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What Is Market Research?

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

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How to Do Market Research, Types, and Example

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

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

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

Key Takeaways

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

Market Research

How market research works.

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

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

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

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

Primary Market Research vs. Secondary Market Research

Market research usually consists of a combination of:

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

Primary Market Research

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

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

Secondary Market Research

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

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

History of Market Research

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

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

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

Types of Market Research

Face-to-face interviews.

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

Market research and surveys were adapted from these early techniques.

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

Focus Groups

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

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

Phone Research

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

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

Survey Research

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

Online Market Research

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

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

How to Conduct Market Research

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

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

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

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

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

Benefits of Market Research

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

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

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

Example of Market Research

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

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

What Are the Main Types of Market Research?

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

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

What Is Online Market Research?

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

What Are Paid Market Research Surveys?

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

What Is a Market Study?

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

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

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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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Market research is the systematic process of gathering, analyzing and interpreting information about a specific market or industry.

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?

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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Written by Mary Kate Miller | June 1, 2021

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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: Definition, Types, Methods

Jul 25, 2024

11 min. read

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

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

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

Table of Contents

What Is Market Research?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1. Interviews

3. Focus Groups

4. Observations

5. AI-Driven Market Research

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

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

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

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

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

3. Focus groups

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

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

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

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

5. AI-driven market research

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

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

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

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

Examples of common market research questions include:

Demographic market research questions

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

Product or service usage market research questions

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

Brand perception market research questions

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

Buying behavior market research questions

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

Customer satisfaction market research questions

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

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

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

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

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

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

Step 1: Define your objectives

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

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

Step 2: Select your market research methods

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

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

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

Step 3: Develop your research tools

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

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

Step 4: Conduct the market research

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

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

Step 5: Analyze and apply your findings

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

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

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

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

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

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

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A Plain-English Guide to Market Research

Published: January 21, 2021

In some circles, market research is a catch-all term for asking the industry what it wants. "Do we know what the demand is for this product? Who's even looking for our services? Let me do some market research to find out," someone might say.

But what does that actually mean?

Here's a simple definition of market research that encompasses all the possible goals of this practice, in fewer than 100 words:

Market Research Definition

Market research is the process of examining an industry's buyers, the product these buyers want, and where they're currently getting it. By engaging the right people and data, a business can use this research to position itself in the market and predict where the market will go in the future.

Market research can answer various questions about the state of an industry, but 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.

Certainly you can make sound judgment calls based on your experience in the industry and your existing customers. However, keep in mind that market research offers benefits beyond those strategies. There are two things to consider: 

• 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. 

Why is market research important?

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 from knowing the bigger picture.

Here are some examples of insights you can gain from market research:

• Consumer attitudes about a particular topic, pain, product, or brand
• Whether there's demand for the business initiatives you're investing in
• Where to advertise or sell to (geographically or online)
• Unaddressed or underserved customer needs that can be flipped into selling opportunity
• Attitudes about pricing for a particular product or service

Getting answers to these questions based on real data can help you make sound business decisions and minimize risk.

Types of Market Research

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.

Let's talk about four different types of market research studies you can conduct , a potential goal of each one, and how these studies help you better understand your market.

Qualitative information

Interviews are the personal, one-on-one conversations you can have with the buyers in your industry. You can conduct interviews in person or over the phone.

Your interviewees can answer questions about themselves to help you design your buyer personas. These buyer personas describe your ideal customer's age, family size, budget, job title, the challenges they face at work, and similar aspects of their lifestyle. Having this buyer profile in hand can shape your entire marketing strategy, from the features you add to your product to the content you publish on your website.

Focus Groups

Focus groups are similar to interviews, but in this case, you're assembling a large group of people for one shared interview. A focus group consists of people who have at least one element of your buyer persona in common -- age or job title, for instance.

This type of market research can give you ideas for product differentiation, or the qualities of your product that make it unique in the marketplace. Consider asking your focus group questions about (and showing them examples of) your services, and ultimately use the group's feedback to make these services better.

Quantitative information

Surveys are a form of quantitative research, and you can distribute them over the phone, via email, or through an online survey. A survey could cater to people who've downloaded content from your website or interacted with a member of your business.

Enough completed surveys can help you determine your customer satisfaction level. This denotes how happy your customers are with what you're selling them. You might include questions like, "How well did we solve your problem?" and "Would you recommend our product to a friend?"

Secondary Data

The interviews, focus groups, and surveys are all sources of primary data. Secondary data , on the other hand, is the public information -- online and offline -- that characterizes your industry. This includes competitor websites, social media business pages, trade magazines, market reports, and even census data published by the government.

If you examine enough secondary data, you can learn how much brand awareness you have in the marketplace compared to the companies that provide the same product or service as you.

The market research you perform doesn't have to include every source of information described above. What data you collect will depend on the needs of your business and what you might be most interested in at the moment. 

Editor's note: This post was originally published in July 2018 and has been updated for comprehensiveness.

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

Ryan Fratzke

Partner & Executive Strategist

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

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

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

Article Overview

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

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

What is market research?

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

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

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

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

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

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

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

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

Why do market research?

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

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

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

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

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

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

Primary vs. Secondary Research

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

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

Primary Research

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

Exploratory Primary Research

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

Specific Primary Research

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

Secondary Research

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

• Public sources
• Commercial sources
• Internal sources

Public Sources

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

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

Commercial Sources

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

Internal Sources

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

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

Types of Market Research

• Interviews (in-person or remote)

Focus Groups

• Product/ Service Use Research

Observation-Based Research

Buyer persona research, market segmentation research, pricing research.

• Competitive Analysis Research

Customer Satisfaction and Loyalty Research

Brand awareness research, campaign research.

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

• Family size 
• Challenges faced at work or in life 

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

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

Product/Service Use Research

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

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

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

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

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

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

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

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

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

Competitive Analysis

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

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

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

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

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

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

How to Do Market Research (Detailed Roadmap)

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

1. Define the problem or objective of the research

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

2. Determine the type of data needed

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

3. Identify the sources of data

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

4. Collect the data

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

5. Analyze the data

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

6. Interpret the results

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

7. Report the findings

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

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

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

8. Take action based on the findings

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

How to Prepare for Market Research Projects

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

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

How to Identify the Right People to Engage for Market Research

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

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

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

Gather a mix of participants

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

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

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

Related Resources:

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

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

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

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

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

Here are a few ways to build your competitor list:

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

Identifying Content Competitors

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

Once you have this list, follow these steps:

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

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

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

Market Research Examples

Mcdonald's focus on customer feedback and profiling.

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

Nike's Extensive Research and Collaboration for Running Shoes Development

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

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

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

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

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

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

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

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

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

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

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

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

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

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

VideoTranscript

The takeaway.

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

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

Ryan Fratzke is a Partner and Executive Strategist at Fratzke, specializing in transforming mid-size businesses into human-centered brands through storytelling, strategy, culture, and technology. 

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Market Research: What It Is, Why It Matters, and How To Get It Right

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What is market research?

What is market research used for? How important is it? And, how do you choose the right type of research for your business?

Sit back, take five, and I’ll explain the different types of research , what tools are best for the job, and how you can leverage them to grow your business and master your market .

Market research definition:

Market research means to systematically collect and analyze data about a target market or defined segment. It’s a multivariate process that uncovers key facts and insights to inform decisions.

Whether you’re launching a new product , looking for ways to expand a business, or seeking out efficiencies in an existing company, market research is a highly effective way to flesh-out ideas, innovate, and grow. 

Advantages of market research

Market research helps you identify your greatest strengths, threats, and opportunities. It can help you find your way when markets become tough to predict and find efficient ways to grow your business .

• Reduce costs
• Define detailed customer personas
• Make data-driven decisions
• Find new opportunities for growth
• Unpack competitor’s successes
• Develop an informed content marketing strategy
• Identify trends
• Inform market analysis
• Discover the best marketing channels to use
• Find the best ways to communicate with customers
• Benchmark performance against rivals

Online market research can help the whole business at any stage of its life. When practiced consistently and systematically, you can realize its many benefits.

Why is market research important?

Market research helps you identify your greatest threats. And it also gives you a clear picture of opportunities you can capitalize on for greater returns on your business investments, or ROI.

Understanding your specific market on different levels and from different perspectives helps you reach well-informed, data-informed decisions . The process can involve multiple phases. But, if you follow a systematic approach using a market research template , your efforts will pay off.

For more, check out our blog: Importance of Market Research: 9 Reasons Why It’s Crucial for Your Business

To skip ahead and start right now, download our free pack of market research templates.

Different types of market research

Market research is a questions and answers game. Once you’ve asked the important questions, you’ll need to choose the right type of research to get your answers. There are four core types of research, each of which can be applied to help you solve a problem or gather insights to inform key decisions.

Primary market research

Primary market research is the first-hand collection of data. It’s data that’s not available to others, and can be obtained in a number of ways. Here are the most common.

• Web Metrics Use analytics software that provides traffic and engagement metrics to understand how audiences behave.
• Observation To observe how users behave and navigate your site, you can install software that records visits and creates heatmaps. Such tools are useful for qualitative research regarding your UX/UI and at the same time, quantify the findings.
• Customer surveys Survey questionnaires and polls can be distributed to any number of customers through email, SMS, your site, or social media. They let you collect both qualitative and quantitative data from respondents using open-ended questions.
• Focus groups You select a small number of people for a group discussion. A moderator leads the session with questions and records the conclusions. This is also a form of qualitative research, and you would use it to get in-depth information.
• Face-to-face interviews Another qualitative assessment method is one-on-one interviews. Consumers representative of your target audience or a segment of it are selected to answer questions about a specific research topic.
• Phone calls To involve a larger number of people and get more answers, you can conduct surveys over the phone. These interviews would be less specific and include fewer questions.

Helpful: A complete guide to doing primary market research

Secondary market research

Secondary research is second-hand data that has already been produced. It’s available to all who wish to consume it. Using this type of data is preferred by those who wish to keep costs low, as it can be quicker and freely available.

• Government reports and census data Annual, quarterly, and other periodic industry reports are a rich data source to tap into. Government organizations publish statistics in areas of trade, ecommerce, and finance.
• Academic papers and educational resources University research is a source of high-quality information. This is useful for in-depth background information on a broad scale.
• Online articles and case studies, public and commercial sources Industry-specific publications can be a valuable source of information for market segmentation, providing you with data and insights on market trends or a specific market segment or niche.

Further reading: A complete guide to doing desk research

Qualitative market research

Qualitative market research is one of the best ways to understand how people think or feel about a brand, product, or service. It takes more time to plan and analyze the results than other market research types. However, with tools like market research surveys , there are quick and effective ways to do it.

As some of the methods are outlined in the primary and secondary research sections, I’ve included a short list of qualitative research methods below.

• Focus groups
• Case study or whitepaper 
• Online forums
• Biometrics 
• Ethnography

Helpful: Read the complete guide to qualitative research and 83 qualitative research questions & examples

Quantitative market research

Quantitative market research is all about numbers. It collects numerical data to help answer specific research questions . The information collected can be easily quantified and analyzed to establish trends, insights, and patterns.

With this type of research, you’ve got three core data collection methods. However, you’ve also got to consider the design of the research, which can impact which method is used.

What is market research used for?

The applications for market research are virtually limitless. Market research can help you unravel the most complex of business challenges to reach data-driven decisions , and when used consistently, it can help you navigate turbulent times, fuel growth, and support your success . Here are just a few examples of what market research is used for, with a few real-world examples thrown in for good measure.

1. Company research

Market research allows you to shine a spotlight on any business and unpack its wins and losses for your own gain. Let’s say you are doing market research for a business plan ; you’ll likely want to evaluate the successes of others in your industry. Doing systematic company research is a proven way to inform a SWOT analysis .

Doing industry analysis can show you who your industry leaders are , along with any emerging players showing exponential growth.

Let’s say I want to find out which companies to research, I would use Similarweb Digital Research Intelligence to analyze an industry. Here, I can see who my top companies to watch are instantly. It also shows me other companies showing rapid growth in my market.

Read More: How to Research a Company: The Ultimate Guide

2. Competitive benchmarking

Most of your relevant data will come from your competition. If you plan to offer something that’s new for you but already exists in the market, learn from other’s mistakes and successes. If your goal is to evaluate and optimize, collect competitors’ data, and compare it to yours. See what works for them, find their weak spots, and improve on them.

What market research gives you here, is the ability to systematically compare each of your rivals. And, it’s not as complex as it sounds either. Simply choose a type of competitive analysis frameworks to use, complete the template for each; then compare the results to uncover relevant insights.

Read More: The Why and How of Competitive Benchmarking

3. Trendspotting

Another objective for market researchers is to forecast upcoming trends. Data collection over time helps you understand the dynamics of the market. Some markets have strong seasonal fluctuations. Increased shopping during December is an obvious example, but often these shifts are not always evident unless you measure and analyze them specifically.

With the data from your historical market research, you can evaluate their impact and the likelihood you will keep seeing these trends. Based on that, you can make predictions about future developments.

4. Audience analysis

Who will find your product most useful and why? 

Examining the size of your audience and the existing demand for your product or services is crucial. Understanding  your target audience allows you to build your product offering and marketing strategy more efficiently. You also want to learn first-hand where people buy this type of product and how much they are willing to spend so that you can estimate your reachable market share .

Here’s a quick example of how we use Similarweb to do effective audience analysis . You can unpack key audience demographics for any site you choose. And get up-to-date stats about gender, age, location, interests, browsing habits, and more.

5. Market segmentation

There are lots of ways to segment a market. Doing this well can deliver higher conversions, reduce costs, redefine marketing strategies, and help you connect with customers on a more personal level. Market research can help you do most types of market segmentation, the most widely adopted of all is demographic segmentation . Here, you look for shared but specific characteristics of a target audience.

Using Similarweb, I can view audience demographics for a website, and compare it side-by-side with rival sites. In this example, I am looking at hotel booking sites to try and spot any difference between the respective audiences of each.

Helpful: Read our complete guide to market segmentation

6. Marketing strategy

Market research can also help you reach the right decision regarding where to advertise or market your business. After analyzing the data, you’ll know which marketing channels are most effective with your target audience. You can also use research to look at the specific keywords and ad creatives that are generating the best responses and ROI.

Similarweb Digital Research Intelligence makes this type of research effortless. Within the marketing channels tab, you can analyze an entire industry or hone in on a specific site of interest. View the various channels across social media, email, direct, organic search, paid search, and display ads to see which channels convert and where the highest channel traffic comes from.

7. Customer experience

Market research is your best way to get information that isn’t naturally visible but that may significantly affect your business. Just think, the fact that your users don’t complain doesn’t necessarily mean they are all delighted with what you offer.

While some customers tend to keep their criticism to themselves, others will be vocal and leave reviews online. Market research is a powerful tool to help inform improvements to services and products alike. Asking for feedback, listening to it, and looking at the feedback left for rivals in your market can uncover telling insights that can shape service offerings, marketing campaigns, and new feature development.

To see what people use market research for and view real-world instances of research in action, head over to our market research examples page.

Tools for market research

When we look at what market research is, the answer is always rooted in data . Over 100 years ago, vehicle manufacturers undertook extensive research to help them develop different models to suit various segments of society. Fast-forward 100 years, and we find similar applications still exist. However, what’s changed are the tools being used and, more importantly, the accessibility of those tools to a far broader audience .

There are more market intelligence tools in existence today than ever before. Here’s a quick summary of a few you can use to collect information for your market research.

• Google Trends Google Trends is a valuable resource for quantitative research data about market tendencies and user behavior.

• Similarweb Research Intelligence Get the freshest digital intelligence from a platform that shows the insights that count. With the ability to analyze an entire market in an instant and unpick competitors’ wins and losses online, you can count on it to help you perform quick and effective market research.
• Hotjar The digital tool lets you observe and record user behavior on your website. It also creates heatmaps of your pages so you can analyze how visitors navigate.
• SurveyMonkey Create your own online survey with this free tool. SurveyMonkey provides templates for questionnaires and lets you distribute them through your various channels, then collect and interpret results.
• YouGov This platform offers its users daily with thousands of data points and statistics on consumer attitudes, opinions, and behavior.
• Pew Research Center This non-profit organization conducts and publishes public opinion polling, demographic research, content analysis, and other data-driven social science research.
• Living Facts The site provides current statistics about the American population, including demographics, social and health issues, opinions, and more.

Read this post to see what market research tools are hot right now.

Wrapping up: what is market research

Market research is insight. It gives you information to fuel key decisions in your business. Without it, companies must navigate their market uncertainly and make key decisions based on instinct or outdated data.

Similarweb transforms the way companies do market research . There’s no expensive outlay for prolonged research reports that take an age to produce. The data is the freshest there is; it’s credible and shows traffic trends and comparable performance like no other.

Try using it to answer your next big market research question.

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Get actionable insights for market research here

What are the benefits of market research?

Effective market research helps businesses understand and improve their position while also identifying potential threats and opportunities, while also spotting emerging trends .

What is the main purpose of market research?

The main benefit of market research is insight. It can give you access to the data you need to make decisions in your business. Before you invest money or time in any venture, use market research to inform your decision.  

What’s the difference between primary and secondary market research?

Primary research is research you conduct on your own that uses numbers and metrics, and secondary research is research that was done by someone else with a qualitative focus.

by Liz March

Digital Research Specialist

Liz March has 15 years of experience in content creation. She enjoys the outdoors, F1, and reading, and is pursuing a BSc in Environmental Science.

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What is Market Research? Types, Tools, Examples

Appinio Research · 13.12.2022 · 33min read

Are you ready to unlock the secrets to success in today's competitive business landscape? Understanding your market is critical to thriving in an ever-changing environment. But where do you start? Market research holds the answers. It's not just about gathering data; it's about gaining invaluable insights into your customers, competitors, and industry trends. Whether you're a seasoned entrepreneur or just starting out, mastering the art of market research is essential for making informed decisions that drive growth and profitability. In this guide, we'll demystify the world of market research, breaking down complex concepts into easy-to-understand insights and practical strategies. From defining market research to implementing actionable insights, we'll cover everything you need to know to take your business to the next level.

What is Market Research?

Market research is the systematic process of gathering, analyzing, and interpreting information about a market, its consumers, and its competitors. It involves collecting both quantitative and qualitative data to gain insights into consumer behavior, market trends, and competitive landscapes. Market research serves as a foundation for strategic decision-making in business, helping organizations understand their target audience , identify opportunities, and mitigate risks.

Importance of Market Research

• Understanding  Customer  Needs : Market research helps businesses gain insights into their target customers' needs, preferences, and expectations. By understanding what drives consumer behavior,  businesses  can develop products and services that effectively meet customer demands.
• Identifying Market Trends : Market research enables businesses to stay abreast of emerging trends and shifts in consumer behavior. By monitoring market trends,  businesses  can adapt their strategies accordingly and capitalize on new opportunities.
• Assessing Competitive Landscape : Market research provides insights into competitors' strategies, strengths, and weaknesses. By understanding the competitive landscape, businesses can identify gaps in the market and differentiate themselves effectively.
• Mitigating Risks : Market research helps  businesses  assess the feasibility and viability of new products, services, or business ventures. They can minimize risks and avoid costly mistakes by conducting market research before making strategic decisions.
• Optimizing Marketing Strategies : Market research informs the development and optimization of marketing strategies, enabling businesses to target the right audience with the right message through the proper channels. By understanding consumer preferences and behaviors, they can tailor their marketing efforts for maximum impact.

Objectives of Market Research

• Understanding Consumer Behavior : Market research aims to understand  the  motivations, preferences, and behaviors  of target consumers .  By gaining insights into consumer behavior, businesses can tailor their products, services, and marketing strategies to meet  customer  needs effectively.
• Identifying Market Opportunities : Market research helps  businesses  identify untapped market segments, niche markets, and unmet needs. By identifying market opportunities, they can develop new products or services that address market gaps and drive growth.
• Assessing Market Potential : Market research enables businesses to evaluate the size, growth potential, and attractiveness of target markets. By understanding market potential, they can prioritize resource allocation and focus their efforts on markets with the most significant opportunities for success.
• Evaluating Competitor Strategies : Market research provides insights into competitors' strategies, offerings, and market positioning. By analyzing competitor data, businesses can identify areas of competitive advantage and develop strategies to differentiate themselves.
• Informing Decision-Making : Market research  serves as  a basis for strategic decision-making across all business areas.  By providing data-driven insights and actionable recommendations,  market research helps businesses make informed decisions that drive growth and profitability.

Understanding Market Research

Scope of Market Research

The scope of market research extends far beyond simply understanding consumer preferences. It encompasses various aspects of market dynamics, including:

• Consumer Behavior : Understanding  the  motivations, needs, and preferences  of target consumers .
• Market Trends : Identifying emerging trends, shifts in consumer behavior, and changes in market demand.
• Competitive Analysis : Assessing competitor strategies, market positioning, and strengths and weaknesses.
• Industry Insights : Gathering information about industry trends, regulatory changes, and technological advancements.
• Market Segmentation : Identifying distinct market segments based on demographics, psychographics, and behavior.

By comprehensively exploring these aspects, businesses can  gain a holistic understanding of  their market environment and make strategic decisions accordingly.

Types of Market Research

Market research can be broadly categorized into two main types: qualitative  research and quantitative research .

Qualitative Research

Qualitative research focuses on exploring underlying motivations, attitudes, and perceptions through non-numerical data. Common methods include:

• Focus Groups : Small group discussions led by a moderator to gather insights into consumer opinions and attitudes.
• In-depth Interviews : One-on-one interviews  conducted  to delve deeper into individual experiences and perspectives.
• Observation : Direct observation of consumer behavior in real-world or simulated environments.

Qualitative research provides rich, nuanced insights that help businesses understand the "why" behind consumer actions and preferences.

Quantitative Research

Quantitative research involves collecting and analyzing numerical data to quantify market trends, consumer behavior, and business performance. Key methods include:

• Surveys : Structured questionnaires administered to a sample of respondents to gather quantitative data.
• Experiments : Controlled studies designed to test hypotheses and measure the impact of variables on consumer behavior.
• Secondary Data Analysis :  Utilizing existing data sources, such as market reports and databases , to analyze  trends and patterns .

Quantitative research provides statistically valid insights that enable businesses to make data-driven decisions and measure the effectiveness of marketing strategies.

Market Research Components

The success of market research initiatives hinges on several key components:

• Clear Objectives : Defining research objectives that align with business goals and provide actionable insights.
• Methodological Rigor : Selecting appropriate research methods and ensuring the validity and reliability of data collection.
• Data Analysis : Applying rigorous analysis techniques to derive meaningful insights from collected data.
• Insightful Interpretation : Interpreting research findings in the context of broader market dynamics and business implications.
• Actionable Recommendations : Providing actionable recommendations that guide strategic decision-making and drive business growth.

How to Set Market Research Objectives?

Before embarking on any market research initiative, establishing clear objectives is essential to guide the entire process.  By setting  research objectives , you can ensure  that your efforts are focused, relevant, and aligned with your business goals and target audience.

1. Identify Business Goals

The first step in setting research objectives is identifying your overarching business goals. What are you trying to achieve with your market research? Are you looking to launch a new product, enter a new market, or improve customer satisfaction ?  By clearly  defining your business goals , you  can tailor your research efforts to address specific challenges and opportunities.

Suppose your goal is to increase market share in a particular demographic segment. Your research objectives may then focus on understanding the preferences and purchasing behavior of that target audience.

2. Define Research Questions

Once you've identified your business goals, the next step is to define research questions that will help you achieve those goals. Research questions should be specific, measurable, and relevant to your objectives. They should guide your data collection efforts and provide a framework for analysis.

For instance, if your business goal is to improve brand perception among millennials, your research questions may include:

• What factors influence millennials' brand preferences?
• How do millennials perceive our brand compared to competitors?
• What channels do millennials use to engage with brands?

3. Establish Market Research KPIs

In addition to defining research questions, it's essential to establish key performance indicators (KPIs) that will measure the success of your market research efforts. KPIs should be aligned with your business goals and reflect the outcomes you aim to achieve.

For example, if your goal is to increase customer satisfaction, KPIs may include metrics such as Net Promoter Score (NPS) , customer retention rate, and customer lifetime value. These KPIs provide quantifiable measures of success that can inform strategic decision-making.

4. Align Objectives with Target Audience

Finally, it is crucial to ensure that your research objectives align with  those of your target audience .  Understanding their needs, preferences, and behaviors is essential for conducting meaningful research and deriving actionable insights.

For example, if your target audience consists of young professionals, your research objectives may focus on understanding their lifestyle choices, media consumption habits, and purchasing behavior.  You  can gather relevant data that drives business growth and customer satisfaction  by aligning your goals with your target audience .

By following these steps to set clear and actionable research objectives, you can maximize the effectiveness of your market research efforts and achieve tangible results that contribute to your business success.

Market Research Tools

Market research tools are essential resources that facilitate data collection,  data analysis, and data  interpretation to gain insights into consumer behavior, market trends, and competitive landscapes.  These tools come in various forms, ranging from survey platforms to analytics software , each  designed to streamline and enhance the market research process. Here's a closer look at what market research tools are, what they do, and their benefits.

What Are Market Research Tools?

Market research tools encompass a wide range of software, platforms, and applications specifically designed to assist businesses in gathering and analyzing data related to their target market, customers, and competitors. These tools offer functionalities such as survey creation, data visualization, sentiment analysis , competitor monitoring, and trend forecasting, among others. By leveraging these tools, businesses can gain valuable insights that inform strategic decision-making and drive business growth.

What Do Market Research Tools Do?

Market research tools serve multiple purposes throughout the market research process. They enable businesses to:

• Collect Data : Market research tools facilitate the gathering of data through surveys, questionnaires, social media monitoring, web scraping, and other methods.
• Analyze Data : Once data is collected, these tools provide analytical capabilities to process and interpret the data, uncovering actionable insights and trends.
• Visualize Insights : Many market research tools offer data visualization features, allowing users to create charts, graphs, and dashboards to present insights in a clear and visually appealing manner.
• Monitor Competitors : Some tools enable businesses to track and analyze competitor activities, pricing strategies, product launches, and customer sentiment, providing valuable competitive intelligence.
• Forecast Trends : Advanced market research tools leverage data analytics and machine learning algorithms to forecast market trends, consumer behavior patterns, and emerging opportunities, helping businesses stay ahead of the curve.

Benefits of Market Research Tools

Market research tools offer several benefits to businesses of all sizes and industries, including:

• Time and Cost Savings : Market research tools save businesses valuable time and resources compared to traditional research methods by automating data collection, analysis, and reporting processes.
• Data Accuracy and Reliability : These tools ensure data accuracy and reliability by standardizing data collection methods , reducing human error, and providing robust analytical capabilities.
• Actionable Insights : Market research tools generate actionable insights that inform strategic decision-making, product development, marketing campaigns, and overall business strategy.
• Competitive Advantage : By monitoring competitors and identifying market trends, businesses gain a competitive advantage and adapt quickly to changing market conditions.
• Improved Customer Understanding : Market research tools enable businesses to gain a deeper understanding of their target audience, including their needs, preferences, behaviors, and pain points, leading to more effective customer engagement and retention strategies.

Appinio: Your All-in-One Market Research Platform

Ready to take your market research to the next level? Look no further than Appinio – the ultimate all-in-one market research platform. With Appinio, you can seamlessly conduct surveys, analyze data, and gain real-time consumer insights in minutes. Our intuitive platform empowers businesses to  make data-driven decisions with confidence , driving growth and profitability.

Say goodbye to complex research processes and hello to actionable insights with Appinio. Book a demo today and experience the power of Appinio for yourself!

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Primary Research Methods

Primary research methods are fundamental tools  used by businesses and researchers  to gather firsthand data directly from the source.  Unlike secondary research, which relies on existing data, primary research involves collecting new information tailored to specific research objectives. These methods allow for a deeper understanding of target audiences, market dynamics, and consumer preferences through direct interaction and observation.

Surveys are one of the most widely used primary research methods for gathering quantitative data from a sample of respondents. Surveys typically consist  of a series of structured close-ended questions as well as open-ended questions administered through various mediums, such as online platforms, phone interviews, or paper forms.

Interviews involve direct one-on-one or group interactions with respondents to gather in-depth qualitative insights. Depending on the level of flexibility in questioning, interviews can be structured, semi-structured, or unstructured.

Focus Groups

Focus groups involve facilitated discussions with  a  small  group of  participants to gather qualitative insights on a specific topic or issue.  Focus groups are  particularly useful  for exploring complex topics and understanding group dynamics and consensus.

Observation

Observation involves systematically watching and recording behaviors, interactions, and events in natural or controlled settings. Observation can be overt or covert and is often used to gather qualitative data on behaviors that may be difficult to capture through other methods.

How to Conduct Secondary Research?

Secondary research is a foundational step in the market research  process , providing valuable insights from existing sources.

What is Secondary Research?

Secondary research involves collecting and analyzing existing data and information from various sources. Unlike primary research, which  involves gathering original data through surveys or experiments, secondary research relies on data that others have already collected. The purpose of secondary research is to leverage existing knowledge to inform decision-making and gain insights into market trends, consumer behavior, and industry dynamics.

Sources of secondary data  include government agencies, industry associations, research organizations, companies, market research firms, academic institutions, online databases, and media sources.  By accessing these diverse sources, businesses can leverage existing knowledge to inform their strategies and decision-making processes effectively.

Techniques for Gathering Secondary Data

Several techniques can be employed to gather secondary data, including:

• Literature Review : Conducting a comprehensive review of existing literature and research studies relevant to the topic of interest.
• Data Mining : Using advanced data analytics techniques to extract valuable insights from large datasets and databases.
• Content Analysis : Analyzing textual data from  sources such as  news articles, social media posts, and online reviews to identify patterns and trends.
• Document Analysis : Examining reports, whitepapers, and other documents to extract relevant information and insights.

Evaluating the Credibility of Secondary Sources

When utilizing secondary sources, it's essential  to critically evaluate their credibility and reliability . Several factors should be considered when assessing the credibility of secondary sources, including:

• Authoritativeness : Assessing the reputation and expertise of the source or organization that produced the data.
• Accuracy :  Verifying  the accuracy of the data and  ensuring  that it is based on sound research methods and rigorous analysis.
• Currency : Checking the timeliness of the data to ensure that it reflects current market conditions and trends.
• Objectivity : Evaluating whether the source has any biases or conflicts of interest that may impact the reliability of the data.

By carefully evaluating the credibility of secondary sources, businesses can ensure that the information they rely on is accurate, relevant, and trustworthy.

By leveraging secondary research, businesses can access a wealth of information that informs strategic decision-making, drives innovation, and facilitates business growth.

Market Research Use Cases

Market research is a crucial tool for businesses to understand their target audience, competitors, and market dynamics. By employing various research methods, companies can gain valuable insights into consumer behavior, preferences, and trends. Here are some of the most common use cases of market research.

Market Segmentation

Market segmentation involves dividing a heterogeneous market into smaller, more manageable segments based on shared characteristics such as demographics, psychographics, or behavior.

By segmenting the market, businesses can tailor their marketing strategies and offerings to better meet the needs and preferences of specific customer groups . For example, a clothing retailer might segment its market based on age groups to create targeted advertising campaigns and product assortments for different demographics.

Target Group Analysis

Target group analysis focuses on identifying and understanding specific market segments most likely to be interested in a company's products or services. This analysis involves researching the characteristics, behaviors, and preferences of potential customers within these segments.

By understanding their target groups, businesses can develop more effective marketing strategies and allocate resources more efficiently. For instance, a software company might conduct target group analysis to identify industries or businesses  most in need of their product, allowing them to tailor their sales efforts accordingly.

Utility Analysis/Feature Prioritization

Utility analysis,  also known as feature prioritization, helps businesses understand which product features are most important to customers and prioritize development efforts accordingly. This analysis involves gathering customer feedback through surveys, focus groups, or interviews to determine which features they value most.

By prioritizing features that offer the highest utility to customers, businesses can enhance customer satisfaction and differentiate their products from competitors. For example, a mobile phone manufacturer might conduct a utility analysis to identify which features—such as camera quality or battery life—are most important to consumers when purchasing a new phone.

MaxDiff Analysis

MaxDiff analysis , short for Maximum Difference Scaling, is a research method used to identify the relative importance of different product features or attributes. In a MaxDiff study, participants are presented with sets of features and asked to indicate which they consider the most and least important.

By analyzing the results, businesses can determine which features impact customer preferences most  and prioritize them in product development efforts. For instance, a fast-food chain might use MaxDiff analysis to identify the most desired menu items or promotional offers among customers.

TURF Analysis

Total Unduplicated Reach & Frequency (TURF) analysis is a method used to optimize product portfolios, marketing strategies, or product variants to maximize reach and frequency among target customers. TURF analysis helps businesses identify the combination of offerings that appeal to the  largest  number of customers while minimizing overlap. For example, a media company might use TURF analysis to determine the  most effective  combination of TV shows or advertising channels to reach their target audience.

Conjoint Analysis

Conjoint analysis is a powerful technique  used  to understand customer preferences and trade-offs when evaluating product features or attributes. In a conjoint study, participants are presented with multiple product profiles that vary in features and  asked to choose their preferred option.

By analyzing these choices, businesses can determine the relative importance of different features and predict how changes in product attributes will impact customer preference and willingness to purchase. For example, a car manufacturer might use conjoint analysis to determine a new model's optimal combination of price, fuel efficiency, and design features.

Kano Analysis

Kano analysis helps businesses understand the factors that drive customer satisfaction and dissatisfaction. This method categorizes product features into three categories:  basic , performance, and delighters.

Basic features are essential and expected by customers, while performance features increase satisfaction linearly. Delighters, on the other hand, provide unexpected satisfaction and can differentiate a product from competitors. By understanding the Kano model, businesses can prioritize features that delight customers and differentiate their offerings in the market.

Driver Analysis

Driver analysis identifies the key factors influencing customer behavior and purchasing decisions. By quantifying the impact of different product features or attributes on customer satisfaction or purchase intent, businesses can prioritize areas for improvement and allocate resources efficiently. For example, a hospitality company might conduct a driver analysis to determine which amenities or services have the greatest  impact on guest satisfaction and loyalty.

Cost/Price Analysis

Price analysis involves studying customer preferences and purchasing behavior around different price points to optimize pricing strategies.  By  quantifying the relative importance of price levels and understanding price sensitivity , businesses can set prices that maximize revenue and profitability .  Price analysis methods include Van Westendorp analysis, Gabor-Granger analysis, and price elasticity modeling.

Gabor-Granger Price Analysis

Gabor-Granger price analysis is a method used to understand customer responses to different pricing strategies. In a Gabor-Granger study, participants are presented with  different price points  and asked about their likelihood of purchasing the product at each price level. By analyzing these responses, businesses can determine price sensitivity and identify the optimal price point that maximizes revenue and profitability.

Van Westendorp Pricing Analysis

Van Westendorp pricing analysis helps businesses understand customer preferences around different price points and determine the optimal pricing strategy for their products or services. This method involves asking customers a series of questions about price acceptability, including the price they would consider too expensive, too cheap, a bargain, and too expensive but still worth considering. By analyzing the responses, businesses can identify the price range that maximizes customer acceptance and willingness to purchase.

Discovering consumer insights has  never  been  easier . With Appinio , you can conduct these market research use cases in minutes, effortlessly gaining valuable insights to fuel your business decisions. From segmenting your market to prioritizing features and analyzing pricing strategies, Appinio streamlines the entire process, allowing you to focus on what truly matters – making data-driven decisions that propel your business forward.

Ready to experience the  full  potential market research? Book a demo today and experience the power of real-time consumer insights with Appinio!

How to Interpret Market Research Findings?

Once you've collected and analyzed your data, the next step is to interpret the findings to extract actionable insights. Interpreting research findings involves more than just looking at the numbers or qualitative responses—it requires understanding the broader context, identifying patterns, and drawing meaningful conclusions.

To interpret your market research findings:

• Contextualize the Data : Consider the broader context in which the data was collected, including market trends, competitive dynamics, and industry developments. Understanding the context helps you interpret the findings accurately and identify potential implications for your business.
• Identify Patterns and Trends : Look for patterns, trends, and relationships in the data that provide insights into consumer behavior, preferences, and market dynamics. Use visualizations such as charts, graphs, and  heatmaps  to identify patterns.
• Compare and Contrast : Compare your findings with previous research, industry benchmarks , or internal data to gain a deeper understanding of your market position and performance. Contrasting your findings with competitors' data can also provide valuable insights.
• Consider Limitations : Acknowledge any limitations or biases in your research methodology that may impact the interpretation of findings. Be transparent about the strengths and weaknesses of your research approach to ensure the validity of your conclusions .
• Seek Diverse Perspectives : Encourage collaboration and discussion among team members or stakeholders to gain diverse perspectives on the findings. Different viewpoints can lead to  richer  interpretations and more robust insights.
• Look for Actionable Insights : Focus on identifying actionable insights that can inform strategic decision-making and drive business growth. Translate your findings into concrete recommendations and initiatives that address key challenges or capitalize on opportunities.

How to Implement Market Research Insights?

Implementing market research insights is where the actual value of your research efforts comes to fruition. It involves translating your findings into actionable strategies and initiatives that drive business growth and competitive advantage.

• Prioritize Key Findings : Identify your research's most critical findings and insights with the  greatest  potential impact on your business objectives. Prioritize these insights to focus your implementation efforts effectively.
• Develop Action Plans : Translate your research findings into concrete action plans and initiatives that address identified opportunities or challenges. Define clear goals, objectives, timelines, and responsibilities for each action plan to ensure accountability and alignment.
• Engage Stakeholders : Involve key stakeholders, including senior leadership, department heads, and frontline employees, in the implementation process. Seek their input and buy-in to ensure alignment and support for your initiatives.
• Allocate Resources : Allocate the necessary resources, including budget, personnel, and technology, to support the implementation of your market research insights. Ensure that resources are allocated effectively to maximize the impact of your initiatives.
• Monitor Progress : Establish metrics and KPIs to track the progress and success of your implementation efforts. Regularly monitor and evaluate performance against these metrics to identify any deviations or areas for improvement.
• Iterate and Adapt : Market dynamics are constantly evolving, so it's essential to iterate and adapt your strategies based on ongoing research and feedback. Continuously reassess your initiatives and make adjustments as needed to stay competitive and responsive to changing market conditions.

By effectively implementing market research insights, you can drive tangible results and create a competitive advantage for your business in today's dynamic marketplace.

Conclusion for Market Research

Market research is the compass that guides your business journey, helping you navigate through uncertainties and make informed decisions. By understanding your customers, competitors, and market trends, you can position your business for success and stay ahead of the curve. Remember, market research isn't a one-time task—it's an ongoing process that evolves with your  business  and the market. So, continue to gather insights, analyze data, and adapt your strategies to meet the ever-changing needs of your target audience.

In today's fast-paced world, the importance of market research cannot be overstated. It's the foundation upon which successful businesses are built, providing the insights needed to drive innovation, optimize marketing efforts, and maximize profitability. By harnessing the power of market research, you can unlock new opportunities, mitigate risks, and achieve sustainable growth.

How to Conduct Market Research in Minutes?

Introducing Appinio , the real-time market research platform that revolutionizes how companies gather consumer insights. With Appinio, conducting market research is not only fast but also incredibly intuitive. Say goodbye to long waits for data and complex research processes.

Here's why Appinio is the ultimate solution for your market research needs:

• From questions to insights in minutes:  With our platform, you can go from formulating your research questions to obtaining actionable insights in mere minutes.
• No research degree required:  Our intuitive platform is designed for everyone, regardless of their research background. You don't need a PhD to navigate our user-friendly interface and access powerful consumer insights.
• Global reach, instant results:  Define your target audience from over 1200 characteristics and survey them in more than 90 countries, all within minutes. With an average field time of just 23 minutes for 1,000 respondents, you can get the data you need quickly and efficiently.

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What is Convenience Sampling? Definition, Method, Examples

• Login to Survey Tool Review Center
• What Is Market Research?

Summary: Market research is a structured process to identify, gather, and analyze information to support business decisions. Market research can provide insights into the customer journey and guide decisions related to product development, marketing strategy, pricing strategy, and points of sales (online and offline) to create a customer experience that supports customer acquisition and retention.

8 minutes to read. By author Michaela Mora on July 10, 2021 Topics: Relevant Methods & Tips , Business Strategy , Market Research

Market research is a discipline with roots in psychology and sociology and involves the identification, collection, analysis, and use of information to make business decisions.

Market research and marketing research are so connected that the nuances are lost and both terms are used interchangeably in practice. For this article, I’ll use the term market research.

We use market research to identify and solve problems in different business areas, often connected to the four Ps in marketing:

• Place (distribution, point of sale)
• Promotion (advertising)

Overall, these four aspects of any product or service are drivers of the customer experience as customers interact with each of them through the customer journey from product development, pre-sale, point-of-sale, and post-sale.

Market Research to Identify Problems

The use of market research to identify problems aims at the discovery of what we don’t know. It is often called “generative research” in the context of product development as we look for new product ideas. At a very high level is exploratory in its goals and it can use qualitative and quantitative data collection and analysis techniques.

We use market research for problem discovery when we design research to:

• Identify unmet market needs and their market potential.
• Size the market share for specific products or services.
• Monitor brand image issues of our brand and competitors.
• Profile market segments.
• Analyze sales trends.
• Forecast future trends.
• Identify business trends.

Market Research to Solve Problems

Once a business discovers market opportunities through an understanding of unmet needs, or issues related to its branding, pricing of distribution that may impact the customer experience, the next step is to generate solutions and validate them.

The solutions may be new products and services, new product features to improve the customer experience, a pricing strategy, a brand positioning, a marketing strategy including customization of marketing messages and content for different marketing channels, a redesign of points of sales (online and offline), an internal reorganization to align systems and employees with the customer experience, etc.

For each need or issue discovered there are many potential solutions limited by resources available to the business. The more limited the resources are, the higher the need to use them effectively. Market research can help design solutions for high business impact.

We use market research to solve problems when we design research to:

• Identify actionable market segments for products or services (digital or physical)
• Develop new products (digital or physical)
• Establish a pricing strategy and identify optimal price points.
• Determine effective ways to advertise products and services and optimize marketing channels.
• Identify distribution issues and barriers to the path to purchase.
• Improve customer experience to support customer acquisition and retention strategies.

The Market Research Process

For any given market research project, the process usually includes six major steps:

• Business problem definition and translation to a research problem
• Development of an approach to the research problem
• Research design selection
• Data collection or fieldwork
• Data processing
• Analysis and reporting

Market Research Design Categories

There are different ways to categorize market research depending on:

• The focus on the problem at hand: Primary vs. Secondary.
• The research design goal: Exploratory vs. Descriptive, vs. Causal
• The type of data and collection methods used: Qualitative vs. Quantitative.

Each of these categories helps us guide how to select different research designs, data collection methods, and analysis techniques to gather the information we need to help solve the research problem and provide insights to support business decisions.

Primary Vs. Secondary

First, we try to determine whether we need to conduct secondary or primary research.

Primary research is based on data collection designed to address specific problems.

Secondary research is based on data that have already been collected for other purposes but may be related to the topic at hand. Secondary research should be a prerequisite to the collection of primary data, which would be appropriate when the secondary data sources have been exhausted or yield minimal returns.

Exploratory vs. Descriptive vs. Causal

Exploratory research designs are used to provide insights into problems we don’t fully understand or have not been discovered yet. This is often the type of research we start with when we use market research to identify problems.

We conduct descriptive market research when we try to describe characteristics of target markets or segments of interest, frequency of certain behaviors, attitudes, and perceptions, market trends, etc.

Causal market research, on the other hand, tries to find evidence of cause-and-effect relationships to understand which variables are the cause of behaviors, attitudes, perceptions , or other phenomena of interest.

Qualitative vs. Quantitative

This categorization helps us separate data collection and analysis methods based on their:

• Objectives.
• Sample design.
• Type of data and analysis they allow.
• Type of decisions they support.

Generally, qualitative research helps us explore and get a deeper understanding of a problem, while we use quantitative research to quantify and validate findings and test hypotheses. The latter may come from qualitative research, secondary research, or just assumptions made by the business.

Note that different combinations of the four criteria mentioned may render a research design qualitative or quantitative. For example, surveys with small samples may provide only directional results more appropriate for qualitative analysis.

Primary Market Research Data Collection Methods

As describe above, once we decide to design research to answer a specific business and research problem, we are on our way to conduct primary research.

We use a myriad of data collection methods in primary market research depending on the research objectives and research design selected.

Ideally, we should combine qualitative and quantitative methods since they provide different types of data and insights.

Qualitative Research

Qualitative Research is one type of exploratory market research methodology based on semi-structured or unstructured data collection. Data collection methods used in primary qualitative research can be classified as direct or indirect .

Direct methods are those in which we disclose the research objective to participants. These data collection methods include:

• In-depth Interviews (IDIs) – Online , In-person, Phone
• Focus Groups , Online, In-person
• Online bulletin boards
• Diary Studies
• Usability Testing , Online, In-person
• Usability Expert Reviews
• Contextual inquiry
• Shop-alongs
• Ethnographic observation

Indirect methods are those for which the true purpose of the research is not disclosed to participants. These are based on projective techniques, which are unstructured questioning techniques to encourage respondents to reveal underlying motivations, beliefs, attitudes, and feelings regarding particular issues.

These techniques are usually embedded into direct data collection methods and are classified into four major groups:

• Association
• Construction

Quantitative Research

Primary quantitative data collection methods include surveys and observational methods .

Surveys involve the administration of a questionnaire through different modes (online, phone, mail, in-person) to groups of interest. As a best practice, we try to always use qualitative research to design good surveys .

We use the survey format, particularly in the online mode, to implement many different question types that sometimes are considered “research methods” by those new to research, especially in the UX field. Surveys used in online unmoderated, remote usability tests are an example.

These are just surveys with very special question formats for very specific purposes.

Observation, on the other hand, doesn’t include communicating with the people being observed and can be conducted through different structured and unstructured, direct and indirect methods and performed in natural or lab environments.

Quantitative observational methods include:

• Digital transaction/behavior tracking (e.g., sales tracking, web traffic tracking, A/B testing).
• Biometric measurement
• Audit and inventory analysis.
• Content analysis.
• Trace analysis from past behaviors.

Although these data collection methods are very different, they should not be seen as mutually exclusive. Each method has advantages and disadvantages and can be used productively in combination.

Market Research Career

To emphasize the value of market research in supporting business decisions and get away from being mainly associated with data collection, the market research industry went through a rebranding process a few years ago. The American Market Research Association is now called the Insights Association , and many market researchers have changed their titles to “Insights” professionals.

You will find insights professionals in research agencies, like ours, and in nonprofit and profit organizations. The latter group is often referred to as corporate researchers. They often in a group within the marketing department or as independent centralized function serving other departments or functional areas in a company. Nowadays, this group goes by names such as “Customer Insights,” “Insights & Analytics,” “Voice of the Customer,” “Consumer Insights,” and the like.

As of 2021, many digital-first companies don’t have a market research/consumer insight group. These companies tend to be organized around digital products (app, software, online service) and prioritize UX research if any research is conducted at all.

Unfortunately, many don’t understand that UX research is a specific application of market research used to solve a particular set of problems.

Market researchers in agencies or inside organizations are involved with all or some steps of the research process depending on whether they do the work themselves or partner with other research vendors in the market research ecosystem.

Market Research Ecosystem

There are many specialists in the market research echo system offering services in line with different steps of the research process or servicing specific industries.

Overall, the market research ecosystem includes providers in areas such as:

• Participant sample (online panels, phone list, mail lists, qualitative panels)
• Data collection tools for different modes (online survey tools, online qualitative tools, phone surveys, mail surveys, eye tracking, biometrics, usability testing tools)
• In-person interviewing services (for onsite, intercept interviews at public places, stores, etc.)
• Mystery shopping services
• Facilities for in-person research (focus groups, interviews, food testing, product testing)
• Data aggregators (syndicated data services, omnibus services)
• Qualitative moderation (focus group moderators, in-depth interview moderators)
• Analytic software tools (Tools for statistical analyses, crosstabulations, advanced procedures, text analytics )
• Panel and community technology platforms (to create proprietary panels and branded research communities)
• Recruitment services (for qualitative research and hard to reach audiences)
• Open-ended question coding services
• Transcription services
• Data and reporting visualization tools
• Software development for specific applications and methodologies

I hope this summary gives you an idea of what the market research/insights profession is about and how this discipline can be used to find information needed to support business decisions.

Many who are not familiar with the field confuse market research with specific data collection methods (e.g., surveys, focus groups) and tools that facilitate data collection (e.g., online survey tools), but market research is more than its tools.

As researchers, we need to have expertise in research methodology to avoid providing biased insights. This knowledge of methodology is applied in the context of business problems related to product development, customer experience, branding, and financial outcomes. Our goal is to guide decisions that have a business impact.

To read more about how to use market research, check the article 10 Key Pieces of Advice On How to Do And Use Market Research .

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What Is Market Research? How To Do It Right Every Time

In this post

Importance of market research

Types of market research, market research process, how to conduct market research, benefits of market research, challenges of market research, market research vs. marketing research.

Do your users know your business’ product or service like the back of their hand?

You work with it every day and know it inside and out: all of its features, how it benefits users, and where it falls short. Yes, you know your product like nothing else, but what about your users? What do you know about the people buying your product? That’s where market research comes in. It helps businesses understand a target market’s ins and outs, present and potential customers’ needs and spending habits, competitors, and the industry. Market research services providers perform in-depth research to help businesses identify potential markets, check product viability, and ensure optimal placement.

What is market research?

Market research is a systematic process to collect, analyze, and interpret qualitative and quantitative data about potential customers, existing users, competitors, and the target market. Businesses use market research results to create products, experiences, and messages to attract and maintain a solid customer base. For example, companies use market research to gauge customer sentiment, gain competitor insights, fix brand perception, create marketing strategies, to name a few.

Every successful business has one thing in common; they get their target customers right. Market research helps them get a clear picture of their potential customers’ values, goals, aspirations, and needs. An effective market research strategy is crucial to understanding the business landscape, connecting with customers, planning marketing campaigns , and beating the competition. Organizations conduct market research in-house or hire a third-party company specializing in market research services. Companies can leverage market research findings in the following ways.

• Identify opportunities to improve average order value (AOV), form business partnerships, and design targeted campaigns.
• Investigate customers’ buying behaviors to test new products, gain actionable insights into customer churn rates , and find potential product glitches.
• Create promotional strategies to create brand awareness , boost brand perception, and buy ads.
• Gather competitive intelligence to address unfulfilled customer needs, find underserved market segments , and mitigate external business environment challenges.
• Make informed business decisions by addressing potential problems and strategizing operational alternatives.

Functions of market research

• Describes target customers’ preferences, competitors, and the overall market situation
• Evaluates product positioning and marketing in comparison to competitors
• Explains reasons behind existing business problems and potential fixes
• Predicts future market opportunities and consumer behavior for creating suitable plans and policies
• Aids in choosing the correct course of action based on the newly found merits and demerits of product, price, promotion, and place (4Ps)

Whether you’re researching to understand a market or draw conclusions on squirrel migration patterns, there are two kinds you can conduct: primary and secondary.

Primary research

Primary research is research you conduct yourself. It includes going directly to a source to gather original data. Researchers use primary research methods to discover meaningful first-hand data about a specific issue or problem. The result of primary research is either exploratory (when there isn’t a clear problem definition) or conclusive (solves a problem from the exploratory research) information. Different types of primary market research are as follows.

• Focus group discussions (FGDs) collect data from a small group of participants or subject matter experts representing a target market. Researchers usually select these participants based on demographics or characteristics. An interviewer facilitates the discussion and engages in conversation to find insights about a product, market, or service.
• Telephonic or face-to-face interviews are two-way conversations between participants and researchers. Interviewers rely on a series of open-ended questions to gain insights into respondents’ opinions and perceptions. The length of these in-depth interviews depends on the complexity of the subject.
• Surveys use open- and close-ended questionnaires to collect responses from a larger population. Online surveys have become a cost-efficient way to conduct primary research across different geographies. Researchers analyze survey research responses to draw inferences about respondents’ opinions and preferences.
• Observations don’t involve direct interaction between respondents and researchers. Trained observers record subjects’ reactions and make organized notes to study further and analyze user behavior.
• Field tests assess how the product or service will function in the real-life environment. These tests are risky but show how people react to your product when other viable options are available. Field test results enable you to adjust factors that might motivate users to take their business elsewhere, like price or packaging.

Secondary research

Secondary research gathers and analyzes information from previous research analyses and publications. In this case, a researcher uses research reports of another researcher as their source of data instead of doing the research themselves. Different types of secondary research are as follows.

• Internal research discovers data available within your organization. Internal data include website, database, user-generated content , and previous research findings and campaign results.
• External research fills the knowledge gap with data from public libraries, newspapers, government agencies, competitive analyses , and journals.

Primary and secondary research methods use qualitative and quantitative data to classify research findings and conclude.

Qualitative research

Qualitative research focuses on the ‘why’ rather than ‘what’ of any behavior, action, or event. It collects and analyzes non-numerical primary and secondary data to generate new research ideas or offer in-depth insights into a problem. Qualitative research relies on observations, interviews, surveys, and FGDs to collect and interpret data. The most common qualitative research approaches are as follows.

• Grounded theory collects rich data on a topic of interest to develop theoretical approaches from observations.
• Ethnography seeks to understand a group or community’s shared culture, beliefs, and conventions.
• Action research connects research and action to drive transformative changes.
• Phenomenological research interprets participants’ lived experiences to investigate an event.
• Narrative research relies on storytelling to understand participants’ perceptions of an event.

Quantitative research

Quantitative research analyzes numerical data to discover patterns, make predictions, and generalize results. Researchers use quantitative techniques to find historical benchmarks for their study. Quantitative methods include surveys, interviews, and experiments. Market researchers use quantitative and qualitative methods to derive insights from data and make decisions. Organizations leverage these techniques to execute different kinds of marketing research.

• Product/service use research discovers what and why of product or service usability for your target audience.
• Buyer persona research uncovers your target market size, challenges, characteristics, aspirations, and motivations.
• Market segmentation research categorizes your target audience groups into segments based on their unique pain points, goals, and needs.
• Pricing research studies competitors’ price points and helps you set a fair pricing point.
• Competitive analysis evaluates competitors’ strengths and weaknesses regarding their products, sales, and marketing.
• Brand awareness research helps a brand uncover its market position and improve brand preference.
• Campaign research dives deep into previous campaigns to discover what went well.
• Brand association research studies the desirability of a brand and boosts positioning accordingly.
• Demand estimation analysis measures customer demand for a product or service.
• Marketing effectiveness assesses the potency of a go-to-market strategy in maximizing revenues.
• Mystery shopping uses independent auditors as customers to assess the sales and service quality.
• Sales forecasting studies potential unit sales to predict future revenue.
• Trendspotting identifies local, global, or regional trends before they become mainstream.
• Feasibility studies predict the success or failure of business concepts, product development, service launches, or business expansion plans.

Systematic inquiry is at the heart of any market research exercise. The process may vary depending on deadlines, budgets, resources, methodologies yet generally follow the sequential stages below.

• Define the problem or opportunity. A problem half-defined remains half-solved. That’s why researchers start with problem diagnosis and definition. A clearly defined research problem aids researchers in establishing accurate research objectives and collecting relevant data.
• Create a research objective statement to develop a hypothesis or investigate a set of research questions. Market researchers create a hypothesis only when they have sufficient empirical evidence to support a claim.
• Choose a research design to specify your plan to collect and analyze data. Think of this research design as a framework to identify information sources, data collection methods, sampling methodology, and research costs.
• Develop a sampling plan to understand the characteristics of a population and make a conclusion. Researchers define the sample population, population size, and choose a sampling method at this stage. Two commonly used sampling methods are as follows.

Types of sampling

• Probabilistic sampling selects samples from a population using the theory of probability. This sampling method is ideal for quantitative research and finding sampling errors after data collection.
• Non-probability sampling relies on a researcher’s subjective judgment to select data. This method offers an equal chance for all respondents to participate in the research and is ideal for qualitative research.
• Collect primary or secondary data depending on the research design or plan. Researchers use various data collection methods to find information on variables. This data further helps them to study and analyze the research problem.
• Process and analyze collected data. Data editing and coding help researchers to identify and remove data classification inconsistencies. Coding involves setting rules for data categorization and transfer. The analysis part attempts to discover similar data patterns and their logic.
• Prepare and present a conclusion. The final stage of the market research process interprets data analysis and presents findings through a report. Such reports ease executive decision-making with concrete data-backed evidence.

When to use market research?

Startups and prominent businesses use market research to understand their customers, measure business profitability, analyze the target market, and beat the competition. Companies conduct market research activities to:

• Evaluate product demand
• Test new products or services
• Assess business expansion opportunity
• Understand customer satisfaction levels
• Develop customer persona and test messaging
• Estimate overall business growth opportunities
• Get an inside look into customer experience (CX)
• Gauge product packaging and promotional decisions

The purpose of market research is to understand your customers to develop a one-of-a-kind product or service that fulfills their wants and needs. Researching the target market might require some extra digging, but following the steps below is an excellent place to start.

1. Identify your target audience(s)

The first step is to identify your target audience. Who do you think will benefit most from your product? Segment your target market into small groups based on location, demographics, personality traits, and buying behaviors. Because you are segmenting your audience on more than one quality, you’ll end up with more than one group to target, which is perfectly fine. You can create a persona from these audiences or develop a made-up person that might show interest in your business. This customer persona helps you hone in on the pains you’ll be relieving and gains you’ll be offering with your business.

2. Scope the competition

Researching your competition is arguably the most effective way to understand your market. Observing others in the same line of work helps you create a better marketing mix and overpower competitors. A business’s marketing mix includes four parts:

• Product: What is your competition selling? What are the benefits of the product? How can you make it better?
• Price: At what price are they offering their product? Are people willing to spend that much? Can you charge more for a luxury item or less for a cheaper version?
• Place: How is your competition reaching its customers? Is this channel effective? Or can you find a better way to connect with them?
• Promotion: How is your competition promoting its product? Where are they spending money on marketing wisely, and where are they wasting it?

3. Engage a portion of your persona

Once you have an idea of competitors, you'll want to focus on your audience. During this stage, you will conduct primary research to determine what your audience looks for in a product, why they find it valuable, and how it will benefit them. What's working for your product? What should you change? Should you scrap your idea and start over? Directly engaging with customers in this step is your best bet. Compile focus groups, send surveys, or use another market research method. We will go into more detail on those later. Your first goal will be to gather some demographic information. Ask customers their age, gender, income range, profession, education, and city of residence. Once you have that, you can ask more about their hobbies and interests and the associated goals and challenges they face daily. Then it's time to get down to business. Ask your audience about buying preferences, where they make purchases, and how often they buy a specific product. Have them go into detail about why they buy a particular product and ignore others.

4. Summarize data and draw conclusions

At this point, you’ve gathered a lot of data that’ll help you better understand the market. The last step is to organize your data and conduct customer data analysis to conclude your target audience so you can provide them with the best product, service, and messaging.

No matter what you do market research for, you’ll discover insights into your business and customers at the end. The research findings help you make informed decisions and unlock business growth. Let’s look at how companies benefit from market research activities.

• Stay ahead of the competition with a better understanding and perspective of your target market and audience.
• Minimize investment risks by evaluating new products, features, or services before launching them.
• Identify threats and opportunities to modify existing business plans, models, investments, or strategies.
• Spot emerging trends by taking a pulse of what’s hot and not in the market.
• Find business growth benchmarks to compare business revenue, productivity, and growth.

Market research challenges stem from Complex business dynamics, automation, and consumer data protection. Let’s take a sneak peek at how these challenges restrict the way researchers collect data and contribute to decision-making.

• The need for speed. Opinions change every day, and so do products. That’s why businesses can’t any longer wait for a month or more to get their hands on market research results. This need for agility pushes market research agencies to deliver quick turnaround times.
• Tight budget and automation are complicating how researchers design research and offer insights. The presence of multiple tools doesn’t necessarily streamline analysis. They instead add to training, ongoing support, and maintenance costs. That’s why you need a comprehensive platform so that you can do more with less.
• The human dimension is becoming more important in research. Today, organizations have more data available than ever and can make wrong interpretations and incorrect decisions. Market researchers’ expertise and skill are essential for companies to find real-time insights from unstructured data.
• Lack of focus on data curation is another challenge that organizations face. Analytics and data visualization software can produce many insights that may not offer concise answers to the problems at hand. That’s where data curation comes in to help businesses find the most relevant solutions for making better decisions.
• Consumer data protection is of utmost importance to any organization. This increasing need to maintain data privacy means organizations should look for credible and verifiable market research agencies that have robust data privacy protection policies in place.

Market research is the process of collecting, analyzing, and interpreting data about the viability of a product or service in a target market. Market researchers aim to understand the buying habits, behaviors, motivations of consumers to predict a potential target segment for a product or service. Marketing research goes behind finding a suitable market to sell your products. It investigates an organization’s marketing strategy. Organizations conduct marketing research to identify issues and gaps in existing marketing activities. Want to identify a market opportunity? Learn how to assess market opportunities to find their desirability.

Mary Clare Novak

Mary Clare Novak is a Content Marketing Specialist at G2 based in Burlington, Vermont, where she is currently exploring topics related to sales and customer relationship management. In her free time, you can find her doing a crossword puzzle, listening to cover bands, or eating fish tacos. (she/her/hers)

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Market Research

Published on :

21 Aug, 2024

Blog Author :

Edited by :

Reviewed by :

Dheeraj Vaidya

What Is Market Research?

Market research refers to a business strategy wherein an organization analyzes the market trends, competition, and consumer preferences ahead of launching new products or services. It involves collecting and interpreting data during product development or marketing to help businesses make informed decisions.

The research process includes getting feedback from existing and potential customers through surveys and interviews to understand the demand for a specific product type. Besides introducing new products, many organizations do this to identify the target market when planning to launch a new business. Either a business can choose to do it by itself or hire a third-party company for the job. Its purpose is to give them a competitive advantage in the industry.

Table of contents

How to do market research, #1 - defining the problem, #2 - deciding an approach, #3 - preparing a research design, #4 - collecting data, #5 - analyzing data, #6 - drafting reports, #1 - primary research, #2 - secondary research, frequently asked questions (faqs), recommended articles.

• The   market research definition refers to gathering market and consumer data by a business to make informed decisions about launching its new products and services.
• It requires a business to set up an in-house research and development division or hire a third-party firm to evaluate how its products or services will perform post-launch.
• The steps involved in conducting research include – defining the problem, deciding the approach, preparing a research design, collecting and analyzing data, and drafting a research report for presentation.
• Two types of marketing research are primary research (exploratory and specific) and secondary research through online, public, and commercial resources.

Knowing target consumer interests, market demand, and competition is essential for a business before rolling out new products or services or upgrading the existing ones. The process of gaining all this information is known as market research. For this, the business sets up an in-house research and development segment, appoints a market research analyst, or takes the services of a third-party firm. The product differentiation and market segmentation allow them to devise an effective marketing strategy.

Most of the time, businesses trust their instincts when it comes to launching their products successfully. But this is not always the case. The results could be harsh enough to show how their beliefs can go wrong.

Before going into the market research methods, let us understand what makes the process so important for businesses.

• It helps businesses understand the target market and implement product development and marketing strategies accordingly.
• The research ensures that the soon-to-be-launched product or service will meet the market demand and consumer requirements.
• It helps firms become customer-centric by narrowing down customer segments.
• The research allows businesses to study the performance of products from their competitors.
• It gives an idea of how better the sales would be and how profitable the production would prove.

Market Research Process

Marketing research involves gathering data from different sources to identify market trends and consumer behavior. It then analyzes and interprets the collected data to develop innovative products, offer unique services, or launch new businesses. The process is an essential part of business strategy and helps in decision-making. It usually involves the following steps:

Identifying issues or defining problems that consumers face with existing products or services is the first step. The research and development team should prepare questionnaires directed at those issues for respondents to find the optimum solution.

The business must define an approach to study consumer behavior and market trends correctly. It can include everything from establishing analytical models for a research design to defining research objectives and hypotheses.

Next, the business should outline the process and the goal that the research intends to achieve. Starting with data collection and ending with data analysis, the research design should cover it all.

It is the most critical aspect of marketing research as results would be as accurate as the data collected. A business can use online surveys, emails with questions, one-to-one interviews, and so on to get feedback from customers.

The data collected must be analyzed to understand how the market and consumers will react to soon-to-be-released products.

The business needs to draft the final research report for presentation based on the data collection and analysis. It would help investors and top management create an effective business plan for future products.

Let us consider the below-mentioned market research examples to understand the concept better.

Shelly distributed her handmade soaps to friends and relatives to get feedback and decide whether to sell her products. She received a tremendous response from them but decided to do a little more research.

She ran a poll on her social media accounts to check how many people would prefer handmade soap. Simultaneously, she read reviews for similar products on e-commerce websites. It helped her understand what customers want.

After the marketing research, she found that people seem satisfied with handmade soaps but only if the packaging is eco-friendly. Hence, Shelly opted to focus on packaging design while considering market viability and consumer behavior.

First Book, a non-profit social enterprise, has set up the First Book Research & Insights research division to understand the significance of  human-centered design  in the social sector. It aims to conduct marketing research to gain insights on promoting educational equity by removing barriers to learning.

The data includes feedback from educators from under-resourced schools and programs across the United States that support underserved children ages 0-18. Academics, organizations, and curriculum developers use this data for developing strategies and providing human-centered design solutions to benefit underserved children.

Types of Market Research 

Businesses gather information from publicly available sources or through surveys, feedback, etc. After analyzing the data, they can evaluate whether to introduce new products. Based on the sources available, the process of marketing research can be of two types:

When businesses interact with consumers directly or via a third-party firm, it becomes their primary data source. In this case, they do not rely on third-party or publicly available resources. Instead, they create their data to understand consumer requirements and market trends. This type of research exists in two phases – Exploratory and Specific.

• Exploratory Research –  It involves preparing open-ended questionnaires to identify the problems faced by consumers. It helps in the launch of new products or upgrade of existing ones.
• Specific Research –  It aims to find solutions to problems identified in the exploratory research. Besides, it explores opportunities based on customer needs and market trends.

Primary research comprises the following data collection methods:

• Handing out a questionnaire or creating an online poll to collect feedback from customers
• Conducting surveys via phone, Internet, or in-person about the existing and soon-to-be-launched products
• Interacting with focus group remotely through online surveys or in-person
• Doing telephonic, online, or one-on-one in-depth interviews

This type of marketing research entails data collection from publicly accessible resources, either online or offline. For online research, analysts can use various tools to find trending keywords and focus on them when promoting products or services on virtual platforms. The keyword research provides insight into the types of products that customers want.

The online/offline methods that comprise the secondary research include:

• Accessing sources like articles, newspapers, magazines, journals, and social media
• Using census data, report, and studies from the government
• Referring to trade association research reports, academic papers, literature reviews, and case studies

Marketing research is a part of marketing strategy enabling a business to analyze market trends and understand consumer requirements before introducing new products or services. It follows a data-driven approach to make an informed decision.

Conducting market research is essential as it lets businesses evaluate how their products will perform post-launch. A well-prepared research report guarantees successful product launch and performance. It saves both their precious time and money while giving them a competitive advantage in the respective industry.

Marketing research involves gathering information about relevant target markets and consumers. The collection of data relies on the resources available either online or offline. Interacting with customers directly through various mediums or referring to publicly available resources are more common methods.

This has been a guide to What is Market Research and its definition. Here we discuss how to do the market research and process along with examples & types. You may also have a look at the following articles to learn more –

• Direct Marketing
• Segmented Market Theory
• Market Index

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The first step in formulating most marketing strategies is conducting market research. It is an essential step as it allows companies to explore whether specific ideas are likely to work or not. Before conducting market research, it is vital to figure out which type of research works best for the current project. Let's take a look at how exactly marketers can do this.

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Types of market research are the same as methods of market research

Collecting and interpreting primary data is 

Collecting and interpreting data is ......

Survey is a popular type of ....... market research 

The following are all disadvantages of secondary market research except

The following are all disadvantages of primary market research except

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Market Research Definition

Market research is used by many companies worldwide. Whether small or large and whether the company spent £100 or £1 million, all businesses use a form of market research. Market research is the process through which organisations collect data about customers and markets to help them construct better marketing strategies .

Check out our explanation of Marketing Strategy to find out more.

It helps companies understand why customers purchase certain products or brands. Market research is directly related to the marketing mix ; therefore , it allows marketers to make decisions about product, price, promotion and place through the data they collect during market research.

• Market research involves collecting and analysing information about markets, consumers, and their behaviour.

Market research involves designing a research project and collecting, analysing, and reporting relevant data. As a result, market research may help companies understand:

Customer wants and needs,

Consumer behaviour,

Customer satisfaction,

Customer attitudes and preferences,

Market potential,

Market share,

Market growth,

Demand trends,

The impact of marketing mix elements like pricing, promotion, etc.

Some organisations might have large departments working on research and spend millions yearly conducting market research. Other companies might hire external organisations and consultants to help them conduct market research for specific projects.

For instance, pharmaceutical giant Novartis spent $9.5 billion on research and development in 2021. 1

Types of Market Research

There are two branches of market research depending on the organisation's objectives. Firstly, the firm must decide whether to conduct primary or secondary research. Secondly, the researcher must decide whether to use quantitative or qualitative tactics. Let's now take a look at these four types of market research.

Primary market research

Primary market research is sometimes called 'field research' because the researcher needs to take a direct approach to collect data. This is a type of research that an organisation plans itself and involves collecting new data that has not been gathered before.

Primary research involves collecting and interpreting primary data. This is new data that has not been collected before.

Primary research involves collecting data based on a research problem or question that is specific and unique to the business. Primary market research can be carried out by the company itself or an external organisation, but the data collected will be brand new. It often involves gathering data on the business's existing customers. Primary data are collected through surveys, focus groups, interviews, and questionnaires.

To learn more about this data collection technique, check out our explanation of Primary Market Research.

Secondary market research

Secondary data has been collected before for purposes other than the research question or problem at hand. Secondary data can be collected both internally and externally. This could include things like sales and inventory records of the company (internal), internet research (external), market reports (external), or information from the U.K. Census (external).

Secondary market research involves interpreting secondary data. This type of data was collected before the researcher began their research.

Secondary research is often referred to as 'desk research' as it can be conducted from your desk. Your role as a secondary researcher is to find data relevant to your business research objectives.

To learn more about this data collection technique, check out our explanation of Secondary Market Research.

Figure 1 below outlines the main differences between the two types of market research. There are advantages and disadvantages to both primary and secondary research. The type of research chosen will depend on the objectives and aims your business is trying to achieve.

Market Research: qualitative research

This research tries to describe specific situations and understand characteristics, opinions, concepts, and experiences. It is used to understand complicated customer motivations that are difficult to study with quantitative methods. It is also used to illustrate the impacts of different factors on customer decision-making.

• Qualitative research focuses on gathering and analysing data that is not numerical.

Qualitative data is usually collected from smaller sample sizes. The goal of this type of research is to question and observe what people say, do, and how they react to certain situations or ideas. Questions are usually open-ended, and it is up to the respondent how they answer each question (no predetermined answers).

Market Research: quantitative research

Quantitative research usually involves structured questions, where responses to those questions are predetermined, and respondents choose between one of the predetermined answers. Sample sizes are generally larger (more people surveyed).

Quantitative research is the opposite of qualitative research. This type of research focuses on collecting numeric data, which the researcher can later analyse through different statistical measures.

For instance, understanding age's effect on the number of clothes customers purchase each month is an example of a quantitative research project.

Marketing Research Process

Now that we understand why organisations conduct market research let's explore the process behind it. The marketing research process is made up of six steps (see Figure 2 below).

1. Define the research problem and objectives

During this step, the researcher needs to define the problem they are trying to solve with their research. It is vital to make sure that the problem the researcher decides to focus on is not too broad. The researcher then has to define their objectives and decide on the type of research they will conduct:

Descriptive - describe a situation, event, market, or customer group.

Exploratory - collecting preliminary information to understand the problem and develop hypotheses.

Causal - exploring cause and effect relationships.

This step should result in a defined research question.

2. Develop the research plan

The researcher then has to develop the research plan. During this step, they decide whether they will be collecting primary or secondary data and the type of research method they will use (surveys, focus groups, etc.). This step also involves coming up with a sampling plan. Sampling could either be:

Random - a ll people in the sample group have an equal chance of being selected.

Convenience - choosing the people that volunteer to take part in the research.

Judgement - deliberately choosing certain people to sample.

3. Collect the data

During this step, the researcher conducts the research.

If their research method is an online survey, this is when they would send participants the survey and ask them to complete it.

4. Data analysis

During this step, the researcher uses various statistical tools if they are conducting quantitative research or analyses different interviews if they are conducting qualitative research.

5. Present findings

During this step, the researcher will format their analysis and data into detailed insights - translate data into valuable recommendations for managers .

For example, imagine a researcher exploring customer satisfaction in a restaurant. Instead of mentioning that a unit increase in staff friendliness will significantly increase perceived service quality, the researcher would advise the restaurant manager to carefully train their customer-facing staff as this could improve customer satisfaction.

6. Make a decision

This is where the organisation would decide how to tackle the problem they were researching with the researcher's findings. For example, this step could involve a decision on whether to launch a new product or not.

Market Research Examples

Let's now take a look at a few market research examples.

Example of primary market research

A popular type of primary market research is surveys. You can customise your survey to be as short or as extensive as you wish. Surveys can be digital, received via email, for example, or in a physical form, like a card you receive to share your thoughts after staying in a hotel. Surveys are helpful when you want to measure something specific.

When you use certain services, you will likely receive an online survey after completing the purchase and utilising the service. An example of this is ordering food online through a delivery service like Deliveroo or Uber Eats. Once you have made your purchase and received your food, you could find a survey in your inbox with prompts like:

Answers to these questions are then analysed and turned into valuable data and actionable insights.

Example of secondary market research

Secondary market research can take several forms. Consider the example below, which outlines how a marketer might combine various secondary sources.

Imagine you are working for a company that is trying to develop a new product. Instead of conducting your own research, you decide it would be more efficient to gather information from existing resources.

You look at industry reports and see data on whether the industry is growing and whether it seems profitable. You then examine market reports which describe customer needs and wants in the industry and predict customer attitudes and behaviours in the future. You also conduct internet research to investigate how your competitors act in the industry. You then look at your company's internal records of sales and expenditure for current products and brands you offer.

Based on the data and information gathered, you then decide whether it is worth developing a new product; the type of product you should create (what are customers looking for?); how you could differentiate your product from competitors, and how much money you would need for the development of this new product (budget).

How to do market research for a startup?

Founders often establish startups to address a problem in the market or to take advantage of certain opportunities other organisations have not yet addressed. However, c onducting market research for a startup is similar to that of an established company. Once the startup has its main idea, it must:

Define the research problem and objectives,

Choose a research approach and create the research plan,

Collect and analyse data,

Interpret and present findings,

Make a decision.

Similar to other forms of market research, startup market research also aims to understand markets and consumer behaviour. However, it is crucial for startups to also conduct extensive environmental and competitor analysis before launching the research and development of a new product. Having a cohesive market research plan and understanding the ins and outs of an industry or market will also increase the chances of investment into the startup.

Market Research - Key takeaways

• Primary research involves collecting and interpreting primary data. This is entirely new data.
• Secondary market research involves interpreting secondary data. Someone else collected this type of data before the researcher began their investigation.
• Quantitative research collects numerical data, which the researcher can later analyse through different statistical measures.
• Marketing research involves defining the research problem and objectives, developing the research plan, collecting data, analysing data, presenting the findings, and making a decision.
• Novartis. (February 2, 2022). Novartis AG's expenditure on research and development from 2004 to 2021 (in billion U.S. dollars) [Graph]. In Statista. Retrieved August 30, 2022, from https://www.statista.com/statistics/266134/novartis-expenditure-on-research-and-development-since-2004/

Flashcards in Market Research 12

Which of the following statements is correct about market research? 

The qualitative researcher usually poses open-ended questions. 

Quantitative research involves smaller sample sizes. 

Only statement I. is correct. 

Secondary market research can _____________. 

Provide access to industry-specific information

One of the disadvantages of secondary research is: 

It can be quite costly. 

It can be very time consuming. 

It is available to your competitors. 

It requires specific skills to be carried out. 

Which of the following is a disadvantage of primary research? 

It can provide data that is less specific to your business. 

You often need a specialized team to conduct the research. 

The information is available to your competitors. 

The data could have been gathered a long time ago.

Primary research can take a long time to complete. 

Secondary research can provide access to industry-specific knowledge. 

Both statements are correct. 

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Frequently Asked Questions about Market Research

What is market research?

Market research is collecting and analysing information about markets, consumers, and their behaviour.  Market research involves designing a research project and collecting, analysing, and reporting relevant data.

What is the first step in the marketing research process?

The first step in the marketing research process includes defining the research problem and objectives. During this step, the researcher needs to define the problem they are trying to solve with their research. It is important to make sure that the problem the researcher decides to focus on is not too broad.

What are the 3 main types of market research?

There are two branches of market research depending on the organisation's objectives. Firstly, the firm must decide whether to conduct primary or secondary research. Secondly, the researcher must decide whether to use quantitative or qualitative tactics. Let's now take a look at these four types of market research.

Why is market research important?

Market research is important because it helps marketers understand customers’ wants and needs. Market research can also help an organisation predict customer preferences and purchase patterns. This can aid in deciding how to position a products or brand in relation to competitors. Market research is also essential for developing marketing strategies.

What is the purpose of market research?

The purpose of market research is to understand what customers want and need within a target market or industry. It is also useful for gaining insight into customer behaviour and customers’ attitudes towards different products and services. Market research is essential for developing new products, introducing new brands or coming up with a new marketing strategy. 

Test your knowledge with multiple choice flashcards

Which of the following statements is correct about market research? The qualitative researcher usually poses open-ended questions. Quantitative research involves smaller sample sizes. 

One of the disadvantages of secondary research is: It can be quite costly. It can be very time consuming. It is available to your competitors. It requires specific skills to be carried out. 

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More From Forbes

Understanding market research for your business plan.

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When you’re building a business plan, market research needs to happen pretty early in the process. It’s where you learn about your audience’s wants and needs and the financial trends in your industry, and where you combine the data, and uncover trends that tell you what customers want and how to provide it most effectively.

The results of that research and analysis will shape aspects of the rest of your business plan. Assessments of your market and competition inform critical decisions in areas such as product design or service offerings, price, marketing methods, and business location.

That means accurate and comprehensive market research matters. To be comprehensive, your information and analysis should answer every possible question about the market you plan to enter and the consumers you believe will buy your product or service, including (but not limited to):

• Demand: Do consumers want what you’re offering?

• Economic indicators: Do they have the money to buy your product/service?

• Pricing: How much will they pay for your product/service?

• Location: Where do they live, and where are they likely to make their purchases?

• Saturation: How many other options do they currently have for that product/service?

First Steps: Budget

You can spend a lot answering these questions. Many large businesses hire firms to do the research and analysis, employing large-scale surveys, focus groups and statistical models, among other methods. However, for entrepreneurs just starting out, marketing budgets are typically too slim to cover that kind of research.

So, the work needs to stay in-house and fit a small marketing budget. Affordable, effective market research is possible. It may not be as specific to your market as the big-budget stuff, but it can get you the information you need to work out a solid understanding of your market.

First Steps: Market-Research Objectives

Before you start your research and analysis, determine your objectives. Decide what you want to learn from the process. It will guide the data you search for and how you use it, so be specific. Write down actual goals – what would give you the most accurate, comprehensive and useful picture of your market? This could include areas such as demographics, competitor offerings and customer pain points.

First Steps: Research Terminology

In market research, you’re basically dealing with two types of research and two types of data:

• Primary research: This is research you perform yourself in order to get very specific insights into your very specific business. It includes methods such as surveys, interviews and direct observations (by visiting competitor locations, for instance). It can help you gather qualitative data. This is data that goes beyond statistics and market trends. It can tell you what your consumers want, what they don’t want and how they feel about your offerings.

• Secondary research: This is research other people have performed and analyzed. To conduct secondary research, you can visit government websites such as the U.S. Census Bureau and the Bureau of Labor Statistics, as well as private data collectors such as Google and market-research companies. It can help you gather quantitative data. This is generally statistical data and can reveal insights on consumer demographics, spending patterns, market trends and earnings projections.

Where To Start Your Market Research

There’s a ton of existing research out there, and a lot of it is totally free. The Small Business Administration website has a list of free government sources for various types of quantitative data, such as industry statistics, consumer demographics, consumer demand and spending, and sales indicators. Much of it comes from the U.S. Census Bureau and the Bureau of Labor Statistics. A simple search will turn up enough places to start gathering secondary research to build a picture of your market.

With a good understanding of your market from secondary sources, you’re in a good position to know which types of primary research, if any, would be worth an investment of your time and energy. Maybe a well-designed survey completed by everyone you know could help fill in some holes.

You can also conduct primary research by visiting and speaking with your would-be competition and their customers; through crowdsourcing forums such as Quora, where you can glean raw data from comments and responses and post questions related to your product, service and market; on social-media websites such as Facebook, where you can parse conversations in relevant interest groups; and by reading product and service reviews on sites such as Amazon or Yelp.

Analyzing Your Market Research

Armed with all your data, you’ll draw conclusions that will help guide many of your business decisions.

But first, make sure all of your data will benefit those decisions. Don’t start analyzing until you weed out extraneous information that will waste your time and hinder focused insights. If it doesn’t relate directly to your business and your market, set it aside.

Then organize the relevant data into tables, graphs, lists and pie charts, and see what trends emerge. What do those trends mean for your business? Your product? Your location? Your planned promotions?

Be open to whatever the data tells you. Even if your research findings are unexpected, embrace them, and make any necessary adjustments. Listening to good market research can save you a lot of headaches down the road: The better you know your consumers, the better your chances of successfully selling to them.

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