Intelligence team created the 26-page ConsumerReports Market Intelligence Research document (which you can see for yourself at that link).

This example was originally published in Calling All Writers and Marketers: Write the most effective copy for this Consumer Reports email and win a MarketingSherpa Summit package and Consumer Reports Value Proposition Test: What you can learn from a 29% drop in clickthrough .

Example #3: Virtual event company’s conversation

What if you don’t have the budget for A/B testing? Or any of the other tactics in this article?

Well, if you’re like most people you likely have some relationships with other human beings. A significant other, friends, family, neighbors, co-workers, customers, a nemesis (“Newman!”). While conducting market research by talking to these people has several validity threats, it at least helps you get out of your own head and identify some of your blind spots.

WebBabyShower.com’s lead magnet is a PDF download of a baby shower thank you card ‘swipe file’ plus some extras. “Women want to print it out and have it where they are writing cards, not have a laptop open constantly,” said Kurt Perschke, owner, WebBabyShower.com.

That is not a throwaway quote from Perschke. That is a brilliant insight, so I want to make sure we don’t overlook it. By better understanding customer behavior, you can better serve customers and increase results.

However, you are not your customer. So you must bridge the gap between you and them.

Often you hear marketers or business leaders review an ad or discuss a marketing campaign and say, “Well, I would never read that entire ad” or “I would not be interested in that promotion.” To which I say … who cares? Who cares what you would do? If you are not in the ideal customer set, sorry to dent your ego, but you really don’t matter. Only the customer does.

Perschke is one step ahead of many marketers and business leaders because he readily understands this. “Owning a business whose customers are 95% women has been a great education for me,” he said.

So I had to ask him, how did he get this insight into his customers’ behavior? Frankly, it didn’t take complex market research. He was just aware of this disconnect he had with the customer, and he was alert for ways to bridge the gap. “To be honest, I first saw that with my wife. Then we asked a few customers, and they confirmed it’s what they did also. Writing notes by hand is viewed as a ‘non-digital’ activity and reading from a laptop kinda spoils the mood apparently,” he said.

Back to WebBabyShower. “We've seen a [more than] 100% increase in email signups using this method, which was both inexpensive and evergreen,” Perschke said.

This example was originally published in Digital Marketing: Six specific examples of incentives that worked .

Example #4: Spiceworks Ziff Davis’ research-informed content marketing

Marketing research isn’t just to inform products and advertising messages. Market research can also give your brand a leg up in another highly competitive space – content marketing.

Don’t just jump in and create content expecting it to be successful just because it’s “free.” Conducting research beforehand can help you understand what your potential audience already receives and where they might need help but are currently being served.

When Spiceworks Ziff Davis (SWZD) published its annual State of IT report, it invested months in conducting primary market research, analyzing year-over-year trends, and finally producing the actual report.

“Before getting into the nuts and bolts of writing an asset, look at market shifts and gaps that complement your business and marketing objectives. Then, you can begin to plan, research, write, review and finalize an asset,” said Priscilla Meisel, Content Marketing Director, SWZD.

This example was originally published in Marketing Writing: 3 simple tips that can help any marketer improve results (even if you’re not a copywriter) .

Example #5: Business travel company’s guerilla research

There are many established, expensive tactics you can use to better understand customers.

But if you don’t have the budget for those tactics, and don’t know any potential customers, you might want to brainstorm creative ways you can get valuable information from the right customer target set.

Here’s an example from a former client of Mitch McCasland, Founding Partner and Director, Brand Inquiry Partners. The company sold a product related to frequent business flyers and was interested in finding out information on people who travel for a living. They needed consumer feedback right away.

“I suggested that they go out to the airport with a bunch of 20-dollar bills and wait outside a gate for passengers to come off their flight,” McCasland said. When people came off the flight, they were politely asked if they would answer a few questions in exchange for the incentive (the $20). By targeting the first people off the flight they had a high likelihood of reaching the first-class passengers.

This example was originally published in Guerrilla Market Research Expert Mitch McCasland Tells How You Can Conduct Quick (and Cheap) Research .

Example #6: Intel’s market research database

When conducting market research, it is crucial to organize your data in a way that allows you to easily and quickly report on it. This is especially important for qualitative studies where you are trying to do more than just quantify the data, but need to manage it so it is easier to analyze.

Anne McClard, Senior Researcher, Doxus worked with Shauna Pettit-Brown of Intel on a research project to understand the needs of mobile application developers throughout the world.

Intel needed to be able to analyze the data from several different angles, including segment and geography, a daunting task complicated by the number of interviews, interviewers, and world languages.

“The interviews were about an hour long, and pretty substantial,” McClard says. So, she needed to build a database to organize the transcripts in a way that made sense.

Different types of data are useful for different departments within a company; once your database is organized you can sort it by various threads.

The Intel study had three different internal sponsors. "When it came to doing the analysis, we ended up creating multiple versions of the presentation targeted to individual audiences," Pettit-Brown says.

The organized database enabled her to go back into the data set to answer questions specific to the interests of the three different groups.

This example was originally published in 4 Steps to Building a Qualitative Market Research Database That Works Better .

Example #7: National security survey’s priming

When conducting market research surveys, the way you word your questions can affect customers’ response. Even the way you word previous questions can put customers in a certain mindset that will skew their answers.

For example, when people were asked if they thought the U.S. government should spend money on an anti-missile shield, the results appeared fairly conclusive. Sixty-four percent of those surveyed thought the country should and only six percent were unsure, according to Opinion Makers: An Insider Exposes the Truth Behind the Polls .

But when pollsters added the option, "...or are you unsure?" the level of uncertainty leaped from six percent to 33 percent. When they asked whether respondents would be upset if the government took the opposite course of action from their selection, 59 percent either didn’t have an opinion or didn’t mind if the government did something differently.

This is an example of how the way you word questions can change a survey’s results. You want survey answers to reflect customer’s actual sentiments that are as free of your company’s previously held biases as possible.

This example was originally published in Are Surveys Misleading? 7 Questions for Better Market Research .

Example #8: Visa USA’s approach to getting an accurate answer

As mentioned in the previous example, the way you ask customers questions can skew their responses with your own biases.

However, the way you ask questions to potential customers can also illuminate your understanding of them. Which is why companies field surveys to begin with.

“One thing you learn over time is how to structure questions so you have a greater likelihood of getting an accurate answer. For example, when we want to find out if people are paying off their bills, we'll ask them to think about the card they use most often. We then ask what the balance was on their last bill after they paid it,” said Michael Marx, VP Research Services, Visa USA.

This example was originally published in Tips from Visa USA's Market Research Expert Michael Marx .

Example #9: Hallmark’s private members-only community

Online communities are a way to interact with and learn from customers. Hallmark created a private members-only community called Idea Exchange (an idea you could replicate with a Facebook or LinkedIn Group).

The community helped the greeting cards company learn the customer’s language.

“Communities…let consumers describe issues in their own terms,” explained Tom Brailsford, Manager of Advancing Capabilities, Hallmark Cards. “Lots of times companies use jargon internally.”

At Hallmark they used to talk internally about “channels” of distribution. But consumers talk about stores, not channels. It is much clearer to ask consumers about the stores they shop in than what channels they shop.

For example, Brailsford clarified, “We say we want to nurture, inspire, and lift one’s spirits. We use those terms, and the communities have defined those terms for us. So we have learned how those things play out in their lives. It gives us a much richer vocabulary to talk about these things.”

This example was originally published in Third Year Results from Hallmark's Online Market Research Experiment .

Example #10: L'Oréal’s social media listening

If you don’t want the long-term responsibility that comes with creating an online community, you can use social media listening to understand how customers talking about your products and industry in their own language.

In 2019, L'Oréal felt the need to upgrade one of its top makeup products – L'Oréal Paris Alliance Perfect foundation. Both the formula and the product communication were outdated – multiple ingredients had emerged on the market along with competitive products made from those ingredients.

These new ingredients and products were overwhelming consumers. After implementing new formulas, the competitor brands would advertise their ingredients as the best on the market, providing almost magical results.

So the team at L'Oréal decided to research their consumers’ expectations instead of simply crafting a new formula on their own. The idea was to understand not only which active ingredients are credible among the audience, but also which particular words they use while speaking about foundations in general.

The marketing team decided to combine two research methods: social media listening and traditional questionnaires.

“For the most part, we conduct social media listening research when we need to find out what our customers say about our brand/product/topic and which words they use to do it. We do conduct traditional research as well and ask questions directly. These surveys are different because we provide a variety of readymade answers that respondents choose from. Thus, we limit them in terms of statements and their wording,” says Marina Tarandiuk, marketing research specialist, L'Oréal Ukraine.

“The key value of social media listening (SML) for us is the opportunity to collect people’s opinions that are as ‘natural’ as possible. When someone leaves a review online, they are in a comfortable environment, they use their ‘own’ language to express themselves, there is no interviewer standing next to them and potentially causing shame for their answer. The analytics of ‘natural’ and honest opinions of our customers enables us to implement the results in our communication and use the same language as them,” Tarandiuk said.

The team worked with a social media listening tool vendor to identify the most popular, in-demand ingredients discussed online and detect the most commonly used words and phrases to create a “consumer glossary.”

Questionnaires had to confirm all the hypotheses and insights found while monitoring social media. This part was performed in-house with the dedicated team. They created custom questionnaires aiming to narrow down all the data to a maximum of three variants that could become the base for the whole product line.

“One of our recent studies had a goal to find out which words our clients used to describe positive and negative qualities of [the] foundation. Due to a change in [the] product’s formula, we also decided to change its communication. Based on the opinions of our customers, we can consolidate the existing positive ideas that our clients have about the product,” Tarandiuk said.

To find the related mentions, the team monitored not only the products made by L'Oréal but also the overall category. “The search query contained both brand names and general words like foundation, texture, smell, skin, pores, etc. The problem was that this approach ended up collecting thousands of mentions, not all of which were relevant to the topic,” said Elena Teselko, content marketing manager, YouScan (L'Oréal’s social media listening tool).

So the team used artificial intelligence-based tagging that divided mentions according to the category, features, or product type.

This approach helped the team discover that customers valued such foundation features as not clogging pores, a light texture, and not spreading. Meanwhile, the most discussed and appreciated cosmetics component was hyaluronic acid.

These exact phrases, found with the help of social media monitoring, were later used for marketing communication.

Creative Sample #7: Marketing communicating for personal care company with messaging based on discoveries from market research

“Doing research and detecting audience’s interests BEFORE starting a campaign is an approach that dramatically lowers any risks and increases chances that the campaign would be appreciated by customers,” Teselko said.

This example was originally published in B2C Branding: 3 quick case studies of enhancing the brand with a better customer experience .

Example #11: Levi’s ethnographic research

In a focus group or survey, you are asking customers to explain something they may not even truly understand. Could be why they bought a product. Or what they think of your competitor.

Ethnographic research is a type of anthropology in which you go into customers’ homes or places of business and observe their actual behavior, behavior they may not understand well enough to explain to you.

While cost prohibitive to many brands, and simply unfeasible for others, it can elicit new insights into your customers.

Michael Perman, Senior Director Cultural Insights, Levi Strauss & Co. uses both quantitative and qualitative research on a broad spectrum, but when it comes to gathering consumer insight, he focuses on in-depth ethnographic research provided by partners who specialize in getting deep into the “nooks and crannies of consumer life in America and around the world.” For example, his team spends time in consumers’ homes and in their closets. They shop with consumers, looking for the reality of a consumer’s life and identifying themes that will enable designers and merchandisers to better understand and anticipate consumer needs.

Perman then puts together multi-sensory presentations that illustrate the findings of research. For example, “we might recreate a teenager’s bedroom and show what a teenage girl might have on her dresser.”

This example was originally published in How to Get Your Company to Pay Attention to Market Research Results: Tips from Levi Strauss .

Example #12: eBags’ ethnographic research

Ethnographic research isn’t confined to a physical goods brand like Levi’s. Digital brands can engage in this form of anthropology as well.

While usability testing in a lab is useful, it does miss some of the real-world environmental factors that play a part in the success of a website. Usability testing alone didn’t create a clear enough picture for Gregory Casey, User Experience Designer and Architect, eBags.

“After we had designed our mobile and tablet experience, I wanted to run some contextual user research, which basically meant seeing how people used it in the wild, seeing how people are using it in their homes. So that’s exactly what I did,” Gregory said.

He found consumers willing to open their home to him and be tested in their normal environment. This meant factors like the television, phone calls and other family members played a part in how they experienced the eBags mobile site.

“During these interview sessions, a lot of times we were interrupted by, say, a child coming over and the mother having to do something for the kid … The experience isn’t sovereign. It’s not something where they just sit down, work through a particular user flow and complete their interaction,” Gregory said.

By watching users work through the site as they would in their everyday life, Gregory got to see what parts of the site they actually use.

This example was originally published in Mobile Marketing: 4 takeaways on how to improve your mobile shopping experience beyond just responsive design .

Example #13: John Deere’s shift from product-centric market research to consumer-centric research

One of the major benefits of market research is to overcome company blind spots. However, if you start with your blind spots – i.e., a product focus – you will blunt the effectiveness of your market research.

In the past, “they’d say, Here’s the product, find out how people feel about it,” explained David van Nostrand, Manager, John Deere's Global Market Research. “A lot of companies do that.” Instead, they should be saying, “Let's start with the customers: what do they want, what do they need?”

The solution? A new in-house program called “Category Experts” brings the product-group employees over as full team members working on specific research projects with van Nostrand’s team.

These staffers handle items that don’t require a research background: scheduling, meetings, logistics, communication and vendor management. The actual task they handle is less important than the fact that they serve as human cross-pollinators, bringing consumer-centric sensibility back to their product- focused groups.

For example, if van Nostrand’s team is doing research about a vehicle, they bring in staffers from the Vehicles product groups. “The information about vehicle consumers needs to be out there in the vehicle marketing groups, not locked in here in the heads of the researchers.”

This example was originally published in How John Deere Increased Mass Consumer Market Share by Revamping its Market Research Tactics .

Example #14: LeapFrog’s market research involvement throughout product development (not just at the beginning and the end)

Market research is sometimes thought of as a practice that can either inform the development of a product, or research consumer attitudes about developed products. But what about the middle?

Once the creative people begin working on product designs, the LeapFrog research department stays involved.

They have a lab onsite where they bring moms and kids from the San Francisco Bay area to test preliminary versions of the products. “We do a lot of hands-on, informal qualitative work with kids,” said Craig Spitzer, VP Marketing Research, LeapFrog. “Can they do what they need to do to work the product? Do they go from step A to B to C, or do they go from A to C to B?”

When designing the LeapPad Learning System, for example, the prototype went through the lab “a dozen times or so,” he says.

A key challenge for the research department is keeping and building the list of thousands of families who have agreed to be on call for testing. “We've done everything from recruiting on the Internet to putting out fliers in local schools, working through employees whose kids are in schools, and milking every connection we have,” Spitzer says.

Kids who test products at the lab are compensated with a free, existing product rather than a promise of the getting the product they're testing when it is released in the future.

This example was originally published in How LeapFrog Uses Marketing Research to Launch New Products .

Related resources

The Marketer’s Blind Spot: 3 ways to overcome the marketer’s greatest obstacle to effective messaging

Get Your Free Test Discovery Tool to Help Log all the Results and Discoveries from Your Company’s Marketing Tests

Marketing Research: 5 examples of discovering what customers want

Online Marketing Tests: How do you know you’re really learning anything?

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Types of market research: Methods and examples

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Here at GWI we publish a steady stream of blogs, reports, and other resources that dig deep into specific market research topics.

But what about the folks who’d appreciate a more general overview of market research that explains the big picture? Don’t they deserve some love too?

Of course they do. That’s why we’ve created this overview guide focusing on types of market research and examples. With so many market research companies to choose from, having a solid general understanding of how this sector works is essential for any brand or business that wants to pick the right market research partner.

So with that in mind, let’s start at the very beginning and get clear on…

Market research definition

At the risk of stating the slightly obvious, market research is the gathering and analyzing of data on consumers, competitors, distributors, and markets. As such it’s not quite the same as consumer research , but there’s significant overlap.

Market research matters because it can help you take the guesswork out of getting through to audiences. By studying consumers and gathering information on their likes, dislikes, and so on, brands can make evidence-based decisions instead of relying on instinct or experience. 

What is market research?

Market research is the organized gathering of information about target markets and consumers’ needs and preferences. It’s an important component of business strategy and a major factor in maintaining competitiveness.

If a business wants to know – really know – what sort of products or services consumers want to buy, along with where, when, and how those products and services should be marketed, it just makes sense to ask the prospective audience. 

Without the certainty that market research brings, a business is basically hoping for the best. And while we salute their optimism, that’s not exactly a reliable strategy for success.

What are the types of market research?

Primary research .

Primary research is a type of market research you either conduct yourself or hire someone to do on your behalf.

A classic example of primary research involves going directly to a source – typically customers or prospective customers in your target market – to ask questions and gather information about a product or service. Interviewing methods include in-person, online surveys, phone calls, and focus groups.

The big advantage of primary research is that it’s directly focused on your objectives, so the outcome will be conclusive, detailed insights – particularly into customer views – making it the gold standard.

The disadvantages are it can be time-consuming and potentially costly, plus there’s a risk of survey bias creeping in, in the sense that research samples may not be representative of the wider group.

Secondary research 

Primary market research means you collect the data your business needs, whereas the types of market research known as secondary market research use information that’s already been gathered for other purposes but can still be valuable. Examples include published market studies, white papers, analyst reports, customer emails, and customer surveys/feedback.

For many small businesses with limited budgets, secondary market research is their first choice because it’s easier to acquire and far more affordable than primary research.

Secondary research can still answer specific business questions, but with limitations. The data collected from that audience may not match your targeted audience exactly, resulting in skewed outcomes. 

A big benefit of secondary market research is helping lay the groundwork and get you ready to carry out primary market research by making sure you’re focused on what matters most.

Qualitative research

Qualitative research is one of the two fundamental types of market research. Qualitative research is about people and their opinions. Typically conducted by asking questions either one-on-one or in groups, qualitative research can help you define problems and learn about customers’ opinions, values, and beliefs.

Classic examples of qualitative research are long-answer questions like “Why do you think this product is better than competitive products? Why do you think it’s not?”, or “How would you improve this new service to make it more appealing?”

Because qualitative research generally involves smaller sample sizes than its close cousin quantitative research, it gives you an anecdotal overview of your subject, rather than highly detailed information that can help predict future performance.

Qualitative research is particularly useful if you’re developing a new product, service, website or ad campaign and want to get some feedback before you commit a large budget to it.

Quantitative research

If qualitative research is all about opinions, quantitative research is all about numbers, using math to uncover insights about your audience. 

Typical quantitative research questions are things like, “What’s the market size for this product?” or “How long are visitors staying on this website?”. Clearly the answers to both will be numerical.

Quantitative research usually involves questionnaires. Respondents are asked to complete the survey, which marketers use to understand consumer needs, and create strategies and marketing plans.

Importantly, because quantitative research is math-based, it’s statistically valid, which means you’re in a good position to use it to predict the future direction of your business.

Consumer research 

As its name implies, consumer research gathers information about consumers’ lifestyles, behaviors, needs and preferences, usually in relation to a particular product or service. It can include both quantitative and qualitative studies.

Examples of consumer research in action include finding ways to improve consumer perception of a product, or creating buyer personas and market segments, which help you successfully market your product to different types of customers.

Understanding consumer trends , driven by consumer research, helps businesses understand customer psychology and create detailed purchasing behavior profiles. The result helps brands improve their products and services by making them more customer-centric, increasing customer satisfaction, and boosting bottom line in the process.

Product research 

Product research gives a new product (or indeed service, we don’t judge) its best chance of success, or helps an existing product improve or increase market share.

It’s common sense: by finding out what consumers want and adjusting your offering accordingly, you gain a competitive edge. It can be the difference between a product being a roaring success or an abject failure.

Examples of product research include finding ways to develop goods with a higher value, or identifying exactly where innovation effort should be focused. 

Product research goes hand-in-hand with other strands of market research, helping you make informed decisions about what consumers want, and what you can offer them.

Brand research  

Brand research is the process of gathering feedback from your current, prospective, and even past customers to understand how your brand is perceived by the market.

It covers things like brand awareness, brand perceptions, customer advocacy, advertising effectiveness, purchase channels, audience profiling, and whether or not the brand is a top consideration for consumers.

The result helps take the guesswork out of your messaging and brand strategy. Like all types of market research, it gives marketing leaders the data they need to make better choices based on fact rather than opinion or intuition.

Market research methods 

So far we’ve reviewed various different types of market research, now let’s look at market research methods, in other words the practical ways you can uncover those all-important insights.

Consumer research platform 

A consumer research platform like GWI is a smart way to find on-demand market research insights in seconds.

In a world of fluid markets and changing attitudes, a detailed understanding of your consumers, developed using the right research platform, enables you to stop guessing and start knowing.

As well as providing certainty, consumer research platforms massively accelerate speed to insight. Got a question? Just jump on your consumer research platform and find the answer – job done.

The ability to mine data for answers like this is empowering – suddenly you’re in the driving seat with a world of possibilities ahead of you. Compared to the most obvious alternative – commissioning third party research that could take weeks to arrive – the right consumer research platform is basically a magic wand.

Admittedly we’re biased, but GWI delivers all this and more. Take our platform for a quick spin and see for yourself.

And the downside of using a consumer research platform? Well, no data set, however fresh or thorough, can answer every question. If you need really niche insights then your best bet is custom market research , where you can ask any question you like, tailored to your exact needs.

Face-to-face interviews 

Despite the rise in popularity of online surveys , face-to-face survey interviewing – using mobile devices or even the classic paper survey – is still a popular data collection method.

In terms of advantages, face-to-face interviews help with accurate screening, in the sense the interviewee can’t easily give misleading answers about, say, their age. The interviewer can also make a note of emotions and non-verbal cues. 

On the other hand, face-to-face interviews can be costly, while the quality of data you get back often depends on the ability of the interviewer. Also, the size of the sample is limited to the size of your interviewing staff, the area in which the interviews are conducted, and the number of qualified respondents within that area.

Social listening 

Social listening is a powerful solution for brands who want to keep an ear to the ground, gathering unfiltered thoughts and opinions from consumers who are posting on social media. 

Many social listening tools store data for up to a couple of years, great for trend analysis that needs to compare current and past conversations.

Social listening isn’t limited to text. Images, videos, and emojis often help us better understand what consumers are thinking, saying, and doing better than more traditional research methods. 

Perhaps the biggest downside is there are no guarantees with social listening, and you never know what you will (or won’t) find. It can also be tricky to gauge sentiment accurately if the language used is open to misinterpretation, for example if a social media user describes something as “sick”.

There’s also a potential problem around what people say vs. what they actually do. Tweeting about the gym is a good deal easier than actually going. The wider problem – and this may shock you – is that not every single thing people write on social media is necessarily true, which means social listening can easily deliver unreliable results.

Public domain data 

Public domain data comes from think tanks and government statistics or research centers like the UK’s National Office for Statistics or the United States Census Bureau and the National Institute of Statistical Sciences. Other sources are things like research journals, news media, and academic material.

Its advantages for market research are it’s cheap (or even free), quick to access, and easily available. Public domain datasets can be huge, so potentially very rich.

On the flip side, the data can be out of date, it certainly isn’t exclusive to you, and the collection methodology can leave much to be desired. But used carefully, public domain data can be a useful source of secondary market research.

Telephone interviews 

You know the drill – you get a call from a researcher who asks you questions about a particular topic and wants to hear your opinions. Some even pay or offer other rewards for your time.

Telephone surveys are great for reaching niche groups of consumers within a specific geographic area or connected to a particular brand, or who aren’t very active in online channels. They’re not well-suited for gathering data from broad population groups, simply because of the time and labor involved.

How to use market research 

Data isn’t an end in itself; instead it’s a springboard to make other stuff happen. So once you’ve drawn conclusions from your research, it’s time to think of what you’ll actually do based on your findings.

While it’s impossible for us to give a definitive list (every use case is different), here are some suggestions to get you started.

Leverage it . Think about ways to expand the use – and value – of research data and insights, for example by using research to support business goals and functions, like sales, market share or product design.

Integrate it . Expand the value of your research data by integrating it with other data sources, internal and external. Integrating data like this can broaden your perspective and help you draw deeper insights for more confident decision-making.

Justify it . Enlist colleagues from areas that’ll benefit from the insights that research provides – that could be product management, product development, customer service, marketing, sales or many others – and build a business case for using research.

How to choose the right type of market research 

Broadly speaking, choosing the right research method depends on knowing the type of data you need to collect. To dig into ideas and opinions, choose qualitative; to do some testing, it’s quantitative you want.

There are also a bunch of practical considerations, not least cost. If a particular approach sounds great but costs the earth then clearly it’s not ideal for any brand on a budget.

Then there’s how you intend to use the actual research, your level of expertise with research data, whether you need access to historical data or just a snapshot of today, and so on.

The point is, different methods suit different situations. When choosing, you’ll want to consider what you want to achieve, what data you’ll need, the pros and cons of each method, the costs of conducting the research, and the cost of analyzing the results. 

Market research examples

Independent agency Bright/Shift used GWI consumer insights to shape a high-impact go-to-market strategy for their sustainable furniture client, generating £41K in revenue in the first month. Here’s how they made the magic happen .

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2023 Guide to Market Research: Key Strategies and Best Practices

When Steve Sasson—a Kodak engineer—invented the first digital camera in 1975, a breakthrough in photography was born. However, Kodak wasn’t interested—it was a film company, and Sasson’s digital camera threatened to disrupt its core business. Despite an extensive market research effort confirming the imminent shift from film to digital, Kodak continued to double down on its film business until it filed for bankruptcy in 2012.

The moral of the story is that strategic decisions need to be based on accurate market research in order to avoid costly mistakes, especially when they entail reinvention. Kodak is just one example—another common scenario in which a company might need to reinvent itself is when it’s looking to expand into new markets . Be it a new or adapted product or service, a new target audience, or new business models—changing tack to cater to a new market can be a make-or-break moment for businesses.

That’s why, if you’re looking to take your product global, conducting market research should be a key part of your strategy. Venturing into unfamiliar markets armed with solid market intelligence can help you make the most of opportunities and avoid pitfalls. In this article, we will discuss best practices for market research as a key component of a global expansion , and how you can make the most of it.

What is market research?

Market research is the process of collecting and analyzing data about a target market to understand consumer preferences and purchasing decisions. Companies can use this information to better inform their business strategies, such as what products or services to develop, how to adapt them to different market conditions, or what factors can affect demand.

When a company operates globally or is trying to enter new markets, market research becomes even more important. This is because culture and geography can have a big impact on consumer behavior. To be successful, you need to understand the nuances of each market and tailor your products and marketing strategies accordingly.

Market research vs marketing research

It’s common to see the terms “market research” and “marketing research” used interchangeably, but they actually refer to two different things.

Market research is a broad category that includes all types of data collection and analysis related to a target market. The aim is to understand the market, including the needs of consumers and the dynamics of competition.

Marketing research, on the other hand, is more specific and refers to the process of collecting and analyzing data to assess and identify the changing elements of the marketing mix (product, price, place, and promotion).

For example, if you want to launch a new product in the Spanish market, you would first conduct market research to assess whether there is a demand for it, what the market size, what market trends are, and what the competition looks like.

Once you have this information, you can then move on to marketing research for concept testing and to determine how to market the product , what channels to use for distribution, and what kind of marketing campaigns will be most effective.

Both activities do share some similarities, though: They may use the same data sources and methods, and the line between them can sometimes be blurry. Ultimately, the goal of both is to generate insights that can be used to make better business decisions.

Why is market research important?

There are many reasons why market research is important, but perhaps the most important is that it helps you reduce risk. When you have a clear understanding of your target market and what they want, you are much less likely to make costly mistakes.

In the context of globalization , market research can help you assess the potential of new markets and make informed decisions about where to allocate resources. It can also help you develop strategies for entering new markets, such as identifying the most effective channels for marketing and distribution.

When you’re expanding your business into new markets informed by market research, you’re much more likely to:

• Develop successful products and services: By understanding your customers’ needs , you can develop products and services that they will actually want to buy.
• Increase sales: By understanding your target market’s buying habits, pain points, and motivators, you can develop marketing campaigns that are more likely to resonate and result in sales.
• Improve customer satisfaction: If you know what your customers want, you can deliver it to them, resulting in happier customers who are more likely to continue doing business with you.
• Reduce costs by avoiding duplicate effort: Market intelligence allows you to allocate resources strategically and get it right the first time. For example, you can avoid spending money on conventional translation for marketing campaigns that require more creative adaptation to be effective in a new market.
• Get localization right: A good localization strategy is a key to success in any new market. But without market intelligence, it can be difficult to know how to adapt your products and marketing materials for a new culture. For example, you might not realize that certain colors have different connotations in different cultures, or that video content gives you a higher return on investment in one market but not another.

Arming yourself with nothing but assumptions can lead to less-than-optimal results—and this is especially true when expanding into new markets. When legal systems, consumer preferences, and business practices differ from country to country, the risks are even greater, and so should your commitment to market research.

Market analytics vs market research

A common misconception is that market research and analytics mean the same. In reality, they’re two distinct ways of doing consumer investigation, and they serve different purposes.

Market analytics is the process of collecting and analyzing data to unveil patterns and trends. This data can come from a variety of sources, including surveys, social media, transactional data, and web analytics. For example, you might use market analytics to track how often certain foreign-language keywords are being searched for on Google or to understand which demographics are most likely to purchase your product outside your home market.

Market research, on the other hand, captures data to answer specific questions. For example, a company might want to know what factors influence its customers’ purchase decisions in a particular market, or what the barriers to entry are for a new product.

Market analytics can help generate hypotheses that you can then test through market research. You can think of analytics as the inward-looking “what” (What happens? What are the trends?) and market research as the outward-looking “why” (Why does it happen? Why do people want this?).

When you leverage market analytics and market research together, you can get a well-rounded view of your target market and what they want. This, in turn, helps you make better business decisions and avoid costly mistakes.

What types of market research are there?

There are several types of market research depending on the questions you want to answer, the type of data you need, the resources that you have available, and the timeline that you are working with.

Primary market research vs secondary market research

Primary research is the first-hand research that you conduct yourself. This could involve surveys, interviews, focus groups, or any other type of research method where you directly interact with consumers.

Secondary research is the intelligence that someone else has already gathered and published. This includes data from government reports, trade associations, industry journals, commercial data providers, and other published sources.

Quantitative market research vs qualitative market research

Quantitative research focuses on numbers and statistics. For example, if you want what percentage of people in a certain age group prefer your product over a competitor’s, you would use quantitative research. Polls, surveys, desk research, web statistics, and consumer panels are all quantitative research methods.

Qualitative research, on the other hand, focuses on understanding people’s opinions, motivations, and behaviors. Multilingual sentiment analysis, ethnography, and in-depth interviews are all qualitative research methods.

Exploratory market research vs conclusive market research

You use exploratory research to generate hypotheses and identify key variables. This type of research is frequent at the beginning of a project to get a better understanding of the problem. For example, if you want to know why customers are leaving your website in a foreign market, you might use exploratory research to generate hypotheses that you can then test through further market research.

Conclusive research is used to test hypotheses and measure relationships. This type of research usually comes after exploratory research. For example, if your exploratory research suggests that customers are leaving your website because the current user experience isn’t considering their cultural preferences—think things like imagery or payment methods—you could use conclusive research to measure the impact of a new user interface that takes these cultural preferences into account.

Branding research

Branding research helps you create, manage, and measure the success of your brand. This type of research can help you understand how customers perceive your brand, what associations they have with it, and how well your brand is positioned in the market.

When expanding globally, branding research can help you strike the right balance between global brand consistency and local brand relevance. It can also help you understand how to adapt your brand messaging and identity to different cultures.

Product development research

Product development research helps you establish if there is a market for your product or service and what features or benefits customers are looking for. This type of research can help you understand the viability of your product, optimize its characteristics, and ensure it performs well before taking it to market.

Most global companies adapt their product offering to local markets. Product development research can help you understand what features or benefits are most important to customers in different countries so you can out-compete local companies.

Customer research

Customer research is a type of market research that can serve different purposes, from segmenting your customer base to measuring customer satisfaction. In the context of international operations, customer research can help you understand how to appeal to different customer segments in different countries.

For example, when you know that 64% of Asian-Pacific customers are willing to share personal data for a tailored online experience, you can use this information to improve your website design and user experience in the region.

The main types of customer research are:

• Customer satisfaction research: Also known as customer experience research, this type of research helps you understand how customers feel about your product or service. This includes understanding what they like and don’t like, their unmet needs, and how likely they are to recommend your product or service to others.
• Customer segmentation research: Segmentation research helps you understand how to divide your customer base into smaller groups with shared characteristics. This type of research can help you better target your marketing efforts and create more personalized experiences for your customers.
• Consumer insights: Consumer insights are actionable, research-based observations about your customers. They go beyond demographic information to include things like customer values, preferences, and behaviors. For example, if you want to understand why customers in a certain market are choosing your competitor’s product over yours, consumer insights research could help you uncover the reasons.

Competitive market research

Competitive market research helps you understand what your competitors are doing. This can include things like their marketing strategies, product offerings, pricing, and distribution channels. Understanding your competitor’s strengths and weaknesses can help you make informed decisions about how to position your own product or service in the market.

How to do market research?

Like every complex process, you can break market research down into smaller, more manageable steps. Here’s a high-level overview of how to do market research:

Identify your target audience

The first step in any market research project is to identify your target audience. This will help you focus your research efforts and ensure that you’re gathering information that’s relevant to your business. For example, if you’re planning an expansion to the Brazilian market, an example of a target audience you might identify would be “Brazilian upper-middle-class women ages 25-40.”

Define your research objectives

Identify an issue, problem, or opportunity that you want to understand better. For example: “I want to understand what payment methods Brazilian upper-middle-class women ages 25-40 prefer when shopping online so we can optimize our checkout process.”

Select your research methods

Once you’ve identified your target audience and objectives, you’ll need to select the research methods that will help you gather the data you need. There are many different market research methods, some of which are quantitative and some of which are qualitative. In the case above, to find out the preferred payment methods of Brazilian shoppers, you might conduct a survey.

Develop your research plan

Once you’ve selected your methods, you move on to developing your research plan. This should include a detailed description of how you’ll execute your project, including timelines, budgets, and any risks or challenges you anticipate. For example, if you’re planning to conduct interviews in Brazil, you’ll need to consider things like language barriers and cultural differences.

Collect and analyze your data

Once you’ve executed your research plan, it’s time to collect and analyze your data. This can be a complex process, depending on the methods you’ve used and the type of data you’ve gathered. In the case of a survey, you might use statistical software to analyze your results.

Present your findings

After you’ve analyzed your data, you’ll need to present your findings in a way that’s easy for others to understand. The stakeholders in your business will use these findings to make decisions about things like product development, marketing, and expansion plans. How you present your findings will depend on the type of data you’ve collected and the objectives of your research. For example, if you’re presenting the results of a survey, you might create a report or presentation that includes charts and graphs.

The above steps are a high-level overview of the market research process. In practice, each project will be unique, and you’ll need to tailor your approach to fit the specific needs of your business.

What are some key market research methods? 

We’ve briefly touched on some of the most common market research methods, but let’s take a closer look at each one:

Surveys involve collecting data from a target audience through questions administered either in person, by phone, or online. They can be used to gather data about a wide range of topics, including consumer behavior, preferences, and opinions.

• Surveys are relatively easy and inexpensive to administer.
• They can provide a great deal of immediate information.
• Their extensive reach gives you insights about a large number of people.
• Analyzing survey data is typically straightforward.
• Surveys can be time-consuming to administer and analyze.
• It can be difficult to find people who are willing to participate.
• Survey results can be skewed by the way you word questions or by the order in which you ask them .

How to do it right:

• Avoid asking too many questions so as not to overwhelm respondents
• Make sure your questions are clear and concise
• Try to ask neutral questions that don’t lead respondents to a particular answer
• Include open-ended questions to encourage respondents to give more detailed answers.

Interviews are a type of market research that involve conducting in-depth conversations with individuals from a target audience. They can be used to gather data about a wide range of topics, including attitudes, beliefs, and motivations.

• Interviews can provide a great deal of rich, detailed information about a small number of people.
• You can conduct them online if needed.
• They allow you to build empathy with your audience.
• The resources required to administer interviews (e.g., time, money, personnel) can be significant.
• It can be challenging to find people who are willing to participate (incentives might be necessary to encourage participation).
• They don’t reach an audience as extensive as surveys do.
• Choose the most appropriate format for your interview—e.g., in-person, phone, video chat, etc.
• Make sure to explain to the respondent what the interview will entail and how you will use their responses.
• Build rapport by repeating back what the respondent says and showing empathy
• Leave time for follow-up questions.

Focus groups

Many companies choose to bring together a group of potential customers to discuss a product or service before it’s launched. This type of market research is called a focus group, and it can be used to gather data about things like reactions, perceptions, and opinions.

• Focus groups can provide rich, detailed information about a small number of people.
• They can provide insights into the purchase decision-making process.
• You can easily measure customer reactions to a product’s design, packaging, price and message.
• They aren’t as in-depth as interviews.
• They can be expensive to conduct.
• They can be biased by the moderator’s questions or the group dynamics—like a dominant personality in the group who steers everyone’s opinions.
• People might not give honest feedback if you’re paying them to participate.
• Ensure the recruiting process is well-designed so you end up with a diverse and representative group of participants.
• Use skilled and experienced moderators who know how to keep the discussion on track.
• Pay attention to the nonverbal cues of participants—e.g., body language.
• Establish ground rules at the beginning of the session.
• Consider and pre-empty potential intercultural communication issues.

Observational research

When you observe people, you’re looking at their behavior in a natural setting. This type of market research can be used to gather data about a wide range of topics, including shopping habits, use of public spaces, and interactions with technology. There’s both overt and covert observational research, depending on whether or not participants are aware that they’re being watched.

• Observational research is relatively easy and inexpensive to conduct.
• Natural surroundings can provide insights that would be difficult or impossible to glean from other types of market research.
• The researcher’s own biases can skew the data.
• It can be time-consuming to observe people for extended periods of time.
• People might not behave naturally if they’re aware that someone’s watching them.
• When conducting covert observational research, be sure to follow all ethical guidelines.
• When conducting overt observational research, make sure to get the consent of participants.
• Always capture context.
• Try to avoid bias by maintaining a detached and objective attitude.
• Be sure to take detailed notes or record videos of the behavior you’re observing.
• Complete debriefing notes as soon as possible after the observation so the data is fresh in your mind.

What are some best practices for market research?

For any market research project, it’s important to keep the following best practices in mind:

Define your scope and objectives clearly

Unless you know what you’re trying to learn, it will be difficult to design an effective market research project. Based on your product offering, target market, and expansion goals, you should be able to define the scope and objectives of your project. These will help guide the rest of your decisions.

Get input from stakeholders early on

People whom the results of the market research will affect—e.g., marketing, sales, leadership—should be involved from the outset to help shape the project. Their input will ensure that the objectives of the market research are aligned with the company’s goals, and it will help ensure buy-in for the project from key stakeholders.

Consider cultural differences

If you’re expanding into new markets, it’s important to be aware of cultural differences that could affect your market research. For example, some cultures might consider it impolite to ask certain types of questions, or the interpretation of body language might be different. Working with local market research partners can help you navigate these differences.

Choose the right method

While it’s tempting to assume that any research method will eventually get you the information you need, that’s often not the case. For example, if you’re trying to learn about the associations that your content is getting in a foreign market to spot and fix any cultural missteps, a multiple-choice survey with predefined answers might not be the most optimal method.

Pilot-test your methods

Before you launch a full-scale market research project, it’s important to pilot-test your methods to make sure they’re effective. This will help you identify any potential problems so that you can fix them before they impact your data.

Analyze your results carefully

All the data in the world won’t be of any use if you don’t take the time to analyze it carefully. When reviewing your results, look for both quantitative and qualitative trends, and try to identify any potential sources of bias. Moreover, if you’ve conducted the research in a language other than your own, it’s a good idea to enlist the help of professional localizers who can help you interpret the results—they’ll be familiar with the nuances of the language and culture that you might not be.

Communicate your findings effectively

Communication can be a challenge when dealing with market research since you’re often dealing with complex data sets. However, presenting your findings in a way that’s clear and actionable for stakeholders is crucial if you want your research to have an impact.

Follow up with respondents

If you’ve collected data from respondents, it’s important to follow up with them after the fact. This shows that you value their input. Moreover, if you’ve acted on any of their feedback, be sure to let them know the results—e.g., a feature they suggested was added to the product, their feedback helped shape a new marketing campaign, etc. This can make a big impression and solidify your relationship with respondents.

Effective market research must be systematic

When done right, market research is a powerful tool that can help companies make informed decisions about their expansion strategies. However, a lack of planning and foresight can lead to wasted effort and resources.

By following a systematic process and keeping best practices in mind, you can ensure that your market research is effective and informative. The result is a stronger market expansion strategy and a better chance of success in new markets.

Last updated on August 11, 2023.

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Market Research: Meaning, Types, Methods and Examples

Today's entrepreneurship landscape is very fast-paced. Consumer demands and market conditions change frequently, often predetermining the product's chances for success or failure. And although following your intuition can sometimes help, when it comes to business where a lot is at stake, making factless calls is almost equal to using a Magic 8 ball.

What should business owners do to withstand the competition and stay afloat among all the unpredictability? Repeatedly conducting market research could be the answer. Like a skilled detective, teams must take a magnifying glass, gather evidence, and look into the data and recent findings to find clues and invaluable insights to unravel fundamental mysteries.

The bottom line here is that thorough investigation can lead to a deeper consumer understanding and more informed decisions. So, if you're ready to put on your detective trench coat, keep browsing the page, as we'll give the definition of market research, provide answers to questions like what is market research necessary for, go over the various types of market research, common methods, and provide examples.

What Is Market Research?

Giving the market research definition, it refers to the process of investigating customer behavior, client preferences, market trends, industry intricacies, and various competitive landscapes . This is a systematic and methodical process, which can help bring valuable insights to light. By navigating through the labyrinth of data and analyzing the findings, teams may gather and piece together the clues to base their decisions on.

What else does the meaning of market research imply? This approach is used to omit guesswork and raises the lid on multiple things like:

• customer preferences;
• product appeal;
• existing market trends;
• current competitors, their strengths or weak spots.

To obtain such information, teams apply various techniques, including surveys, interviews, competitor analysis , among others. In the end, it empowers organizations by revealing answers to many questions on how to upgrade or modify the product.

When to Conduct Market Research

The whole purpose of market research is to gather data to strengthen your strategy and build a better product. And when is the best time to do it? The earlier, the better.

Although staying up to date with the changes and trends is vital at all times, it is especially important to apply market research techniques and collect information at the earliest product stages while you lay the foundation of the work ahead. Precisely, this is done when the team is going through proof of concept or moving toward project planning and the discovery phase.

What do you get by applying business market research methods during discovery? Upsilon's team has been delivering discovery phase services for more than a decade, so we can positively state that thorough research lets you:

• understand the target audience and their needs;
• figure out the market gaps you can fill;
• formulate the product problem statement ;
• select the must-include features more effectively;
• improve other strategic decisions (e.g., regarding pricing, marketing, and so on). 

Bottom line: the fewer calls you make falling back on guesses or gut feelings, the better the outcomes. And it definitely makes sense to base your decisions on research and facts from the very outset of the project.

Want to ensure that your project discovery isn't a waste of time?

In just 2 weeks, Upsilon can deliver detailed feature descriptions, user stories, wireframes, UI/UX designs, a defined tech stack, and more so that your development kicks off from the right note!

Why Is Market Research Important? 

As you see, it's sort of a detective-like quest to solve a confusing case that requires clue allocation, studying the "suspect" behavior, and deciphering the obtained information. It isn't an easy process, and it requires a lot of time and effort.

So, what is market research in business needed for, and which gains does it bring? Here are several notable benefits of market research and why you should do it.

1. Getting to Know the Target Audience

Market research makes it possible to gain a comprehensive understanding of the market size and target audience. After all, you need to clearly identify who can find your offering useful and know all the ins and outs of whom you're building your product for . This includes their behavior, desires, expectations, needs, pain points, aspirations, and buying habits.

On a side note, email validation plays a crucial role in ensuring the accuracy, deliverability, and effectiveness of market research efforts by maintaining a clean and reliable database of email addresses. Employing proper email validation methods and bulk email verifier tools can contribute to the success of market research campaigns.

2. Improving the Product or Offering

When you're aware of which customer needs are unmet, it becomes much easier to address them. Hence, market research becomes leverage for tailoring products to better meet specific client demands , needs, and desires.

This certainly strengthens the creation process at all stages of the product development life cycle . Plus, it helps reinforce the sales and marketing strategies and the product itself (from packaging and positioning to pricing, monetization paths, etc.).

3. Informed and Strategic Decision-Making

As follows from the above, making calculated, data-driven decisions that are backed by facts (instead of your gut feeling) can accelerate other vital business processes that don't necessarily have to deal with the product directly. Because market research implies in-depth analysis, not surface-like observations, data unveils various patterns and possibly hidden opportunities , which can define the entire business trajectory. To streamline the process of organizing market data, you can consider exploring Google Sheet alternatives to foster efficient collaboration among team members involved in the analysis processes.

4. Shaping the Business Plan

Surely, market research can be considered one of the pillars of business strategy creation. Such data provides a sturdy foundation for planning business development steps and crafting an optimal product development roadmap . It also allows for making more accurate project estimations and reduces the chances of making non-precise assumptions that will be completely off the mark.

5. Reducing Risks

Like a guiding compass, market research may enable team members to avoid uncalled-for risks . For starters, it often helps uncover possible pitfalls, allocate potentially hazardous areas, or identify sketchy moves.

Moreover, it can minimize risks related to an ineffective product or MVP launch . For example, it could signal an untimely release or, even more importantly, the threat of launching something people don't need or that doesn't resonate with their expectations. Certainly, this saves invested resources like time, effort, and money from being put to waste.

6. Helping Teams Learn

Undoubtedly, market research is a versatile source of knowledge . It flags what you're doing right or wrong and illuminates the paths that can be taken. Gathering feedback and measuring customer satisfaction can assist in evaluating how effective a promotional campaign is, what to improve in the product, or how to spend the budget more optimally.

7. Becoming More Flexible and Adaptable

Agility is an essential component of a successful business, and market research can also expose the necessity for a strategic adjustment or business pivot . Such data grants teams the chance to anticipate shifts and adapt to the changes in due time. This can not only ensure that you're staying ahead of market trends but also that the product and offering remain relevant.

8. Gaining a Competitive Advantage

Of course, businesses strive to obtain a competitive edge, and that won't be possible if you don't understand the competitive landscape . Who are your competitors? What are they doing? How are they getting on? Do they have any visible strong sides or weaknesses?

Market research definitely lends a helping hand in identifying market gaps . It hints at untapped opportunities to try seizing and how to amend the strategy to differentiate your product in the market and put your best foot forward to help it win over clients and stand out.

Types of Market Research

Just as detectives, business owners have to use fragments of the data puzzle to see the full picture and perspective. What are the three types of market research? In a broad sense, we can actually distinguish four. Below, we describe a few main categories or approaches to how research can be conducted based on its data source, focus, or purpose.

Primary Research

There are different types of market research, but primary research deals with gathering original data from firsthand sources to obtain new, tailored, and business-specific insights. For instance, primary market research methods imply that teams can collect information from:

• their target audience directly via observations, interviews, surveys, personal one-on-one contact;
• controlled experiments (held for hypothesis testing or data gathering purposes or to get an answer to a specific question or objective).

Now, let's put primary vs secondary market research side by side to see how they differ.

Secondary Research

What's for secondary research, such types of market research rely on your own historical data and previous findings or on data that was collected by someone else . These secondary market research methods imply analyzing and even synthesizing data that already exists, shortening the time and the required resources to gather the information and offering a broader perspective. Here are some things that may serve as sources for analysis:

• your own previous research results;
• industry reports;
• research publications;
• data analysis and statistics by government agencies;
• public records;
• online databases;
• statistical repositories;
• market studies.

However, it is crucial to keep in mind that the data from these types of secondary market research may have originally been collected for a different purpose. It can be handy if you want to explore trends or validate what you've discovered from your own primary research.

Quantitative Research

The market research types can also be distinguished by being either quantitative or qualitative. Quantitative market research techniques place an emphasis on quantity, that is, it's exploratory market research that involves the collection and analysis of numerical data and objective measurements . Data can be collected from:

• surveys or polls with predetermined responses;
• questionnaires with closed-ended questions;
• experiments, regression or correlation analysis;
• and other sources.

As a result, teams get statistical insights that make it possible to compare, generalize, or make conclusions using a rather large sample size. Now, let's compare qualitative vs quantitative market research.

Qualitative Research

Mentioning qualitative types of market research, they place emphasis on digging deep to find answers to specific questions based on non-numerical data , such as the points of view of select individuals. In this case, subjective experiences are under analysis with the aim of allocating patterns, getting extensive insights, and generating hypotheses.

For instance, to get descriptive insights and obtain business-specific answers to many "whys", teams can use qualitative methods of market research and: 

• hold in-depth interviews with open-ended questions;
• run detailed opinion polls in focus groups to understand the users' motivation, behavior, or attitude toward something.

Now that we've shed light on the question of "what are the types of market research", as an additional tidbit, it is worth noting that both primary and secondary research could be quantitative and qualitative . It depends on which market research approaches and analysis methods are chosen as well as the data sources.

Market Research Methods

Businesses can use various techniques for collecting data and gathering insights about their competitors, target market, and industry. But how exactly do teams approach the matter? Let's take a closer look at the most common methods of market research that can help teams "crack the case".

Surveys and Polls

Surveying or asking people to give answers to a poll are quite cost-effective types of market research methods. They are best applicable for getting information from a large number of respondents. The extensiveness and depth of the questions depend on the aims.

Polls or surveys can be run in person, but the more popular online channels of distribution are email send-outs, social media, or specialized platforms. Luckily, there are lots of MVP tools that can visibly simplify the process of creating polls, questionnaires, etc.

Interviews and Focus Groups

Leveraging data from customer interviews with individuals is a first-hand source of truth that teams often turn to (as long as it's not an interrogation, right?). Just as with market survey methods, the size and level of detail of the interviews will vary. They can be held via video chats, phone calls, face-to-face meetings, or even in written Q&A chat format.

Focus groups, however, entail gathering a petite group of people who match the company's target customer profile or market segments. They can watch a demo, provide feedback on something, or test the product. This is also a qualitative method but assumes questioning more than one person at a time in the course of a discussion.

Observations and Usability Tests

The observation method implies taking out your detective binoculars and studying the target audience or even competitors and how they act in their natural environment. This silent tactic is generally unintrusive but can provide a pretty realistic picture of how users interact with the product and their behavior. Such methods of market research as usability testing, scrollmapping, heatmaps, clickmaps, or shop camera footage may be the "footprints" or "fingerprints" of observational research, offering in-depth insights.

Product Testing

Certainly, market research may be a challenge if you have an incomplete product or lack one on the whole. Nevertheless, there exist very simple MVP types like smoke tests, fake doors, or email campaigns. This market research method applies simple solutions like landing pages to test user interest or collect data, contact details, and feedback. If you do have a new service or product to show, you can assess its quality and how happy people are with it by running usability tests.

Competitive Analysis

Competing with other players on the market is tough if you don't know who they are and their strengths and weaknesses. That's why competitive analysis plays an important role in the market research process and benchmarking your offering. Teams overview various business aspects of direct and close competitors, including their used business or startup digital marketing strategy, product advantages, pricing, and brand positioning. Then, they may apply these findings to differentiate their own product.

Social Media Listening

Social media platforms and forums can become a great source of data. These are effective market research methods if you want to reveal the latest trends or customer sentiment and desires. After choosing the most appropriate channels, teams can monitor, track, and analyze information such as comments, threads, mentions, and often discussed topics. Moreover, social media may serve as a tool for obtaining feedback, discovering opportunities, or learning about issues. You can also use social media analytics tools to delve deeper into audience insights and engagement metrics, which will help in refining your content strategy.

Brand Research

Such research revolves around brand positioning, i.e., user interaction with it, awareness, perception, etc. Teams do their best to measure customer satisfaction and brand loyalty (for instance, by studying client reviews, ratings, feedback forms, and complaints submitted to customer service, as well as metrics like the customer retention rate, repeat purchases, customer lifetime value, and others obtained from Google Analytics, Mixpanel or Amplitude ). They can then amend the product and the marketing and sales strategies correspondingly.

Data Mining

This approach highlights the analysis of big datasets to uncover vital business learnings such as prominent behavioral patterns. Multiple things can act as sources, e.g., social media, site analytics, or product performance metrics . Nonetheless, in this case, the larger the volume of assessed data, the better.

Neuromarketing

Interestingly, neuroscience has made its way into the field of research, too. Such types of market research techniques focus on the subconscious and help teams understand crucial things, such as how people make choices. The techniques applied include brain imaging and eye tracking to assess reactions to marketing stimuli.

Experimental Research

Additionally, teams can run various controlled experiments to test their ideas and assumptions. For instance, A/B testing, split or multivariate tests may be of great help if you want to ensure which option to select. Say, you'd like to know which landing page color scheme or CTA phrase to choose, then you randomly direct traffic to each version and, after a while, make conclusions based on user clicks and engagement.

How to Do Market Research

Now that we've overviewed the possible types of market research and the often applied methods, it's time to figure out how to perform market research using the sequence of steps teams generally take throughout the process.

Step 1: Determine the Objective

Begin by clearly defining the purpose of why you're planning to invest time and effort into research. What reason led you to the need to conduct this market research? Who is in focus (e.g., market trends, competitors, a customer segment, or a specific buyer persona group)? What are you planning to achieve?

The "why" can be determined by lots of things like initial research to learn whether it's worth taking a shot at starting a startup or building a product, a market shift, a sudden drop in sales, or your team's overall KPIs and OKRs . The "what" should specify who is the focus of the study. Jotting it all down can be a good start. 

Step 2: Select the Best-Fit Research Strategy and Plan It

What kind of research type is best applicable to help you find answers? Which specific market research methods can be of use? What do you have enough resources for? At this point, you have to line out the plan and strategy :

• put your research hypotheses on paper;
• mark the expected results and the success/failure indicators;
• pick the ways to collect data;
• choose the best-fit types of market research and channels;
• select the groups of participants, test subjects, or respondents;
• indicate the duration of the procedure;
• possibly note the incitive or reward for participation;
• make a research plan noting the activities;
• assign responsible people;
• decide on the budget if necessary. 

Step 3: Start the Work

Next, you have to prepare the actual research instruments . For instance, you can:

• spend time making a logical and consistent list of questions for the focus group interview;
• think through the survey and poll content (you can use Typeform or Google Forms to speed things up);
• or put together several versions of the landing page that you'll run split tests for (e.g., using VWO ).

Then, set up the tools or organize the processes that'll help you track the results and collect data.

Step 4: Analyze Collected Data

When the execution stage is complete, move on to analyzing the gathered data and interpreting the findings . Carefully study the results to try to find patterns, identify trends, and set aside repetitive insights. The evaluation process can entail:

• analyzing statistical information;
• going through interviews or survey replies one by one;
• using data visualization ;
• and other methods.

On another note, organizing a separate space to store the knowledge you've obtained thanks to market research, hypothesis tests, and other used methods is considered a best practice. Having all your data analysis reports at hand with a quick overview of what you were searching for, when, why, and the results can help keep the whole team on track, share the findings, and have a single source to return to later.

Step 5: Make Conclusions and Act on the Findings

Which key findings did you get? Draw conclusions on the outcomes and note the results to help you make data-backed business decisions. Then, continue by taking after-research steps related to fine-tuning the strategies, going through feature prioritization once again, refining the offering, and other actions.

Once these changes are implemented, make sure to keep monitoring the results. If relevant, return to the research data after some time or repeat the process.

Examples of Market Research

Here are a few hypothetical market research examples that can better illustrate cases of how teams can utilize this approach.

Startup W is thinking about working on a product in a highly competitive market . To understand how to position the product and what to emphasize, they spent time on a detailed competitor analysis. First, when approaching industry market research, they singled out their potential direct competitors and then took a deep dive into their pricing, features, marketing, and available client feedback. The results illuminated a market gap and the possibility of formulating a unique value proposition that could make their product stand out.

Let's assume that the founders of Startup X have a great product idea. They want to ensure there is market demand for it and that people will be willing to pay for such a product. They wish to find this out at the early stages of startup development before investing significant resources into its creation. To test demand, they put together a fake door landing page, showcasing a video with a mini demo of the to-be product. Tracking the number of CTA clicks and filled-out forms gave them a primary understanding of customer interest. 

‍ Startup Y isn't certain about the problem their product should solve and which user needs to address. Hence, to learn about the target audience's challenges and pain points, the team created user stories and target audience profiles. Then, they conducted detailed interviews with a focus group to determine the customer preferences, what is expected from the product, and which feature set to focus on first. Afterward, the team also ran a survey via email and social media channels.

Startup Z is currently working on the MVP design for their early product version. They made a clickable prototype and decided to present it to potential customers to see whether it's usable and gets what people want done. They analyzed the recorded user sessions and feedback, which allowed them to spot inefficiencies in the user flow and make the product better before release.

Need help developing your product?

Upsilon's team can be with you all the way from the discovery phase to developing an MVP and then scaling your product.

Concluding Thoughts on the Types of Market Research

In this article, we've answered the question of "what is market research", overviewed which types of market research exist, and found out why it is integral for business development. By utilizing various techniques, teams can make important discoveries and gain invaluable insights into various areas.

Like detectives, they analyze data instead of relying on the sixth sense to learn about the market state, the competitive landscape, and important factors related to the customers to make informed calls and enhance business strategies. Plus, this comprehensive approach allows us to avoid many costly mistakes down the line and make better, data-backed decisions.

Being a product studio, Upsilon knows how integral market research is for product success. So, if you need a hand with product development, don't be shy to turn to us for MVP development services for startups or to reach out and book a consultation!

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The 8 types of market research and how to use them

There are eight types of marketing research you can try to stay ahead of the competition. Learn more about marketing research methods and how to use them.

Latest posts on Tips

Typeform    |    06.2024

Typeform    |    05.2024

“If you keep doing what you’ve always done, you’ll keep getting what you’ve always got.”

Doesn’t sound too threatening if you’ve always been successful, right?

Continuing to do what you’ve always done means you’ll fall behind—and probably fade to darkness—to where all the forgotten brands go.

Take Kodak. They were a major player in photography for decades—remember? When digital photography boomed, Kodak kept doing what they always did. Their business floundered and people forgot about them. Well, everyone apart from Pitbull.

Now, look at Fujifilm, one of Kodak’s biggest competitors. They did the opposite and looked for ways to apply their expertise in film to the technology of the new millennium instead. Their company is still going strong.

The same goes for research. If you’re doing the same old types of market research, speaking to the same old people, and doing the same old tired surveys—you’re already behind.

How do you decide what kind of market research you need to do? It all comes down to what you need to know and what your business goals are.

In this article, we’ll explain the various types of market research you can use to solve issues and challenges in your business. We’ll throw you a freebie, too, and provide some market research tips about when to use each strategy.

Let’s get you ahead of the curve.

1. Brand research

Brand research helps with creating and managing a company’s brand, or identity. A company’s brand is the images, narratives, and characteristics people associate with it.

When to use it

Brand research can be used at every stage in a business’s lifecycle, from creation to new product launches and re-branding. There are at least seven types of brand research:

Brand advocacy: How many of your customers are willing to recommend your brand?

Brand awareness : Does your target market know who you are and consider you a serious option?

Brand loyalty: Are you retaining customers?

Brand penetration: What is the proportion of your target market using your brand?

Brand perception : What do people think of as your company’s identity or differentiating qualities?

Brand positioning: What is the best way to differentiate your brand from others in the consumer’s mind and articulate it in a way that resonates?

Brand value: How much are people willing to pay for an experience with your brand over another?

How to do it

A researcher will use several types of market research methods to assess your and your competitors’ strengths and weaknesses. Generally, they will conduct competitor research, both qualitative and quantitative, to get a picture of the overall marketplace. Focus groups and interviews can be used to learn about their emotions and associations with certain brands.

Market research surveys are useful to determine features and benefits that differentiate you from competitors . These are then translated into emotionally compelling consumer language.

2. Campaign effectiveness

This type of market research is designed to evaluate whether your advertising messages are reaching the right people and delivering the desired results. Successful campaign effectiveness research can help you sell more and reduce customer acquisition costs.

It’s estimated people see up to 5,000 advertising messages each day. That means attention is a scarce resource, so campaign effectiveness research should be used when you need to spend your advertising dollars effectively.

Campaign effectiveness research depends on which stage of the campaign you use it in (ideally, it’s all of them!). Quantitative research can be conducted to provide a picture of how your target market views advertising and address weaknesses in the advertising campaign.

3. Competitive analysis

Competitive analysis allows you to assess your competitors’ strengths and weaknesses in the marketplace, providing you with fuel to drive a competitive advantage.

No business exists in a vacuum—competitive analysis is an integral part of any business and market plan. Whether you’re just getting started, moving into a new market, or doing a health check of your business, a competitive analysis will be invaluable.

A researcher will typically choose a few of your main competitors and analyze things like their marketing strategy, customer perceptions, revenue or sales volume, and so on.

Secondary sources such as articles, references, and advertising are excellent sources of competitive information; however, primary research, such as mystery shopping and focus groups, can offer valuable information on customer service and current consumer opinions.

4. Consumer insights

Consumer insights research does more than tell you about who your customers are and what they do. It reveals why customers behave in certain ways and helps you leverage that to meet your business goals.

Knowing your customers deeply is integral to creating a strategic marketing plan. This type of market research can help you anticipate consumer needs, spark innovation, personalize your marketing, solve business challenges, and more.

Consumer insights research should be specific to your business—it’s about getting to know your target audience and customers. Various market research methods can be used, such as interviews, ethnography, survey research, social monitoring, and customer journey research.

Here are some of the characteristics you should understand through consumer insights research:

Purchase habits

Interests, hobbies, passions

Personal and professional information

How they consume media and advertising

5. Customer satisfaction research

Customer satisfaction research is a type of market research that measures customers’ experiences with products or services, specifically looking at how those meet, exceed, or fail to live up to their expectations.

Customer satisfaction is a strong indicator of customer retention and overall business performance. Successful customer satisfaction research should help you understand what your customers like, dislike, and feel needs improvement. You can use this type of market research to look at the quality and design of products, speed and timeliness of delivery, staff and service reliability, knowledge, and friendliness, market price, and value for money.

There are several ways to measure customer satisfaction, most commonly using surveys. An NPS or Voice of the Customer Survey can help you measure customer loyalty. Customer Effort Scoring measures how satisfied people are with customer service or problem resolution. CSAT is any survey that measures customer satisfaction , typically measured using Likert scale surveys . They can be conducted at different points in the customer experience, allowing deeper insight into that moment.

6. Customer segmentation research

Customer segmentation studies aim to divide markets or customers into smaller groups or personas with similar characteristics to enable targeted marketing. By understanding how people in each category behave, you can understand how each influences revenue.

Customer segmentation research is best used if you’re ready to give customers individualized experiences. Not every customer in your target market is the same. The more you understand each specific persona, the easier it is to focus on delivering personalized marketing, build loyal relations, price products effectively, and forecast how new products and services will perform in each segment.

Market researchers use four characteristics to segment customers.

Demographics: demographic information such as age, gender, family status, education, household income, occupation and so on

Geography: where people live, from cities and countries to whether they are city dwellers or suburbanites

Psychographics: socioeconomic status, class, lifestyle, personality traits, generation, interests, hobbies, etc.

Behavior: brand affinity, consumption and shopping habits, spending, etc.

A researcher will identify your current customers and collect data about them through various market research methods, such as surveys, database research, website analytics, interviews, and focus groups. The aim is to gather as much information as possible.

7. Product development

Market research for product development involves using customer knowledge to inform the entire process of creating or improving a product, service, or app and bringing it to market.

Innovation is hard work. A quick Google will tell you that 80–95% of new products fail every year. Conducting market research for product and app development helps minimize the risk of a new product or change going bust as it enters the market. There are three stages where you can use market research:

Conception: The moment you’re thinking about adding something new, market research can find market opportunities and provide insights into customer challenges or their jobs-to-be-done, so you can find a way to fill the gap.

Formation: Once you have an idea, market researchers can help you turn it into a concept that can be tested. You can learn more about strategizing pricing, testing advertising and packaging, value proposition, and so on.

Introduction: Market research can help you gauge attitudes toward the product once it’s in the market and adapt your messaging as it rolls out.

Keep making the product better or find opportunities to introduce it to new markets.

Product development research will utilize different market research methods, depending on the goal of the research. A researcher could present focus groups with product concepts and listen to their opinions, conduct interviews to learn more about their pain points, or perform user testing to see how they interact with an app or website.

8. Usability testing

Usability testing is concerned with understanding how customers use your products in real time. It can involve physical products, like a new blender, or digital products like a website or app.

Usability testing is helpful when you need to detect problems or bugs in early prototypes or beta versions before launching them. It typically costs far less to test a product or service beforehand than to pull a flawed product off the shelves or lose sales because of poor functionality.

There are several types of usability tests, which vary based on whether you’re testing a physical or digital product.

Journey testing involves observing the customer experience on an app or website and monitoring how they perform. This type of study can be done online

Eye tracking studies monitor where people’s eyes are drawn. Generally, they are conducted on websites and apps, but can also be done in stores to analyze where people look while shopping

Learn ability studies quantify the learning curve over time to see which problems people encounter after repeating the same task

Click tracking follows users’ activity on websites to evaluate the linking structure of a website

Checklist testing involves giving users tasks to perform and recording or asking them to review their experience

Combining types of market research with Typeform

When it comes to market research, you need to ask yourself what business challenge or question you’re trying to address. Then, select the appropriate methods and tools, such as market research automation , to simplify your process.From there, the world of useful data and actionable insights will open to you.

About the author

We're Typeform - a team on a mission to transform data collection by bringing you refreshingly different forms.

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Marketing research

Definition, how-to, examples.

Marketing research is the process of using surveys, feedback, and observations to better understand audiences and the market for your brand and products. Discover how to conduct your own marketing research with examples.

9 Innovative Market Research Methods

Marketing is too important to leave the details up to chance — or to walk into a campaign without knowing what to expect. When you’re promoting your brand, you want to make sure your efforts are on target, selling the products your audience wants in a way that will get a good response.

Market research is the not-so-secret weapon that allows you to reach this state of on-target marketing and outreach. Putting in the time and effort to know your audience, industry and region can pay off quickly when the results start rolling in.

Engaging in market research is especially useful when you’re:

• Engaging in product development.
• Developing messaging for a marketing campaign.
• Shifting your brand positioning.

One of the best aspects of market research is that you never have to feel constrained in your efforts to gather valuable insight. There are plenty of methods under the market research umbrella, and you can pick the one that best suits your situation.

9 Types of Market Research To Use

Market research isn’t just one set of practices. By studying various aspects of your market, audience and competitors, using a selection of methodologies and tactics, you can form a nuanced picture that will prepare you to succeed.

1. Focus Groups

It can be easy to overlook focus groups as an innovative market research technique. After all, this is a tried-and-true methodology. Can a focus group really yield surprising or compelling results? In practice, these gatherings’ reliability as sources of insights makes up for their lack of innovation. Having them as a central pillar of your qualitative market research strategy gives you a solid foundation.

Running an effective focus group, with participants who truly fit your target audience and feel empowered to speak openly, helps you collect qualitative information about your chosen topic. A flexible moderator who is able to stick with the flow of a conversation can gather honest answers about the highest-priority topics for your business — this kind of feedback is always worthwhile.

2. Online Surveys

Surveys are a lower-overhead option when compared to focus groups. Instead of bringing together a panel and gathering their qualitative thoughts, you’re gathering quantitative data from a passive audience. While online surveys are relatively simple to run, the insights you capture can be profound if you structure your questions well.

Your choice of polling platform can determine the success of your approach. By picking a specialized tool — survey software like Pollfish or LinkedIn’s polling feature , for example — you can quickly build out a market research survey that will deepen your knowledge of your target market and customer base. The former uses generative AI to craft questions based on objectives, while the latter gives you easy access to LinkedIn’s attentive B2B audience.

3. Interviews

While focus groups let members of your target audience share their feelings about important issues in your field, the format can be somewhat indirect. Sometimes, you need direct answers about specific products, features or brand decisions. In these cases, it’s time to find a good audience sample and conduct interviews for qualitative market research.

Interview best practices differ based on your market. In a B2C context, you can reach out to your audience through public posts on social media, email and other channels to find your participants. In the B2B space, where products and services tend to be more targeted and niche, you may have to turn to communities based around your industry on platforms like LinkedIn.

4. Text and SMS Polling

Focus groups and interviews are exciting options for getting to the heart of the important questions about your industry — but sometimes, that level of detail isn’t what you’re looking for. Instead, you need a snap response, gauging clients’ responses about a new product or offering. “Would you buy this?” “Which of these do you prefer?”

Text messaging is not just a way to keep in touch with your audience through promotions and updates. It’s also a potential method of gathering prompt reactions to your queries. Your audience is right at your fingertips, ready to give you input about upcoming decisions.

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5. Crowdsourcing

In lieu of asking questions directly to your target audience by SMS, LinkedIn poll or another method, you can cast a wider net. Making a public request for input or information through your most public-facing channels, including B2B social media platforms, allows you to take in a wide variety of responses.

While you may receive a rather unfiltered sample of responses by publicly posing a question, the process can also be engaging for customers and enlightening for you. Letting people sound off on important questions about your brand may yield interesting results that are less predictable than responses to narrower surveys.

6. Gamification

If getting your audience interested in answering your questions is proving to be a struggle, you can change up your tone. Gamification, which means adding fun mechanics to brand interactions, allows you an easier way to approach your audience. Offering points or badges to an experience is one way to gamify your communications, as is giving your app a fun, game-like user interface.

Building your market research into an overall gamified customer experience allows you to keep your audience close, while still gathering the data you need. If you use a loyalty point system, giving out points to people who answer survey questions is an easy way to stoke interest.

7. Competitive Analysis

Sometimes, you can learn a lot from studying the lay of the land in your industry, with a specific focus on how well your competitors are targeting your shared audience. When you’re planning to launch a new product or service, it’s worth learning from the experiences of other companies with similar offerings.

Making note of your competitors’ successes and stumbles allows you to start from a position of strength, rather than having to learn every lesson directly. After interviewing or surveying members of your target market about audience sentiments regarding rival brands, you can intentionally differentiate your own offerings and stay ahead of market trends.

8. Social Media Listening

While asking questions directly is one way to learn more about your industry, passively observing the ongoing discussion on social media is another option. What are people saying about your brand and your competitors when they’re not being asked directly? The answers can inform your next steps, provided you filter out the noise.

Listening to social media chatter may present an unrepresentative sample — after all, the people who talk the most might not be the ones most likely to buy your product. With that said, there can be interesting strategic ideas in the unfiltered thoughts of a vast audience, and they can help you understand the mood at that exact moment.

9. Artificial Intelligence (AI)

Using AI technology isn’t a method of market research in itself. Rather, it’s a market research tool that can empower other methods. When engaging in data collection about your market or analyzing consumer insights from surveys, interviews or other inputs, you can filter the information through generative AI tools to unlock compelling insights.

Recent developments in the generative AI field have only boosted the technology’s potential value. For instance, an algorithm that can accurately assess the sentiments of natural-language answers and extract trends from that data is a valuable tool for survey takers and interviewers, shortening the time from input to insight.

The Benefits of Market Research

Running down various market research strategies provides a good reminder of how much your brand can learn. It’s also a good reminder that performing effective research takes effort. Why invest in this process?

Market research is worthwhile because of the difference it can make for all your subsequent work. Three specific benefits of market research include:

• Better understanding your customers’ needs: Products and services, no matter how well designed, are nothing without an audience. You need to know what your customers want and prefer to make sure everything from your design decisions to your advertising strategy is locked on target.
• Identifying market opportunities: If there’s a customer need that’s going unmet or an audience segment going unserved, you should know about it. Understanding gaps in the market can help you deliver new products and services that have strong built-in audiences from their launch. 
• Optimizing your marketing strategies: Spending money on a marketing strategy that isn’t getting results is damaging to your bottom line. You should make a point of monitoring the reception of your marketing and sales efforts to optimize every dollar of spend and extract maximum value.

Guesswork can be a waste of time and effort. Well targeted market research takes the uncertainty out of your key processes, providing actionable insight from product development to market research.

Find Market Research That Works for You

As you embrace market research, it’s important to remember there’s no one-size-fits-all approach. Your audience is unique, even within your field, and so are your products and services. Finding the perfect combination of market research methods for your business may take some experimentation as you determine the best way to learn about the challenges and opportunities you face.

As tough as it can be to go through a period of discovery, the results are worth it. A strong market research approach lets you know who your customers are and what they need from you. That valuable insight is so fundamental that it can guide your brand strategy for years to come, so all your decisions are informed ones.

Anthony Basile

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Anthony Basile has been part of Brafton since 2012, having written and edited every form of content that Google's algorithm has favored (there have been a few). When off the clock, he sings and plays guitar at the pubs and clubs of Boston.

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How to Create a Social Media Marketing Strategy in 9 Easy Steps [Free Template]

Creating your social media marketing strategy doesn’t need to be painful. Create an effective plan for your business in 9 simple steps.

A social media marketing strategy is a summary of everything you plan to do and hope to achieve on social media. It guides your actions and lets you know whether you’re succeeding or failing.

The more specific your plan is, the more effective it will be. Keep it concise. Don’t make it so lofty and broad that it’s unattainable or impossible to measure.

In this post, we’ll walk you through a nine-step plan to create a winning social media strategy of your own. We’ve even got expert insights from Amanda Wood, Hootsuite’s Senior Manager of Social Marketing.

How to create a social media strategy:

Bonus: Get a free social media strategy template   to quickly and easily plan your own strategy. Also use it to track results and present the plan to your boss, teammates, and clients.

What is a social media marketing strategy?

A social media strategy is a document outlining your social media goals, the tactics you will use to achieve them and the metrics you will track to measure your progress.

Your social media marketing strategy should also list all of your existing and planned social media accounts along with goals specific to each platform you’re active on. These goals should align with your business’s larger digital marketing strategy.

Finally, a good social media plan should define the roles and responsibilities within your team and outline your reporting cadence.

Create. Schedule. Publish. Engage. Measure. Win.

Creating your own social media marketing strategy (video guide)

No time to read the whole article? Let Amanda, Hootsuite’s own Senior Manager of Social Media Marketing, guide you through our free social media marketing strategy template in less than 10 minutes:

How to create a social media marketing strategy in 9 steps

Step 1. choose goals that align to business objectives, set s.m.a.r.t. goals.

The first step to creating a winning social media strategy is to establish clear objectives and goals. Without goals, you have no way to measure success and return on investment (ROI) .

Each of your social media marketing goals should be SMART : s pecific, m easurable, a ttainable, r elevant and t ime-bound.

Psst: Need help getting started? We’ve got social strategy guides for small businesses , financial services , government , higher education , healthcare , real estate , law firms , and non-profits .

Oh, and if you need examples of smart social media goals , we’ve got you covered there too.

Once you’ve decided on your goals, track them in a social media strategy doc — grab our free template if you don’t have one already.

Track meaningful metrics

Vanity metrics like number of followers and likes are easy to track, but it’s hard to prove their real value. Instead, focus on things like engagement, click-through, and conversion rates.

For inspiration, take a look at these 19 essential social media metrics .

You may want to track different goals for different social media networks, or even different uses for each network.

For example, if you use LinkedIn to drive traffic to your website, you would measure click-throughs. If Instagram is for brand awareness, you might track the number of Instagram Story views. And if you advertise on Facebook, cost-per-click (CPC) is a common success metric.

Social media goals should align with your overall marketing objectives. This makes it easier to show the value of your work and secure buy-in from your boss.

Start developing a successful social media marketing plan by writing down at least three goals for social media.

“ It’s easy to get overwhelmed by deciding what to post and which metrics to track, but you need to focus on what you want to get out of social media to begin with,” says Amanda Wood, Hootsuite’s Senior Manager of Social Marketing. “Don’t just start posting and tracking everything: match your goals to your business, and your metrics to your goals.”

Step 2. Learn everything you can about your audience

Get to know your fans, followers, and customers as real people with real wants and needs, and you will know how to target and engage them on social media.

When it comes to your ideal customer, you should know things like:

• Average income
• Typical job title or industry

Here’s a simple guide and template for creating audience/buyer personas .

Don’t forget to document this information in your strategy doc!

Social media analytics can also provide a ton of valuable information about who your followers are, where they live, and how they interact with your brand on social media. These insights allow you to refine your strategy and better target your audience.

Jugnoo, an Uber-like service for auto-rickshaws in India, used Facebook Analytics to learn that 90% of their users who referred other customers were between 18- and 34-years-old, and 65% of that group was using Android. They used that information to target their ads, resulting in a 40% lower cost per referral.

Check out our guide to using social media analytics and the tools you need to track them .

Step 3. Get to know your competition

Odds are your competitors are already using social media, and that means you can learn from what they’re doing.

Conduct a competitive analysis

A competitive analysis allows you to understand who the competition is and what they’re doing well (and not so well). You’ll get a good sense of what’s expected in your industry, which will help you set social media targets of your own.

It will also help you spot opportunities and weaknesses you can document in your social strategy doc.

Maybe one of your competitors is dominant on Facebook, for example, but has put little effort into X (Twitter) or Instagram. You might want to focus on the social media platforms where your audience is underserved, rather than trying to win fans away from a dominant player.

Use social media listening

Social listening is another way to keep an eye on your competitors.

Do searches of the competition’s company name, account handles, and other relevant keywords on social media. Find out what they’re sharing and what other people are saying about them. If they’re using influencer marketing, how much engagement do those campaigns earn them?

Pro tip : Use Hootsuite Streams to monitor relevant keywords, hashtags and accounts in real-time.

Try Hootsuite for free. You can cancel anytime.

As you track, you may notice shifts in how your competitors and industry leaders are using social media. You may come across new, exciting trends. You might even spot specific social content or a campaign that really hits the mark—or totally bombs.

Use this kind of intel to optimize and inform your own social media marketing strategy.

Just don’t go overboard on the spy tactics, Amanda advises. “ Make sure you aren’t ALWAYS comparing yourself to the competition — it can be a distraction. I’d say checking in on a monthly basis is healthy. Otherwise, focus on your own strategy and results.”

Step 4. Do a social media audit

If you’re already using social media, take stock of your efforts so far. Ask yourself the following questions:

• What’s working, and what’s not?
• Who is engaging with you?
• What are your most valuable partnerships?
• Which networks does your target audience use?
• How does your social media presence compare to the competition?

Once you collect that information, you’ll be ready to start thinking about ways to improve.

We’ve created an easy-to-follow social media audit guide and template to walk you through each step of this process.

Your audit should give you a clear picture of what purpose each of your social accounts serves. If the purpose of an account isn’t clear, think about whether it’s worth keeping.

To help you decide, ask yourself the following questions:

• Is my audience here?
• If so, how are they using this platform?
• Can I use this account to help achieve my goals?

Asking these tough questions will keep your social media strategy focused.

Look for impostor accounts

During the audit, you may discover fake accounts using your business name or the names of your products.

These imposters can be harmful to your brand—never mind that they’re capturing followers that should be yours.

You may want to get your accounts verified too to ensure your fans know they are dealing with the real you.

Here’s how to get verified on:

• X (Twitter)

Step 5. Set up accounts and improve profiles

Decide which networks to use.

As you decide which social networks to use, you will also need to define your strategy for each.

Benefit Cosmetics’ social media manager, Angela Purcaro, told eMarketer : “For our makeup tutorials … we’re all about Snapchat and Instagram Stories. [X], on the other hand, is designated for customer service.”

Hootsuite’s own social team even designates different purposes for formats within networks. On Instagram, for example, they use the feed to post high-quality educational infographics and product announcements and Stories to cover live events or quick social media updates.

View this post on Instagram A post shared by Hootsuite 🦉 (@hootsuite)

Pro tip : Write out a mission statement for each network. A one-sentence declaration to keep you focused on a specific goal.

Example: “We will use X for customer support to keep email and call volumes down.”

Or: “We will use LinkedIn for promoting and sharing our company culture to help with recruitment and employee advocacy.”

One more: “We will use Instagram to highlight new products and repost quality content from influencers.”

If you can’t create a solid mission statement for a particular social media channel, you may want to ask yourself if it’s worth it.

Note : While larger businesses can and do tackle every platform, small businesses may not be able to — and that’s ok! Prioritize social platforms that will have the most impact on your business and make sure your marketing team has the resources to handle content for those networks. If you need help focusing your efforts, check out our 18-minute social media plan .

Set up your profiles

Once you’ve decided which networks to focus on, it’s time to create your profiles. Or improve existing ones so they align with your strategy.

• Make sure you fill out all profile fields
• Include keywords people would use to search for your business
• Use consistent branding (logos, images, etc.) across networks so your profiles are easily recognizable

Pro tip : Use high-quality images that follow the recommended dimensions for each network. Check out our always-up-to-date social media image size cheat sheet for quick reference.

We’ve also got step-by-step guides for each network to walk you through the process:

• Create a Facebook business page
• Create an Instagram business account
• Create a TikTok account
• Create a X (Twitter) business account
• Create a Snapchat account
• Create a LinkedIn Company Page
• Create a Pinterest business account
• Create a YouTube channel

Don’t let this list overwhelm you. Remember, it’s better to use fewer channels well than to stretch yourself thin trying to maintain a presence on every network.

Optimize your profiles (and content) for search

Never heard of social SEO ? It’s time to learn.

44% of Gen Z consumers use social platforms to research their purchase decisions, which means it’s extra critical that your channels are optimized for social search.

That means making sure your profile names are clear and descriptive, you’re including relevant hashtags and keywords in your bio and on every post, and you’re using features like alt text and captions to include your target keywords as naturally as possible.

Step 6. Find inspiration

While it’s important that your brand be unique, you can still draw inspiration from other businesses that are great on social.

“ I consider it my job to stay active on social: to know what’s trending, which campaigns are winning, what’s new with the platforms, who’s going above and beyond,” says Amanda. “This might be the most fun step for you, or the hardest one, but it’s just as crucial as the rest of them.”

Social media success stories

You can usually find these on the business section of the social network’s website. ( Here’s Facebook’s , for example.)

Case studies can offer valuable insights that you can apply to your own social media plan.

Award-winning accounts and campaigns

You could also check out the winners of The Facebook Awards or The Shorty Awards for examples of brands that are at the top of their social media game.

For learning and a laugh, check out Fridge-Worthy, Hootsuite’s bi-weekly awards show highlighting brands doing smart and clever things on social media.

Your favorite brands on social media

Who do you enjoy following on social media? What do they do that compels people to engage and share their content?

National Geographic, for example, is one of the best on Instagram, combining stunning visuals with compelling captions.

View this post on Instagram A post shared by National Geographic (@natgeo)

Then there’s Shopify. The ecommerce brand uses Facebook to sell themselves by showcasing customer stories and case studies.

And Lush Cosmetics is a great example of superior customer service on X. They use their 280 characters to answer questions and solve problems in an extremely charming and on-brand way.

Source: lushcosmetics on X

Notice that each of these accounts has a consistent voice, tone, and style. That’s key to letting people know what to expect from your feed. That is, why should they follow you? What’s in it for them?

Consistency also helps keep your content on-brand even if you have multiple people on your social media team.

For more on this, read our guide on establishing a compelling brand voice on social media .

Ask your followers

Consumers can also offer social media inspiration.

What are your target customers talking about online? What can you learn about their wants and needs?

If you have existing social channels, you could also ask your followers what they want from you. Just make sure that you follow through and deliver what they ask for.

Step 7. Create a social media content calendar

Sharing great content is essential, of course, but it’s equally important to have a plan in place for when you’ll share content to get the maximum impact.

Your social media content calendar also needs to account for the time you spend interacting with the audience (although you need to allow for some spontaneous engagement as well).

Set your posting schedule

Your social media content calendar lists the dates and times at which you will publish types of content on each channel. It’s the perfect place to plan all of your social media activities—from images, link sharing, and re-shares of user-generated content to blog posts and videos. It includes both your day-to-day posting and content for social media campaigns.

Your calendar also ensures your posts are spaced out appropriately and published at the best times to post .

Pro tip: You can plan your whole content calendar and get recommended best times to post on every network based on your past engagement rate, impressions, or link click data in Hootsuite.

Hootsuite’s Best Time to Publish feature

Determine the right content mix

Make sure your content strategy and calendar reflect the mission statement you’ve assigned to each social profile, so that everything you post is working to support your business goals.

(We know, it’s tempting to jump on every meme, but there should always be a strategy behind your social media marketing efforts!)

You might decide that:

• 50% of content will drive traffic back to your website
• 25% of content will be curated from other sources
• 20% of content will support lead-generation goals (newsletter sign-ups, ebook downloads, etc.)
• 5% of content will be about your company culture

Placing these different post types in your content calendar will ensure you maintain the right mix.

If you’re starting from scratch and you’re not sure what types of content to post, try the 80-20 rule :

• 80% of your posts should inform, educate, or entertain your audience
• 20% can directly promote your brand.

You could also try the social media content marketing rule of thirds :

• One-third of your content promotes your business, converts readers, and generates profit.
• One-third of your content shares ideas and stories from thought leaders in your industry or like-minded businesses.
• One-third of your content is personal interactions with your audience

Whatever you decide on, be sure to document it in your strategy doc.

Don’t post too much or too little

If you’re starting a social media marketing strategy from scratch, you may not have figured out how often to post to each network for maximum engagement yet.

Post too frequently and you risk annoying your audience. But, if you post too little, you risk looking like you’re not worth following.

Start with these posting frequency recommendations:

• Instagram (feed): 3-7 times per week
• TikTok: 3-5 times per week
• Facebook: 1-2 times per day
• X (Twitter): 1-5 times per day
• LinkedIn: 1-5 times per day

Pro tip : Once you have your social media content calendar planned out, use a scheduling tool to prepare messages in advance rather than updating constantly throughout the day.

We might be biased, but we think Hootsuite is the best social media management tool. You can schedule social media posts to every network and the intuitive calendar view gives you a full picture of all your social activity each week.

Try It Free

Step 8. Create compelling content

Remember those mission statements you created for each channel in Step 5? Well, it’s time to go a bit deeper, a.k.a. provide some examples of the type of content you’ll post to fulfill your mission on each network.

If you’re not sure what to post, here’s a long list of social media content ideas to get you started. Or (to make it even easier) you can use an AI tool like OwlyWriter to generate on-brand content in a flash.

The idea here is to:

• Keep your content aligned with the purpose of each network;
• Show other stakeholders (if applicable) what kind of content they can expect to see on each network.

This last point especially will help you avoid any tension when your colleagues want to know why you haven’t posted their case study/whitepaper/blog post to TikTok yet. It’s not in the strategy, Linda!

Ideally, you will generate content types that are both suited to the network and the purpose you’ve set out for that network.

For example, you wouldn’t want to waste time posting brand awareness tweets if you’ve designated X/Twitter for primarily customer support. And you wouldn’t want to post super polished corporate video ads to TikTok, as users expect to see short, unpolished videos on that platform.

It might take some testing over time to figure out which type of content works best on which type of network, so prepare to update this section frequently.

We won’t lie: content creation isn’t as easy as everyone not on the social team seems to think. But if you’re struggling, Amanda suggests going back to basics.

The first question to ask is: is there cohesion between your content types? Is your content providing value? Do you have a good mix of entertaining, or educational content? What does it offer that makes a person stop and spend time? Creating a few different content pillars or categories that encompass different aspects of storytelling for your brand, and what you can offer your audience is a good start.

This brings us to Step 9.

Step 9. Track performance and make adjustments

Your social media marketing strategy is a hugely important document for your business, and you can’t assume you’ll get it exactly right on the first try.

As you start to implement your plan and track your results, you may find that some strategies don’t work as well as you’d anticipated, while others are working even better than expected.

That’s why it’s important to document your progress along the way.

Look at performance metrics

In addition to the analytics within each social network (see Step 2), you can use UTM parameters to track social visitors as they move through your website, so you can see exactly which social posts drive the most traffic to your website.

Benchmark your results

You’ve got your numbers, but how do they stack up to the competition in your industry? Industry benchmarks are a great way to evaluate your performance against other businesses in your category.

If you’ve got Hootsuite Analytics , you can use our built-in social media benchmarking tool to compare the performance of your social accounts against the average of brands in your industry with just a couple of clicks.

You can set up custom timeframes, switch between networks — Instagram, Facebook, X (Twitter), LinkedIn, and TikTok — and look up benchmarks for metrics like followers, audience growth rate, engagement rate, clicks, shares, and much more.

You’ll also find resources to improve your performance  right in the summary section:

Re-evaluate, test, and do it all again

Once this data starts coming in, use it to re-evaluate your strategy regularly. You can also use this information to test different posts, social marketing campaigns, and strategies against one another. Constant testing allows you to understand what works and what doesn’t, so you can refine your social media marketing strategy in real time.

You’ll want to check the performance of all your channels at least once a week and get to know the basics of social media reporting so you can track your growth over time.

Pro tip: If you use Hootsuite, you can review the performance of all your posts on every network in one place. Once you get the hang of checking your analytics, you may even want to customize different reports to show specific metrics over a variety of different time periods.

Surveys can also be a great way to find out how well your social media strategy is working. Ask your followers, email list, and website visitors whether you’re meeting their needs and expectations, and what they’d like to see more of. Then make sure to deliver on what they tell you.

Finalizing your social media strategy

Spoiler alert: nothing is final.

Social media moves fast. New networks emerge, others go through demographic shifts.

Your business will go through periods of change as well.

All of this means that your social media marketing strategy should be a living document that you review and adjust as needed. Refer to it often to stay on track, but don’t be afraid to make changes so that it better reflects new goals, tools, or plans.

When you update your social strategy, make sure to watch our 5-step video on how to updating your social media strategy for 2024:

Social media strategy template

Ready to start documenting? Grab your free social media strategy template below!

What’s next? When you’re ready to put your plan into action, we’re here to help…

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• Plan, create, and schedule posts to every network
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With files from Shannon Tien .

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Christina Newberry is an award-winning writer and editor whose greatest passions include food, travel, urban gardening, and the Oxford comma—not necessarily in that order.

Amanda Wood is a senior social marketing professional who combines analytical and creative thinking to build brands.

As head of social at Hootsuite, Amanda oversees the global social strategy encompassing organic and paid social on Instagram, Facebook, Twitter, TikTok, and LinkedIn, a social engagement and listening strategy, and an employee advocacy program.

As the leader of a high-performing social team, she has extensive experience collaborating with creatives to bring campaigns to life on social and drive business results.

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What is omnichannel marketing?

Picture this: you’re browsing online for some new work clothes, and you add something to your virtual cart but ultimately decide not to buy it. Then later, you see an ad on social media for the abandoned garment. Some scratch their heads at this, but it’s actually an example of omnichannel marketing.

The prefix “omni” means “all,” and “channel” is a reference to the many ways customers might interact with a company—in physical stores, by surfing the web, on social media, and in emails, apps, SMS, and other digital spaces. And this omnichannel approach can be a powerful way to meet your customers where they are, providing them good service in line with their preferences and needs. (Note that, in this article, we use the terms “customers,” “consumers,” and “shoppers” interchangeably in referring to omnichannel marketing in both B2B and B2C contexts.)

More and more, customers move across all channels—in person, online, and beyond—to get what they want. But not every customer is looking for the same thing, and omnichannel marketing acknowledges that. Some people want more services for certain transactions; others prefer low-touch, 24/7 interactions. Effective omnichannel marketing , then, happens when companies provide a set of seamlessly integrated channels, catering to customer preferences, and steer them to the most efficient solutions.

So why is omnichannel marketing important? Research on the omnichannel experience  shows more than half of B2C customers engage with three to five channels each time they make a purchase or resolve a request. And the average customer looking to make a single reservation for accommodations (like a hotel room) online switched nearly six times between websites and mobile channels. If these customers encounter inconsistent information or can’t get what they need, they may lose interest in a brand’s products or services.

And this can translate into business outcomes. Omnichannel customers shop 1.7 times more than shoppers who use a single channel. They also spend more.

Sometimes the term omnichannel is used in the context of customer service or customer experience . And it’s also used as a descriptor of other elements that go into supporting an organization’s omnichannel efforts—for instance, omnichannel supply chains , which is shorthand for an approach in which companies ensure that their supply chains are optimally set up to support omnichannel marketing efforts.

What are examples of omnichannel?

Omnichannel approaches are commonly used in retail  (both B2B  and B2C ), but you’ll also find it in healthcare and other spaces. Medtech companies , for instance, use a variety of channels including digital marketing, inside sales, portal and e-commerce, and hybrid sales-rep interactions to engage with healthcare professionals.

Several omnichannel examples  can illustrate various approaches:

• Best Buy typically focuses on commerce (both in store and online), but boosted its in-store experience by creating offerings for customers to explore smart home-technology solutions, pairing them with free in-home advisory services. And its mobile app lets customers “scan to shop” from catalogs and curbside, or buy online and pick up merchandise in the store itself, smoothing the end-to-end journey for customers with the 24/7 tech support from its Geek Squad. Best Buy’s Totaltech support offer was compelling to customers—it launched with 200,000 memberships in 2018, which climbed to two million within a year.
• Beauty retailer Sephora emphasizes omnichannel personalization, relying on rich in-app messaging, personalized push notifications, and easy ways for customers to book in-person consultations. Its in-store technology is a powerful complement that allows employees to access customer favorites and suggest products they might try next. Its loyalty program also plays an important role. The efforts are already driving value for Sephora: data showed that customers visiting the retail website within 24 hours of visiting a store were three times more likely to make a purchase, and orders were 13 percent higher than for other customers.
• Nike takes an ecosystems view of omnichannel, extending the brand experience and offering customers an ever-growing platform of content, offers, and community interactions. Its SNKRS and Run Club apps, for example, facilitate in-person meetups, running groups, and events. It also has an app for delivering individual workouts and fitness programs, creating experiences that go far beyond shoe and apparel lines to meet customers in their day-to-day routines.

Learn more about our Retail  and Growth, Marketing & Sales  practices.

How has omnichannel been affected by the COVID-19 pandemic?

Omnichannel rose during the COVID-19 pandemic as more consumers turned to e-commerce. Due to the increased demand for contactless shopping during the height of the pandemic, US grocery stores saw 20 to 30 percent of their business shift to online . Before the pandemic, e-commerce accounted for just 3 to 4 percent of total sales for grocers.

The shifts made during the pandemic are likely to persist . In the pandemic, people gravitated to curbside pickup, “buy online, pay in store” models, and self-checkout at higher rates than in the past. And recent research indicates these behaviors are “sticky”—indeed, about 70 percent of people who first tried self-checkout in the pandemic say they’ll use it again.

Introducing McKinsey Explainers : Direct answers to complex questions

What do customers want out of the omnichannel experience.

Customers want a compelling and personalized omnichannel user experience with robust digital capabilities, both online and offline. About 60 to 70 percent of consumers research and shop both in stores and online . More concretely, over one-third of Americans  made omnichannel features—think buying online and picking up in store or curbside—part of their regular shopping routines since the COVID-19 pandemic emerged. Nearly two-thirds of those individuals plan to continue doing so. And younger buyers, like Gen Zers, embrace omnichannel enthusiastically; these customers don’t think in terms of traditional channel boundaries, and they expect brands and retailers to provide a seamless experience, no matter where they are.

In a sense, all customers are omnichannel customers now, McKinsey partner Tiffany Burns  explains in an episode of the McKinsey on Consumer and Retail podcast :

“Many retailers still think, ‘There are omnichannel interactions and store interactions, and I’m optimizing those two things separately. I have two different teams working on and thinking about those experiences.’ But as a consumer, when I go on the retailer’s website or app, I expect to see availability, a connection to what’s in the store, and a way to order things that I can pick up in store. I also expect to be able to stand in the aisle in the store and research a product. Today, consumers are figuring out workarounds to do all those things: they’re switching over from the app to Google, looking up the product, and searching for reviews.”

Organizations that make shopping a seamless omnichannel experience , or provide an app that helps customers find their way or see what’s in stock in the store, are already creating experiences that are a win for omnichannel customers .

Is omnichannel the same thing as phygital? And what is phygital, anyway?

Omnichannel is a business strategy, while “phygital” (a portmanteau that combines the word “physical” and “digital”) refers to the integration of the physical and digital worlds.

The term suggests a completely connected world that is both physical and digital at the same time . While fewer consumers are visiting brick-and-mortar stores and choosing to use e-commerce instead, more than 80 percent of retail sales still occur in a physical location . By 2030, the shopping experience will be highly personalized , and some activities may even take place in the metaverse . According to a recent survey, 80 percent of US adults  want personalization from retailers with multiple, personalized touchpoints , which can include a mobile app, digital displays, interactive screens, tech-enabled associates, and point of sale.

What about omnichannel vs multichannel?

When it comes to omnichannel vs multichannel, the key difference is the focus at the center of all efforts. Omnichannel is a customer-centric approach in which all channels are integrated so the customer has a unified and consistent experience whether they are at a physical store, using an app, or on a website. Multichannel, in contrast, tends to revolve around products instead of customers. It aims to inform as many people as possible about the product or brand, and the channels are not linked, so the customer experience is often different for each channel.

An interview with an insurance executive, Eric Gewirtzman of BOLT , makes that distinction relatable: “Insurance customers are already moving between various channels,” Gewirtzman says. “But there’s a big difference between being multichannel and being omnichannel. Just because carriers have, say, an exclusive agent channel, an independent agent channel, and a website, doesn’t mean they’re omnichannel. Too often, consumers will get a different experience and different results depending on which channel they use. This has to change. If there is no awareness between the channels, sales are lost.”

Learn more about our Financial Services practice.

What is omnichannel personalization?

Omnichannel personalization refers to the way organizations might tailor the customer experience for individuals across physical and digital channels. This includes multiple touchpoints that cater to the customer’s preferences pre-visit, during the visit, and post-visit. Customers receive products, offers, and communications that are unique to them as individuals.

Efforts to personalize the omnichannel market can have a big payoff. Indeed, getting omnichannel personalization right  could help companies increase revenue by 5 to 15 percent across the full customer base.

While companies recognize the power of omnichannel personalization, they may face roadblocks in implementing these efforts for a variety of reasons:

• Omnichannel personalization requires a lot of investment in technology  (both software and hardware). Personalizing physical spaces often starts from scratch because it requires enabling digital touchpoints such as screens, kiosks, or tablets for store associates, which may not exist.
• It is difficult to deliver a seamless customer experience and train employees. The front line needs training to understand and reinforce the customer journey.
• Traditionally, companies operate their digital and physical channels independently. Omnichannel personalization requires companies to rethink their organizational structure across both the digital and physical parts of the business .

These barriers, however, can be overcome. Five steps can help companies achieve omnichannel personalization :

• Define the omnichannel personalization strategy and learning agenda. It’s crucial to develop a clear view on key moments of influence in the customer journey , and then identify what outcomes are desired at each step of that journey. Finally, an organization needs to prioritize use cases to test, looking at their ability to deliver business benefits and value to customers.
• Address five digital touchpoints to activate personalized experiences in physical environments. Companies need to connect digital and physical footprints to drive omnichannel personalization, especially at touchpoints where these worlds converge. Five are particularly important: mobile apps, digital displays, interactive screens, tech-enabled associates, and point of sale.
• Use an omnichannel “ decisioning engine ” to deliver experiences and measure performance. This can help organizations identify, quickly and accurately, the next best action to take with each customer.
• Implement agile operating practices. Personalized marketing goes beyond mere technology; it requires new ways of working, and agile marketing teams  can help in this regard.
• Activate omnichannel personalization in the field. To bring all these elements together, a company’s sales force must be fully aligned and well trained. In-person teams could make your customer’s day, so frontline personnel need to support personalization efforts, understand their value, and use digital tools to deliver the complete experience.

What is omnichannel strategy?

An omnichannel strategy for marketing is a way of ensuring that your efforts drive tangible business value. Rather than rushing blindly into the space, or haphazardly approaching it, organizations should step back and think about underlying business value drivers. Excelling in omnichannel depends on a laser focus on value creation, looking at both strategic and customer priorities to craft the omnichannel strategy that will be most effective for their unique circumstances.

The most successful companies set their omnichannel strategy by leading with their strategic ambition and aspirations for customer experience. There are three primary omnichannel strategies :

• Commerce. This prioritizes cross-channel shopping experience both in store and online.
• Personalization. This strategy focuses on tailored, targeted, and relevant cross-channel engagement at scale.
• Ecosystem. Here, the strategy aims to provide rich cross-channel platforms integrated with consumer needs and lifestyles.

Learn more about our Growth, Marketing & Sales  practice.

What’s involved in omnichannel operations?

Organizations can build leading omnichannel operations , spanning a variety of areas. By strengthening the foundation of your omnichannel operations and focusing on strategy, structure, and processes, you could gain a performance edge.

Topics to explore include mastering omnichannel supply chains , creating a customer-centric supply chain strategy , designing the omnichannel distribution network of the future , reimagining the role of physical stores , and more.

What should I know about B2B omnichannel?

Omnichannel has become a permanent part of B2B sales , with e-commerce, face-to-face, and remote videoconference sales all a necessary part of buyers’ experience. According to a 2021 McKinsey survey of US-based B2B decision makers, 94 percent of respondents view today’s B2B omnichannel reality  as being as effective or more effective than before COVID-19. The findings also revealed that B2B customers regularly use ten or more channels to interact with suppliers, up from five in 2016.

B2B omnichannel efforts can be a path to grow an organization’s market share, but loyalty is up for grabs, with customers more willing than ever to switch suppliers for a better omnichannel experience. B2B decision makers use more channels than ever before to interact with suppliers, and being attuned to those channels will be important.

There are five must-dos for B2B companies seeking to retain customer loyalty and succeed in omnichannel:

• offer a performance guarantee (nearly 80 percent of B2B customers say it’s crucial)
• show product availability online
• enable purchases over any channel
• provide customer service in real time
• ensure the customer experience is consistent as buyers toggle between channels

While B2C omnichannel efforts might be the first to spring to mind, omnichannel experience is crucial to giving all customers a better and more seamless journey.

For more in-depth exploration of these topics, see McKinsey’s insights on marketing and sales —and check out omnichannel-related job opportunities if you’re interested in working at McKinsey.

Articles referenced include:

• “ The new B2B growth equation ,” February 23, 2022, Arun Arora , Liz Harrison , Max Magni, Candace Lun Plotkin , and Jennifer Stanley
• “ Omnichannel: The path to value ,” April 30, 2021, Holly Briedis, Brian Gregg , Kevin Heidenreich, and Wei Wei Liu
• “ Omnichannel shopping in 2030 ,” April 9, 2021, Praveen Adhi , Eric Hazan , Sajal Kohli , and Kelsey Robinson
• “ Redefine the omnichannel approach: Focus on what truly matters ,” June 22, 2020, Jorge Amar , Raelyn Jacobson , Becca Kleinstein, and Allison Shi
• “ The end of shopping’s boundaries: Omnichannel personalization ,” February 10, 2020, Gal Gitter, Meg Raymond, Kelsey Robinson , and Jamie Wilkie

Want to know more about omnichannel marketing?

Related articles.

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What Is Product-Market Fit? Examples, Tips, and How to Measure

Find it by placing customers at the center of your strategy, conducting marketplace research & inviting continuous feedback.

Richard Harris

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You know you’ve struck gold when your customers sell for you. People are not only signing up and renewing with you but they’re telling their friends about your product or service as well. It’s a dream come true — a product-market fit (PMF). You’ve created a product or service that solves your target audience’s pain points. Now these satisfied customers understand how valuable you are to their business success. They are spreading the word about their experience, and new prospects are lining up.

If you’re wondering how to achieve product-market fit, you’re in the right place to learn. Let’s get started.

What you’ll learn:

What is product-market fit, steps to product-market fit, why is it important, how do you measure it, product-market fit questions to ask, goals to determine your product-market fit, two examples of product-market fit, when do you have product-market fit, what to do after you achieve product-market fit, drive pipe faster with a single source of truth.

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Product-market fit is when your product or service solves a universal and unmet challenge within the marketplace where there are enough customers to build a successful business. In short, you have a large TAM (total addressable market). People are consistently buying your product, your revenue is growing, and you have low churn because your customers stick around year after year. You’ve successfully filled your industry’s pains or service gaps by securing proper alignment with your buyer personas. Now, you can use this roadmap to scale your business to meet more ideal customer expectations.

Product-market fit can only be accomplished when you put your customer at the center of your strategy. You know you’re on the right track when your business has reached a place where you:

1: Recognize an obstacle in your industry that must be solved

Why it matters: The obstacle prevents your target audience from achieving its goals. Recognizing it is especially crucial for startup success. If you don’t identify a problem, you risk creating a solution nobody needs — and no one will buy what you’re selling.

Example: You’re a customer relationship management (CRM) service provider who notices your customer base struggles to balance administrative work and redundant tasks, or your customer wants greater insights into their own customer data to leverage for finding even more new customers. 

2: Develop a minimum viable product (MVP) that solves specific pains head-on

Why it matters: This is where you directly address the obstacle. Your product offers a clear value proposition — which highlights the pictures of pain a customer feels when they don’t have a solution, and then a description of the positive outcomes from using your product. You demonstrate how it will solve your prospect’s pain points and why your product is indispensable to your target audience’s businesses.

How it’s done: 

• You develop a hypothesis: “We believe our product will solve X pain points felt by Y companies in Z industries.” 
• Then, set a predetermined goal of speaking to at least 100 people to prove your hypothesis. This list should include conversations with the various titles you feel will be using your products or services.  Track this information deeply, you will be coming back to them very soon.
• Make adjustments to your hypothesis as you learn.

Example: You create a CRM tool that integrates with current tech stacks, optimizes workflows, and automates important tasks such as lead scoring, prospect follow-up, and forecasting because they want to use this information to measure their own success as well as create a consistent roadmap for finding new customers.

( Back to top )

3: Product-Market Validation 

Now that you’ve done your research you want to get real world validation on your potential solution. There is a difference between 100 people liking your idea and telling you it’s something they would want and need and then actually having a product in the marketplace they actually use. 

MVP – Minimum Viable Product

Based on all the research you’ve done you can now start to build something. This is called an MVP. It is the very first version of your solution. It does not need to be perfect, it simply needs to be something that works and something potential customers can tinker around with.  Think of it as a solid B, it’s not an A, and it’s definitely not a C+. It will solve the problems you have learned your potential customers have shared with you. And yes, you can also include a few solutions you believe they don’t even know they may need and want.

Alpha Testing

With an MVP in hand you can now go and find your early adopters, usually the people you interviewed when doing research. At this point, you are testing out your Alpha version.

Your goal now is to get real user feedback based on what you’ve built. The most important piece of feedback will be on how much they feel your product or service will help them on a regular basis. And more specifically, how do they quantify that satisfaction in time and dollars. Yes, you will also get feedback on bugs, functionality, user interface, additional features they would want in a complete version. However, we must remember we are driving to product-market-validation with the hopes of achieving product-market-fit. 

Too often, people take all the product functionality feedback, make those changes, and think they have product-market fit. But all that does is build a product for a handful of customers. Don’t fall into that trap.

Monetization 

Now that you’ve gathered initial feedback, it’s time to research pricing.  How much is the market willing to pay for your solution?

At this phase, you are not coming up with your actual pricing. That comes later. You are simply creating a hypothesis for the value you are providing and conducting research with real users on what they would be willing to pay. You also want to pinpoint the specific challenges you’re solving and the right customers to target. Here are some tips:

• Study market trends to gain a better understanding of the needs of your target audience. You can use a few of those measurement signals we discussed above, such as surveys, customer count, and search engine keywords.
• Ask for feedback from users during your Alpha testing. By testing the product this way, you’ll fix technical bugs and fine-tune the features before general release.
• Once you have about 10 companies using your products or services, you should have enough validation to move forward.

When you reach your goal, move on to phase two.

4: Test your hypothesis

As you advance from your Alpha product, you are now adding more features and functionality, so you can start looking for real customers. This is your Beta version. Now, you are trying to get traction in the marketplace.

To confirm product-market validation, you will need 20-30 paying customers. These are different from your initial Alpha users.

You begin slowly introducing your product or service into the marketplace for greater adoption by more customers. You can now start to confirm your ICP (Ideal Customer Profile). Offer them demos and free trials of the service with confirmation that after a successful trial, they will convert to paying customers. 

The demos are Beta versions of the product, meaning you are now in the final stages of testing. You’ll want to continue getting feedback from users to:

• Confirm your solution aligns with the pains they want solved.
• Confirm that the pain they have is worth paying for, especially in relation to other projects or pains they may also have internally.
• Cement your hypothesis with customer stories and use cases. The best source of accreditation is your customers. You can promote the value of your product with a case study demonstrating how it solved a real-world challenge.
• Narrow your customer base to the top verticals you want to target.

This is the longest stage of the process. A high churn rate — the percentage of users who stop engaging with your product — suggests your hypothesis might be incorrect. If this is the case, you’ll need to start back at the discovery phase. Don’t be dismayed. This is another opportunity to refine your target-audience research to ensure you are connecting with the right customers.

Let’s assume phases one and two were a success. Now what?

Well, you now have product-market validation

5. Product-market validation to product-market fit 

Now you are really focusing on the marketplace. Your hypothesis may still feel true, but you need more information to confirm it. Your customers’ validation ensures you’re addressing a genuine need and not wasting time building something they don’t care about. The real question is whether the rest of the market feels the same way.

Example: It’s an urgent problem when sales reps cannot focus on selling. Now, your customers are back to closing deals while your CRM tool handles all the administrative tasks standing in the way.

You are growing your customer base because you built a product or service that your target audience finds useful. Your prospects now become customers.

Every business wants to achieve product-market fit because it is how you get your product or service in front of the right prospects. Let’s explore why your product must find its niche and fit into a market segment.

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Think of your product as a giant toolbox — you fill it with screwdrivers, hammers, saws, and nails. Then you’ll target anyone in the construction and maintenance field. But is a screwdriver going to help a plumber when they need a wrench? Product-market fit helps inform strategies that can:

• Help sell your product: Product-market fit helps your sales reps with solution selling . Your sellers understand how your customers view their pain points and how your product or service solves them. It is a customer-centric approach to selling. This helps increase the trust that must exist between your sales people and your prospects. This builds an authentic relationship between both parties and creates a higher probability for closing deals.
• Better position your product: Product-market fit is about being specific and intentional with your target customer. Just because your product has many features doesn’t mean it’s a great fit for every industry. If you don’t find your product-market fit, you risk losing time and budget on a go-to market strategy that doesn’t pay off.
• Improve customer loyalty: Customers spend time, money, and research trying to find solutions. You can help them by creating products meant to solve their specific pains that happen over and over again. In fact, returning customers spend 67% more than new customers because they know that what you’re offering works. This doesn’t just benefit your bottom line; it also helps you optimize your products. The more people use your product, the more you can understand what features are valuable and what needs improvement.
• Grow your business: Happy customers are returning customers. These users will also share your product with associates, organically expanding your product reach with word-of-mouth advertising. The more people buy your product, the more your revenue increases.

Achieving product-market fit is about getting inside the minds of your customers. You don’t have to be a mind reader; you just have to ask the right questions.

When people ask me how I measure product-market fit, they want to know what its signals are. Signals are confirmation that a large enough part of the marketplace needs your solution. Here are some ways you know you are satisfying the market:

• Interviews – Because you have real data from testing and paying customers, you can continue to research the marketplace. You can discover what your target audience feels is a necessary feature of your solution, how much they are willing to pay, and how willing or reluctant they are to handle organizational change to implement your solution. (Further down, I’ve supplied a few questions you can include in your research to ensure you get the answers you need.)
• Customer count: At some point, customer count will matter. How many customers use your product or a similar solution from a competitor? A new entry into the marketplace could be popular initially, but putter out over time. You need to see whether your customer count is sustainable. Do people continue to use the product? If they stop after a year or two, this could indicate a poor product-market fit.
• Use cases: This refers to how customers use your product to solve problems. A wide range of use cases demonstrates the product’s value to different customer needs within the target market. This strengthens the product’s value proposition because it benefits multiple audiences.
• Multiple verticals: If a product is adaptable and sold across various industries (verticals), it suggests a broad market need and potentially strong product-market fit. Your product is so versatile that multiple audiences are clamoring for it.
• Price stabilization: A stable price point suggests customers perceive the product’s value to be consistent with its cost. This can be a sign of product-market fit. Frequent price drops or difficulty maintaining a desired price point indicate customers’ resistance to the pricing strategy . That could mean a potential mismatch between perceived value and actual cost.
• Timing: It is not unusual for a product or service to be ahead of the curve. The question is whether it’s too far ahead. Did you know the first electric cars appeared on the market in 1891? They didn’t achieve mass market appeal for many reasons. The proper infrastructure wasn’t in place to support the cars’ maintenance. And not many people at the time could afford personal automobiles.

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Interviews are just one of the tools you can use to gauge your product-market fit. Asking your target audience specific questions can help you better understand your customers’ challenges. You can structure your surveys using multiple-choice or open-ended questions.

Multiple-choice questions

Multiple-choice questions are great for understanding your target audience’s demographics, geographies, occupations, and industries.

How big is your company? 

A)Less than 50 employees

B) 51-100 employees

C) 101-250 employees 

D) 251-500 employees

E) 501- 1000 employees 

F) 1000+ employees

Note: You could also segment by company revenue

Who are the end users that would want to use this service 

A) Front Line 

B) Manager 

C) Director 

D) VP 

E) C-Level 

Open-ended questions

Open-ended questions allow your target audience to voice their opinions in detail. It is best to use this format to understand how customers will use your product. And these questions should be based on your hypothesis

• ) How hard is it to do _____ currently?
• ) How much time is that currently taking you?
• ) If you got a percentage of that time back, what could you do with that time?  
• What’s the difference between the number you gave and a 10 that would make it mission critical?

These answers tell you what is important to potential customers. After all, the last thing you want to create is something no one wants. That’s where having a set of goals is key.

Setting goals will help you keep on track with your product-market fit before you launch. Consider:

Who are your prospects?

Defining your target customer is essential to building, marketing, and selling a product. To build your buyer personas, or identify the types of people most likely to buy your product, you can conduct research that includes:

• Competitors: What is already out on the market and how well is it doing? Competitor research will help determine who is buying this product and at what price point.
• Customers: Customer research digs into individual industries. For startups, it’s important to focus on customers in one vertical. You want to be smart with your budget and sales strategies. Focus on solving the challenges within a single industry so you can target a highly specific customer base.

What are their pain points?

Survey your ideal customers to discover exactly what is standing in their way. You can conduct interviews or use SEO (organic search) and SEM (paid search) research. What type of solution are people looking for? How are they describing their challenges when they type it into a search bar?

How will your product help (value proposition)?

You need to know the ins and outs of your product. You won’t be able to solve every challenge for everyone. Keep your product roadmap top of mind — it will help you stay on schedule with specific solutions you can offer now and products in development for later. A simple value proposition will help convey your product’s purpose and an efficient selling strategy .

For example: A sleep device company wants to give customers the best sleep without medication. Its value proposition is, “Sleep soundly, naturally. Block noise, not your dreams.”

Measure your efforts

A great indicator of a healthy product-market fit is your total addressable market (TAM). TAM is everyone who will benefit from your product. A large TAM suggests there’s a significant customer base for the product. However, even a small TAM can be profitable if the product has a strong fit within that industry.

To find your TAM, follow these steps:

• ) Find your average revenue per user (ARPU): Let’s say you have a subscription service that charges a monthly $10 fee and, after a month of operation, you have 1,000 paying users.

Total revenue / total number of users in a set time frame = ARPU

($10/month x 1,000 users) / 1,000 users = $10/month

• ) Estimate the total number of customers in the market: Through market research, you estimate that there are 500,000 prospects in your industry who might benefit from your product.
• ) Solve for TAM.

(Total customers in the market) x (ARPU) = TAM

500,000 users x ($10/month) = $5,000,000/month

From here, you can find what percentage of your TAM is current customers. Reach out to them for feedback on the product or service.

Important note: Ensure your product or service stays relevant to your intended audience. Innovations are created every day. Maintain your product-market fit by aligning your product’s features with changing customer needs.

Here are a couple examples of product-market fit to consider.

Consumer Packaged Goods

• Pain point: Some men prefer a shaven face, while others diligently maintain their beards. However, buying razor blades in stores can get expensive, especially when you need fresh razors weekly for a safe, clean cut. Let’s not forget the inconvenience of traveling to and from the store to search for your ideal razor.
• Target audience: An online consumer packaged goods business decided to tap into the pain points felt by millennial men and other folks tired of expensive and over-hyped razors.
• Solution: The business offers high-quality razor blades delivered directly to subscribers’ doorsteps at a fraction of the cost of traditional brands. They offer a subscription model to promote consistent affordability and customer retention. Their direct-to-consumer shipping cuts out the middlemen, lowering prices and increasing convenience.
• Pain point: You’re out to dinner with friends and the check arrives. You want a convenient and safe way to split the check or pay back your friends that will deposit the cash right into their bank accounts.
• Target audience: Tech-savvy millennials and Gen Z consumers comfortable with mobile technology searching for a seamless way to send and receive payments.
• Solution: A fintech startup creates a social payment app. Users can easily send and receive money with friends and contacts. The app is intuitive with a great user experience.

How businesses find their product-market fit can be broken into two phases: validation and traction.

It will take two or three years to determine true product-market fit. This is because you need to know how many of your customers will renew to make a call. If you’re a SaaS organization with annual contracts, you need your customers to stick around for at least three years to be truly profitable with a significant growth trajectory. Typically, a 5-7% churn rate is considered good. Your churn rate may be higher during the product-market validation stage, and that’s okay.

In addition, you need to have about 100 paying customers at fair-market value. Aim to get at least 10 publishable case studies from these customers.

Don’t let this discourage you. It’s a good thing to have product-market validation. With validation it is possible to seek additional funding to grow your startup. VC’s want to see product-market fit before making an investment. Once they see you have market validation, they will take the risk alongside you.

Congratulations! You made it!  

If you’ve reached this point, you’ve found your product-market fit.

Don’t overlook your own professional development. As your organization grows, so will your responsibilities. This means you simply may not be able to dig into all the weeds you did before. So it’s important for you to learn how to let go, delegate with trust, and realize you cannot do it all. If you are still stuck in the weeds of tinkering with the code, micromanaging every deal in the pipeline, you will not survive. Your company may survive, they will simply do it without you.

Now it’s time to scale from start-up and expansion stage to growth stage.  This means you need to start scaling everything up. Here’s how.

Deepen customer understanding

Increase customer engagement by regularly collecting customer feedback. Stimulate customer success by providing resources, educational content, and active support. As your audience base grows, consider segmenting your user base by demographics, needs, and usage patterns. This allows you to tailor your messaging, features, and support.

Power your growth engine

When you know what is working, make it repeatable and scalable as you prepare to grow. Invest in infrastructure, customer support, and processes to handle an influx of new customers without compromising quality or service. Build up resources for research and development. This allows you to explore new features and business models that can fuel future growth and potentially disrupt the market.

Increase customer loyalty

Finding new customers is important, but keeping them is crucial. Implement strategies such as loyalty programs, exclusive offers, and top-notch customer service to keep users engaged and prevent churn.

Dominate the marketplace

At this point, you should be an expert in three or four verticals with the customers you have. Now you can consider expanding to new markets or user segments. Explore opportunities for product line extensions or complementary offerings that cater to a broader range of customer needs.

Find success with your product-market fit

Product-market fit is crucial to the success of any startup or new product launch. It involves recognizing a challenge in the marketplace and developing a product or service that delivers a solution. You can find your product-market fit by placing your customers at the center of your strategy, conducting marketplace research, and inviting continuous feedback. When a product works — and works well — you’ll retain your current customers. And those customers will become your best sellers.

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Influencer Marketing

What is influencer marketing: An influencer strategy guide for 2024

Learn about the evolving world of influencer marketing in this guide from understanding the types of influencers to crafting effective strategies.

Ready to dive right in and start looking for influencers to work with? Check out our catalog of unique, up-to-date influencer trends by category.

Find influencers

Reading time  13 minutes

Published on  June 6, 2024

Table of Contents

• Influencer marketing has evolved significantly over the past decade. It has expanded beyond celebrities to include social media influencers who foster authentic connections and influence purchase decisions and brand reputation.
• Understanding the types of influencers, from mega to nano, is crucial for brands to choose the right partners. The types of influencers you choose to partner with will determine the reach, engagement and ROI you get.
• Common influencer marketing mistakes to avoid include failing to define clear goals and expectations, prioritizing follower-count over engagement, neglecting influencer research and sharing unclear briefs.

Influencers are here to stay. According to a Q3 2023 Sprout Pulse Survey, more than 80% of marketers agree that influencers are essential to their overall social media strategy.

But the world of influencer marketing is constantly evolving.

A decade ago, the influencer marketing arena was limited only to celebrities and a few dedicated bloggers, whereas now, social media influencers are abound across all social networks. Their followings may vary in size, but these influencers pack a punch. Their tight-knit communities foster authentic connections and influence purchase behaviors, leading to higher brand engagement and ultimately, sales.

However, working with digital creators and influencers needs a well-planned and strategic approach. And this guide aims to help you navigate it. Read on for tips on how to build an effective influencer marketing strategy, what mistakes to avoid and how to find the right influencers for your brand.

Download the 2024 Influencer Marketing Benchmarks Report

What is influencer marketing?

Influencer marketing is a social media marketing approach that uses endorsements and product mentions from influencers. These individuals have a dedicated social following and are viewed as experts within their niche.

Influencer marketing works because of the high trust social influencers have built with their following over time. Recommendations from these influencers serve as a form of social proof to your brand’s potential customers.

Types of influencers: By size and reach

Partnering with an influencer with millions of followers might sound like a dream come true but they may not be the best fit for your brand.

Some social media influencers have large, broad audiences spanning across several demographics. Others boast smaller but more targeted and engaged communities.

Knowing what each type of influencer can offer you in terms of reach, range, cost and engagement is key to choosing the right ones for your brand.

Let’s take a deeper look at the various types of influencers out there:

Mega or celebrity influencers

These influencers have a massive following of over 1 million and often include famous actors, musicians, athletes and other public figures. Their celebrity status allows them to captivate a diverse audience, making them ideal for large-scale brand awareness campaigns. Think: Cristiano Ronaldo .

Mega influencers can give your brand unparalleled exposure, but partnering with them can be incredibly expensive. Plus, since their audience is often broad, their engagement rates may not be as high as influencers with smaller, more niche followings.

Here are some businesses that might benefit from working with mega influencers:

• Large enterprise corporations that have the budget and resources
• Brands targeting a broad audience with varying characteristics
• Luxury or high-end brands that want to create a sense of exclusivity

Macro-influencers

With a following that typically ranges from 100,000 to 1 million, macro-influencers are established personalities within their respective niches.

These influencers have earned their reputation through consistent content creation and engagement over time, and are now thought leaders in their niche .

Macro-influencers offer a more targeted approach compared to celebrities, as their followers usually share common interests. Collaborating with macro-influencers can provide your brand with substantial reach, but it may still be relatively costly depending on your budget.

Here are some examples of brands that might work with macro-influencers:

• Startups seeking rapid exposure, growth and credibility (e.g., Canva )
• Nonprofit organizations looking to raise funds and awareness
• Hotels and airlines targeting a specific but large audience

Micro-influencers

With 10,000 to 100,000 highly engaged followers, micro-influencers are the rising stars of influencer marketing. These influencers typically have a strong presence on specific platforms, like Instagram, YouTube and TikTok.

Marketers love working with micro-influencers as they captivate a niche, passionate audience with their creative content, relatable recommendations and genuine interactions. They’re also more affordable than larger influencers.

Nano-influencers

Nano-influencers have between 1,000 to 10,000 followers. These influencers often have a strong connection with their audience, thanks to the close-knit community they’ve built and their personable content.

While they offer a smaller reach, nano-influencers can be excellent partners for businesses who want to target specific communities and demographics without breaking the bank. In fact, per the latest Influencer Marketing Hub data, 44% of brands prefer to partner with nano influencers in 2024, compared to 39% in 2023.

There are many reasons for this, namely, since nano-influencers work on a small scale, they dedicate more time and effort to individual partnerships. This means more tailored content for your brand and personal relationships within niche communities. They are perfect for businesses such as:

• Local businesses targeting specific communities, cities or regions
• Small businesses with limited budgets that want to run cost-effective campaigns
• Artisan, home-based or speciality food businesses reaching a niche audience interested in their one-of-a-kind products

Why use influencer marketing?

Influencer marketing can be an incredibly powerful marketing tool for you, and brands are already using it to their advantage, as these influencer marketing examples show.

According to The 2024 Influencer Marketing Report , almost half of all consumers (49%) make purchases at least once a month because of influencer posts; and almost all consumers (86%) make a purchase inspired by an influencer at least once a year. Not surprisingly, the influencer marketing industry is expected to grow to $24 billion in 2024 as indicated by the Influencer Marketing Hub's latest research.

Here are more reasons why you should add influencers to your marketing mix.

Increased brand awareness

Collaborating with an influencer draws a wider audience to your brand. By featuring your brand in their content, influencers introduce it to new audiences who may not have been familiar with it. Also, the trust influencers hold with their followers enhances your brand's reputation and credibility and boosts market awareness.

Precise audience targeting

Influencer marketing helps brands with precise audience targeting by connecting brands to influencers whose followers align with the brand's target demographic. This ensures their message reaches the right audience and is delivered from a perspective that resonates with the audience, making the campaign more effective.

Higher conversions

Social proof is a powerful factor in the likelihood of making a purchase after seeing an influencer campaign, because it helps sway undecided consumers in your favor. Similarly, influencers often share interactive content such as giveaways, challenges and live sessions that drive engagement and prompt actions like making purchases or signing up for deals. They also share exclusive discount codes or special offers making it easy to track conversions directly linked to their promotion.

Building trust and authenticity with your audience

Influencers build trust with their followers by sharing personal experiences and opinions that resonate with their audience, making them more relatable. They further increase their credibility by being open about brand partnerships and only promoting products they genuinely support.

Plus, their seemingly unscripted content contrasts with traditional advertisements, making it sound authentic and spontaneous, which fosters personal connection with followers. This trust is further reinforced by how they respond to comments, making their audiences feel valued and heard, thus strengthening the bond. All this combined, helps influencers drive higher conversion rates for brands.

How to create an influencer marketing strategy in 5 steps

While Instagram influencer marketing is a well-known strategy, other platforms like TikTok , YouTube and Snapchat resonate increasingly well with different demographics.

Like any marketing tactic, an influencer program takes thoughtful planning. Here are key factors to consider while developing your influencer marketing strategy.

1. Find influencers and understand their payment structure

Finding the right influencer for your brand is the first step to building a successful influencer marketing strategy. You must invest time in market research to understand your audience’s preferences and choose the right platform to engage them with an influencer collaboration.

This is especially important because each network caters to a specific audience. For example, beauty and fashion brands shine on Instagram and YouTube, while the video game industry dominates Twitch.

Here are some factors to consider when searching for influencers:

• Does the influencer already post about similar topics related to your service?
• Are they legit? Scroll through their feed and click through on posts. A poor engagement ratio to follower count and spam-like comments are signs of a fake account or fake followers.
• Have they worked with similar brands before? Depending on what type of influencer you’re looking for, a seasoned one will be able to show you a press kit that contains a portfolio of their work.

Social listening can assist you in identifying where people are discussing your industry and brand, and to find influential voices within your industry on each platform.

40 Unique Ways To Use Social Listening To Make An Impact On Your Business

Similarly, focus on the type of influencers you want, and plan for their pricing . Whether it’s celebrities with massive followings or micro-influencer s with less than 2,000 followers, do your due diligence because that will determine your budget.

Compensation varies based on platform, influencer types and types of influencer collaborations, so think about the expected ROI of your social influencer marketing campaign. How will you measure the impact of influencer posts on your overall marketing goals? For instance, compare how you would budget for a video production firm creating an ad versus an influencer creating a video. Resources like this Instagram influencer rate map can help you estimate influencer costs based on audience size and industry.

2. Set a budget and management strategy

The next step is to create an influencer marketing budget.

Use an influencer marketing budgeting template to manage your expenses and strategically allocate resources to high-value partnerships. Be sure to account for the time needed to plan, execute and review your influencer program because, unlike automated ad strategies, influencers often juggle multiple partnerships, requiring a more hands-on approach from you.

If your budget allows, consider establishing an ambassador program to diversify and enrich your content. Similar to Fujifilm , which uses ambassadors for new product launches and to highlight new product features.

Whether you engage an influencer marketing agency or not, investing in an all-in-one influencer marketing software is a good idea, helping you sift through suitable influencers, manage pricing negotiations and review and approve content.

3. Decide on campaign goals and messaging

To ensure your influencer strategy succeeds, focus on your campaign's goals and needs. Determine whether you want to reach a new demographic, introduce a new product or highlight your brand values through influencers. Also, explore influencer trends to see what’s resonating in your industry.

Your message is as crucial as your goal. And since influencers target specific audiences, refining your campaign messaging is important for effective content.

Influencer content is typically more conversational and personal, which helps differentiate it from brand-driven or sales-oriented posts. But while it’s important to preserve an influencer’s creativity and uniqueness, ensure their content aligns with your brand values.

4. Establish influencer outreach: How to contact influencers

Your outreach will depend on the type of influencer you’ve chosen. For example, celebrities and macro influencers often work through agencies, so you might have to connect with an agency to reach them. Some may also list their contact information for business inquiries in their bio and have a website that denotes brand partnerships.

For example, Summer Rayne Oakes has a multi-channel presence, which is a perk for her brand partners.

For micro-influencers, you could reach out directly in a private message via their social platform.

5. Review and refine your strategy

It’s important to refine and review your strategy so you’ll be more successful with each campaign going forward. Having predetermined milestones where you’ll measure progress can prove very helpful in this.

While these tips serve as a guide to help you craft a well-planned strategy, it's crucial to be aware of common mistakes to avoid in influencer marketing. We’ll dive into those, next.

Influencer marketing mistakes to avoid

Influencer marketing can be highly rewarding — if done right. Sidestep these potential pitfalls to ensure smooth influencer collaborations and successful campaign outcomes.

Failing to define clear goals and KPIs

First things first, know why you’re doing this in the first place. Partnering with an influencer is a big deal — you need to be clear about the purpose and goals of your campaign.

Here are a few ways setting goals in advance can help you:

• Choose the right influencers: Defining goals helps you identify the specific characteristics and qualities you need in an influencer to achieve those outcomes. For example, if your goal is to increase brand awareness, you can find influencers who have a strong presence and reach within your niche.
• Define and measure success: What does success mean to you? Is it the number of impressions, post engagement or the amount of traffic coming to your website? Define which KPIs and metrics to track both during and after the campaign to assess how well your influencer campaign is performing.
• Keep everyone on track: Setting clear goals ensures that both the brand and the influencer are working towards a common purpose. This facilitates effective communication and constructive feedback, saving everyone’s valuable time.
• Hold influencers accountable: Establishing clear expectations and performance benchmarks makes influencers feel responsible. They know the results they need to provide and will focus on creating content that aligns with those goals.

Prioritizing follower count over engagement

A large following doesn't always mean high engagement. It’s entirely possible an influencer has millions of passive followers but very low engagement.

Instead, partner with influencers with an engaged and loyal audience. A handful of people who trust the influencer are more valuable to your brand than thousands of indifferent followers unlikely to convert.

Look at the influencer’s engagement metrics, comments and interactions, as well as past results for other brands to gauge their level of influence and likeability.

Neglecting to research the influencer

Choosing the wrong influencers, including fake influencers , can cost your business valuable time and money. But this hasn’t deterred marketers, with 60% of marketers intending to increase their influencer marketing budget over 2024, the Influencer Marketing Hub states.

An easy fix is to properly research the influencer of your choice, before signing a partnership. Vet influencers and evaluate their influencer media kit to ensure they share your vision and complement your brand’s personality.

Here are some key areas to look into when researching influencers for your brand:

• Audience demographics: Study the influencer's followers to ensure your campaign reaches the right audience. Analyze factors like age, gender, location and interests (e.g., Millennials who identify as women) to determine if they are likely to become your customers.
• Interactions, voice and content: Look at the influencer’s engagement rate, the tone of voice they use and the type of content they create. For example, if your brand has a playful, casual image, partnering with an influencer known for their formal, business-oriented content might not be the best fit.
• Authenticity and influence: Forced partnerships can appear insincere and hurt both your campaign and brand image. Collaborate with influencers who genuinely love your brand and products. Their followers trust them for a reason and you don't want your brand to get in the way of their (and your) credibility.
• Experience with branded content: Has the influencer worked with other brands in the past? Have they ever worked with your competitors? Carefully scrutinize their content to spot any red flags and gauge the value they can provide.

Writing poorly constructed briefs

Crafting well-structured briefs is key to maximizing your influencer marketing campaigns. A good social media campaign brief equips influencers with the details and resources they need to represent your brand effectively, without being overly restrictive.

Here’s a quick rundown on what to include in your brief:

• What is the main goal of your campaign? What are you hoping to achieve?
• What is your company’s background? What is your brand and what product/s are you selling?
• What are your product’s key benefits, features and differentiators?
• Who is your target audience? Include an audience persona if you have one.
• What does your budget look like for this campaign?
• Do you have a timeline in mind?
• Do you want the influencer to use your brand assets? Provide them with your logo, colors and fonts if necessary.

Don’t forget to inform influencers of any words or ideas to avoid in their content. For example, if you’re an eco-friendly brand, let the influencer know that sustainability is a core value and they should avoid using plastic and other such products in their content.

Restricting the influencer's creative freedom

While comprehensive briefs are important, there’s such a thing as too much information.

Avoid going overboard with your guidelines. You don’t need to dictate the influencer’s exact words or actions. Doing so can stifle the influencer's creative freedom, resulting in content that looks scripted and inauthentic.

Some brands also make the mistake of micro-managing every aspect of the content creation process. For example, you don’t need to vet multiple drafts just before they go live.

Remember, influencers are the experts in creating content their audience loves and trusts. Your brand just needs to support them with resources they need to create great content for effective influencer marketing.

Not setting expectations upfront

Establishing clear expectations beforehand enables a smooth, productive collaboration. The result? A successful campaign aligned with your goals.

Make sure you agree on the following items in advance:

• Timeline and deliverables: Clearly outline the campaign timeline, including start and end dates, as well as any deadlines for content submission and publication. Also, specify the required deliverables, such as the number of posts, stories or videos the influencer needs to create.
• Payment and terms: Agree on the payment structure, whether it's a one-time fee, ongoing retainer or performance-based compensation. Discuss the payment schedule and any additional terms, such as bonuses for exceptional performance or penalties for missed deadlines.

Focusing on the wrong metrics

Influencer marketing can offer more benefits to your business than merely boosting sales. Fixating only on conversions and revenue data can mislead brands into thinking their campaigns are not working.

Here are some other metrics to consider when measuring the impact of your campaigns:

• Engagement metrics: Evaluate likes, comments, and shares to understand content resonance and audience interaction.
• Brand awareness metrics: Measure views, clicks and website traffic to gauge campaign reach and audience interest.
• Follower growth: Track new followers to determine influencer impact on brand visibility and audience expansion.
• Inbound leads: Track the number of inquiries and messages your brand gets to analyze the campaign’s impact on inbound lead generation.

How to track influencer marketing campaigns

There are a few ways of measuring the success of your campaign.

If you want to keep a pulse on the content your influencers are creating and interacting with, you can create a specific branded hashtag, like #SproutPartner. The Sprout Social Smart Inbox makes it easy to see what’s being talked about with specific hashtags, or to watch for mentions of specific keywords .

Use Sprout’s reporting feature to tag and track campaign-related posts. You can also compare how each post is performing and view metrics such as post engagements, clicks and impressions.

Similarly, if you’re aiming for more sales, giving out affiliate codes or tracking links will help you measure the revenue generated from influencers.

Create a successful influencer marketing strategy for your brand

It’s clear—influencers are the new wave in marketing. However, the influencer marketing world is constantly evolving, and in five years may be drastically different from today.

While working with influencers has unique considerations, setting up a campaign is the same as most marketing campaigns: research, set a budget, determine goals, find your influencers, and review and revise. Once you’ve got a hold of the rhythm, creating different influencer marketing campaigns to meet your brand’s various needs will become second nature.

If you need more resources for your team on running influencer campaigns, check out our ultimate guide for running successful social media campaigns .

Influencer Marketing FAQs

The three R’s in influencer marketing strategy are relevance, reach and resonance.

• Reach alludes to the number of followers the influencer has and the people they can potentially reach with their content.
• Relevance is how well the influencer’s content aligns with your brand voice, target audience and marketing goals.
• Resonance is the level of meaningful interactions and connections the influencer’s content creates with their followers, which translates to greater audience loyalty.

An influencer marketing strategy needs meticulous planning. Here are five things you need to keep in mind to ace it.

• Find influencers and understand their payment structure
• Set a budget and management strategy
• Decide on campaign goals and messaging
• Establish influencer outreach process
• Review and refine your strategy

Social media influencers collaborate with brands to promote products or services to their followers through sponsored posts, product reviews and endorsements. In doing so, they help shape consumer opinions and purchasing decisions.

Additional resources for Influencer Marketing

• Influencers
• Other Platforms

The ultimate playbook to build a Snapchat influencer marketing strategy

• Social Media Strategy

Influencer pricing: how much influencers really cost

• Social Media Content

UK Food influencers redefining taste for your brand

Influencer marketing trends across industries

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More From Forbes

The strategic role of market research in mergers and acquisitions.

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Amaan Kazi is the CEO of Verified Market Research , a global market research & consulting firm focused on niche & emerging markets.

What’s the one thing you do before making a big purchase? Before buying a house, a car or even a pricey gadget? You research. You watch videos, read articles, scroll through reviews, speak with friends and family.

That’s what we do as consumers to dodge the regret of a bad decision—a decision that could set us back years. Ever wonder what businesses do in similar high-stakes situations like mergers and acquisitions (M&A)? The answer is the same: Market research.

Just like you don’t buy a car without checking under the hood, businesses leverage market research to extrapolate insights that go beyond ticking boxes. Especially when it comes to mergers and acquisitions, this research can uncover crucial information.

1. Identifying Prospects

A filmmaker selects locations that enhance the storytelling of their film; they consider each location's unique characteristics, accessibility and how well it fits into the film’s narrative and aesthetic needs. Similarly, as a business, the first step in a successful merger/acquisition deal is identifying the right companies that not only complement strengths but also offset weaknesses, noting unique assets that have a strategic fit to your capabilities.

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Case in point: When Amazon bought Whole Foods , it wasn’t just buying a company. Amazon acquired an established grocery chain with an affluent, health-conscious customer base and strong urban and suburban presence. Detailed market research highlighted Whole Foods’ alignment with trends in organic products, supply chain synergies and potential for technological integration.

This strategic fit, combined with Amazon’s technological prowess, enabled them to enhance customer experiences, optimize operations and effectively compete in the grocery sector, ultimately reinventing grocery logistics.

Here's the essential check-list to determine your potential acquisition targets:

• Customer demographics and behaviors

• Market position and brand reputation

• Financial health and performance

• Operational efficiency and supply chain/distribution

• Technological capabilities

• Human capital and corporate culture

• Regulatory and compliance status

2. Matching Interests

Take the process of choosing a life partner in marriage, for example. Besides the initial attraction, a deeper evaluation of compatibility in values, life goals and personalities plays a key role in deciding a fit. Both parties look for a partnership that will bring mutual benefits, support growth and enhance each other’s lives.

This is similar to how companies assess cultural fit, leadership vision and business model compatibility in potential mergers or acquisitions.

We can learn from history: The Daimler-Benz and Chrysler merger of 1998 promised a global auto empire. Instead, clashing German-American corporate cultures created a roadmap to disaster. A deeper dive into their cultural compatibilities might have shown red flags early on.

Here's how to leverage market research to hopefully avoid this kind of disaster:

• Make human capital and corporate culture assessments. Conduct employee surveys and interviews to gather insights into the corporate cultures of both companies.

• Identify synergies and gaps. Use focus groups to explore cultural similarities and differences, fostering open dialogue and understanding.

• Develop a cultural integration plan. Organize joint cultural workshops to create a detailed plan for integrating teams and aligning corporate values.

• Monitor and adjust your integration plan: Establish feedback mechanisms such as surveys and focus groups to continuously monitor your integration process and make necessary adjustments.

3. Foresight

Knowing the weather ahead can make or break your road trip. Before setting out, you don't only check the weather for the day you leave, but for every leg of your journey, adjusting your route to avoid potential storms and capitalize on clear skies.

Similarly, in the world of mergers and acquisitions, foresight is the ability to understand not only how a potential acquisition fits with your current operations but also how it will synergize and evolve within your industry's future landscape.

One illustrative example: Microsoft’s acquisition of LinkedIn was a game-changer and strategic masterstroke. They didn’t just see LinkedIn as a professional network; they recognized the platform’s potential as a pivotal element in the future of work. Beyond adding a new asset, it strategically positioned Microsoft at the forefront of professional networking, enhancing its existing suite of productivity tools in a digital-first professional environment.

Here are some methods to predict acquisition fit and avoid common pitfalls:

• Scenario planning. Anticipate performance under future conditions.

• SWOT analysis. Understand strengths, weaknesses, opportunities and threats.

• Technology assessment. Align with future tech trends.

• Market trend analysis. Position your company in the future market.

• Competitive analysis. Assess market positioning relative to competitors.

• PESTLE analysis. PESTLE stands for political, economic, sociological, technological, legal and environmental. This type of analysis can help you evaluate macro-environmental factors impacting operations.

By addressing these points, companies can leverage foresight in their M&A strategies, helping to ensure successful integration and long-term synergy.

How Research Can Lead To An M&A

A few years ago, a client of ours sought insights on a niche market they planned on expanding into. The research report we delivered not only provided them with a comprehensive analysis of key segments of the market but also highlighted underexploited synergies with a competitor.

Fast forward a couple of months, the two companies, initially competitive in nature, gradually shifted toward collaborative opportunities that capitalized on both their strengths while also covering for each other’s weaknesses. Eventually, this led to both parties realizing the mutual benefit of a merger, especially since they both aligned on their vision of the industry.

Closing Notes

Market research defines and then empowers a well-thought-out strategy. It helps dodge bullets, seize opportunities and make informed decisions. More specifically, it also helps you understand cultural insights, make better decisions, boost confidence, avoid risk, spot opportunities and integrate with others more smoothly.

In conclusion, just as you wouldn’t shop blindly for a significant investment, in business, you don’t dive into mergers and acquisitions without homework. Market research is that homework.

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Competitor Analysis

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Competitor analysis is a critical process for businesses to understand their market position and strategic advantages. By conducting a competitor SWOT analysis , companies can identify their strengths, weaknesses, opportunities, and threats compared to their rivals. This analysis helps in developing effective strategies, improving market positioning, and anticipating market trends. Understanding competitors’ tactics and performance provides valuable insights that drive informed decision-making and foster competitive growth.

What is Competitor Analysis

Competitor analysis is the strategic process of evaluating the strengths, weaknesses, opportunities, and threats of current and potential competitors. This analysis helps businesses understand market dynamics, improve strategies, and identify areas for growth and differentiation.

Competitor Analysis Examples

• Price comparison – Analyzing competitors’ pricing strategies to adjust your own.
• Product features comparison – Evaluating competitors’ product features to enhance your offerings.
• Market share analysis – Assessing competitors’ market share to identify your market position.
• Marketing strategies review – Studying competitors’ marketing tactics to refine your own campaigns.
• Customer reviews – Analyzing competitor feedback to improve your product or service.
• Website traffic analysis – Comparing website traffic data to optimize online presence.
• SWOT analysis – Evaluating competitors’ strengths, weaknesses, opportunities, and threats.
• Social media monitoring – Tracking competitors’ social media activity to enhance engagement.

Types of Competitor Analysis

Direct Competitor Analysis : This analysis focuses on businesses that offer the same products or services to the same target market. By examining their strengths, weaknesses, and market strategies, you can identify opportunities to differentiate your offerings and improve your competitive position.

Indirect Competitor Analysis : Indirect competitors provide alternative solutions that meet the same customer needs. Analyzing these competitors helps you understand potential threats from different market segments and adapt your strategies accordingly.

Future Competitor Analysis : This involves identifying potential new entrants into your market. Understanding their capabilities, market potential, and possible strategies allows you to anticipate and prepare for future competition.

Competitive Market Analysis : Competitive market analysis examines the broader competitive landscape, including direct, indirect, and future competitors. This comprehensive approach helps you understand market dynamics, identify trends, and develop effective strategies to enhance your market position.

Industry Market Analysis : Industry market analysis focuses on the overall industry environment, including key players, market size, growth potential, and regulatory factors. This analysis helps you identify industry trends and opportunities, enabling you to make informed business decisions.

Competitor Analysis Tools

SWOT Analysis : Evaluates strengths, weaknesses, opportunities, and threats for strategic planning and decision-making.

Porter’s Five Forces : Assesses industry competitiveness through five key forces to determine market attractiveness and profitability using target market analysis .

Benchmarking : Compares company performance against industry leaders to identify best practices and areas for improvement.

PEST Analysis : Analyzes political, economic, social, and technological factors influencing market dynamics and strategic planning.

Competitive Profile Matrix (CPM) : Rates competitors based on key success factors to visualize competitive landscape.

Market Segmentation : Divides market into segments to identify and target specific customer groups effectively through market analysis for business .

Perceptual Mapping : Visualizes product positioning based on customer perceptions to identify market gaps and opportunities.

Customer Feedback Analysis : Gathers and analyzes customer feedback to understand market needs and improve product offerings.

Social Media Monitoring : Tracks competitors’ social media activities to gain insights into their strategies and customer engagement through a data analysis report .

Financial Ratio Analysis : Compares financial metrics to assess competitors’ financial health and performance.

Competitor Analysis in Marketing

Competitor analysis in marketing is a crucial aspect of developing a comprehensive business analysis report . This process involves examining direct and indirect competitors to understand their strengths, weaknesses, strategies, and market positions. By leveraging tools such as SWOT analysis , Porter’s Five Forces, and benchmarking, businesses can gather valuable insights into the competitive landscape. This analysis helps identify market opportunities, anticipate threats, and develop strategies to improve market positioning. Incorporating competitor analysis into a business analysis report ensures a well-rounded understanding of the market, enabling informed decision-making and strategic planning.

Competitor Analysis Framework

• Identifying Competitors : Recognize direct, indirect, and potential competitors to understand the competitive landscape.
• Market Positioning : Evaluate competitors’ market positions to identify strengths, weaknesses, and market gaps.
• SWOT Analysis : Analyze competitors’ strengths, weaknesses, opportunities, and threats for strategic insights.
• Product Comparison : Compare competitors’ products and services based on features, quality, and pricing.
• Marketing Strategies : Assess competitors’ marketing strategies, including advertising, promotions, and customer engagement.
• Financial Analysis : Review competitors’ financial health through revenue, profit margins, and market share.
• Customer Feedback : Gather and analyze customer feedback on competitors to understand market perception and satisfaction.
• Future Potential : Evaluate potential future threats from emerging competitors or industry trends.

Competitor Analysis UX

Competitor analysis in UX (User Experience) involves evaluating how competitors design and implement their user interfaces to attract and retain customers. This analysis includes conducting a company Swot analysis to identify the strengths, weaknesses, opportunities, and threats related to user experience. By examining competitors’ website and app designs, navigation ease, and overall user satisfaction, businesses can gain valuable insights into what works well and what areas need improvement. This detailed competitor analysis in UX helps companies refine their own user interfaces, enhance customer satisfaction, and stay ahead in the market by leveraging the findings from the company SWOT analysis.

Competitor Research

Step 1: Identify Competitors : Recognize direct, indirect, and potential competitors to understand the competitive landscape comprehensively.

Step 2: Gather Data : Collect information on competitors’ products, services, marketing strategies, and customer feedback.

Step 3: Analyze Strengths and Weaknesses : Conduct SWOT analysis to determine competitors’ strengths, weaknesses, opportunities, and threats.

Step 4: Evaluate Market Position : Assess competitors’ market positions to identify gaps and opportunities for your business.

Step 5: Monitor Competitor Activities : Continuously track competitors’ actions and strategies to stay updated and adjust your approach accordingly.

How to Use Competitor Analysis

• Identify Competitors : Recognize direct, indirect, and potential competitors.
• Gather Data : Collect information on competitors’ products, services, and strategies.
• Conduct SWOT Analysis : Evaluate strengths, weaknesses, opportunities, and threats.
• Compare and Evaluate : Assess your position relative to competitors.
• Develop Strategic Actions : Use competitive analysis insights to refine your business strategy.

How to Make Competitor Analysis Report:

• Identify Competitors: Research and list direct and indirect competitors in your industry.
• Gather Data: Collect information on competitors’ products, pricing, marketing strategies, strengths, and weaknesses.
• Analyze Strengths and Weaknesses: Evaluate each competitor’s strengths and weaknesses compared to your business.
• Compare Market Position: Assess your competitors’ market share, customer base, and overall market positioning through thorough competitive analysis .
• Develop Strategies: Use the analysis to identify opportunities, threats, and strategies to improve your competitive advantage.

Benefits of Conducting Competitor Analysis

• Identify Market Opportunities : Discover gaps in the market that your business can exploit.
• Understand Competitors’ Strategies : Gain insights into competitors’ marketing, pricing, and product strategies.
• Improve Business Strategies : Refine your business approach by learning from competitors’ successes and failures.
• Enhance Product Development : Develop better products by understanding competitors’ strengths and weaknesses.
• Increase Market Share : Implement strategies that can help you capture a larger portion of the market.
• Anticipate Market Trends : Stay ahead of industry trends by observing competitors’ adaptations.
• Improve Customer Satisfaction : Learn from competitors’ customer feedback to enhance your offerings.
• Boost Competitive Advantage : Strengthen your market position by leveraging insights gained from competitor analysis.

Why is competitor analysis important?

It helps businesses identify market opportunities and threats.

What are the key components of competitor analysis?

Market position, product offerings, pricing strategies, and marketing tactics.

How often should a business conduct competitor analysis?

At least once a year, but more frequently in rapidly changing markets.

What tools are commonly used for competitor analysis?

Tools like SEMrush, Ahrefs, and SimilarWeb are commonly used.

What is the first step in conducting a competitor analysis?

Identifying your main competitors.

How can competitor analysis benefit marketing strategies?

It helps refine marketing tactics to better compete in the market.

What data is crucial in competitor analysis?

Sales data, market share, customer reviews, and product features.

How does competitor analysis impact product development?

It highlights gaps and opportunities for innovation.

What is a competitive advantage?

A unique strength that sets a business apart from its competitors.

How can a business use competitor analysis in pricing strategy?

By understanding competitors’ pricing, a business can adjust its prices competitively.

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