what is strategy in market research

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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How to do market research: The complete guide for your brand

Written by by Jacqueline Zote

Published on  April 13, 2023

Reading time  10 minutes

Blindly putting out content or products and hoping for the best is a thing of the past. Not only is it a waste of time and energy, but you’re wasting valuable marketing dollars in the process. Now you have a wealth of tools and data at your disposal, allowing you to develop data-driven marketing strategies . That’s where market research comes in, allowing you to uncover valuable insights to inform your business decisions.

Conducting market research not only helps you better understand how to sell to customers but also stand out from your competition. In this guide, we break down everything you need to know about market research and how doing your homework can help you grow your business.

Table of contents:

What is market research?

Why is market research important, types of market research, where to conduct market research.

• Steps for conducting market research
• Tools to use for market research

Market research is the process of gathering information surrounding your business opportunities. It identifies key information to better understand your audience. This includes insights related to customer personas and even trends shaping your industry.

Taking time out of your schedule to conduct research is crucial for your brand health. Here are some of the key benefits of market research:

Understand your customers’ motivations and pain points

Most marketers are out of touch with what their customers want. Moreover, these marketers are missing key information on what products their audience wants to buy.

Simply put, you can’t run a business if you don’t know what motivates your customers.

And spoiler alert: Your customers’ wants and needs change. Your customers’ behaviors today might be night and day from what they were a few years ago.

Market research holds the key to understanding your customers better. It helps you uncover their key pain points and motivations and understand how they shape their interests and behavior.

Figure out how to position your brand

Positioning is becoming increasingly important as more and more brands enter the marketplace. Market research enables you to spot opportunities to define yourself against your competitors.

Maybe you’re able to emphasize a lower price point. Perhaps your product has a feature that’s one of a kind. Finding those opportunities goes hand in hand with researching your market.

Maintain a strong pulse on your industry at large

Today’s marketing world evolves at a rate that’s difficult to keep up with.

Fresh products. Up-and-coming brands. New marketing tools. Consumers get bombarded with sales messages from all angles. This can be confusing and overwhelming.

By monitoring market trends, you can figure out the best tactics for reaching your target audience.

Not everyone conducts market research for the same reason. While some may want to understand their audience better, others may want to see how their competitors are doing. As such, there are different types of market research you can conduct depending on your goal.

Interview-based market research allows for one-on-one interactions. This helps the conversation to flow naturally, making it easier to add context. Whether this takes place in person or virtually, it enables you to gather more in-depth qualitative data.

Buyer persona research

Buyer persona research lets you take a closer look at the people who make up your target audience. You can discover the needs, challenges and pain points of each buyer persona to understand what they need from your business. This will then allow you to craft products or campaigns to resonate better with each persona.

Pricing research

In this type of research, brands compare similar products or services with a particular focus on pricing. They look at how much those products or services typically sell for so they can get more competitive with their pricing strategy.

Competitive analysis research

Competitor analysis gives you a realistic understanding of where you stand in the market and how your competitors are doing. You can use this analysis to find out what’s working in your industry and which competitors to watch out for. It even gives you an idea of how well those competitors are meeting consumer needs.

Depending on the competitor analysis tool you use, you can get as granular as you need with your research. For instance, Sprout Social lets you analyze your competitors’ social strategies. You can see what types of content they’re posting and even benchmark your growth against theirs.

Brand awareness research

Conducting brand awareness research allows you to assess your brand’s standing in the market. It tells you how well-known your brand is among your target audience and what they associate with it. This can help you gauge people’s sentiments toward your brand and whether you need to rebrand or reposition.

If you don’t know where to start with your research, you’re in the right place.

There’s no shortage of market research methods out there. In this section, we’ve highlighted research channels for small and big businesses alike.

Considering that Google sees a staggering 8.5 billion searches each day, there’s perhaps no better place to start.

A quick Google search is a potential goldmine for all sorts of questions to kick off your market research. Who’s ranking for keywords related to your industry? Which products and pieces of content are the hottest right now? Who’s running ads related to your business?

For example, Google Product Listing Ads can help highlight all of the above for B2C brands.

The same applies to B2B brands looking to keep tabs on who’s running industry-related ads and ranking for keyword terms too.

There’s no denying that email represents both an aggressive and effective marketing channel for marketers today. Case in point, 44% of online shoppers consider email as the most influential channel in their buying decisions.

Looking through industry and competitor emails is a brilliant way to learn more about your market. For example, what types of offers and deals are your competitors running? How often are they sending emails?

Email is also invaluable for gathering information directly from your customers. This survey message from Asana is a great example of how to pick your customers’ brains to figure out how you can improve your quality of service.

Industry journals, reports and blogs

Don’t neglect the importance of big-picture market research when it comes to tactics and marketing channels to explore. Look to marketing resources such as reports and blogs as well as industry journals

Keeping your ear to the ground on new trends and technologies is a smart move for any business. Sites such as Statista, Marketing Charts, AdWeek and Emarketer are treasure troves of up-to-date data and news for marketers.

And of course, there’s the  Sprout Insights blog . And invaluable resources like The Sprout Social Index™  can keep you updated on the latest social trends.

Social media

If you want to learn more about your target market, look no further than social media. Social offers a place to discover what your customers want to see in future products or which brands are killin’ it. In fact, social media is become more important for businesses than ever with the level of data available.

It represents a massive repository of real-time data and insights that are instantly accessible. Brand monitoring and social listening are effective ways to conduct social media research . You can even be more direct with your approach. Ask questions directly or even poll your audience to understand their needs and preferences.

The 5 steps for how to do market research

Now that we’ve covered the why and where, it’s time to get into the practical aspects of market research. Here are five essential steps on how to do market research effectively.

Step 1: Identify your research topic

First off, what are you researching about? What do you want to find out? Narrow down on a specific research topic so you can start with a clear idea of what to look for.

For example, you may want to learn more about how well your product features are satisfying the needs of existing users. This might potentially lead to feature updates and improvements. Or it might even result in new feature introductions.

Similarly, your research topic may be related to your product or service launch or customer experience. Or you may want to conduct research for an upcoming marketing campaign.

Step 2: Choose a buyer persona to engage

If you’re planning to focus your research on a specific type of audience, decide which buyer persona you want to engage. This persona group will serve as a representative sample of your target audience.

Engaging a specific group of audience lets you streamline your research efforts. As such, it can be a much more effective and organized approach than researching thousands (if not millions) of individuals.

You may be directing your research toward existing users of your product. To get even more granular, you may want to focus on users who have been familiar with the product for at least a year, for example.

Step 3: Start collecting data

The next step is one of the most critical as it involves collecting the data you need for your research. Before you begin, make sure you’ve chosen the right research methods that will uncover the type of data you need. This largely depends on your research topic and goals.

Remember that you don’t necessarily have to stick to one research method. You may use a combination of qualitative and quantitative approaches. So for example, you could use interviews to supplement the data from your surveys. Or you may stick to insights from your social listening efforts.

To keep things consistent, let’s look at this in the context of the example from earlier. Perhaps you can send out a survey to your existing users asking them a bunch of questions. This might include questions like which features they use the most and how often they use them. You can get them to choose an answer from one to five and collect quantitative data.

Plus, for qualitative insights, you could even include a few open-ended questions with the option to write their answers. For instance, you might ask them if there’s any improvement they wish to see in your product.

Step 4: Analyze results

Once you have all the data you need, it’s time to analyze it keeping your research topic in mind. This involves trying to interpret the data to look for a wider meaning, particularly in relation to your research goal.

So let’s say a large percentage of responses were four or five in the satisfaction rating. This means your existing users are mostly satisfied with your current product features. On the other hand, if the responses were mostly ones and twos, you may look for opportunities to improve. The responses to your open-ended questions can give you further context as to why people are disappointed.

Step 5: Make decisions for your business

Now it’s time to take your findings and turn them into actionable insights for your business. In this final step, you need to decide how you want to move forward with your new market insight.

What did you find in your research that would require action? How can you put those findings to good use?

The market research tools you should be using

To wrap things up, let’s talk about the various tools available to conduct speedy, in-depth market research. These tools are essential for conducting market research faster and more efficiently.

Social listening and analytics

Social analytics tools like Sprout can help you keep track of engagement across social media. This goes beyond your own engagement data but also includes that of your competitors. Considering how quickly social media moves, using a third-party analytics tool is ideal. It allows you to make sense of your social data at a glance and ensure that you’re never missing out on important trends.

Email marketing research tools

Keeping track of brand emails is a good idea for any brand looking to stand out in its audience’s inbox.

Tools such as MailCharts ,  Really Good Emails  and  Milled  can show you how different brands run their email campaigns.

Meanwhile, tools like  Owletter  allow you to monitor metrics such as frequency and send-timing. These metrics can help you understand email marketing strategies among competing brands.

Content marketing research

If you’re looking to conduct research on content marketing, tools such as  BuzzSumo  can be of great help. This tool shows you the top-performing industry content based on keywords. Here you can see relevant industry sites and influencers as well as which brands in your industry are scoring the most buzz. It shows you exactly which pieces of content are ranking well in terms of engagements and shares and on which social networks.

SEO and keyword tracking

Monitoring industry keywords is a great way to uncover competitors. It can also help you discover opportunities to advertise your products via organic search. Tools such as  Ahrefs  provide a comprehensive keyword report to help you see how your search efforts stack up against the competition.

Competitor comparison template

For the sake of organizing your market research, consider creating a competitive matrix. The idea is to highlight how you stack up side-by-side against others in your market. Use a  social media competitive analysis template  to track your competitors’ social presence. That way, you can easily compare tactics, messaging and performance. Once you understand your strengths and weaknesses next to your competitors, you’ll find opportunities as well.

Customer persona creator

Finally, customer personas represent a place where all of your market research comes together. You’d need to create a profile of your ideal customer that you can easily refer to. Tools like  Xtensio  can help in outlining your customer motivations and demographics as you zero in on your target market.

Build a solid market research strategy

Having a deeper understanding of the market gives you leverage in a sea of competitors. Use the steps and market research tools we shared above to build an effective market research strategy.

But keep in mind that the accuracy of your research findings depends on the quality of data collected. Turn to Sprout’s social media analytics tools to uncover heaps of high-quality data across social networks.

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What Is Market Research?

• How It Works
• Primary vs. Secondary
• How to Conduct Research

The Bottom Line

• Marketing Essentials

How to Do Market Research, Types, and Example

Joules Garcia / Investopedia

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 .”

U.S. Small Business Administration. “ Market Research and Competitive Analysis .”

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Market research is a cornerstone of all successful, strategic businesses. It can also be daunting for entrepreneurs looking to launch a startup or start a side hustle . What is market research, anyway? And how do you…do it?

We’ll walk you through absolutely everything you need to know about the market research process so that by the end of this guide, you’ll be an expert in market research too. And what’s more important: you’ll have actionable steps you can take to start collecting your own market research.

What Is Market Research?

Market research is the organized process of gathering information about your target customers and market. Market research can help you better understand customer behavior and competitor strengths and weaknesses, as well as provide insight for the best strategies in launching new businesses and products. There are different ways to approach market research, including primary and secondary research and qualitative and quantitative research. The strongest approaches will include a combination of all four.

“Virtually every business can benefit from conducting some market research,” says Niles Koenigsberg of Real FiG Advertising + Marketing . “Market research can help you piece together your [business’s] strengths and weaknesses, along with your prospective opportunities, so that you can understand where your unique differentiators may lie.” Well-honed market research will help your brand stand out from the competition and help you see what you need to do to lead the market. It can also do so much more.

The Purposes of Market Research

Why do market research? It can help you…

• Pinpoint your target market, create buyer personas, and develop a more holistic understanding of your customer base and market.
• Understand current market conditions to evaluate risks and anticipate how your product or service will perform.
• Validate a concept prior to launch.
• Identify gaps in the market that your competitors have created or overlooked.
• Solve problems that have been left unresolved by the existing product/brand offerings.
• Identify opportunities and solutions for new products or services.
• Develop killer marketing strategies .

What Are the Benefits of Market Research?

Strong market research can help your business in many ways. It can…

• Strengthen your market position.
• Help you identify your strengths and weaknesses.
• Help you identify your competitors’ strengths and weaknesses.
• Minimize risk.
• Center your customers’ experience from the get-go.
• Help you create a dynamic strategy based on market conditions and customer needs/demands.

What Are the Basic Methods of Market Research?

The basic methods of market research include surveys, personal interviews, customer observation, and the review of secondary research. In addition to these basic methods, a forward-thinking market research approach incorporates data from the digital landscape like social media analysis, SEO research, gathering feedback via forums, and more. Throughout this guide, we will cover each of the methods commonly used in market research to give you a comprehensive overview.

Primary vs. Secondary Market Research

Primary and secondary are the two main types of market research you can do. The latter relies on research conducted by others. Primary research, on the other hand, refers to the fact-finding efforts you conduct on your own.

This approach is limited, however. It’s likely that the research objectives of these secondary data points differ from your own, and it can be difficult to confirm the veracity of their findings.

Primary Market Research

Primary research is more labor intensive, but it generally yields data that is exponentially more actionable. It can be conducted through interviews, surveys, online research, and your own data collection. Every new business should engage in primary market research prior to launch. It will help you validate that your idea has traction, and it will give you the information you need to help minimize financial risk.

You can hire an agency to conduct this research on your behalf. This brings the benefit of expertise, as you’ll likely work with a market research analyst. The downside is that hiring an agency can be expensive—too expensive for many burgeoning entrepreneurs. That brings us to the second approach. You can also do the market research yourself, which substantially reduces the financial burden of starting a new business .

Secondary Market Research

Secondary research includes resources like government databases and industry-specific data and publications. It can be beneficial to start your market research with secondary sources because it’s widely available and often free-to-access. This information will help you gain a broad overview of the market conditions for your new business.

Identify Your Goals and Your Audience

Before you begin conducting interviews or sending out surveys, you need to set your market research goals. At the end of your market research process, you want to have a clear idea of who your target market is—including demographic information like age, gender, and where they live—but you also want to start with a rough idea of who your audience might be and what you’re trying to achieve with market research.

You can pinpoint your objectives by asking yourself a series of guiding questions:

• What are you hoping to discover through your research?
• Who are you hoping to serve better because of your findings?
• What do you think your market is?
• Who are your competitors?
• Are you testing the reception of a new product category or do you want to see if your product or service solves the problem left by a current gap in the market?
• Are you just…testing the waters to get a sense of how people would react to a new brand?

Once you’ve narrowed down the “what” of your market research goals, you’re ready to move onto how you can best achieve them. Think of it like algebra. Many math problems start with “solve for x.” Once you know what you’re looking for, you can get to work trying to find it. It’s a heck of a lot easier to solve a problem when you know you’re looking for “x” than if you were to say “I’m gonna throw some numbers out there and see if I find a variable.”

How to Do Market Research

This guide outlines every component of a comprehensive market research effort. Take into consideration the goals you have established for your market research, as they will influence which of these elements you’ll want to include in your market research strategy.

Secondary Data

Secondary data allows you to utilize pre-existing data to garner a sense of market conditions and opportunities. You can rely on published market studies, white papers, and public competitive information to start your market research journey.

Secondary data, while useful, is limited and cannot substitute your own primary data. It’s best used for quantitative data that can provide background to your more specific inquiries.

Find Your Customers Online

Once you’ve identified your target market, you can use online gathering spaces and forums to gain insights and give yourself a competitive advantage. Rebecca McCusker of The Creative Content Shop recommends internet recon as a vital tool for gaining a sense of customer needs and sentiment. “Read their posts and comments on forums, YouTube video comments, Facebook group [comments], and even Amazon/Goodreads book comments to get in their heads and see what people are saying.”

If you’re interested in engaging with your target demographic online, there are some general rules you should follow. First, secure the consent of any group moderators to ensure that you are acting within the group guidelines. Failure to do so could result in your eviction from the group.

Not all comments have the same research value. “Focus on the comments and posts with the most comments and highest engagement,” says McCusker. These high-engagement posts can give you a sense of what is already connecting and gaining traction within the group.

Social media can also be a great avenue for finding interview subjects. “LinkedIn is very useful if your [target customer] has a very specific job or works in a very specific industry or sector. It’s amazing the amount of people that will be willing to help,” explains Miguel González, a marketing executive at Dealers League . “My advice here is BE BRAVE, go to LinkedIn, or even to people you know and ask them, do quick interviews and ask real people that belong to that market and segment and get your buyer persona information first hand.”

Market research interviews can provide direct feedback on your brand, product, or service and give you a better understanding of consumer pain points and interests.

When organizing your market research interviews, you want to pay special attention to the sample group you’re selecting, as it will directly impact the information you receive. According to Tanya Zhang, the co-founder of Nimble Made , you want to first determine whether you want to choose a representative sample—for example, interviewing people who match each of the buyer persona/customer profiles you’ve developed—or a random sample.

“A sampling of your usual persona styles, for example, can validate details that you’ve already established about your product, while a random sampling may [help you] discover a new way people may use your product,” Zhang says.

Market Surveys

Market surveys solicit customer inclinations regarding your potential product or service through a series of open-ended questions. This direct outreach to your target audience can provide information on your customers’ preferences, attitudes, buying potential, and more.

Every expert we asked voiced unanimous support for market surveys as a powerful tool for market research. With the advent of various survey tools with accessible pricing—or free use—it’s never been easier to assemble, disseminate, and gather market surveys. While it should also be noted that surveys shouldn’t replace customer interviews , they can be used to supplement customer interviews to give you feedback from a broader audience.

Who to Include in Market Surveys

• Current customers
• Past customers
• Your existing audience (such as social media/newsletter audiences)

Example Questions to Include in Market Surveys

While the exact questions will vary for each business, here are some common, helpful questions that you may want to consider for your market survey. Demographic Questions: the questions that help you understand, demographically, who your target customers are:

• “What is your age?”
• “Where do you live?”
• “What is your gender identity?”
• “What is your household income?”
• “What is your household size?”
• “What do you do for a living?”
• “What is your highest level of education?”

Product-Based Questions: Whether you’re seeking feedback for an existing brand or an entirely new one, these questions will help you get a sense of how people feel about your business, product, or service:

• “How well does/would our product/service meet your needs?”
• “How does our product/service compare to similar products/services that you use?”
• “How long have you been a customer?” or “What is the likelihood that you would be a customer of our brand?

Personal/Informative Questions: the deeper questions that help you understand how your audience thinks and what they care about.

• “What are your biggest challenges?”
• “What’s most important to you?”
• “What do you do for fun (hobbies, interests, activities)?”
• “Where do you seek new information when researching a new product?”
• “How do you like to make purchases?”
• “What is your preferred method for interacting with a brand?”

Survey Tools

Online survey tools make it easy to distribute surveys and collect responses. The best part is that there are many free tools available. If you’re making your own online survey, you may want to consider SurveyMonkey, Typeform, Google Forms, or Zoho Survey.

Competitive Analysis

A competitive analysis is a breakdown of how your business stacks up against the competition. There are many different ways to conduct this analysis. One of the most popular methods is a SWOT analysis, which stands for “strengths, weaknesses, opportunities, and threats.” This type of analysis is helpful because it gives you a more robust understanding of why a customer might choose a competitor over your business. Seeing how you stack up against the competition can give you the direction you need to carve out your place as a market leader.

Social Media Analysis

Social media has fundamentally changed the market research landscape, making it easier than ever to engage with a wide swath of consumers. Follow your current or potential competitors on social media to see what they’re posting and how their audience is engaging with it. Social media can also give you a lower cost opportunity for testing different messaging and brand positioning.

SEO Analysis and Opportunities

SEO analysis can help you identify the digital competition for getting the word out about your brand, product, or service. You won’t want to overlook this valuable information. Search listening tools offer a novel approach to understanding the market and generating the content strategy that will drive business. Tools like Google Trends and Awario can streamline this process.

Ready to Kick Your Business Into High Gear?

Now that you’ve completed the guide to market research you know you’re ready to put on your researcher hat to give your business the best start. Still not sure how actually… launch the thing? Our free mini-course can run you through the essentials for starting your side hustle .

About Mary Kate Miller

Mary Kate Miller writes about small business, real estate, and finance. In addition to writing for Foundr, her work has been published by The Washington Post, Teen Vogue, Bustle, and more. She lives in Chicago.

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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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Market research definition

Market research – in-house or outsourced, market research in the age of data, when to use market research.

• Types of market research 

Different types of primary research

How to do market research (primary data), how to do secondary market research, communicating your market research findings, choose the right platform for your market research, try qualtrics for free, the ultimate guide to market research: how to conduct it like a pro.

27 min read Wondering how to do market research? Or even where to start learning about it? Use our ultimate guide to understand the basics and discover how you can use market research to help your business.

Market research is the practice of gathering information about the needs and preferences of your target audience – potential consumers of your product.

When you understand how your target consumer feels and behaves, you can then take steps to meet their needs and mitigate the risk of an experience gap – where there is a shortfall between what a consumer expects you to deliver and what you actually deliver. Market research can also help you keep abreast of what your competitors are offering, which in turn will affect what your customers expect from you.

Market research connects with every aspect of a business – including brand , product , customer service , marketing and sales.

Market research generally focuses on understanding:

• The consumer (current customers, past customers, non-customers, influencers))
• The company (product or service design, promotion, pricing, placement, service, sales)
• The competitors (and how their market offerings interact in the market environment)
• The industry overall (whether it’s growing or moving in a certain direction)

Free eBook: 2024 market research trends report

Why is market research important?

A successful business relies on understanding what like, what they dislike, what they need and what messaging they will respond to. Businesses also need to understand their competition to identify opportunities to differentiate their products and services from other companies.

Today’s business leaders face an endless stream of decisions around target markets, pricing, promotion, distribution channels, and product features and benefits . They must account for all the factors involved, and there are market research studies and methodologies strategically designed to capture meaningful data to inform every choice. It can be a daunting task.

Market research allows companies to make data-driven decisions to drive growth and innovation.

What happens when you don’t do market research?

Without market research, business decisions are based at best on past consumer behavior, economic indicators, or at worst, on gut feel. Decisions are made in a bubble without thought to what the competition is doing. An important aim of market research is to remove subjective opinions when making business decisions. As a brand you are there to serve your customers, not personal preferences within the company. You are far more likely to be successful if you know the difference, and market research will help make sure your decisions are insight-driven.

Traditionally there have been specialist market researchers who are very good at what they do, and businesses have been reliant on their ability to do it. Market research specialists will always be an important part of the industry, as most brands are limited by their internal capacity, expertise and budgets and need to outsource at least some aspects of the work.

However, the market research external agency model has meant that brands struggled to keep up with the pace of change. Their customers would suffer because their needs were not being wholly met with point-in-time market research.

Businesses looking to conduct market research have to tackle many questions –

• Who are my consumers, and how should I segment and prioritize them?
• What are they looking for within my category?
• How much are they buying, and what are their purchase triggers, barriers, and buying habits?
• Will my marketing and communications efforts resonate?
• Is my brand healthy ?
• What product features matter most?
• Is my product or service ready for launch?
• Are my pricing and packaging plans optimized?

They all need to be answered, but many businesses have found the process of data collection daunting, time-consuming and expensive. The hardest battle is often knowing where to begin and short-term demands have often taken priority over longer-term projects that require patience to offer return on investment.

Today however, the industry is making huge strides, driven by quickening product cycles, tighter competition and business imperatives around more data-driven decision making. With the emergence of simple, easy to use tools , some degree of in-house market research is now seen as essential, with fewer excuses not to use data to inform your decisions. With greater accessibility to such software, everyone can be an expert regardless of level or experience.

How is this possible?

The art of research hasn’t gone away. It is still a complex job and the volume of data that needs to be analyzed is huge. However with the right tools and support, sophisticated research can look very simple – allowing you to focus on taking action on what matters.

If you’re not yet using technology to augment your in-house market research, now is the time to start.

The most successful brands rely on multiple sources of data to inform their strategy and decision making, from their marketing segmentation to the product features they develop to comments on social media. In fact, there’s tools out there that use machine learning and AI to automate the tracking of what’s people are saying about your brand across all sites.

The emergence of newer and more sophisticated tools and platforms gives brands access to more data sources than ever and how the data is analyzed and used to make decisions. This also increases the speed at which they operate, with minimal lead time allowing brands to be responsive to business conditions and take an agile approach to improvements and opportunities.

Expert partners have an important role in getting the best data, particularly giving access to additional market research know-how, helping you find respondents , fielding surveys and reporting on results.

How do you measure success?

Business activities are usually measured on how well they deliver return on investment (ROI). Since market research doesn’t generate any revenue directly, its success has to be measured by looking at the positive outcomes it drives – happier customers, a healthier brand, and so on.

When changes to your products or your marketing strategy are made as a result of your market research findings, you can compare on a before-and-after basis to see if the knowledge you acted on has delivered value.

Regardless of the function you work within, understanding the consumer is the goal of any market research. To do this, we have to understand what their needs are in order to effectively meet them. If we do that, we are more likely to drive customer satisfaction , and in turn, increase customer retention .

Several metrics and KPIs are used to gauge the success of decisions made from market research results, including

• Brand awareness within the target market
• Share of wallet
• CSAT (customer satisfaction)
• NPS (Net Promoter Score)

You can use market research for almost anything related to your current customers, potential customer base or target market. If you want to find something out from your target audience, it’s likely market research is the answer.

Here are a few of the most common uses:

Buyer segmentation and profiling

Segmentation is a popular technique that separates your target market according to key characteristics, such as behavior, demographic information and social attitudes. Segmentation allows you to create relevant content for your different segments, ideally helping you to better connect with all of them.

Buyer personas are profiles of fictional customers – with real attributes. Buyer personas help you develop products and communications that are right for your different audiences, and can also guide your decision-making process. Buyer personas capture the key characteristics of your customer segments, along with meaningful insights about what they want or need from you. They provide a powerful reminder of consumer attitudes when developing a product or service, a marketing campaign or a new brand direction.

By understanding your buyers and potential customers, including their motivations, needs, and pain points, you can optimize everything from your marketing communications to your products to make sure the right people get the relevant content, at the right time, and via the right channel .

Attitudes and Usage surveys

Attitude & Usage research helps you to grow your brand by providing a detailed understanding of consumers. It helps you understand how consumers use certain products and why, what their needs are, what their preferences are, and what their pain points are. It helps you to find gaps in the market, anticipate future category needs, identify barriers to entry and build accurate go-to-market strategies and business plans.

Marketing strategy

Effective market research is a crucial tool for developing an effective marketing strategy – a company’s plan for how they will promote their products.

It helps marketers look like rock stars by helping them understand the target market to avoid mistakes, stay on message, and predict customer needs . It’s marketing’s job to leverage relevant data to reach the best possible solution  based on the research available. Then, they can implement the solution, modify the solution, and successfully deliver that solution to the market.

Product development

You can conduct market research into how a select group of consumers use and perceive your product – from how they use it through to what they like and dislike about it. Evaluating your strengths and weaknesses early on allows you to focus resources on ideas with the most potential and to gear your product or service design to a specific market.

Chobani’s yogurt pouches are a product optimized through great market research . Using product concept testing – a form of market research – Chobani identified that packaging could negatively impact consumer purchase decisions. The brand made a subtle change, ensuring the item satisfied the needs of consumers. This ability to constantly refine its products for customer needs and preferences has helped Chobani become Australia’s #1 yogurt brand and increase market share.

Pricing decisions

Market research provides businesses with insights to guide pricing decisions too. One of the most powerful tools available to market researchers is conjoint analysis, a form of market research study that uses choice modeling to help brands identify the perfect set of features and price for customers. Another useful tool is the Gabor-Granger method, which helps you identify the highest price consumers are willing to pay for a given product or service.

Brand tracking studies

A company’s brand is one of its most important assets. But unlike other metrics like product sales, it’s not a tangible measure you can simply pull from your system. Regular market research that tracks consumer perceptions of your brand allows you to monitor and optimize your brand strategy in real time, then respond to consumer feedback to help maintain or build your brand with your target customers.

Advertising and communications testing

Advertising campaigns can be expensive, and without pre-testing, they carry risk of falling flat with your target audience. By testing your campaigns, whether it’s the message or the creative, you can understand how consumers respond to your communications before you deploy them so you can make changes in response to consumer feedback before you go live.

Finder, which is one of the world’s fastest-growing online comparison websites, is an example of a brand using market research to inject some analytical rigor into the business. Fueled by great market research, the business lifted brand awareness by 23 percent, boosted NPS by 8 points, and scored record profits – all within 10 weeks.

Competitive analysis

Another key part of developing the right product and communications is understanding your main competitors and how consumers perceive them. You may have looked at their websites and tried out their product or service, but unless you know how consumers perceive them, you won’t have an accurate view of where you stack up in comparison. Understanding their position in the market allows you to identify the strengths you can exploit, as well as any weaknesses you can address to help you compete better.

Customer Story

See How Yamaha Does Product Research

Types of market research

Although there are many types market research, all methods can be sorted into one of two categories: primary and secondary.

Primary research

Primary research is market research data that you collect yourself. This is raw data collected through a range of different means – surveys , focus groups,  , observation and interviews being among the most popular.

Primary information is fresh, unused data, giving you a perspective that is current or perhaps extra confidence when confirming hypotheses you already had. It can also be very targeted to your exact needs. Primary information can be extremely valuable. Tools for collecting primary information are increasingly sophisticated and the market is growing rapidly.

Historically, conducting market research in-house has been a daunting concept for brands because they don’t quite know where to begin, or how to handle vast volumes of data. Now, the emergence of technology has meant that brands have access to simple, easy to use tools to help with exactly that problem. As a result, brands are more confident about their own projects and data with the added benefit of seeing the insights emerge in real-time.

Secondary research

Secondary research is the use of data that has already been collected, analyzed and published – typically it’s data you don’t own and that hasn’t been conducted with your business specifically in mind, although there are forms of internal secondary data like old reports or figures from past financial years that come from within your business. Secondary research can be used to support the use of primary research.

Secondary research can be beneficial to small businesses because it is sometimes easier to obtain, often through research companies. Although the rise of primary research tools are challenging this trend by allowing businesses to conduct their own market research more cheaply, secondary research is often a cheaper alternative for businesses who need to spend money carefully. Some forms of secondary research have been described as ‘lean market research’ because they are fast and pragmatic, building on what’s already there.

Because it’s not specific to your business, secondary research may be less relevant, and you’ll need to be careful to make sure it applies to your exact research question. It may also not be owned, which means your competitors and other parties also have access to it.

Primary or secondary research – which to choose?

Both primary and secondary research have their advantages, but they are often best used when paired together, giving you the confidence to act knowing that the hypothesis you have is robust.

Secondary research is sometimes preferred because there is a misunderstanding of the feasibility of primary research. Thanks to advances in technology, brands have far greater accessibility to primary research, but this isn’t always known.

If you’ve decided to gather your own primary information, there are many different data collection methods that you may consider. For example:

• Customer surveys
• Focus groups
• Observation

Think carefully about what you’re trying to accomplish before picking the data collection method(s) you’re going to use. Each one has its pros and cons. Asking someone a simple, multiple-choice survey question will generate a different type of data than you might obtain with an in-depth interview. Determine if your primary research is exploratory or specific, and if you’ll need qualitative research, quantitative research, or both.

Qualitative vs quantitative

Another way of categorizing different types of market research is according to whether they are qualitative or quantitative.

Qualitative research

Qualitative research is the collection of data that is non-numerical in nature. It summarizes and infers, rather than pin-points an exact truth. It is exploratory and can lead to the generation of a hypothesis.

Market research techniques that would gather qualitative data include:

• Interviews (face to face / telephone)
• Open-ended survey questions

Researchers use these types of market research technique because they can add more depth to the data. So for example, in focus groups or interviews, rather than being limited to ‘yes’ or ‘no’ for a certain question, you can start to understand why someone might feel a certain way.

Quantitative research

Quantitative research is the collection of data that is numerical in nature. It is much more black and white in comparison to qualitative data, although you need to make sure there is a representative sample if you want the results to be reflective of reality.

Quantitative researchers often start with a hypothesis and then collect data which can be used to determine whether empirical evidence to support that hypothesis exists.

Quantitative research methods include:

• Questionnaires
• Review scores

Exploratory and specific research

Exploratory research is the approach to take if you don’t know what you don’t know. It can give you broad insights about your customers, product, brand, and market. If you want to answer a specific question, then you’ll be conducting specific research.

• Exploratory . This research is general and open-ended, and typically involves lengthy interviews with an individual or small focus group.
• Specific . This research is often used to solve a problem identified in exploratory research. It involves more structured, formal interviews.

Exploratory primary research is generally conducted by collecting qualitative data. Specific research usually finds its insights through quantitative data.

Primary research can be qualitative or quantitative, large-scale or focused and specific. You’ll carry it out using methods like surveys – which can be used for both qualitative and quantitative studies – focus groups, observation of consumer behavior, interviews, or online tools.

Step 1: Identify your research topic

Research topics could include:

• Product features
• Product or service launch
• Understanding a new target audience (or updating an existing audience)
• Brand identity
• Marketing campaign concepts
• Customer experience

Step 2: Draft a research hypothesis

A hypothesis is the assumption you’re starting out with. Since you can disprove a negative much more easily than prove a positive, a hypothesis is a negative statement such as ‘price has no effect on brand perception’.

Step 3: Determine which research methods are most effective

Your choice of methods depends on budget, time constraints, and the type of question you’re trying to answer. You could combine surveys, interviews and focus groups to get a mix of qualitative and quantitative data.

Step 4: Determine how you will collect and analyze your data.

Primary research can generate a huge amount of data, and when the goal is to uncover actionable insight, it can be difficult to know where to begin or what to pay attention to.

The rise in brands taking their market research and data analysis in-house has coincided with the rise of technology simplifying the process. These tools pull through large volumes of data and outline significant information that will help you make the most important decisions.

Step 5: Conduct your research!

This is how you can run your research using Qualtrics CoreXM

• Pre-launch – Here you want to ensure that the survey/ other research methods conform to the project specifications (what you want to achieve/research)
• Soft launch – Collect a small fraction of the total data before you fully launch. This means you can check that everything is working as it should and you can correct any data quality issues.
• Full launch – You’ve done the hard work to get to this point. If you’re using a tool, you can sit back and relax, or if you get curious you can check on the data in your account.
• Review – review your data for any issues or low-quality responses. You may need to remove this in order not to impact the analysis of the data.

A helping hand

If you are missing the skills, capacity or inclination to manage your research internally, Qualtrics Research Services can help. From design, to writing the survey based on your needs, to help with survey programming, to handling the reporting, Research Services acts as an extension of the team and can help wherever necessary.

Secondary market research can be taken from a variety of places. Some data is completely free to access – other information could end up costing hundreds of thousands of dollars. There are three broad categories of secondary research sources:

• Public sources – these sources are accessible to anyone who asks for them. They include census data, market statistics, library catalogs, university libraries and more. Other organizations may also put out free data from time to time with the goal of advancing a cause, or catching people’s attention.
• Internal sources – sometimes the most valuable sources of data already exist somewhere within your organization. Internal sources can be preferable for secondary research on account of their price (free) and unique findings. Since internal sources are not accessible by competitors, using them can provide a distinct competitive advantage.
• Commercial sources – if you have money for it, the easiest way to acquire secondary market research is to simply buy it from private companies. Many organizations exist for the sole purpose of doing market research and can provide reliable, in-depth, industry-specific reports.

No matter where your research is coming from, it is important to ensure that the source is reputable and reliable so you can be confident in the conclusions you draw from it.

How do you know if a source is reliable?

Use established and well-known research publishers, such as the XM Institute , Forrester and McKinsey . Government websites also publish research and this is free of charge. By taking the information directly from the source (rather than a third party) you are minimizing the risk of the data being misinterpreted and the message or insights being acted on out of context.

How to apply secondary research

The purpose and application of secondary research will vary depending on your circumstances. Often, secondary research is used to support primary research and therefore give you greater confidence in your conclusions. However, there may be circumstances that prevent this – such as the timeframe and budget of the project.

Keep an open mind when collecting all the relevant research so that there isn’t any collection bias. Then begin analyzing the conclusions formed to see if any trends start to appear. This will help you to draw a consensus from the secondary research overall.

Market research success is defined by the impact it has on your business’s success. Make sure it’s not discarded or ignored by communicating your findings effectively. Here are some tips on how to do it.

• Less is more – Preface your market research report with executive summaries that highlight your key discoveries and their implications
• Lead with the basic information – Share the top 4-5 recommendations in bullet-point form, rather than requiring your readers to go through pages of analysis and data
• Model the impact – Provide examples and model the impact of any changes you put in place based on your findings
• Show, don’t tell – Add illustrative examples that relate directly to the research findings and emphasize specific points
• Speed is of the essence – Make data available in real-time so it can be rapidly incorporated into strategies and acted upon to maximize value
• Work with experts – Make sure you’ve access to a dedicated team of experts ready to help you design and launch successful projects

Trusted by 8,500 brands for everything from product testing to competitor analysis, Our Strategic Research software is the world’s most powerful and flexible research platform . With over 100 question types and advanced logic, you can build out your surveys and see real-time data you can share across the organization. Plus, you’ll be able to turn data into insights with iQ, our predictive intelligence engine that runs complicated analysis at the click of a button.

Related resources

Market intelligence 10 min read, marketing insights 11 min read, ethnographic research 11 min read, qualitative vs quantitative research 13 min read, qualitative research questions 11 min read, qualitative research design 12 min read, primary vs secondary research 14 min read, request demo.

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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:

Unravel’s eye-tracking study on Heineken Beers

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

The Fascinating Science Behind Eye Tracking: How Our Eyes Reveal Hidden Insights.

Global business

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: 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

You're all set!

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.

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Marketing software that helps you drive revenue, save time and resources, and measure and optimize your investments — all on one easy-to-use platform

How To Get the Most Out of Strategic Market Analysis

Strategic market analysis is a thorough examination of your company’s target market and the competitive landscape within a specific industry to unlock granular business insights. It spans from a broad analysis of your market to an understanding of consumer demand. Comprehensive market analysis enables you to forecast the potential success your brand, product, or services might achieve with consumers when entering a new market or competing in your current markets.

The more granular your research, the better your understanding of how a specific market moves and evolves, enabling you to be more knowledgeable when making business decisions and creating a winning strategy. Because, after all, knowledge is power.

Advancements in market analysis

In recent years, technological advancements have empowered businesses to gain a more intricate understanding of their markets, utilizing advanced market research tools to automate analytical processes within organizations. These developments in market analysis have enabled newcomer retailers like Shein and Temu to grow at unprecedented speed and disrupt the digital landscape.

As such, market analysis professionals, including consumer insights, analytics, and market research teams, can no longer rely on first-party data and panel-based research alone for their decision-making. In a digital age with fast-changing consumer trends, companies are increasingly utilizing digital intelligence to gather deep consumer and market insights that influence the future and growth of the company.

The insights gained from digital research intelligence can inform your strategic market analysis and optimize your marketing and sales strategies, audience targeting, product lines, facility and workforce expansion, and more. With fresh digital data that depicts today’s conditions — not last quarter’s or last year’s — your speed to insight is elevated, and you can take advantage of untapped consumer trends to avoid disruption. Ultimately, you want to be informed with the most accurate and updated insights to improve customer satisfaction and retention, increase sales and profits, and expand your market share .

Fuel Digital Growth with Market & Audience Intelligence

Go beyond your own first-party data: Track your digital market share, benchmark your business performance, and monitor consumer trends.

The importance of market analysis in business growth

We all understand the importance of market analysis . Still, in today’s rapidly changing digital economy, it’s more critical than ever to stay on top of the trends and spot the possible threats before your competitors. Without deeply understanding your market and the developing needs of your consumers today, you’re going blind.

Imagine you’re in a game of laser tag in a huge, multi-floored, obstacle-filled, highly versatile location, and then someone turns off the light, and you’re in complete darkness. Without seeing, without knowing your target, how are you going to hit it?

Now imagine that your business, but only your business, obtains night vision goggles.

That is what precise market research intelligence can be for your business: A way to see in the dark. Even in a challenging environment filled with competitors, if you can identify the obstacles and clearly see your consumers, you can find growth and success as well as reduce risk.

Strategic market analysis also lets you:

• Understand the size, growth rate, and profitability of the market
• Analyze market difficulty, ad cost efficiency, price sensitivity, and consumer loyalty
• Evaluate major players, their market share, and the competitive landscape
• Leverage timely trends and untapped niche markets in your industry
• Discover the main threats, costs, and revenue drivers
• Quickly and accurately deduce the price elasticity of demand and entry potential

How to unearth trends that are shaping the market

Let’s say your company is a consumer electronics manufacturer, and you want to launch a new product or optimize the strategy for an existing product, like those night vision goggles, for example. A quick glance utilizing Similarweb’s Market Intelligence Tool can unearth the top markets for consumer electronics and the market difficulty.

You can filter by country of interest and gain fast insights. In this example, you can see that the US market difficulty is medium:

• Audience loyalty is low, and branded traffic is medium, which allows for easier market penetration of new products.
• On the flip side, there is high consolidation, with market dynamics largely influenced by key players.
• Moreover, the substantial investment in paid advertising in the industry escalates the market challenges.

These factors must be considered when building your product/market launch or optimization strategy , and their effects on your success will vary depending on your brand. If you are an established brand like Samsung, a high consolidation percentage works in your favor, but if you’re a relatively new player, like DJI Innovations (a drone for photography startup) you’ll need to invest in building up brand awareness , which will be costly due to the high average PPC spend.

As seen in the graph above, you might find exciting opportunities if you check out Japan, the fourth-largest consumer electronics market.

While the market difficulty here is also medium , the individual factors differ slightly:

• The consolidation percentage is lower in Japan than in the US at 66.6% vs. 83.3%, respectively.
• The percentage of direct and branded traffic is also lower, affording opportunities to newcomers.
• The average spend on paid advertising in Japan is 6.3% of the US market.

These factors could make it easier for a new brand to launch into the market and build a following through paid ads, which average $76K per site in Japan vs. $1.2M in the US.

Ready to delve deeper into market research? Download our exclusive 90-page State of Ecommerce flagship report to uncover the most important trends shaping today’s market.

Download our flagship market research report

A comprehensive report on consumer market research trends in 2023

Types of strategic market analysis

There are many approaches to market analysis, and you’ve probably leveraged one or a combination of commonly used methods such as SWOT Analysis , PEST Analysis, Porter’s Five Forces Analysis , Four Corners Analysis , and Value-Chain Analysis .

In today’s digital age, a strategic understanding of how the online marketplace evolves can not only enhance traditional methods but also uncover insights your business had no access to until recently.

In the following sections, we’ll dive into the 5 main types of strategic market analysis , providing examples from Similarweb’s Market Intelligence tool.

1. Market Dynamics

Understanding the potential size of your market is critical when estimating the success of your new product, its relaunch, and even optimizing your marketing strategies. Market sizing enables you to make informed business decisions and involves measuring your PAM, TAM, SAM, and SOM .

To clarify:

• PAM: Potential Addressable Market — Includes consumers that are not in your current target market but could be in the future with the proper marketing and product adjustments or as consumer trends change.
• TAM: Total Addressable Market — The total market size of your target market to which you devote most of your marketing and targeting efforts today.
• SAM: Serviceable Addressable Market — The market your company can reach with its marketing, distribution channels, and current business models.
• SOM: Share of Market — Also known as Serviceable Obtainable Market, this is your share of the market in a category or for a particular product or service, which you can benchmark against the industry and competitors .

Earlier, we peeked into the Potential Addressable Market of the consumer electronics industry, but we can delve deeper into this analysis using Similarweb’s Market Research Add-on.

For example, using the Market Analysis Tool , we’ll evaluate the top players in the industry to examine their market share over the last year. Alternatively, we could pick any time frame within the last two years if we want to see how the market conditions have changed.

In this product feature, you can also benchmark your website against the leading players or select a custom list of up to ten websites of your choice to benchmark against.

2. Market Segmentation

Market segmentation is crucial to your market analysis. It is a powerful method of analyzing your Total Addressable Market, enabling you to identify your ideal customer profile (ICP) and inform your product and marketing strategies.

When segmenting your market with Similarweb, you can:

• Identify your target audience → To customize your marketing and sales strategies
• Analyze consumer behavior → To spot untapped trends and opportunities
• Tailor your business strategies → To optimize your product lines and capture opportunities

3. Target Audience Identification

Your target audience and market segmentation can be identified using various parameters, but they usually fall under five main categories: demographic, geographic, firmographic, psychographic, and behavioral. Each one of these categories offers a plethora of insights that can shape your business strategy. Let’s quickly dive into the most commonly utilized one— audience demographics .

For example, Shein is a relatively new online fashion retailer that launched in the US market in May 2022 and has quickly become one of the top players in the fashion industry.

On the surface, you might expect Shein to cater mainly to Generation Z with its online presence, marketing strategies, and overall visual style. However, a deeper dive into audience traffic data highlights that it is also top-of-mind across older age groups, ranking in the top five most visited sites in the US over the twelve months after its launch.

By understanding Shein’s audience demographics better, product and brand managers in competing companies can cater their targeting efforts to reach different audience demographics. In addition, marketing and content strategies can be adjusted, and new product lines can be introduced.

Marketing teams interested in learning from Shein’s success can also perform a quick website analysis to benchmark the fashion disruptor against its leading competitors and discern their marketing strategies to uncover how to reach a wider audience demographic.

4. Real-user Digital Data Analysis

Businesses have relied on a wide range of survey practices to analyze changing consumer interests, especially during periods of uncertainty. However, a notable gap exists between what consumers claim and their real-time consumer behavior, often due to financial constraints, rapid trend shifts , or lack of awareness.

Real-user digital data allows you to examine what consumers are actually doing online today and adjust your product, sales, and marketing strategies to win more conversions.

Let’s analyze and benchmark Shein’s website using Similarweb’s Website Analysis tool .

First, let’s identify the marketing channels driving the most traffic for the sites in the competitive set. As seen below, Nordstrom stands out with a strong organic search strategy that Shein could adopt. In paid search, Shein leads the way, closely followed by JC Penney and Nike.

Next, let’s look at the social media outlets that are being utilized the most. Nike and JCPenney have a strong presence on YouTube, while Nordstrom is leveraging Pinterest. Surprisingly, none of these brands are on Instagram.

The top publishers and ads that drive the most traffic to the five sites are YouTube (meaning video ads), Yahoo!, and MSN.com. Notably, Macy’s holds a 55.3% market share in advertising on Yahoo.com.

Macy’s has a dominant 56.6% market share for Critero ads, whereas Shein has a smaller share at 7.1%. Macy’s is Shein’s most prominent competitor, ranking first for all age demographics other than 18-24 years. This data underscores the importance of studying Macy’s marketing techniques and leveraging similar strategies for Shein’s benefit.

In conclusion, analyzing Shein’s competitors reveals valuable insights into their marketing strategies. This example also highlights how today’s technological advancements empower businesses to make smarter, data-driven decisions.

Similarweb offers a powerful tool for real-user digital analytics across websites, apps, industries, and segments. Watch this video to see how .

5. Consumer Behavior Analysis

Audience analysis is a key part of optimizing your offering and meeting consumer demand. Consumer trends are changing rapidly, and the business strategies that worked last quarter may not be effective anymore.

For example, Vectra, a veterinary medicine, only had a 1% market share in flea treatments in 2023, but its products were affordably priced. Analyzing consumer demand for flea treatments empowers businesses to spot the strategies that increase sales.

Benchmarking against the top 20 best-selling products in the market, we can spot that the top brands sold packages with a one-month supply, while Vectra sold three and six-month supply packages.

While the average listing price for the product clearly shows that Vectra’s monthly price was lower, offering a six-month supply did not align with consumer demand at the time — most pet owners shopping on Amazon preferred to purchase single-dose packs to save on immediate expenses due to the rising cost of living.

How to leverage market analysis for a winning business strategy

When creating or updating your business strategy, it’s vital to consider all the elements that contribute to the business costs and the opportunities that will drive profit in your particular category. You’ll need granular insights into your categories, products, and audiences to make more accurate and faster decisions. Traditional-only market analysis will not lead to growth in an age filled with micro-consumer demand , niche markets, private labels, dupes, and an on-demand shopper mentality.

Understanding your brand strength, the cost efficiency of your ad spend , and how to increase customer loyalty and retention could mean the difference between a diminishing customer base and a growing market share .

Similarweb’s Market Intelligence Add-On lets you unlock more market and consumer insights for your company, brand, or client by:

• Analyzing your market
• Benchmarking your business performance
• Tracking consumer trends

Let’s take a look at the Home & Garden category and see what that might look like.

1. Analyze your market

Utilizing the market research tool, you can analyze a specific segment within the industry to get more granular insights about your products. We’ll look at the gardening segment.

You can delve into global demand or choose any geography, whether a current market or one you want to enter and adjust the period you want to analyze to spot current or seasonal trends.

Here’s a quick look at the market’s year-over-year (YoY) change and website traffic metrics.

Understand the market difficulty by analyzing audience loyalty, consolidation, average PPC investment, and direct and branded traffic percentage.

Segment the industry into categories to see which are in demand so you can optimize your product lines and marketing strategy.

2. Benchmark your business performance

Evaluate your performance using the Market Quadrant Analysis tool, which gives you visibility into audience growth, brand strength , PPC cost efficiency, as well as loyalty and retention metrics.

Choose your industry and geography, benchmark the leading players in your market, or benchmark your website against up to 14 competitors to identify their strategies and optimize your sales and marketing strategies.

3. Track consumer trends

Understand how consumer demand is changing in your market or new markets, and find untapped opportunities by leveraging the Demand Trends tool .

Analyze what customers in your industry were searching – in the last month or up to 12 months – and uncover volume trends, changes in traffic, and traffic leaders for the top 100 keywords.

Adding a list of specific keywords to the search tool allows you to get more granular insights about your company’s services to understand consumer demand and even spot new vs. trending search terms.

You can also discover how many of your visitors are cross-shopping at competing sites to find opportunities to steal traffic.

Temu: Strategic market analysis example

Temu has disrupted the US ecommerce market, with 50% of Americans using its app and converted visits growing thirteen-fold since its launch in October 2022. Temu has also seen global success with over a billion website visits and a 307% traffic growth period-over-period (PoP). Understanding the newcomer’s success and learning how to emulate it in your own domain can be highly beneficial for your brand.

Upon launching into the US market, Temu’s PPC spend was high relative to the competitive landscape, outpacing established marketplaces such as Walmart, eBay, and Costco – overshadowed only by Amazon’s budget.

This marketing investment fueled massive growth, resulting in unprecedented period-over-period changes in visits to Temu’s website and increased brand awareness. Its online marketing investments paid off, with its audience growing by over 50% between Q1 and Q2 of 2023, making it a strong emerging player.

During this period of growth (Q1 and Q2, 2023), Temu invested in keywords such as alibaba, amazon, and wish, which stole traffic from competitors , investing up to $10.45 per click to steal traffic from Bed Bath and Beyond.

Temu offers discovery-based shopping, which leverages digital data to analyze its audience and algorithms to suggest products based on the consumer’s online behavior and shopping preferences, enabling it to draw in new customers.

However, as of Q3 2023, the Chinese ecommerce platform is benchmarking below its competitors, displaying low rates of exclusive visitors and returning users. Temu’s loyalty and retention metrics highlight some issues that need to be addressed for the newcomer to retain its market share. By better understanding its customers, the Chinese ecommerce platform could anticipate their needs better and improve its customer journey.

Temu’s competitive set loyalty and retention quadrant, Q3 2O23

By analyzing your competitive landscape and its barriers to entry, such as ad cost efficiency, price sensitivity for a category, and loyalty and retention, you can learn from your competitors’ mistakes and emulate their successes.

Consumer insights and demand analysis would inform your:

• Product development, as seen in the Vectra example highlighting product package sizes
• Distribution plan, including the marketing channels and publishers you leverage
• Marketing strategies, as seen in Temu’s paid keyword strategy

From good to great: Elevating your strategic market analysis

In the dynamic landscape of today’s economy, businesses that leverage digital analytics are at an advantage because they can promptly grasp what consumers are looking for today. Digital intelligence enables them to immediately enhance their first-party and survey data to shift strategies and capture consumer demand quickly, which is particularly critical in a fast-changing economy with an on-demand consumer mentality.

By aggregating critical digital signals and presenting them in a meaningful, digestible way, Similarweb’s Market Research tools enable companies to easily understand the market and generate actionable market and consumer insights to gain a competitive edge and grow their brand.

Explore how to use Similarweb Digital Data for your market and audience research. Click below to learn more. 

What is strategic market analysis?

Strategic market analysis is a detailed investigation of your target market and competitive landscape, ranging from broad market trends to consumer demand. It enables you to forecast the potential success of your brand, product, or services.

What are the types of strategic market analysis?

There are five essential types of strategic market analysis:

• Market Dynamics
• Market Segmentation
• Target Audience Identification
• Real-User Digital Data Analysis
• Consumer Behavior Analysis

What is market segmentation?

Market segmentation is an intricate way of understanding your target market by dividing the market into subdivisions of customers with common characteristics.

What is consumer behavior?

Consumer behavior is the actions that individuals, groups, or organizations take when purchasing and using goods and services. These can be measured using digital signals that measure website traffic, loyalty and retention, conversion rates, and popular keywords online.

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Market Research Definition, Types, Tools and Benefits

Published on Jul 01, 2022

More than doubling in size from 2008 to 2021, the market research sector brought in over $76.4 (Statista) billion worldwide in 2021.  

What is Market Research?

Market research is the process of gathering, analyzing, and interpreting information about a market, about the product or service to be offered for sale in that market. It is also about the previous, current, and potential customers for the product or service. 

Data collection, analysis, and interpretation are the three main steps in any successful market research project. The data could pertain to a certain demographic, general consumers, rival businesses, or the entire market. This is the cornerstone of any thriving business. The findings can be used for anything from discovering a fresh opportunity to entering the market to developing an entirely new product or service. 

Small business owners can benefit greatly from conducting market research. It can eliminate uncertainty in the creative process and direct energy and funding toward the most promising ideas and initiatives. Many types of market research are conducted by businesses at many different stages. 

Market Research for Businesses  

Accurate and comprehensive data gives a plethora of information on potential and existing customers, competitors, and the industry as a whole, making it the bedrock of any successful commercial endeavor. It helps entrepreneurs weigh the odds of success before sinking a lot of money into a new firm. 

An essential aspect of every successful business plan is conducting market research to gather data that can be used to address potential marketing obstacles. In reality, it is not viable to develop tactics like market segmentation (identifying distinct groups within a market) and product differentiation (establishing a unique selling proposition for a product or service that distinguishes it from the competition) without conducting market research. 

Types of Market Research  

1. quantitative research .

The results of quantitative studies are typically presented using numerical and graphic representations. It's the gold standard for verifying or disproving hypotheses. It is possible to establish broad, overarching truths about a subject by conducting this kind of study. Experiments, numerically recorded observations, and surveys with a limited number of predetermined answer choices are all examples of common quantitative approaches. 

2. Qualitative research 

Words are the currency of qualitative inquiry. It's a tool for making sense of things like ideas and experiences. Using this method, you can learn more about a topic from every angle, which is very useful for researching controversial or poorly understood subjects. Open-ended interviews, written descriptions of observations, and in-depth analyses of the existing literature are all examples of common qualitative techniques. 

Qualitative vs. Quantitative Research 

Quantitative research focuses on numerical and statistical facts, while qualitative research examines concepts and interpretations. Both are necessary to learn various things. Comparatively, qualitative research draws its conclusions from interviews and documents rather than statistics and reasoning. Quantitative studies typically report their findings numerically or graphically, while qualitative studies report their findings verbally. 

3. Primary Research 

Primary data refers to a study that seeks to collect firsthand information from real-world participants. Primary research is data collected by the researcher themselves through various techniques of approaching the target audience directly. You have full legal and ethical rights to the data set you to create. Primary research can be challenging due to the time, money, resources, and familiarity with the topic that it demands. 

4. Secondary Research 

Secondary research is a study that is done after primary research has already been conducted, and it consists of analyzing, interpreting, and summarizing the results of the primary research. A more precise definition of secondary research would be any study that makes use of publicly available data. When conducting secondary research, scholars refer to information that has already been gathered, processed, and made public (and therefore, you do not own this data). Since the accessible data has already been evaluated and interpreted, the researcher just needs to determine the data he wants to use, i.e., the data that is necessary for his project. 

Primary Research vs. Secondary Research

Research that involves the collection of new information, or "primary" research, is distinguished from secondary research by the fact that it is conducted for the first time on a particular topic. Instead, secondary research makes use of information that has previously been gathered through primary research. The fundamental dividing line between primary and secondary research is whether the research has been done before. 

5. Market Research 

Market research on branding can help a business develop, launch, and sustain its brand. This may involve the firm's ethos, branding, visuals, ideals, or very name. Interviews, focus groups, and surveys are all viable options for conducting research. 

6. Customer Research 

Market research on customers is learning what factors most strongly affect your demographic of interest and what adjustments may be made to better attract and retain them as paying customers. The objective of this study is to acquire an intimate understanding of your consumer base and their habits and preferences as they relate to your business. 

7. Competitor Research 

Conducting market research on your competitors entails learning about their businesses and assessing how they stack up against your own. Your competitive product in the market or how to break into a new market could also be a topic of discussion. The study's overarching goal is to help your company prepare for the future by identifying methods to set itself apart from competitors and by learning from customers' opinions and suggestions. 

8. Product Research 

Conducting market research on your items is essential to ensuring they will sell successfully once they hit the shelves. Finding out how people feel about your product and if they feel it's valuable and functioning properly is the goal of this study. The ability to think creatively about enhancements and new features is another benefit. 

Benefits of Market Research 

According to a survey, the market research business is expected to increase at a rate of 12-14% (The Economic Times) per year through FY26, at which point it would have surpassed the $4 billion mark. 

The following is a list of the most important reasons and benefits of marketing research: 

It's a great tool for boosting companies' standing. The ability to think critically and act on that thinking is the key to success. You can keep your business one step ahead of the competition by conducting market research to expand your knowledge of your market or target audience. 

Reduces the potential for loss on an investment. This is a basic point to think about, but it is often crucial to the success of a firm. When starting a firm, it makes sense to spend what amounts to a negligible amount on research and testing the market, product, concept, or idea. 

Possible dangers and benefits are highlighted. Insurance against these two glaring pitfalls lies in both primary research (fieldwork) and secondary research (desk research). Opportunities or red flags may be uncovered through the combination of this with qualitative research for further investigation. 

You can learn more about the advantages and disadvantages of your own business and of your competitors. To achieve entirely objective reporting, it is generally recommended to collaborate with a market research agency. Take advantage of what you've learned from study to improve in areas where you're weak and to gain an edge over the competition. 

Strategic preparation is helped by this. Where do you stand with the core principles of your company plan? If it's supported by data, and you've put in the time and effort to do your own (hopefully continuous) research, you can rest assured that you're giving yourself the best chance of success in your commercial endeavors. 

This aids in the identification of developing tendencies. Being the first, the best, or coming up with the idea that nobody else has is typically what it takes to stay ahead in business. Taking the pulse of your industry on a regular basis is an important habit. You can learn more about the tools available to you to identify and capitalize on these trends by consulting with a research firm or expert. 

Helpful for firms in keeping up with the competition. Being the best calls for an insatiable need for knowledge and a propensity to experiment. The key to success, and the ability to maintain that success, is knowing how to effectively apply the information gleaned from market research, audience research, and data research. 

It includes forecasts for future income. One of the most important parts of any market study is a forecast, which looks into the future and predicts the size, makeup, and trends of the market you're interested in. This allows for the categorization of prospective clients. You should prioritize the market that is the best fit for your business rather than the largest or fastest-growing. 

It's geared toward meeting the wants and desires of its patrons. Many things in business, including research, benefit from keeping clients front and center. By reaching out to individuals through online panels, web forums, telephone surveys, in-depth interviews, and focus groups, market researchers can learn where their business's ideas, services, and products can be strengthened. 

Using this method, one can measure the progress of one's company against predetermined standards. Utilize data gathered from the market to study the competition, gauge employee enthusiasm, identify knowledge or skill shortages, and identify development opportunities. This will allow you to consider novel approaches, ideas, and resources for boosting your company's efficiency. 

Market Research Tools 

In order to better understand your market and target audience, you need to use market research techniques. It's fundamental to every company's success, and in today's more crowded marketplace, a thorough familiarity with your target market is more important than ever. Good news: you don't have to be an "insights genius" to get started collecting the data you need, owing to the proliferation of market research tools. Some of the best and most widely used methods of market research include: 

• Answer the Public 
• Attest 
• Google Trends 
• Social Mention 
• Remesh 
• Heartbeat Ai 
• Think With Google 
• Spyfu 
• Latana 
• BuzzSumo 
• Statista 
• Typeform 
• Otter.ai 
• Dimensions.ai 

How to Conduct Research for Your Business: Market Research Strategies 

Despite their different objectives, market research and marketing research should use the same framework for gathering and analyzing information about your company's target audiences. These help in primary research as well as secondary research.  

Clearly identify the problem at stake. Establish an initial research topic. Having a clear research question in mind will allow you to better organize your findings. 

Start by figuring out your financial and time constraints. How much money do you have to put into your study? When do you anticipate finishing data collection? Research, like any other tactic for expanding your company, should be carried out within your means. Nonetheless, it may be worthwhile to spend more money to receive the most comprehensive results available, especially if the questions you are answering are time-sensitive. 

Planning your approach and requirements. Find out what information needs to be gathered and figure out how to get it. Observation, surveys, phone calls, and focus groups are among the alternatives. Consult a professional research agency if you are unsure of how to organize your data collection. 

Pick a way to sample the data. I need to know how you plan on picking people to take part in your study. You may require a cross-section of the consumer population at large, a subset of the population who share a particular characteristic of their way of life, or just the opinions of those who are already familiar with your brand. Develop a plan for tracking down and contacting the persons who will take part in your research. 

Prepare a data analysis strategy. Think about the methods you'll use to examine the data. Do you require numbers for statistical analysis, or can you get a sense of things from qualitative, observable data? Spend some time learning about the many types of analysis so you can pick the one that will yield the most useful results for your study. 

Gathering information. The next step is data collection, which may begin once you have settled on a research question and developed a strategy for answering it within the bounds of your time and money. Research is often outsourced to professional firms or consultants by many corporations. 

Examining the information. It is important to apply certain methods of analysis to make sense of your data, no matter how simple it may appear at first. Which analytical techniques you employ are most suited to your data is a function of the information you've gathered. Also, this is the time to double-check for any mistakes that might have crept into your data gathering, analysis, or sampling. 

Make the report you need. Concluding your research with a written report is the next to last stage. From formulating a problem statement to discussing the findings of your data study, your report should include it all. 

Why is Market Research Important?

Over 44,000 businesses across the United States provide some form of market research. Their total annual income is around $23 billion (QuestionPro).  

The importance of Market Research is the following -  

1. Identifies new products or services

By conducting market research, a business can learn what consumers want and how to best meet their demands. Identifying the major challenges associated with creating a product or service can help you save money. It's useful for figuring out what customers value most and how to implement that into your product or service offering. 

2. Identifies potential customers

You may learn more about your clientele by analyzing demographic information like their gender, age, income, occupation, and interests. You'll have a better idea of who to target with your future advertising efforts if you have a clear picture of your current clientele. When a product is marketed to the wrong demographic, sales suffer. 

3. Establishes viability of a product or service

If your organization is considering introducing a novel product or service to consumers, you should find out if there is a need for it. Do people need this product? Do the people you plan to sell to actually want this product? Does it have any chance of succeeding, and does it even have a chance of being a viable trend? 

4. Anticipates and discovers future market trends 

If you are familiar with your market and the tendencies that are just beginning to emerge, you will be better prepared to build tactics to combat any negative tendencies that may threaten your company. As a result, you can use rising tendencies to your advantage and propel your company forward. 

5. Keeps your company ahead of competitors

Examining your company's performance in relation to that of its rivals is a prime use for comparative research. If they're much ahead of you, it's a fantastic chance to figure out what you're doing wrong. It is possible to devise business plans that will help you surpass the competition. 

6. Decide the best marketing strategy

Conducting research is helpful for pinpointing the optimal distribution platform for reaching your target audience. If you find out that a large portion of your audience prefers one form of communication over another, it makes sense to concentrate your efforts there. Because of the scarcity of these resources, it only makes sense to direct them toward endeavors with a high probability of success. 

7. Reduces risk and increases profitability

The ability to assess the value of potential risks in light of past performance and anticipated future market behavior is a crucial business skill. The success or failure of a business idea depends heavily on the results of market research. Understanding your consumers and their habits is another crucial step in risk reduction. Taking less risk leads to greater financial rewards. 

8. Identifies threats and opportunities

The SWOT analysis is likely familiar to many of you. The acronym SWOT refers to a company's "strengths," "weaknesses," and "All four of them can be figured out with the use of market research . While a lot of data can be collected through market research, not all of it needs to be used. Use only information that is directly related to your major objective (which you will have established in advance). 

9. Helps to understand existing customers

By conducting market research, you can learn more about your current clientele. Because of this complexity, you can't assume that you know what your clients require. If you want to be successful, you need to take the temperature of your clientele on a frequent basis. Satisfaction levels among customers can also be measured with the help of surveys. You can find out what is bothering them and make adjustments if necessary. If they are already rather high, you can examine the factors that led to this success and implement changes to maintain it. 

10. Assists in realistic goal setting

Goals that are more realistic can be established with the support of up-to-the-minute information on your market and customer base. Knowing what to expect and how to realistically expand growth over time is greatly aided by establishing a growth pattern throughout time. Setting objectives that are too lofty will cause you to waste time and energy trying to achieve something that is impossible. 

How Efficient is Market Research? 

You should only invest time, energy, and money into market research if you expect to see a favorable return on that investment. Because it is so worthwhile, market research continues to play a significant role in the success of any organization. Market research won't ensure your company's success on its own, but it will arm you with the data you need to make the moves that will. 

Many of the advantages of this type of study were examined, but the drawbacks were also taken into account. If you don't conduct market research, you run the danger of losing clients to the competition, missing out on growth prospects, being more susceptible to hazards, making bad business decisions, and more. Some companies succeed without first doing their homework, but those situations are unusual. To build your firm and avoid typical errors, conduct market research. 

Market Research Methods  

Although there are a variety of approaches to conducting market research, the majority of companies opt to utilize one of the following five fundamental approaches: surveys, focus groups, personal interviews, observation, and field trials. Which strategies you decide to implement for your company will depend on the kinds of data you require as well as the amount of money you are ready to pay. Some of the major methods of market research are following - 

1. Surveys 

Surveys ask participants questions. They can use numerous survey methods. Surveys are a cost-effective technique to collect data for the study. Written surveys may encourage truthful responses since participants feel like they're speaking privately. 

2. Discussions 

Focus groups are moderated discussions. Companies assemble consumers to conduct focus groups, pose questions, and record replies. Participants' replies may reveal what consumers want in a firm or a product because they represent a broad group. Focus groups offer longer participant interaction than surveys. 

3. Interviews 

An interview combines focus group and one-on-one survey aspects. It includes recording one participant's comments at a time. Open-ended questions elicit in-depth answers from the interviewee. Researchers can ask follow-up questions and let interviewees ask their own. 

4. Social media listening 

Social media users routinely discuss corporations and their products. Researchers can search for discussion topics and measure consumer sentiment through social media listening. 

5. Observations 

Observation in market research means studying how consumers shop. Filming shoppers in a store and studying their shopping habits is common. This strategy can reveal their natural selves if they are ignorant of the observation. 

6. Experiments 

In a field trial, a corporation lets participants use a product under typical conditions and collects data. Participants' feedback was used to improve the product. 

7. Competitive analysis 

Competitive analysis is a secondary market research process where companies acquire and analyze competition information. It entails identifying primary and secondary rivals and analyzing their offerings, revenues, and marketing methods. 

8. Statistics 

Public data entails seeking and evaluating public market data. This research is often free online or in libraries. Research centers, polls, or government databases may provide this information. Public data is often used to confirm or compare primary market research. 

9. Purchased data 

Companies without the time or resources to perform their own market research can buy it. Several market research companies sell database subscriptions. Small and medium-sized businesses that can't afford primary market research may benefit from this approach. 

10. Analysis of sales data 

Competition analysis is just one way that may be used in tandem with sales data analysis to show how different business tactics affect revenue. It can also reveal consumers' buying behavior and consumer trends. 

Functions of Marketing Research  

The following are the main functions of Marketing Research - 

Description: Marketing research details customers. Age, sex, education, income, etc., are listed. It describes the market and competitors. This description helps marketing decision-makers and problem-solvers. 

Evaluation: Marketing research evaluates firm performance. It evaluates production and marketing policies. It measures customer reactions to product quality, price, packaging, advertising, sales, and promotions. If consumers dislike the company's policies, they must alter them. It contrasts company and rival policies. 

Explanation: Marketing research answers all marketing questions. It explains why sales are declining, why retailers are unhappy, etc. It explains the problem's causes. It gives a solution. 

Prediction: Marketing research forecasts. Predictions are future forecasts. It predicts sales, market prospects, dangers, marketing environment, customer behavior, etc. All predictions may be wrong. Predictions help the organization create plans and policies. It helps seize possibilities. It prevents future hazards. 

Decision Making: Marketing research aids decision-makers. It gives decision-making data. Decision-making involves choosing between options. Decision-making requires accurate data. MR helps the marketer decide. It gives decision-making data. It offers alternatives. It compares each option's pros and cons. It helps marketing managers choose the right action. 

Conclusion 

The world's markets are changing at a dizzying rate, making it more important than ever for companies to adapt quickly enough to be competitive. One method is to conduct market research. The results of your market research and analysis will provide you with a thorough understanding of your target audience's wants and needs, as well as your competitors' strengths and weaknesses. 

The key to making your business successful in the face of intense competition is identifying and fixing your deficiencies. The right market research tools will aid you in doing just that! The time to begin expanding your company is now.  

With a presence in New York, San Francisco, Austin, Seattle, Toronto, London, Zurich, Pune, Bengaluru, and Hyderabad, SG Analytics, a pioneer in Research and Analytics, offers tailor-made services to enterprises worldwide.    

A leader in  Market research services , SG Analytics enables organizations to achieve actionable insights into products, technology, customers, competition, and the marketplace to make insight-driven decisions.  Contact us  today if you are an enterprise looking to make critical data-driven decisions to prompt accelerated growth and breakthrough performance.

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• Market Research

Effective Market Research: A Step-by-Step Guide

Key Takeaways

• Informed Decision-Making: Master the art of Effective Market Research for strategic decision-making that aligns with market dynamics and consumer behaviors.
• Targeted Strategies: Define your audience, analyze competitors, and choose the right methods to tailor strategies that resonate, ensuring relevance and engagement.
• Continuous Excellence: Elevate your market research journey with ongoing learning. Leverage additional resources, monitor, adapt, and refine strategies for sustained success.

In the ever-evolving landscape of business, one indispensable compass guides decision-makers through the dynamic currents of industry trends, consumer behaviors, and competitive landscapes—Effective Market Research.

As the lifeblood of strategic planning, market research serves as the cornerstone upon which successful enterprises build their foundations.

In this comprehensive Effective Market Research: A Step-by-Step Guide, we embark on a journey of discovery, demystifying the intricacies of market research and equipping you with the tools to navigate the complex realms of your industry.

Why is Market Research Crucial?

In a world where change is the only constant, successful businesses are those that embrace adaptability, innovation, and a profound understanding of their market.

Market research isn’t just a buzzword. It’s the linchpin that connects businesses to the pulse of their target audience, enabling them to foresee shifts in demand, identify unmet needs, and tailor their strategies with surgical precision.

The Significance of Strategic Planning

Effective market research transcends the realm of data collection; it is the catalyst for strategic planning that empowers businesses to make informed decisions.

In a landscape where the competition is fierce and consumer preferences are as dynamic as ever, a strategic approach to market research becomes the differentiator between market leaders and followers.

Navigating Our Step-by-Step Guide

Embarking on the journey of effective market research necessitates a structured approach.

Our step-by-step guide is designed to be your compass, steering you through the nuanced process of gaining actionable insights.

From laying the groundwork with a fundamental understanding of market research principles to implementing strategic changes based on findings, each section of this guide is a building block for comprehensive market intelligence.

But Why a Step-by-Step Guide?

Navigating the vast ocean of market research can be overwhelming, especially for those new to the concept or seeking to enhance their existing practices.

This step-by-step guide is crafted to demystify the process, breaking down complex concepts into digestible segments.

Whether you’re a seasoned entrepreneur, a startup enthusiast, or a marketing maven, this guide provides actionable insights that transcend industry boundaries.

Prepare to embark on a transformative journey—one where the compass is market research, and the destination is unparalleled business insight.

Together, let’s navigate the intricate waters of the business landscape and unveil the power of Effective Market Research—a guide designed not only to inform but to empower, ensuring that your business not only survives but thrives in the ever-evolving marketplace.

Before we venture further, we like to share who we are and our digital experiences.

About AppLabx

From developing a solid marketing plan to creating compelling content, optimizing for search engines, leveraging social media, and utilizing paid advertising,  AppLabx  offers a comprehensive suite of digital marketing services designed to drive growth and profitability for your business.

AppLabx is well known for helping companies and startups use market research techniques and tools to drive web traffic to their websites and web apps and optimize their customer experience.

At AppLabx, we understand that no two businesses are alike. That’s why we take a personalized approach to every project, working closely with our clients to understand their unique needs and goals, and developing customized strategies to help them achieve success.

If you need a digital consultation, then send in an inquiry  here .

• Understanding the Basics of Market Research
• Defining Your Target Audience
• Conducting Competitor Analysis
• Choosing the Right Research Methods
• Collecting and Analyzing Data
• Interpreting Research Findings
• Implementing Changes Based on Research
• Monitoring and Adapting
• Tips for Effective Market Research
• Additional Resources

1. Understanding the Basics of Market Research

In the pulsating realm of business strategy, market research stands as the bedrock upon which successful ventures are built.

Before delving into the intricate steps of effective market research, let’s establish a solid foundation by comprehending the basics.

Definition and Purpose

Market research, at its core, is the systematic gathering, analysis, and interpretation of information to gain insights into a market, enabling informed decision-making.

Its purpose extends beyond mere data collection; it serves as a strategic tool to identify opportunities, mitigate risks, and optimize business performance.

According to the Business Research Company, the global market research industry is projected to reach $95.49 billion in 2027 , underlining its critical role in the business landscape.

Types of Market Research

To navigate the market research landscape effectively, it’s essential to discern between two primary types: primary and secondary research.

Primary Research

This involves the direct collection of data from original sources, such as surveys, interviews, and focus groups.

For instance, a leading smartphone manufacturer conducts primary research by engaging with potential customers through beta testing and gathering firsthand feedback on features, usability, and preferences.

Secondary Research

Secondary research involves the analysis of existing data and sources, including industry reports, competitor publications, and government databases.

According to the Business Research Company, the secondary research market is predicted to grow at a CAGR of 5.3% between 2021 and 2026 , showcasing its increasing importance in the business landscape.

Identifying Research Objectives

Before embarking on a market research endeavour, it’s crucial to clearly define research objectives. These objectives serve as the guiding lights, steering the research process toward valuable outcomes.

For instance, a startup in the health and wellness industry may set research objectives to understand consumer preferences for organic products, identify market gaps, and assess the competitive landscape.

By establishing these fundamental principles, businesses can lay the groundwork for a targeted and purposeful market research strategy, setting the stage for actionable insights and strategic decision-making.

2. Defining Your Target Audience

In the labyrinth of market dynamics, pinpointing and understanding your target audience is akin to discovering the treasure map to business success.

This section delves into the intricacies of defining your target audience, exploring why it’s a paramount step in effective market research.

Importance of Target Audience Definition

The most important part of successful marketing lies in resonance—establishing a profound connection with your audience.

To achieve this, businesses must first define their target audience with meticulous precision.

Creating Buyer Personas

Buyer personas are archetypal representations of your ideal customers, crafted through in-depth research and analysis.

These personas encapsulate demographic, psychographic, and behavioral traits, offering a comprehensive snapshot of your target audience.

Demographic and Psychographic Data Integration

Demographic data (age, gender, income) and psychographic data (lifestyle, values, interests) are indispensable building blocks for creating robust buyer personas.

For instance, a fitness apparel brand defines its target audience not just by age and gender but also by psychographic data, such as an interest in sustainable living and an active lifestyle. This nuanced approach aids in tailoring products and messaging to resonate with the audience on a deeper level.

Utilizing Data Analytics for Precision

In the era of big data, leveraging advanced analytics tools becomes crucial for refining and validating target audience definitions.

Data analytics not only validates assumptions but also unveils nuanced patterns and preferences.

By combining demographic and psychographic insights and harnessing the power of data analytics, businesses can finely sculpt buyer personas that serve as the cornerstone for targeted marketing campaigns and product development.

3. Conducting Competitor Analysis

In the ever-evolving landscape of business, understanding your competitors is not just a tactical advantage but a strategic imperative.

This section delves into the intricacies of conducting competitor analysis, providing a roadmap for businesses to glean actionable insights and fortify their market position.

Identifying Competitors: The Starting Line

Before delving into analysis, businesses must first identify their competitors—both direct and indirect.

Direct competitors offer similar products or services, while indirect competitors may serve the same need but through different means.

Analyzing Competitor Strengths and Weaknesses

Understanding the strengths and weaknesses of competitors provides a nuanced view of the competitive landscape. SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) is a powerful tool in this regard.

Example: SWOT Analysis in Action

Let’s consider a scenario in the e-commerce sector. A new entrant conducts a SWOT analysis of a major competitor:

• Strengths: Established brand, and wide product range.
• Weaknesses: Slow website loading times, and limited customer engagement.
• Opportunities: Emerging markets, and untapped customer segments.
• Threats: Increasing competition, and changing consumer preferences.

Leveraging Technology for Competitive Insights

Technology has become an indispensable ally in the quest for competitive intelligence. AI-driven tools, web scraping, and social media monitoring offer real-time insights into competitor activities and consumer sentiments.

According to a report by Markets and Markets, the business intelligence market is projected to grow from USD 23.1 billion in 2020 to USD 33.3 billion by 2025 .

Benchmarking Strategies for Success

Benchmarking involves comparing your products, services, or processes against the best performers in your industry. This process not only highlights areas for improvement but also unveils opportunities for innovation.

4. Choosing the Right Research Methods

In the multifaceted realm of market research, selecting the appropriate research methods is akin to choosing the right tools for a craftsman.

This section is dedicated to unravelling the intricacies of choosing the right research methods and exploring a spectrum of approaches that cater to diverse business needs.

Surveys and Questionnaires: Tapping into Mass Perspectives

Surveys and questionnaires stand as stalwarts in gathering quantitative data from a large audience.

Whether distributed through traditional means or online platforms, they offer scalable insights.

Interviews and Focus Groups: Unveiling Nuanced Perspectives

When depth and context are paramount, interviews and focus groups step into the spotlight.

These qualitative methods provide nuanced insights, capturing the intricacies of individual experiences and group dynamics.

Example: Focus Groups in Product Development

A technology company considering a new product may conduct focus groups to understand user expectations, pain points, and feature preferences. This qualitative approach offers invaluable insights into the user experience.

Observational Research: Understanding Behavior in the Wild

Observational research involves studying subjects in their natural environment without direct interaction. This method is particularly useful for understanding consumer behaviour in real-world scenarios.

Data Mining and Analytics: Unearthing Patterns in Big Data

In the age of big data, data mining and analytics emerge as transformative tools for market researchers. By sifting through vast datasets, businesses can identify patterns, correlations, and trends.

In a report, businesses leveraging big data analytics witness 15% more sales than companies that fail to do so, as cited by SCORE.

Choosing the Right Mix for Comprehensive Insights

The effectiveness of market research often lies in a judicious mix of research methods.

Combining quantitative approaches like surveys with qualitative methods like interviews ensures a comprehensive understanding of the market landscape.

5. Collecting and Analyzing Data

In the data-driven landscape of market research, the twin pillars of success rest upon the meticulous collection and insightful analysis of data.

This section navigates through the nuances of these critical processes, showcasing how businesses can harness the power of data for informed decision-making.

Data Collection Tools and Techniques: Precision in Practice

Choosing the right tools for data collection is paramount to the accuracy and reliability of research outcomes. Various methods and technologies cater to diverse research needs.

Example: Online Surveys with Google Forms

A global fast-food chain seeking customer feedback may deploy Google Forms for online surveys.

This user-friendly tool not only facilitates large-scale data collection but also offers seamless integration with analytics platforms.

Quantitative vs. Qualitative Data: A Balancing Act

The choice between quantitative and qualitative data depends on the research objectives.

Quantitative data provides numerical insights, while qualitative data delves into the context and depth of responses.

Both quantitative and qualitative methods to ensure a comprehensive understanding of public opinion.

Data Analysis Tools and Software: Unleashing the Power of Technology

The rise of big data has catalyzed the development of advanced data analysis tools and software.

From Microsoft Excel to sophisticated AI-driven platforms, businesses have an array of options to extract meaningful insights.

Example: Tableau in Visual Analytics

A multinational retailer may utilize Tableau for visual analytics, transforming raw data into interactive visualizations.

This not only aids in pattern recognition but also enhances data-driven decision-making.

The global data analytics market is expected to reach $132.9 billion by 2026 , as cited by GlobeNewswire.

Ensuring Data Accuracy and Reliability: The Bedrock of Insights

The integrity of market research hinges on the accuracy and reliability of the collected data.

Rigorous validation processes, random sampling techniques, and data cleansing practices contribute to the trustworthiness of findings.

Ethical Considerations in Data Collection: Upholding Integrity

As technology advances, ethical considerations in data collection become increasingly vital.

Businesses must prioritize user privacy, consent, and transparency to build trust with their audience.

A survey reveals that 93% of consumers believe it’s important for companies to ensure their data is used ethically , as cited by Deloitte Digital, Australia.

6. Interpreting Research Findings

Interpreting research findings is the transformative stage where raw data metamorphoses into actionable intelligence.

This section illuminates the intricacies of this crucial phase, offering insights into how businesses can unlock the true potential of their market research endeavours.

Drawing Conclusions: Connecting the Dots

Interpreting research findings involves synthesizing data points to draw meaningful conclusions. It’s the bridge between data collection and strategic decision-making, requiring a keen eye for patterns and trends.

Example: Consumer Behavior Analysis

A global e-commerce giant, armed with data on customer preferences, may conclude that a specific demographic prefers mobile shopping apps over desktop websites. This insight informs targeted marketing strategies and app optimization.

Making Informed Decisions: Guiding the Way Forward

Informed decision-making is the ultimate goal of market research.

Interpreted findings provide the roadmap, guiding businesses toward strategies that align with market dynamics and consumer expectations.

Addressing Limitations and Biases: Navigating Imperfections

No research is immune to limitations and biases.

Acknowledging and addressing these imperfections is crucial for maintaining the credibility and reliability of research findings.

Leveraging Visualization Tools: Bringing Data to Life

Visualization tools play a pivotal role in simplifying complex data sets, making it easier for stakeholders to grasp insights.

From charts and graphs to interactive dashboards, these tools enhance the communicative power of research findings.

A study shows that 49% of businesses consider visualization critical in effective decision-making .

7. Implementing Changes Based on Research

In the dynamic landscape of business, the true power of market research is unleashed when findings are translated into actionable strategies.

This section explores the intricacies of implementing changes based on research, illustrating how businesses can transform insights into tangible results.

Strategic Planning: Blueprint for Success

Strategic planning is the linchpin between research findings and successful implementation.

It involves crafting a roadmap that aligns business goals with the insights garnered from market research.

Example: E-commerce Expansion Strategy

A retail giant, armed with insights about emerging markets and changing consumer preferences, may decide to implement a strategic plan to expand its e-commerce presence. This decision is rooted in the research-backed understanding of market dynamics.

Product or Service Adjustments: Aligning with Market Needs

Market research often reveals opportunities for product or service adjustments. Whether it’s introducing new features, optimizing existing offerings, or addressing unmet needs, these adjustments are vital for staying relevant.

Example: Tech Product Iterations

A technology company, after conducting user feedback surveys and analyzing market trends, might release software updates to address user pain points and enhance overall user experience.

Marketing and Communication Strategies: Targeted Outreach

Market research shapes marketing and communication strategies by providing insights into consumer preferences, effective channels, and messaging that resonates. This ensures that promotional efforts are finely tuned for maximum impact.

Example: Strategic Marketing Campaigns

A beverage company, having identified through market research that its target audience values sustainability, may launch a marketing campaign emphasizing eco-friendly packaging.

This not only aligns with consumer values but also differentiates the brand in a crowded market.

Measuring and Adapting: The Continuous Cycle

Implementing changes based on research is an iterative process that requires continuous measurement and adaptation. Key Performance Indicators (KPIs) and metrics are essential for gauging the success of implemented strategies.

Example: E-commerce Conversion Rates as a KPI

An online retailer, after implementing changes informed by market research, might track e-commerce conversion rates to measure the effectiveness of the adjustments. This data guides further adaptations for optimal performance.

8. Monitoring and Adapting

In the ever-evolving landscape of business, the journey doesn’t end with implementing changes based on research; it extends into the realm of continuous monitoring and adaptation.

This section explores the significance of this iterative process, shedding light on how businesses can stay agile and responsive to dynamic market forces.

Continuous Monitoring: Staying Ahead of the Curve

Continuous monitoring involves the real-time tracking of key performance indicators (KPIs), market trends, and consumer behaviours. It is the compass that guides businesses through the ever-shifting currents of the market.

Example: Real-Time Analytics in E-commerce

An e-commerce platform employing real-time analytics can monitor website traffic, conversion rates, and customer interactions. This allows for the swift identification of emerging trends and the timely adjustment of strategies.

Key Performance Indicators (KPIs): Metrics for Success

KPIs serve as benchmarks for evaluating the success of implemented strategies. From sales figures to customer satisfaction scores, businesses must define and track KPIs that align with their goals.

Example: Customer Retention Rate

A subscription-based service may monitor its customer retention rate as a KPI.

If the rate declines, it signals potential issues, prompting a closer examination of the service and possible adjustments.

A study showed that increasing customer retention rates by just 5% can boost profits by 25-95% , as cited by Help Scout.

Adapting to Market Changes: Agility in Action

Market dynamics are in constant flux, necessitating an agile approach to business strategies.

Adapting to changes requires a proactive mindset, informed by ongoing research and a willingness to adjust course.

Example: Responsive Social Media Engagement

A company, monitoring social media sentiment through listening tools, may detect a shift in consumer perceptions.

Swift adaptation, such as altering marketing messaging or addressing concerns, showcases responsiveness.

Benchmarking Against Competitors: Staying Competitive

Benchmarking involves comparing key metrics against industry peers to gauge performance. Regular assessments against competitors provide insights into relative strengths and areas for improvement.

Example: Competitive Pricing Benchmarking

A retail brand may routinely benchmark its pricing against competitors to ensure competitiveness. Adjustments based on this benchmarking can be crucial for maintaining market share.

Customer Feedback Loops: A Continuous Dialogue

Establishing customer feedback loops ensures an ongoing dialogue with the audience. Listening to customer insights provides valuable information for refinement and adaptation.

Example: Feedback Integration in Software Development

A software company incorporating customer feedback loops during beta testing can identify bugs, usability issues, and feature requests. This iterative feedback process leads to a refined, customer-centric product.

In a study, 86% of customers are willing to pay more for a better customer experience .

9. Tips for Effective Market Research

Embarking on a journey of effective market research requires more than just the right tools—it demands a strategic mindset and a nuanced approach.

This section unveils a compendium of tips to enhance the effectiveness of your market research endeavours, drawing insights from industry best practices and real-world examples.

Stay Updated on Industry Trends: The Pulse of Innovation

Staying abreast of industry trends is not merely a suggestion but a strategic imperative. In a landscape where change is constant, businesses that anticipate and adapt to trends position themselves as industry leaders.

Example: Tech Companies Anticipating Trends

Leading technology companies routinely invest in research and development to anticipate emerging trends. For instance, the integration of artificial intelligence into consumer electronics aligns with the trend towards smart, interconnected devices.

Incorporate Customer Feedback: A Goldmine of Insights

Customers are the heartbeat of any business, and their feedback serves as a treasure trove of insights. Actively seeking and incorporating customer feedback fosters a customer-centric approach and helps in refining products and services.

Example: Iterative Product Development

Companies like Apple regularly solicit customer feedback through surveys and user forums . This iterative feedback loop contributes to the refinement of software updates and the development of new features in their products.

Collaborate with Cross-Functional Teams: Holistic Insights

Effective market research isn’t confined to a single department—it’s a collaborative effort that benefits from the diverse perspectives of cross-functional teams. Collaboration ensures a comprehensive understanding of market dynamics.

Research by McKinsey highlights that companies with diverse executive teams are more likely to outperform their peers in profitability .

Example: Product Launch Strategy

When launching a new product, cross-functional collaboration is vital. Marketing teams bring consumer insights, R&D teams provide technical perspectives, and sales teams contribute market feedback. This synergy ensures a well-rounded product launch strategy.

Utilize Advanced Analytics: From Data to Actionable Insights

In the era of big data, leveraging advanced analytics tools is non-negotiable. These tools transform raw data into actionable insights, unveiling patterns and correlations that might otherwise remain hidden.

Example: Predictive Analytics in Retail

Retailers leverage predictive analytics to forecast demand, optimize inventory, and personalize marketing strategies. For instance, Amazon’s recommendation engine utilizes predictive analytics to suggest products based on customer browsing and purchase history.

Regularly Revisit and Refine Research Objectives: Agile Adaptation

Market dynamics are fluid, and research objectives must evolve in tandem. Regularly revisiting and refining research objectives ensures that the research remains aligned with shifting business priorities and market trends.

Example: Quarterly Objectives Review

A consumer goods company may conduct quarterly reviews of research objectives, considering changes in consumer behaviour, market trends, and competitive landscapes. This iterative approach ensures research remains relevant and impactful.

10. Additional Resources

Navigating the vast landscape of market research requires a diverse toolkit and a wealth of knowledge.

This section unveils a curated selection of additional resources—ranging from industry reports to online courses—designed to empower businesses and individuals in their pursuit of comprehensive market insights.

Industry Reports and Publications: In-Depth Insights at Your Fingertips

• Statista : Statista provides comprehensive industry reports, infographics, and statistical insights. From global market trends to consumer behaviour, this platform offers a wealth of information. Statista boasts over 1.9 million statistics covering more than 80,000 topics .
• MarketResearch.com : A comprehensive repository of market research reports spanning various industries. Whether seeking insights on emerging technologies or global market trends, MarketResearch.com provides a rich collection of reports.

Online Courses and Training Programs: Sharpening Research Skills

• Coursera – Market Research and Consumer Behavior : This online course, offered by the Wharton School of the University of Pennsylvania, delves into the fundamentals of market research and consumer behaviour. With video lectures and interactive assignments, it provides a structured learning experience. Coursera, as of 2022, boasts over 100 million learners worldwide .
• LinkedIn Learning – Market Research Foundations : This course, available on the LinkedIn Learning platform, provides a practical guide to market research essentials. From defining research objectives to analyzing data, it equips learners with actionable skills. LinkedIn, the parent company of LinkedIn Learning, has over 774 million members as of 2022 .

Professional Organizations: Networking and Insights Exchange

• American Marketing Association (AMA) : The AMA serves as a hub for marketers and researchers. Membership provides access to research publications, industry events, and a network of professionals, fostering continuous learning. The AMA has over 30,000 marketing professionals and academics globally .
• Insights Association : The Insights Association offers resources, events, and a community for professionals in the insights and data analytics space.

Blogs and Online Communities: Real-World Insights Sharing

• GreenBook Blog : GreenBook is a leading market research blog covering industry trends, innovations, and thought leadership. It’s a go-to resource for staying updated on the dynamic landscape of market research. The GreenBook Blog features articles, interviews, and insights from industry experts, creating a repository of valuable content.
• Quirks.com : Quirks is an online platform offering articles, case studies, and insights on market research and consumer behavior. It provides a space for professionals to share their experiences and learn from one another. Quirks.com hosts webinars, conferences, and forums, fostering engagement and knowledge exchange within the market research community.

Government and Nonprofit Resources: Reliable Data Repositories

• U.S. Census Bureau – Economic Census : The U.S. Census Bureau provides a wealth of economic data through the Economic Census. It offers insights into industries, businesses, and the overall economic landscape. The Economic Census collects data on the U.S. economy from over 7 million businesses in order to cover nearly all of the nation’s business sector establishments and provides detailed industry-level data.
• World Bank – Data : The World Bank’s data repository offers a global perspective, providing access to a wide range of economic, social, and environmental data. It’s a valuable resource for understanding global market trends. The World Bank serves 189 member countries , providing a comprehensive view of global economic indicators.

As we conclude this expedition into the realm of effective market research, it’s essential to reflect on the transformative power that meticulous research holds for businesses.

The journey we’ve undertaken, step by step, through the intricate process of market research, unveils a roadmap to informed decision-making, strategic planning, and sustained success.

The Tapestry of Insights Woven

Effective market research is not a mere checklist; it’s a dynamic tapestry woven from diverse threads of data, insights, and strategic acumen.

From understanding the basics of market research to implementing adaptive strategies, each phase is a brushstroke contributing to the masterpiece of market intelligence.

Realizing the Potential of Understanding

The foundational step, understanding the basics of market research, lays the groundwork for all subsequent endeavours. It’s the compass that ensures businesses traverse the right paths, avoiding pitfalls and navigating toward success.

By discerning market trends, consumer behaviour, and competitive landscapes, organizations position themselves to make informed decisions.

Identifying the Audience: Precision in Targeting

Defining the target audience isn’t just a box to check; it’s the key to unlocking resonance.

Through demographic insights, psychographic nuances, and a profound understanding of consumer personas, businesses tailor their offerings and messages. The result? An audience that feels seen, heard, and inclined to engage.

Data-Driven Narratives: The Power of Stories

Conducting competitor analysis adds layers to the narrative, transforming it from a solo performance to a dynamic dialogue.

By deciphering competitor strengths, weaknesses, and strategies, businesses craft their own storylines, positioning themselves as protagonists in the market saga.

Choosing Wisely: The Art of Method Selection

The selection of research methods is akin to choosing the right colours for a painting.

Surveys and questionnaires capture broad strokes, while interviews and focus groups delve into intricate details. Like an artist with a palette, businesses choose their methods judiciously, ensuring a harmonious blend that brings their market picture to life.

Data, the Artist’s Palette: Vibrant and Varied

Collecting and analyzing data is the act of infusing life into the canvas.

Whether through surveys, observational research, or advanced analytics, data is the palette from which businesses draw the hues of insights. It’s the key to uncovering patterns, trends, and the ever-elusive “why” behind consumer behaviours.

Interpreting Insights: The Conductor’s Baton

As the conductor interprets the music, businesses interpret their research findings.

This phase is where raw data transforms into actionable intelligence. Drawing conclusions, making informed decisions, and addressing biases—these are the nuances that define the symphony of success.

Visualizing the Symphony: Tools for Clarity

Visualization tools are the conductor’s baton, transforming complex data into a harmonious performance. Whether through charts, graphs, or interactive dashboards, these tools enhance the clarity and communicative power of research findings.

Strategic Implementation: The Grand Performance

Implementing changes based on research is the grand performance—the culmination of meticulous preparation.

Strategic planning, product adjustments, and targeted marketing campaigns are the acts that resonate with the audience. The stage is set for businesses to shine in the spotlight of success.

Continuous Refinement: The Encore

Yet, the journey doesn’t end with applause; it continues with monitoring and adaptation. Continuous refinement ensures that businesses don’t rest on past laurels but evolve with the changing cadence of the market.

Key performance indicators, customer feedback, and benchmarking become the instruments for an encore performance.

Resources for Ongoing Excellence: The Library of Wisdom

As businesses navigate this dynamic landscape, additional resources emerge as companions in the journey.

Industry reports, online courses, professional organizations, blogs, and government repositories form a library of wisdom. Accessible and diverse, these resources empower businesses to stay informed, agile, and ever-ready for the next chapter.

The Culmination: A Symphony of Success

In conclusion, effective market research is not a one-time event—it’s a continuous symphony.

It requires a conductor’s finesse, an artist’s creativity, and a scholar’s curiosity. From understanding the basics to embracing ongoing learning, businesses that immerse themselves in this journey unlock the gates to sustained success.

In this grand symphony of effective market research, businesses find not just notes but the harmonies that lead to enduring success. As the journey continues, may businesses navigate the dynamic score with finesse, creativity, and an unwavering commitment to excellence.

If you are looking for a top-class digital marketer, then book a free consultation slot  here .

If you find this article useful, why not share it with your friends and business partners, and also leave a nice comment below?

We, at the AppLabx Research Team, strive to bring the latest and most meaningful data, guides, and statistics to your doorstep.

To get access to top-quality guides, click over to the  AppLabx Blog.

People also ask

What are the 4 types of market research.

The four types of market research are:

• Exploratory Research: Uncover initial insights.
• Descriptive Research: Analyze and quantify data.
• Causal Research: Explore cause-and-effect relationships.
• Predictive Research: Forecast future trends based on data patterns.

What are the 4 pillars of market research?

The 4 pillars of market research are:

• Defining the Problem: Clearly outline research objectives.
• Designing the Research: Plan methods and strategies.
• Data Collection: Gather relevant information.
• Data Analysis and Interpretation: Transform data into actionable insights for informed decision-making.

What software is used for market research?

Various software tools enhance market research processes, including:

• SurveyMonkey: For creating and conducting surveys.
• Google Analytics: Analyzing website traffic.
• SPSS: Statistical analysis of data.
• Tableau: Data visualization for insights.
• HubSpot: Customer relationship management and marketing analytics.

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Home Market Research

Market Research: What it Is, Methods, Types & Examples

Would you like to know why, how, and when to apply market research? Do you want to discover why your consumers are not buying your products? Are you interested in launching a new product, service, or even a new marketing campaign, but you’re not sure what your consumers want?

LEARN ABOUT: Market research vs marketing research

To answer the questions above, you’ll need help from your consumers. But how will you collect that data? In this case and in many other situations in your business, market research is the way to get all the answers you need.

In this ultimate guide about market research, you’ll find the definition, advantages, types of market research, and some examples that will help you understand this type of research. Don’t forget to download the free ebook available at the end of this guide!

LEARN ABOUT: Perceived Value

Content Index

Three key objectives of market research

Why is market research important.

• Types of Market Research: Methods and Examples

Steps for conducting Market Research

Benefits of an efficient market research, 5 market research tips for businesses, why does every business need market research, free market research ebook, what is market research.

Market research is a technique that is used to collect data on any aspect that you want to know to be later able to interpret it and, in the end, make use of it for correct decision-making.

Another more specific definition could be the following:

Market research is the process by which companies seek to collect data systematically to make better decisions. Still, its true value lies in the way in which all the data obtained is used to achieve a better knowledge of the market consumer.

The process of market research can be done through deploying surveys , interacting with a group of people, also known as a sample , conducting interviews, and other similar processes.  

The primary purpose of conducting market research is to understand or examine the market associated with a particular product or service to decide how the audience will react to a product or service. The information obtained from conducting market research can be used to tailor marketing/ advertising activities or determine consumers’ feature priorities/service requirement (if any).

LEARN ABOUT: Consumer Surveys

Conducting research is one of the best ways of achieving customer satisfaction , reducing customer churn and elevating business. Here are the reasons why market research is important and should be considered in any business:

• Valuable information: It provides information and opportunities about the value of existing and new products, thus, helping businesses plan and strategize accordingly.
• Customer-centric: It helps to determine what the customers need and want. Marketing is customer-centric and understanding the customers and their needs will help businesses design products or services that best suit them. Remember that tracing your customer journey is a great way to gain valuable insights into your customers’ sentiments toward your brand.
• Forecasts: By understanding the needs of customers, businesses can also forecast their production and sales. Market research also helps in determining optimum inventory stock.
• Competitive advantage: To stay ahead of competitors market research is a vital tool to carry out comparative studies. Businesses can devise business strategies that can help them stay ahead of their competitors.

LEARN ABOUT: Data Analytics Projects

Types of Market Research: Market Research Methods and Examples

Whether an organization or business wishes to know the purchase behavior of consumers or the likelihood of consumers paying a certain cost for a product segmentation , market research helps in drawing meaningful conclusions.

LEARN ABOUT: Behavioral Targeting

Depending on the methods and tools required, the following are the types:

1. Primary Market Research (A combination of both Qualitative and Quantitative Research):

Primary market research is a process where organizations or businesses get in touch with the end consumers or employ a third party to carry out relevant studies to collect data. The data collected can be qualitative data (non-numerical data) or quantitative data (numerical or statistical data).

While conducting primary market research, one can gather two types of information: Exploratory and Specific. Exploratory research is open-ended, where a problem is explored by asking open ended questions in a detailed interview format usually with a small group of people, also known as a sample. Here the sample size is restricted to 6-10 members. Specific research, on the other hand, is more pinpointed and is used to solve the problems that are identified by exploratory research.

LEARN ABOUT: Marketing Insight

As mentioned earlier, primary market research is a combination of qualitative market research and quantitative market research. Qualitative market research study involves semi-structured or unstructured data collected through some of the commonly used qualitative research methods like:

Focus groups :

Focus group is one of the commonly used qualitative research methods. Focus group is a small group of people (6-10) who typically respond to online surveys sent to them. The best part about a focus group is the information can be collected remotely, can be done without personally interacting with the group members. However, this is a more expensive method as it is used to collect complex information.

One-to-one interview:

As the name suggests, this method involves personal interaction in the form of an interview, where the researcher asks a series of questions to collect information or data from the respondents. The questions are mostly open-ended questions and are asked to facilitate responses. This method heavily depends on the interviewer’s ability and experience to ask questions that evoke responses.

Ethnographic research :

This type of in-depth research is conducted in the natural settings of the respondents. This method requires the interviewer to adapt himself/herself to the natural environment of the respondents which could be a city or a remote village. Geographical constraints can be a hindering market research factor in conducting this kind of research. Ethnographic research can last from a few days to a few years.

Organizations use qualitative research methods to conduct structured market research by using online surveys , questionnaires , and polls to gain statistical insights to make informed decisions.

LEARN ABOUT: Qualitative Interview

This method was once conducted using pen and paper. This has now evolved to sending structured online surveys to the respondents to gain actionable insights. Researchers use modern and technology-oriented survey platforms to structure and design their survey to evoke maximum responses from respondents.

Through a well-structured mechanism, data is easily collected and reported, and necessary action can be taken with all the information made available firsthand.

Learn more: How to conduct quantitative research

2. Secondary Market Research:

Secondary research uses information that is organized by outside sources like government agencies, media, chambers of commerce etc. This information is published in newspapers, magazines, books, company websites, free government and nongovernment agencies and so on. The secondary source makes use of the following:

• Public sources: Public sources like library are an awesome way of gathering free information. Government libraries usually offer services free of cost and a researcher can document available information.
• Commercial sources: Commercial source although reliable are expensive. Local newspapers, magazines, journal, television media are great commercial sources to collect information.
• Educational Institutions: Although not a very popular source of collecting information, most universities and educational institutions are a rich source of information as many research projects are carried out there than any business sector.

Learn more: Market Research Example with Types and Methods

A market research project may usually have 3 different types of objectives.

• Administrative : Help a company or business development, through proper planning, organization, and both human and material resources control, and thus satisfy all specific needs within the market, at the right time.
• Social : Satisfy customers’ specific needs through a required product or service. The product or service should comply with a customer’s requirements and preferences when consumed.
• Economical : Determine the economical degree of success or failure a company can have while being new to the market, or otherwise introducing new products or services, thus providing certainty to all actions to be implemented.

LEARN ABOUT:  Test Market Demand

Knowing what to do in various situations that arise during the investigation will save the researcher time and reduce research problems . Today’s successful enterprises use powerful market research survey software that helps them conduct comprehensive research under a unified platform, providing actionable insights much faster with fewer problems.

LEARN ABOUT:  Market research industry

Following are the steps to conduct effective market research.

Step #1: Define the Problem

Having a well-defined subject of research will help researchers when they ask questions. These questions should be directed to solve problems and must be adapted to the project. Make sure the questions are written clearly and that the respondents understand them. Researchers can conduct a marketing test with a small group to know if the questions are going to know whether the asked questions are understandable and if they will be enough to gain insightful results.

Research objectives should be written in a precise way and should include a brief description of the information that is needed and the way in which it will obtain it. They should have an answer to this question “why are we doing the research?”

Learn more: Interview Questions

Step #2: Define the Sample

To carry out market research, researchers need a representative sample that can be collected using one of the many sampling techniques . A representative sample is a small number of people that reflect, as accurately as possible, a larger group.

• An organization cannot waste their resources in collecting information from the wrong population. It is important that the population represents characteristics that matter to the researchers and that they need to investigate, are in the chosen sample.
• Take into account that marketers will always be prone to fall into a bias in the sample because there will always be people who do not answer the survey because they are busy, or answer it incompletely, so researchers may not obtain the required data.
• Regarding the size of the sample, the larger it is, the more likely it is to be representative of the population. A larger representative sample gives the researcher greater certainty that the people included are the ones they need, and they can possibly reduce bias. Therefore, if they want to avoid inaccuracy in our surveys, they should have representative and balanced samples.
• Practically all the surveys that are considered in a serious way, are based on a scientific sampling, based on statistical and probability theories.

There are two ways to obtain a representative sample:

• Probability sampling : In probability sampling , the choice of the sample will be made at random, which guarantees that each member of the population will have the same probability of selection bias and inclusion in the sample group. Researchers should ensure that they have updated information on the population from which they will draw the sample and survey the majority to establish representativeness.
• Non-probability sampling : In a non-probability sampling , different types of people are seeking to obtain a more balanced representative sample. Knowing the demographic characteristics of our group will undoubtedly help to limit the profile of the desired sample and define the variables that interest the researchers, such as gender, age, place of residence, etc. By knowing these criteria, before obtaining the information, researchers can have the control to create a representative sample that is efficient for us.

When a sample is not representative, there can be a margin of error . If researchers want to have a representative sample of 100 employees, they should choose a similar number of men and women.

The sample size is very important, but it does not guarantee accuracy. More than size, representativeness is related to the sampling frame , that is, to the list from which people are selected, for example, part of a survey.

LEARN ABOUT: Behavioral Research If researchers want to continue expanding their knowledge on how to determine the size of the sample consult our guide on sampling here.

Step #3: Carry out data collection

First, a data collection instrument should be developed. The fact that they do not answer a survey, or answer it incompletely will cause errors in research. The correct collection of data will prevent this.

Step #4: Analyze the results

Each of the points of the market research process is linked to one another. If all the above is executed well, but there is no accurate analysis of the results, then the decisions made consequently will not be appropriate. In-depth analysis conducted without leaving loose ends will be effective in gaining solutions. Data analysis will be captured in a report, which should also be written clearly so that effective decisions can be made on that basis.

Analyzing and interpreting the results is to look for a wider meaning to the obtained data. All the previous phases have been developed to arrive at this moment. How can researchers measure the obtained results? The only quantitative data that will be obtained is age, sex, profession, and number of interviewees because the rest are emotions and experiences that have been transmitted to us by the interlocutors. For this, there is a tool called empathy map that forces us to put ourselves in the place of our clientele with the aim of being able to identify, really, the characteristics that will allow us to make a better adjustment between our products or services and their needs or interests. When the research has been carefully planned, the hypotheses have been adequately defined and the indicated collection method has been used, the interpretation is usually carried out easily and successfully. What follows after conducting market research?

Learn more: Types of Interviews

Step #5: Make the Research Report

When presenting the results, researchers should focus on: what do they want to achieve using this research report and while answering this question they should not assume that the structure of the survey is the best way to do the analysis. One of the big mistakes that many researchers make is that they present the reports in the same order of their questions and do not see the potential of storytelling.

To make good reports, the best analysts give the following advice: follow the inverted pyramid style to present the results, answering at the beginning the essential questions of the business that caused the investigation. Start with the conclusions and give them fundamentals, instead of accumulating evidence. After this researchers can provide details to the readers who have the time and interest.

Step #6: Make Decisions

An organization or a researcher should never ask “why do market research”, they should just do it! Market research helps researchers to know a wide range of information, for example,  consumer purchase intentions, or gives feedback about the growth of the target market. They can also discover valuable information that will help in estimating the prices of their product or service and find a point of balance that will benefit them and the consumers.

Take decisions! Act and implement.

Learn more: Quantitative Research

• Make well-informed decisions: The growth of an organization is dependent on the way decisions are made by the management. Using market research techniques, the management can make business decisions based on obtained results that back their knowledge and experience. Market research helps to know market trends, hence to carry it out frequently to get to know the customers thoroughly.

LEARN ABOUT: Research Process Steps

• Gain accurate information: Market research provides real and accurate information that will prepare the organization for any mishaps that may happen in the future. By properly investigating the market, a business will undoubtedly be taking a step forward, and therefore it will be taking advantage of its existing competitors.
• Determine the market size: A researcher can evaluate the size of the market that must be covered in case of selling a product or service in order to make profits.
• Choose an appropriate sales system: Select a precise sales system according to what the market is asking for, and according to this, the product/service can be positioned in the market.
• Learn about customer preferences: It helps to know how the preferences (and tastes) of the clients change so that the company can satisfy preferences, purchasing habits, and income levels. Researchers can determine the type of product that must be manufactured or sold based on the specific needs of consumers.
• Gather details about customer perception of the brand: In addition to generating information, market research helps a researcher in understanding how the customers perceive the organization or brand.
• Analyze customer communication methods: Market research serves as a guide for communication with current and potential clients.
• Productive business investment: It is a great investment for any business because thanks to it they get invaluable information, it shows researchers the way to follow to take the right path and achieve the sales that are required.

LEARN ABOUT: Total Quality Management

The following tips will help businesses with creating a better market research strategy.

Tip #1: Define the objective of your research.

Before starting your research quest, think about what you’re trying to achieve next with your business. Are you looking to increase traffic to your location? Or increase sales? Or convert customers from one-time purchasers to regulars? Figuring out your objective will help you tailor the rest of your research and your future marketing materials. Having an objective for your research will flesh out what kind of data you need to collect.

Tip #2: Learn About Your Target Customers.

The most important thing to remember is that your business serves a specific kind of customer. Defining your specific customer has many advantages like allowing you to understand what kind of language to use when crafting your marketing materials, and how to approach building relationships with your customer. When you take time to define your target customer you can also find the best products and services to sell to them.

You want to know as much as you can about your target customer. You can gather this information through observation and by researching the kind of customers who frequent your type of business. For starters, helpful things to know are their age and income. What do they do for a living? What’s their marital status and education level?

Learn more: Customer Satisfaction

Tip #3: Recognize that knowing who you serve helps you define who you do not.

Let’s take a classic example from copywriting genius Dan Kennedy. He says that if you’re opening up a fine dining steakhouse focused on decadent food, you know right off the bat that you’re not looking to attract vegetarians or dieters. Armed with this information, you can create better marketing messages that speak to your target customers.

It’s okay to decide who is not a part of your target customer base. In fact, for small businesses knowing who you don’t cater to can be essential in helping you grow. Why? Simple, if you’re small your advantage is that you can connect deeply with a specific segment of the market. You want to focus your efforts on the right customer who already is compelled to spend money on your offer.

If you’re spreading yourself thin by trying to be all things to everyone, you will only dilute your core message. Instead, keep your focus on your target customer. Define them, go deep, and you’ll be able to figure out how you can best serve them with your products and services.

Tip #4: Learn from your competition.

This works for brick-and-mortar businesses as well as internet businesses because it allows you to step into the shoes of your customer and open up to a new perspective of your business. Take a look around the internet and around your town. If you can, visit your competitor’s shops. For example, if you own a restaurant specializing in Italian cuisine, dine at the other Italian place in your neighborhood or in the next township.

As you experience the business from the customer’s perspective, look for what’s being done right and wrong.

Can you see areas that need attention or improvement? How are you running things in comparison? What’s the quality of their product and customer service ? Are the customers here pleased? Also, take a close look at their market segment. Who else is patronizing their business? Are they the same kinds of people who spend money with you? By asking these questions and doing in-person research, you can dig up a lot of information to help you define your unique selling position and create even better offers for your customers.

Tip #5: Get your target customers to open up and tell you everything.

A good customer survey is one of the most valuable market research tools because it gives you the opportunity to get inside your customer’s head. However, remember that some feedback may be harsh, so take criticism as a learning tool to point you in the right direction.

Creating a survey is simple. Ask questions about what your customer thinks you’re doing right and what can be improved. You can also prompt them to tell you what kinds of products and services they’d like to see you add, giving you fantastic insight into how to monetize your business more. Many customers will be delighted to offer feedback. You can even give customers who fill out surveys a gift like a special coupon for their next purchase.

Bonus Tip: Use an insight & research repository

An insight & research repository is a consolidated research management platform to derive insights about past and ongoing market research. With the use of such a tool, you can leverage past research to get to insights faster, build on previously done market research and draw trendlines, utilize research techniques that have worked in the past, and more.

Market research is one of the most effective ways to gain insight into your customer base , competitors , and the overall market. The goal of conducting market research is to equip your company with the information you need to make informed decisions.

It is especially important when small businesses are trying to determine whether a new business idea is viable, looking to move into a new market, or are launching a new product or service.  Read below for a more in-depth look at how market research can help small businesses.

• COMPETITION According to a study conducted by Business Insider, 72% of small businesses focus on increasing revenue. Conducting research helps businesses gain insight into competitor behavior. By learning about your competitor’s strengths and weaknesses, you can learn how to position your product or offering. In order to be successful, small businesses need to have an understanding of what products and services competitors are offering, and their price point.

Learn more: Trend Analysis

• CUSTOMERS Many small businesses feel they need to understand their customers, only to conduct market research and learn they had the wrong assumptions. By researching, you can create a profile of your average customer and gain insight into their buying habits, how much they’re willing to spend, and which features resonate with them. Additionally, and perhaps more importantly, you can learn what will make someone use your product or service over a competitor.

Learn more: Customer Satisfaction Survey

• OPPORTUNITIES Potential opportunities, whether they are products or services, can be identified by conducting market research. By learning more about your customers, you can gather insights into complementary products and services. Consumer needs change over time, influenced by new technology and different conditions, and you may find new needs that are not being met, which can create new opportunities for your business.

Learn more: SWOT Analysis 

• FORECAST A small business is affected by the performance of the local and national economy, as are its’ customers. If consumers are worried, then they will be more restrained when spending money, which affects the business. By conducting research with consumers, businesses can get an idea of whether they are optimistic or apprehensive about the direction of the economy, and make adjustments as necessary. For example, a small business owner may decide to postpone a new product launch if it appears the economic environment is turning negative.

Learn more: 300+ Market Research Survey Questionnaires

Market research and market intelligence may be as complex as the needs that each business or project has. The steps are usually the same. We hope this ultimate guide helps you have a better understanding of how to make your own market research project to gather insightful data and make better decisions.

LEARN ABOUT: Projective Techniques

We appreciate you taking the time to read this ultimate guide. We hope it was helpful! 

You can now download our free ebook that will guide you through a market research project, from the planning stage to the presentation of the outcomes and their analysis.

Sign up now, and download our free ebook: The Hacker’s Guide to Advanced Research Methodologies 

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How product managers should do market research

Why do customers buy your product? The simple answer is they have a problem to solve. But a deeper explanation exists beyond the benefits and features of what you offer. You must understand who your customers are, what they really care about, and why they choose your product over another if you want to ensure long-term success.

This is something product managers know well. In fact, it is part of the job. Product managers are responsible for determining what target customers need and value to build a product they will love. This process is called product discovery . And it begins with research.

Market research involves gathering and analyzing information about the overall market environment, prospective customers, and competitors for your product or service. For product managers, this helps you formulate a nuanced worldview of the opportunities and threats that exist for your offering. Think of it like studying a habitat — you are exploring the elements that could affect your product's ability to thrive. Like any habitat, conditions can be variable. You will want to keep learning and observing as markets are constantly shifting (especially in the tech industry).

While research is a core product management task, the entire cross-functional product team needs to understand the market — each representative will zero in on different aspects to help your product succeed. This guide will give you an overview of what market research entails and how to get started conducting your own.

Vision, market research, user feedback — manage it all in Aha! Roadmaps. Try it free .

Why is market research important.

Understanding the market is an important part of crafting your product strategy — along with defining what you want to achieve and how you plan to get there . Market research brings external factors into consideration.

This is important because market research is critical to finding product-market fit . You need to deeply understand your market position, audience, and any alternative solutions if you want your product to succeed. This matters whether you are launching a new product, enhancing an existing offering, or entering a new market.

In other words — intuition alone is not enough. Even if you have a clear product vision and substantial industry experience, conducting regular market research often uncovers new and unexpected ways to improve your product. This can also improve your resilience as an organization.

Of course, there will always be external forces you cannot control. But if you have a deep understanding of the market environment and customer values, you will be in a better position to adapt to challenging situations.

Plus, market research enables all members of the core product team to make more informed decisions. The following are only a few examples of many, but market research helps:

Product management — Empathize with customers and understand their needs to better prioritize upcoming product work.

UX design — Make design choices that reflect how customers want to use modern products.

Engineering — Stay up-to-date with technologies used by competitors.

Product marketing — Update product positioning to resonate with what customers want to hear.

Related: How do product managers work with other teams?

What are the components of market research?

For product development purposes, you will want to explore three core components of market research — the overall market landscape, competitive analysis, and customer research.

Overall market landscape

Examining the market as a whole is a good place to start. Typically this piece of market research looks at macro-level industry characteristics and customer behavior. Below is a list of different factors to consider when researching the market landscape.

A PESTLE analysis — which stands for political, economic, social, technological, legal, and environmental — can be a helpful exercise to get your team thinking about the broader market and where your product will fit into it. Give it a try in Aha! software with this whiteboard template:

Start using this template now

Competitive analysis

Researching competitors involves looking at established players in the market and alternative solutions used by prospective customers. By assessing competitor strengths and weaknesses, you can learn how to differentiate your product.

Read more: A guide to competitive analysis

Customer research

Customer research drives product innovation by enabling you to glean insights directly from your target audience. This helps product teams build empathy for the problems customers want to solve. It can also reveal your customers' true feelings about your product.

Read more: A guide to customer research

How to do market research as a product manager

The market research process will vary in complexity depending on the scale and extent of your plans. Launching a brand new offering often calls for a comprehensive analysis of the entire market — in other scenarios, like enhancing established products, a lightweight look at the current competition could suffice. But in general there are four essential steps for conducting successful market research:

Define your objectives. In order to collect the right data, you must first establish what you are trying to learn. Clarify the focus of your market research by listing out the questions you have about a problem or opportunity, then distill this into a goal statement.

Plan and conduct research. Figuring out where to find the information you need. You can employ a mix of primary and secondary sources — primary includes interviews, surveys, and focus groups while secondary includes sources like industry publications, trade associations, and market reports.

Analyze and share the results. Once you have gathered your data, review it closely to uncover trends and other insights. Summarize your findings and make them accessible to your team. You might even create a presentation to showcase what you discovered.

Plan next steps. Market research should inform action. Use your newfound learnings to build customer personas , form a well-rounded product strategy, or prioritize product decisions that will deliver more value to the market.

Many product managers expedite their research and analysis by using pre-built templates. If you want to get started fast, download one of our customizable research templates or the SWOT analysis whiteboard template . This framework is helpful both for identifying what to research and organizing your findings for discussion after research is complete.

Start using this template now

Market research is not a one-time endeavor. It is something to continually invest in as conditions change and your product grows. But the insights you gain as a product manager should more than make up for the effort that conducting market research requires. When you are able to paint a full picture of the market, you will have more clarity on how your product fits into it.

FAQs about how to do market research

What does a market research analyst do?

A market research analyst gathers and analyzes data about market trends, consumer preferences, and competitive landscapes — helping businesses make informed decisions. This role is crucial for organizations looking to understand their target audience, assess demand for products or services, and develop effective marketing and business strategies.

How can product managers define their target market?

Product managers can define their target market through research, analysis, and a deep understanding of their potential customers. This entails conducting market research, creating customer personas, gathering direct and indirect feedback from prospective customers, and analyzing competitors.

What's the difference between primary and secondary research?

Primary research involves gathering new data directly from your target audience through surveys, interviews, or empathy sessions . Secondary research includes analyzing existing data collected from other sources such as reports, publications, or studies.

What questions should a product manager ask when conducting market research?

Understanding your market is core to deciding what you want to deliver and the value it will bring. Here are some essential questions to get you started:

What problems do potential customers face and how can your product help?

Who are the target customers and what do they need?

Who are your competitors and how can you stand out ?

What market trends and opportunities can you leverage?

What is the right price and value proposition for your product?

How can customers easily access and buy your product?

What might prevent customers from adopting your product, and how can you overcome those barriers?

How can you gather and use customer feedback for improvements?

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How to Conduct Market Research for a Startup

• 17 Mar 2022

With every innovative product idea comes the pressing question: “Will people want to buy it?”

As an entrepreneur with a big idea, what’s the best way to determine how potential customers will react to your product? Conducting market research can provide the data needed to decide whether your product fits your target market.

Before launching a new venture, you should understand market research. Here’s how to conduct market research for a startup and why it’s important.

Access your free e-book today.

What Is Market Research?

Market research is the process of gathering information about customers and the market as a whole to determine a product or service’s viability. Market research includes interviews, surveys, focus groups, and industry data analyses.

The goal of market research is to better understand potential customers, how well your product or service fits their needs, and how it compares to competitors’ offerings.

There are two types of research you can conduct: primary and secondary.

• Primary research requires collecting data to learn about your specific customers or target market segment. It’s useful for creating buyer personas, segmenting your market, and improving your product to cater to customers’ needs .
• Secondary research is conducted using data you didn’t collect yourself. Industry reports, public databases, and other companies’ proprietary data can be used to gain insights into your target market segment and industry.

Why Is Market Research Important for Entrepreneurs?

Before launching your venture, it’s wise to conduct market research to ensure your product or service will be well received. Feedback from people who fall into your target demographics can be invaluable as you iterate on and improve your product.

Performing market research can also help you determine a pricing strategy by gauging customers’ willingness to pay for your product. Additionally, it can improve the user experience by revealing what features matter most to potential customers.

When assessing which startups to fund, investors place heavy importance on thorough market research that indicates promising potential. Providing tangible proof that your product fulfills a market need and demonstrating you’ve taken the time to iterate on and improve it signal that your startup could be a worthwhile investment.

Related: How to Talk to Potential Investors: 5 Tips

How to Do Market Research for a Startup

1. form hypotheses.

What questions do you aim to answer through market research? Using those questions, you can make predictions called hypotheses . Defining your hypotheses upfront can help guide your approach to selecting subjects, researching questions, and testing designs.

An example question you may ask is: “How much are people in my target demographic willing to pay for the current version of my product?” Your hypothesis could be: “If my product contains all its current features, customers will be willing to pay $500 for it.”

Another example question you may ask is: “What’s the user’s biggest pain point, and is my product meeting their needs?” Your hypothesis could be: “I believe the user’s biggest pain point is needing an easy, unintimidating way to learn basic car maintenance, and I predict that my product meets that need.”

You can and should test multiple hypotheses, but try to select no more than a few per test, so the research stays focused.

Related: A Beginner’s Guide to Hypothesis Testing in Business

2. Select the Type of Research Needed to Test Hypotheses

Once you’ve formed your hypotheses, determine which type of research to conduct.

If your hypotheses focus on determining your startup’s place in the broader market, start with secondary research. This can include using existing data to determine market size, how much of that market your startup could reasonably own, who your biggest competitors are, and how your brand and product compare to theirs.

If your hypotheses require primary research, decide which data collection method best fits your needs. These can include one-on-one interviews, surveys, focus groups, and polls. Primary research allows you to gather insights into customer satisfaction and loyalty, brand awareness and perception, and real-time product usability.

3. Identify Target Demographics and Recruit Subjects

To gather meaningful insights, you need to understand your target demographic. Do you aim to cater to working parents, young athletes, or pet owners? Determine the type of person who can benefit from your product.

If you conduct primary research, you need to recruit subjects. This can be done in several ways, including:

• Word of mouth: The simplest but least reliable way to recruit participants is by word of mouth. Ask people you know to refer others to be research subjects, then screen them to confirm they fit your target demographic.
• Promoting the study on social media: Many social media platforms enable you to show an ad to people who fall into specific demographic categories or have certain interests. This allows you to get the word out to a large number of people who qualify.
• Hiring a third-party market research company: Some companies provide full market research services and recruit participants and conduct research on your behalf.

However you recruit subjects, ensure they take a screener survey beforehand, which allows you to determine whether they fit the specific demographic you want to study or have a trait that eliminates them from the research pool. It also provides demographic data—such as age and race—that enables you to select a diverse subset of your target demographic.

In addition, you can offer compensation to boost participation, such as money, meal vouchers, gift cards, or early access to your product. Make it clear that compensation is in appreciation for subjects’ time and honest feedback.

4. Conduct the Research

Once you’ve determined the type of research and target demographic necessary to test your hypotheses, conduct your research. To reduce bias, enlist someone unfamiliar with your hypotheses to perform interviews or lead focus groups.

Ask questions based on your audience and hypotheses. For instance, if you’re aiming to test existing customers’ purchase motivations, you may ask: “What challenge were you trying to solve when you first bought the product?”

If examining brand perception, your audience should consist of potential customers who don’t yet know your brand. Present them with a list of competitor logos—with yours in the mix—and ask them to rank the brands by perceived reliability.

While the questions you ask are vehicles to prove or disprove hypotheses, ensure they don’t lead subjects in one direction. To craft unbiased research questions , use neutral language and vary the order of options in multiple-choice questions. This can keep subjects from selecting the same option each time if they sense the third option is always mapped to a certain outcome. It also helps account for primacy bias (the tendency to select the first option in a list) and recency bias (the tendency to select the final option in a list).

Once you’ve collected data, ensure it’s organized efficiently and securely so you can protect subjects’ identities .

Related: 3 Examples of Bad Survey Questions and How to Fix Them

5. Gather Insights and Determine Action Items

After you’ve organized your data, analyze it to extract actionable insights. While some of the data will be qualitative rather than quantitative, you can detect patterns in responses to make it quantifiable. For instance, noting that 15 of 20 subjects mentioned feeling overwhelmed when attempting to assemble your product.

Once you’ve analyzed the data and communicated emerging trends using data visualizations , outline action items.

If the majority of users in your target demographic reported feeling overwhelmed while assembling your product, action items might include:

• Creating different versions of assembly instructions to test with other groups, varying diagrams and instructional language
• Researching instruction manual best practices

Each round of market research can offer more information about how your product is perceived and experienced by potential users.

Market Research as an Ongoing Endeavor

While it’s useful to conduct market research before launching your product, you should revisit your hypotheses and form new ones over the course of building your venture.

By conducting market research with each version of your product, you can gradually improve it and ensure it continues to fit target customers’ needs.

Are you interested in bolstering your entrepreneurship skills? Explore our four-week online course Entrepreneurship Essentials and our other entrepreneurship and innovation courses to learn to speak the language of the startup world.

About the Author

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Candace Browning

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March 24, 2024

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How Inclusive Brands Fuel Growth

• Omar Rodríguez-Vilá,
• Dionne Nickerson,
• Sundar Bharadwaj

Years before the Barbie movie phenomenon, leaders at Mattel became concerned that consumer perceptions of the famous doll were out of sync with demographic trends. The company conducted in-depth research to understand how customers felt about Barbie and to determine whether more-inclusive versions presented a strong market opportunity. The findings led to a new inclusion strategy that affected all areas of the brand—product design, distribution, and commercial activities—and coincided with a period of significant growth. Barbie revenues increased 63% from 2015 to 2022—before the boost from the film.

Research shows that in most industries the perception of inclusion can materially change customers’ likelihood to purchase and willingness to recommend products and services.

This article presents a framework for increasing marketplace inclusion in three areas: seeing the market, which is about market definition, market intelligence, and strategies for growth; serving the market, which involves developing products, packaging, and other commercial practices; and being in the market, which looks at advocacy and the customer experience.

They unlock new sources of value by meeting the needs of underrecognized customers.

Idea in Brief

The opportunity.

Research shows that the perception of inclusion can materially change customers’ likelihood to purchase and willingness to recommend products and services.

The Problem

Despite the many business and societal benefits of marketplace inclusion, there is a systematic lack of it across industries.

The Approach

Greta Gerwig’s Barbie grossed more than $1 billion at the box office in about two weeks. Only 53 films have ever hit that mark (adjusted for inflation). The 2023 movie, which features themes of women’s empowerment, multiculturalism, and inclusiveness, was a divergence from the narrow social and demographic representation of the original tall, thin, white doll that Mattel introduced in 1959.

• OR Omar Rodríguez-Vilá is a professor of marketing practice at the Goizueta Business School at Emory University and the academic director of education at its Business & Society Institute.
• DN Dionne Nickerson is an assistant professor of marketing at the Goizueta Business School.
• SB Sundar Bharadwaj is the Coca-Cola Company Chair of Marketing at the University of Georgia’s Terry College of Business. LinkedIn: Sundar Bharadwaj

Partner Center

Daniel Kahneman Changed How We Think About Consumer Choice And Brand Strategy

Dipanjan Chatterjee , Vice President, Principal Analyst

Daniel Kahneman was an unlikely economist. He was trained as a psychologist and spent much of his career at Princeton as a psychology and public affairs professor, yet his contribution to modern economics, for which he received the Nobel Prize in 2002, remains unparalleled. Kahneman’s research has shaped much of how today’s experts think about consumer choice and decision-making. Daniel Kahneman died on March 27 at the age of 90.

Kahneman upended a fundamental premise that long guided economists — “homo economicus,” or the rational economic being who responded to stimuli in a very predictable manner, guided by the laws of economics. Turns out, there is much more to it than that. At the heart of Kahneman’s contribution is the idea that people make decisions in a way that is not always rational, but this irrationality is often predictable and based on heuristics.

When we started building the Forrester Brand Energy Framework many years ago, one of my primary objectives was to use traditional quantitative research and econometric analyses to vet the idea that there was more to a consumer’s choice of brands than salience and a rational evaluation of features, functionality, and pricing. Kahneman wrote about dual processes in which some part of us made careful, studied, deliberate decisions (system 2) and another part made choices fueled by intuition and impulse (system 1). Our analysis found that the emotional engagement that brands created with consumers accounted for about half of the brand’s strength, or “energy.” Indeed, what Kahneman referred to as system 1 thinking was the most dominant source of brand power and equity.

At Forester, how we think about consumers making brand choices and how we model that relationship owes a significant debt of gratitude to a truly unique psychologist, economist, and observer of human behavior.

To learn more about Daniel Kahneman without having to read academic papers, I would recommend:

• This story from The New Yorker about Kahneman and his friend and colleague Amos Tversky, who surely would have shared Kahneman’s Nobel had he been alive at that time.
• This eminently readable book by Michael Lewis called “ The Undoing Project ” (featured in the previous New Yorker article).
• If you’re digging what you’re reading, then you can read Kahneman’s book, “ Thinking, Fast and Slow ,” which is quite accessible (but also quite long).

To read more about brand energy, read:

• This foundational brand energy research report .
• This report about how emotions drive consumer choice and brand strategy.

Want to discuss how Kahneman’s work and/or how emotions drive brand energy? Schedule time with me for an inquiry or a guidance session. To follow my research, you can go to my Forrester bio and choose “Follow.”

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