What is Market Research?
Market research refers to employing strategies, collecting data, and studying the target audience of a product by an organization. Businesses analyze customer data to figure out consumer trends, improve product design, improve user experience, develop customer-centric marketing campaigns, generate high-quality leads, and boost conversion rates. Phone surveys, test marketing strategies, and focus groups can be used for marketing research.
For primary research, respondents are frequently provided with products or a reward. Market research is an important part of product development and research for a new product launch.
Importance of Market Research
Market research is all about getting a better understanding of your customer base, which is an important step in building a customer-centric business. Customer-centric businesses prioritize the customer experience in all they do. Potential customers may even help your brand through word-of-mouth marketing. Customer-centric organizations are 60 percent more profitable, according to research. It is easy to understand why putting the needs and wishes of the client first is a winning strategy. Market research is how businesses learn about their target customers' requirements and desires, as well as other crucial parts of their lives. You can not establish a customer-centric company unless you know who your customers are.
Understanding Target Audience
You will be able to reach out to your target customers more successfully if you have a better understanding of them. You do not want to waste resources on trial and error when it relates to your marketing strategy; instead, you want to have a well-informed marketing strategy. When it comes to product channels, using a one-size-fits-all framework, irrespective of your viewing public, can be a risky decision. The print magazines your customers buy, the television programs they follow, and the web pages they visit can all be very different from those of your previous product's target demographic.
Ensuring that there is a requirement for a good or service is one of the most important ways to reduce risks. Many products, unfortunately, fail. According to some market research experts, the failure rate is as high as 95%. While that figure is likely exaggerated, most product innovations struggle to engage with consumers and find themselves in clearance bins. According to one study, 60% of 9,000 innovative products that were widely disseminated at a big shop were no longer offered after three years.
Market research enables businesses to make better-informed and data-driven decisions. Gut instincts are not a reliable way to make judgments for decision-makers. For instance, one might believe that promoting a premium version of the product at a greater cost is a good business strategy. However, consumers ready to pay high prices for premium products may not purchase costly products from a company that generally offers budget-friendly goods. Conducting market research seems to be the only way to be certain that a marketing concept works efficiently.
Gain Competitive Edge
Market research can make all the difference in gaining a competitive advantage in the industry. For startups, by learning more about the clients, they could be capable of engaging customers more successfully with advertising than their competition. Furthermore, market research may provide immediate insight into the competition, allowing you to see how you integrate into the market. Market research can also assist you in identifying untouched market areas. By focusing on these new customers, you will be able to carve out a niche for yourself in the market.
Types of Market Research Methods
Secondary research, surveys, interviews, focus groups, and customer observation are the six basic forms of market research approaches. Depending on your objectives and all you need to know, it's usually best to try out different research designs and marketing mixes.
Secondary Market Research
The act of finding out existent research done by a third party and data is known as secondary research. Since you can perform it at your desk, it's commonly referred to as "desk research." Secondary data collection sources include US Census figures, Twitter responses, social media blog posts, journal publications, and a wide range of other sources. The nicest part of secondary research is that this is cost-effective, suitable for quantitative research, and can be completed quickly. As a secondary researcher, your objective is to locate existing information that can be incorporated into the research useful to the digital marketer.
When it concerns primary market research, surveys are undoubtedly the most well-known and extensively used tool. From the small "feedback paper" on the tables at your local diner, step-by-step questionnaires to the never-ending open-ended online surveys, market research surveys come in all kinds and formats. When the following criteria are satisfied, surveys have a lot more context:
- You would like to quantify anything accurately or assess quantitative data.
- You need to evaluate something exact. To put it another way, you have completed the exploratory analysis of your study and are ready to test more precise questions.
- You have a sizable sample for data analysis.
- You have the time and the means to execute a survey.
Getting a bunch of people into a room for a focus group is the first step. Based on the goods or services, these people belong to a targeted population (for instance, "mothers below 40 with a salary over $50k," "college boys who play eight or more hours of online games per week," "guys with red stubble under six feet tall,"). Almost often, participants are rewarded in some manner, whether in the form of money, vouchers, or free things. Focus groups are ideal for qualitative exploratory research. Focus groups are useful non-numerical tools to utilize before surveying because they help you craft more detailed and targeted survey questions. After a survey, focus groups can be useful as a method to delve further into an issue that popped up in the survey.
Personal interviews are a type of face-to-face qualitative market research. Depending on the interview's aim, there is a variety of interviewing forms. Interviews can be unstructured, with very detailed questions and/or tasks for the subject, or they can be in-depth interviews, with highly precise questions and/or events for the subject. When you want to go deep into a certain topic, find client problems, and grasp psychological motivations and underlying impressions, use this market research strategy.
Observational studies occur in different forms of in-person study. There are two types of observations:
(1) Rigorous observation without any involvement with the subject
(2) Observation with certain interference between the observer and the subject like a one-on-one study.
The most significant advantage of this method is that it allows researchers to monitor real activity rather than user-reported behavior. Because observational research is a real representation of the "real-time buyer persona," the conclusions drawn from it are frequently accurate and beneficial.
Context and Application
This subject is relevant to students who are interested in pursuing the following courses:
- Bachelor of Arts in Business-to-Business Marketing
- Master of Science in Digital Marketing & E-Commerce
- Master of Science in Marketing Management
1. Why is marketing research important?
- To better understand the target audience
- To get a competitive edge
- To keep up marketing during COVID-19
- Both (a) and (b) are correct
Answer: Option d
Explanation: Market research is important to get to know about your customers and get a competitive edge by figuring out your position in the industry.
2. Which market research method deals with open-ended questions?
- Social media blogs
- Secondary research
- None of the above
Answer: Option a
Explanation: From the small "feedback paper" on the tables at your local diner, step-by-step questionnaires, and online polls, surveys usually ask open-ended questions from the consumers.
3. Which market research method is the most time-preserving and cost-effective?
- Secondary research
- Pay-per-click marketing
Answer: Option a
Explanation: The nicest part of secondary research is that this is cost-effective, suitable for quantitative research, and can be completed quickly.
4. When should one undertake observational studies?
- To identify the buyer persona
- To save more money
- To conduct B2B marketing
- All of the above
Answer: Option a
Explanation: Observational study is a good decision when one wants to identify a real-time buyer persona.
5. When should one conduct surveys?
- To do a real-time study on the target audience
- To evaluate something exact
- To promote word-of-mouth advertisement
- None of the above
Answer: Option b
Explanation: Surveys should be conducted when you have completed the exploratory analysis of your study and are ready to test more precise questions.
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