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Market research: Definition, types, steps and benefits

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Market research: Definition, types, steps and benefits Market research
Table of Contents

What is market research?

As an organization that serves the customer base with a wide option, it is important for you to understand the market in and out. This includes factors like the newest market trends that you can use for your next product development, customer needs and wants, market competitors from the same field as you, and so on. 

The question is, how and where will you get that much information from? Well, that’s where your customers will help you. What about the way of collecting that data from the customers? This is where market research comes into the picture.

Market research is nothing but a study conducted with respect to the newest product/service and evaluating its performance in the market. This study is conducted with the help of the potential customers of that product/service. This research study lets the organizations identify their target audience in the market, record their opinions and preferences and develop the products/services accordingly.

Businesses can also hire other organizations that serve particularly market research services and help them to achieve relevant market insights and data from the target customer base. 

In this article, let’s look more into market research advantages and types to conduct it for your organization.

Exploratory Research Guide

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Objectives of market research

While conducting market research, make sure to note down these three objectives:

  • Administrative: it includes a systematic planning and distribution of the human as well as materialistic resources within an organization. This will help in the business development by providing the right services with the right resources at the right time. 
  • Social: this refers to satisfying all the customer needs and wants through developing a product or service that best suits the demands of the target customer base. 
  • Economical: this determines the economical extent to which an organization be a success or failure while being new to the market or with the new product or service launches. This helps you define the actions to be taken prior to their implementations.

Types of market research

There are typically two types of market research, primary market research and secondary market research. Let us have a look at both of them in detail.

  • Primary market research 

Primary research is a research study where the organization itself gets in touch with the target customer and gather relevant insights and information from them about the market. The data gathered from primary research can either be qualitative or quantitative in nature. 

Primary research helps organizations gather two kinds of information. Exploratory research has more open-ended questions that allow the researcher to explore the topic deeper and in detail. Whereas, specific market research focuses on solving the problems that were identified from the exploratory research. 

Let us take a look at sub-types of primary research data collection methods:

  • Focus groups – focus groups are nothing but a small group of the target audience, mostly 6-10. An appropriate market research survey is sent to only this group and the participants are asked to respond to it. There is no intervention of any kind or anyone in this research. The data collected is representative of the entire target population. 
  • Personal interviews – one on one interview is the traditional way of gathering information but is also more effective. The interviewer can ask open-ended questions in any way he wants to get to the bottom of the research topic and collect valuable data in real-time. 
  • Ethnographic research – this is a special type of research that does not include any conversation or data give and take. The researcher just adapts to the participants’ environment and keep on observing their behaviour and responses in their natural habitat. 

  • Secondary market research 

refers to studying the market through the material and sources that are already available publicly. This research makes use of someone else’s primary research. The materials can be newspaper articles, magazine articles, research papers, Internet articles, information with government and non-government agencies and so on. 

  • Public sources: public sources of information like libraries are the best source of gathering information on various fields in the market with a verified factual background. 
  • Commercial sources: these sources include newspapers, magazines, television media, journals and so on can be some of the best sources to collect market research data.
  • Educational institutions: educational institutes carry out the most researches on various topics. Using these research papers that are publicly available, for your market research can be proven an efficient data source. 

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Steps for conducting market research

Define the problem 

For the researchers to be able to systematically conduct their research and ask appropriate questions, it is important for them to know the research topic thoroughly. Define the problem you want to get to the root of and make sure to formulate all the research questions around it. 

It will help you to stay focused on the topic and gather data that highly satisfies the formulated research problem. 

Select the research sample

It is important to select the sample population you are going to study. And it is even more important to make sure they are the right fit and representative of the entire population. As an organization, you surely don’t want to waste your time, efforts and costs behind researching a population that is not even relevant to your study. 

Using probability sampling, you can choose the sample population at random which gives each one of the participants have an equal chance at getting into the sample population. Whereas, non-probability sampling is nothing but conducting a test or a study for selecting the sample of a population to study. 

Data collection

Carry out the data collection process by conducting the study using above mention market research methods. Make sure the respondents are researched properly with asking all the relevant questions about the research topic. Collect the data coming from the surveys which will be qualitative as well as quantitative.

Analyze results 

Now that you have the needed data collected and stored, it is time to analyze it. There is various data analysis software available in the market that processes your data and drives out respective insights and conclusions out of it. 

Using these data analysis software will help you cut to the chase of data processing and make it easy to visualize your data to make sense of it. 

Act on the results

The data collected, when processed and analysed will give you the necessary insights you intended to gather on the market. Take action on the gathered insights and ideas and find out a way to tackle the problem for which you started the research.  

Advantages of market research

  • A well-conducted market research will help you make well structure decisions. The growth of the business is determined by the quality of decisions it makes with respect to its products and service development. With market research, you will get all the insights you need to do so. 
  • Market research allows you to gain verified and factually correct data. So you don’t have to worry about your decisions going wrong.
  • The researcher can also determine the market size for a particular product or service.
  • The market research also helps you plan an appropriate sales system in place. The organization can then position the product or service accordingly in the market. 
  • Learning customer preferences is one of the prime reasons why every organization should do their market research before developing any new product or service. You get to know what the customers have their eye on these days.
  • You can also know what channels do customers prefer to communicate through. Along with that, you can also determine what they think of your brand.

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