what is market research disadvantages

25 Advantages and Disadvantages of Market Research

Market research is a systematic process of collecting, analyzing, and interpreting data and information to gain insights into various aspects of a market, including its size, trends, customer preferences, competition, and potential opportunities or threats. It is a fundamental tool used by businesses, organizations, and governments to make informed decisions, develop effective strategies, and stay competitive in their respective markets.

Market research has ancient roots. It dates back to the time of the Babylonians, who gathered information on crop yields and prices. Even in those early days, data collection and analysis were used to make informed decisions.

To capture a holistic view of consumer behavior , market researchers often combine data from various channels, including social media, e-commerce, traditional surveys, and customer support interactions.

While market research offers numerous advantages, it also comes with its fair share of disadvantages.

Advantages of Market Research

The advantages of market research are not just about surface-level benefits. They are about deepening understanding, mitigating risks, and driving sustainable growth.

1. Informed Decision-Making

Market research provides businesses with a wealth of information that forms the foundation for informed decision-making.

This advantage goes beyond the general idea of making better choices. It means that decisions are grounded in empirical evidence and insights gathered from data analysis. This precision can lead to more effective resource allocation, optimized strategies, and ultimately, increased profitability.

2. Customer Understanding

The understanding of customers garnered through market research is multifaceted. It goes beyond merely recognizing demographics ; it delves into psychographics, behavior, motivations, and pain points.

In-depth customer profiles help businesses craft highly targeted marketing campaigns, design products that meet specific needs, and enhance customer experiences. The result is not just customer satisfaction but customer loyalty and advocacy.

3. Competitive Advantage

Market research serves as a strategic compass for gaining a competitive advantage. It allows businesses to assess their strengths and weaknesses relative to competitors.

By benchmarking performance against rivals, companies can identify areas for improvement or differentiation. This advantage is not about following the competition but strategically outperforming them in ways that resonate with customers.

4. Risk Mitigation

Market research plays a pivotal role in risk mitigation. It’s not just about identifying risks but also understanding their potential impact.

Businesses can use market research to assess the severity of threats and the likelihood of their occurrence. Armed with this knowledge, they can develop contingency plans, adapt to changing market conditions, and reduce exposure to unforeseen risks.

5. Product Development

The advantage of market research in product development is not limited to identifying features customers desire. It extends to optimizing the entire product life cycle. Research helps in defining product specifications, pricing strategies, and launch plans.

It also guides post-launch improvements based on feedback and market response. This iterative approach leads to more successful products with a higher chance of market acceptance.

6. Market Segmentation

Market segmentation through research is akin to using a finely tuned lens to view a diverse audience. It allows businesses to create highly tailored marketing messages, product variations, and distribution channels for each segment.

This personalization leads to higher conversion rates, better customer engagement, and more efficient use of marketing resources.

7. Measuring Effectiveness

Market research doesn’t stop after implementing strategies; it includes continuous monitoring and evaluation. It allows businesses to measure the effectiveness of marketing campaigns, product launches, and other initiatives.

Metrics like customer acquisition cost (CAC), customer lifetime value (CLV), and conversion rates help gauge success. This feedback loop ensures strategies can be adjusted in real time for maximum impact.

8. Enhanced Communication

Effective communication is at the heart of successful marketing, and market research is the cornerstone of this process. It helps businesses understand the language, preferences, and communication channels favored by their target audience .

By tailoring messages accordingly, companies can create a genuine connection with customers, fostering brand loyalty and advocacy.

9. Cost Efficiency

The cost-efficiency advantage of market research extends beyond immediate savings. It ensures that resources are allocated where they are most likely to generate returns.

By avoiding wasted efforts on unproductive strategies or irrelevant markets, businesses can achieve higher returns on investment (ROI) and operate more efficiently.

10. Long-Term Growth

Market research isn’t just about short-term gains; it’s a catalyst for long-term growth. It facilitates innovation, identifies emerging trends, and helps businesses evolve with changing consumer preferences.

This adaptability is essential for sustained success and staying ahead in a dynamic marketplace.

11. Brand Building

Market research plays a pivotal role in brand building. It helps businesses understand how their brand is perceived by customers and competitors.

By conducting brand perception surveys and analyzing the results, companies can identify areas for improvement in brand image, messaging, and positioning. This insight allows for the development of a more compelling and consistent brand identity , which is essential for long-term success and customer loyalty.

12. Product Innovation

Market research is instrumental in driving product innovation . Beyond simply understanding customer needs, it delves into anticipating future needs and desires.

Through methods like trend analysis and concept testing, businesses can identify emerging market trends and consumer preferences. This proactive approach enables companies to stay ahead of the curve by developing innovative products that resonate with evolving consumer demands.

13. Optimized Pricing Strategies

Pricing is a critical element of any business strategy, and market research provides invaluable insights for optimizing pricing strategies .

By conducting pricing surveys, competitive pricing analysis, and willingness-to-pay studies, companies can set prices that maximize revenue while remaining competitive. This precision in pricing can lead to increased profit margins and improved market positioning.

14. Global Expansion

For businesses considering global expansion, market research is indispensable. It helps in assessing the viability of entering new markets by providing insights into local consumer behavior , cultural nuances, regulatory environments, and competitive landscapes.

In-depth international market research ensures that expansion efforts are well-informed, reducing the risks associated with entering unfamiliar territories.

15. Evaluating Marketing Channels

In the digital age, businesses have a multitude of marketing channels at their disposal, from social media and email marketing to content marketing and influencer partnerships.

Market research helps in evaluating the effectiveness of these channels for reaching and engaging with the target audience. By analyzing customer preferences and behavior, businesses can allocate marketing budgets to the most productive channels, maximizing their marketing ROI.

Disadvantages of Market Research

Certainly, let’s explore the disadvantages of market research in greater detail, shedding light on the intricacies and potential challenges associated with this crucial business practice.

1. Costly and Time-Consuming

Market research can be a resource-intensive endeavor. The costs associated with data collection, analysis, and hiring experts can add up quickly, especially for small businesses with limited budgets .

Additionally , conducting comprehensive research often takes time, and in rapidly changing markets, delays can lead to missed opportunities.

2. Risk of Bias

Bias is a significant concern in market research. Researchers and survey designers must be vigilant to minimize bias in various forms, including question phrasing, sample selection, and interpretation of results.

Failure to address bias can lead to skewed data, undermining the reliability and accuracy of research findings.

3. Complex Data Analysis

Interpreting market research data can be complex, requiring expertise in statistics and data analysis.

Misinterpretation of data or improper statistical methods can lead to incorrect conclusions and misguided decision-making. This complexity may necessitate the involvement of trained analysts or data scientists.

4. Overreliance on Data

While data-driven decision-making is essential, an overreliance on data can stifle innovation and creativity.

Market research primarily deals with existing data and known trends, which may limit the exploration of new ideas and unconventional solutions. Striking a balance between data-driven insights and strategic vision is crucial for holistic decision-making.

5. Limited Predictive Power

Market research excels at providing insights into past and current market conditions, but predicting the future is inherently challenging.

Rapid changes in consumer behavior, technological advancements, and external factors can make accurate forecasting difficult. Businesses should be aware that research findings are not crystal balls but rather informed estimations.

6. Data Privacy Concerns

With the increasing emphasis on data privacy regulations and ethical considerations, mishandling customer data can lead to legal issues and reputational damage.

Businesses must navigate a complex landscape of data protection laws and ensure they handle customer information ethically and transparently.

7. Information Overload

In the digital age, businesses have access to vast amounts of data. Handling this information overload can be overwhelming.

Distinguishing valuable insights from noise and managing the sheer volume of data can be challenging, requiring robust data management systems and skilled analysts.

8. Resistance to Change

Implementing changes based on market research findings can be met with resistance, particularly if the findings challenge established beliefs or practices within an organization.

Managing organizational change , convincing stakeholders, and aligning teams with research-driven strategies can be a complex and time-consuming process.

9. Competitive Intelligence Risks

While monitoring competitors is crucial, there’s a risk of overemphasizing competitive intelligence to the detriment of innovation.

Focusing too much on what competitors are doing can lead to a “ follow the leader ” mentality rather than forging a unique market position. Businesses should use competitive intelligence as a tool for inspiration rather than imitation.

10. Sample Size Limitations

The accuracy of market research findings heavily depends on the representativeness of the sample used for data collection.

Small or unrepresentative samples can lead to skewed results and misguided strategies. Ensuring a large enough and diverse sample can be challenging, especially when dealing with niche markets or elusive demographics.

Conclusion:

Market research is a valuable tool for businesses seeking to thrive in competitive markets. It offers a plethora of advantages, including informed decision-making, customer understanding, and a competitive edge. However , it is not without its drawbacks, such as costliness, bias, and limitations in predicting the future.

To harness the benefits of market research while mitigating its disadvantages, businesses must approach it strategically. They should invest in high-quality research, ensure data integrity, and strike a balance between data-driven decisions and visionary thinking.

Moreover , staying updated on ethical and legal considerations in data collection and management is crucial to maintaining a positive reputation and customer trust.

In a rapidly changing business landscape, market research remains an indispensable tool for companies looking to adapt, grow, and succeed. When conducted thoughtfully and with a keen understanding of its strengths and weaknesses, market research can be a cornerstone of sustainable business success.

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Published: July 23, 2019

Customer buying habits, needs and motivations are in many ways measurable, not mysterious. Today’s companies have more tools than ever to ground their innovative ideas with real market information — information revealing the feasibility of a new product or service as well as its roadmap to implementation.

Understanding the importance of market intelligence is the difference between strategic, competitive organizations turning their ideas into profit and those playing a continual guessing game. Before committing substantial resources — indeed, the future of your business — into the launch of a new product, service or branding endeavor, you must conduct intensive research into how customers will respond to that endeavor. Targeted market intelligence is how.

What Is Market Research?

Simply put, market research is when an organization identifies a specific set of information or questions they need to have answered to implement a successful and profitable business change.

This is a broad definition, and purposefully so. Market research is an expansive activity with numerous methodologies that can help a business do everything from launching new product packaging to picking music for commercials to converting customers away from the competition. Yet the purpose of performing market research is the same — to research and analyze the variables of a target goal or question, then create a business strategy informed by findings that’ll pave the way to that goal’s realization.

Using the benefits of market research, a company can better interpret:

• Customers , current or prospective.
• Markets , new or established, domestic or abroad.
• Competition , prevailing or up-and-coming.
• Products or services presently offered or in-the-works.
• Technology , public or private, emerging or existing.
• Entire industries , accounting for many of the variables above.

What Goes Into Thorough Market Research?

While the goals behind conducting market research vary for each enterprise, its overall process holds the same core steps:

• Outline the enterprise goals : Every good market research initiative begins by identifying your market research needs and goals . Organizations need to determine what information they truly require to answer a question, clarify indecision or better understand a business concept. Once compiled, that information helps build the roadmap for your market research methodologies.
• Bring in stakeholders : Identify the individuals and teams who have an interest in achieving a specific enterprise goal. Consider stakeholders those conducting the research as well as those who must receive, interpret and implement market research findings within their own domains to achieve that enterprise goal.
• Review budget allotment : Budget allowance influences what kinds of market intelligence methodologies can be conducted practically, as well as the length of analysis and additional resources or outside consultants to bring onboard.
• Identify necessary facilities and additional resources : Can market analysis be performed completely in-house, using internal information like company sales reports or accounting ledgers? Will surveys need to be drafted and disseminated? Do actual customers or the general public need to be brought in for a live focus group? Account for all facility and technical resources as early as possible.
• Conduct the research : Perform the market research methodology that gives the best chance to extract relevant, goal-solving information.
• Interpret results to make a business decision : Market research can unearth reams of quantitative and qualitative data your key stakeholders then chisel into actionable, effective enterprise solutions, levering market intelligence for its true function — better-run businesses.

What Industries Use Thorough Market Research?

It’s no exaggeration to say in today’s commercial world, nearly all industries deploy thorough market intelligence to their advantage. However, a handful of sectors see strategic gains in conducting continual benchmarking, monitorization and market entry or defense research:

1. Consumer Goods

From shoes to showerheads, smartphones to hair-styling products, everyday commercial goods make the consumer’s life tick. Retailers glean the vast benefits of market research to assist with new product testing, development, consumer segmentation, distribution benchmarking and more retail-centered market strategies .

2. Pharmaceuticals

The pharmaceutical industry is a heavily regulated, cost-competitive sector that undergoes near-constant evolution. Pharmaceutical companies keep pace by performing keen healthcare market intelligence studies into operational profitability and cost advantages, consumer beliefs, new treatment commercialization plans, current treatment and drug therapy development and by maintaining competitor profiles.

3. Technology

Our lives are increasingly dependent upon and tethered to software and hardware. This Internet of Things (IoT) reality drives the hyper-competitive tech industry to perform fluid research and development (R&D) initiatives, conduct pricing analyses, monitor product warranty and servicing metrics, understand their brand’s public perception, optimize consumer retention and user experience (UX) and much more.

4. Banking and Finance

Advances in financial technology, also called fintech, and other industry disruptors have catapulted financial service companies into a new era of competitive undertakings. Differentiation in banking and finance has never been more essential, with market research and intelligence providing service and operational advantages for retail and corporate banks, lending institutions, insurance providers, investment firms and more.

5. Manufacturing

Industrial and commercial manufacturing companies navigate an increasingly complex and profit-volatile industry. From performing threat assessments on domestic and international competition and profiling changing consumer material tastes to undergoing supply chain, production and distribution analyses, the disadvantages of not doing proper market research could spell life or death for those in this industry.

From petroleum-based oil and natural gas to the rapidly advancing renewables market, the energy sector carries both traditional and alternative offerings set to define how future societies run. Energy companies have a long list of reasons for conducting marketing research, beginning with understanding shifting consumer energy attitudes and tastes to developing profitable go-to-market strategies, fuel sourcing supply chains, brand and product evolution and much more.

7. Food and Beverages

The sheer variety of packaged foods and beverages available to today’s consumer alone warrants thorough market research. From individual convenience stores conducting layout analyses to see which shelving designs boost average basket sales to the beverage and snack manufacturers expanding their own consumer taste R&D studies, there’s no shortage of opportunities for market intelligence in the food industry.

Primary Versus Secondary Market Intelligence

While there are many market research methodologies for organizations to adopt, there are only two general categories those methods fall into — primary research or secondary research.

1. Primary Market Intelligence

Primary market research is studies or reports created by your organization, for your organization, using propriety information and specific research criteria aimed at addressing a focused business goal.

Proprietary information is the basis for overall analysis, allowing an organization to get precise, pinpointed answers on products, services, sales cycles, profitability and more. Examples of primary market intelligence research include:

• A mining equipment manufacturer conducting efficiency and output assessments on all its plants.
• An outdoor apparel label reviewing quarterly sales reports to identify the most successful product lines.
• An all-natural cosmetics company determining which new logo idea is most appealing to its customers.

2. Secondary Market Intelligence

As the name suggests, secondary research is non-proprietary, non-customized pieces of broad market research and industry analysis. It focuses not on a particular business’ products, services or brand perceptions, but instead on the larger trends and variables affecting an industry.

Trade associations, the government and third-party groups interested in industry activities are most often responsible for publishing secondary market research. Common secondary market intelligence examples might include:

• A report on Millennial smartphone browsing habits published by the Mobile Marketing Association.
• Public transportation ridership data produced by the U.S. Bureau of Transportation Statistics.
• Data on the top leisure spending habits in your state according to income bracket, published by the Pew Research Center.

What Are the Types of Market Research Intelligence?

Organizations have many options at their disposal to conduct thorough primary and secondary market research.

1. Consumer Brand Awareness Research

Brand awareness encompasses how widely recognizable your business is to target customers, as well as prospective consumers and desired markets. It’s an important tenet of a business’ overall marketing strategy and business growth likelihood since poor brand awareness correlates with smaller market shares and diminished growth outcomes .

Consumer brand awareness research identifies variables like:

• Brand identity : The words, phrases, descriptors and associations the general public ties to your company, positive or negative.
• Brand recognition : How quickly a consumer matches branded collateral — logos, color schemes, audio branding sounds, and more — to your business.
• Brand recall : The ability for the average consumer to name your products, business or collateral when discussing your industry.

2. Market Segmentation

Customer and market segmentation allow organizations to understand their customers better — plus identify segments with higher profit potential. Surveys and interviews with current and prospective consumers give insights into the values, habits, preferences, likes and dislikes of target populations, enabling an organization to morph their products or services to meet these motivations.

3. Research and Development (R&D)

R&D market research encompasses all the ways an organization tweaks and tailors their products according to market segmentation demands, cost-profit calculations and their overall brand identity. It allows a company to produce a superior product at a superior price point without sacrificing basic, profitable operational efficiencies.

R&D market research incorporates activities like:

• Packaging design and testing
• Product features and enhancements
• Actual product testing
• Product launch or re-launch improvements
• Post-launch product support

4. Advertising and Marketing Intelligence

Marketing research is pivotal to understanding what advertising channels, messages and platforms are your strongest, meaning they connect with audiences, generate the most leads, nurture the most loyalty and imbue the most brand identity. Advertising market intelligence lets you create campaigns and marketing tactics with proven, positive customer impact, saving significant time and resources.

5. Satisfaction and Loyalty Testing

Satisfaction and consumer loyalty are coveted — and measurable — markers that a consumer will return to your brand, time and time again. Loyal customers are also more likely to recommend your products or services to others, browse your website, make repeat purchases, interact with your social accounts, give positive online reviews and be open to cross or up-selling opportunities.

You can measure customer satisfaction and loyalty using surveys, focus groups and interviews identifying:

• Brand trust : How much consumers view your company as authentic, admirable, socially conscious and committed to its customers.
• Brand messaging : Are current advertising and marketing methods imbuing customers with the “personality” you want to be known for?
• Product or service appeal : Understanding what’s most important to the satisfaction of your customer — be that price, convenience, status, trendiness, safety or something entirely unique.

6. Market Pricing

Successful market pricing allows you to pinpoint how much target consumer segments would pay for a particular product with particular features. It involves a complementary blend of both primary and secondary research methods:

• Primary market-pricing intelligence gleans what aspects of your products, services or branding customers respond best to, and will, therefore, pay a premium to experience.
• Secondary market-pricing intelligence reveals what industry competitors charge for similar products or services, as well as generalized shifts in consumer tastes and values which inform product pricing. For example, the growing desire to be an eco-conscious consumer means certain segments will pay a dollar or two more for “green” goods compared to cheaper, non-green merchandise.

Top Marketing Research Methods for Businesses

The way an enterprise chooses to collect information, conduct research and compile data is known as its marketing research methodology. What type of methodology an organization adopts — as well as if it’s primary or secondary leaning — is a direct reflection of the strategic business decisions it wants insights into.

Organizations can conduct their market data collection using any of the following approaches:

1. Experimental Studies

Controlled experiments let researchers manipulate specific product, service, advertising or environmental variables, then measure how those manipulations affect the whole. This approach works particularly well during product R&D or pre-launch preparations and for advertising and market intelligence research.

For example, researchers can present multiple versions a piece of software or variations of a commercial, then let test participants fill out response surveys. Overall, measuring such variable differences in controlled settings helps signal what works well for a product or brand and what doesn’t.

Experimental market research can be done in two settings:

• Laboratory studies : Laboratory-tested market intelligence allows researchers to control nearly all product and environmental variables, therefore unearthing more quantitative, consistent findings. It works particularly well for commercial products, technology, food and beverages and is most often done with the assistance of a third-party research firm.
• Field studies : Field-testing market research takes place in real-life environments, such as in a retail store, manufacturing plant or an entire city. It’s great to test actual market conditions and feasibility of certain products, services or branding mechanisms, as well as experiment with price points and buyer intent before applying to larger settings.

2. Focus Groups

Focus groups are large, group interviews made up of pre-screened, volunteer consumers in target segments or relevant subject matter experts. Focus groups are a primary market research methodology ideal for extracting subjective or qualitative information about a brand or good — information that cannot be replicated in a trial-and-error lab setting.

Focus groups can be split into two categories:

• Quantitative-centered focus groups , where group members receive pre-written surveys or tests with standardized, numeric-based questions evaluated together after completing.
• Qualitative-centered focus groups , where group members are asked open-ended questions or given open-ended tasks for researchers to glean more subjective reactions and insights.

3. Primary Interviews

Primary interviews are one-on-one interviews conducted directly between researchers and a pre-screened candidate online, over the phone or face-to-face. That candidate has been selected for their congruence to your target consumer segments because they fit a market demographic or because they’re a subject matter expert who can lend interesting insights on market criteria.

4. UX Groups

User-experience groups are a subcategory of focus groups relevant for software, technology and some physical products. Members of UX groups are tasked with actually using a new product, often during the R&D phase. Using a mix of surveys, journals, individual and group interviews, researchers amass quantitative and qualitative data on the appeal of a product, from its user-friendliness to its actual task-enhancing ratings.

5. Benchmarking

Market intelligence benchmarking allows an organization to identify and measure targeted key performance indicators (KPIs) within their operations, then compare those to competitors. Nearly all businesses benchmark, but not all leverage benchmarked data into formal business growth plans to account for:

• Organizational structure comparisons
• Improved supply chain management
• Enhanced retail experiences and initiatives
• Refreshed sales strategies
• Overall cost reductions and maximized profitability

6. Internal Analyses

Completely internal market research turns a company’s attention inwards. It elevates static enterprise information into compelling and actionable ideas, ensuring your organization doesn’t collect data for the sake of collecting data — it wields it as a tool for innovation.

Internal data analyses can uncover trends and insights from:

• Product line data
• Accounting and financial planning spreadsheets
• Website and social media platform traffic
• Content-marketing analytics

7. External Analyses

Pure external analysis lets businesses understand the broader context behind an industry question or concern. Using only government publications, industry trade research and commercially available data, external analysis can review topics like:

• Regional or national market conditions, for risk-adjusted entry and defense.
• Emerging industry technology.
• Growing consumer trends, fears or behaviors related to their industry.
• Overall market or industry threats and disruptions.

Disadvantages of Not Doing Market Research

The importance of conducting market research goes beyond a few feel-good assessments. Market intelligence hands organizations a blueprint for creating the best version of themselves. Market research offers many benefits, and neglecting to do market research can hurt your company in several ways:

1. Never Learning Your Competitive Advantages

Businesses that know their strengths, capabilities and pain points are far better equipped to make strength-maximizing, risk-mitigating business decisions. It’s a form of self-awareness critical to creating strategic growth outcomes .

Market intelligence allows organizations to craft nearly every operation to their competitive advantage. It spotlights what processes or activities are currently on-brand, lean and successful while also identifying things your competitors might be doing you can integrate, siphoning customers, expanding your market share and furthering your competitive momentum along the way.

2. Forgoing Customer-Centric Marketing Models

Market intelligence lets organizations know what makes their customers tick. When done consistently, thorough customer and market segmentation become both an art and a science. Through customer-focused market research using focus groups, surveys, interviews, field studies and more, companies can glean new sales strategies, devise more impactful brand messages and advertisements and overall make keener investments into customer-facing platforms and touch points.

3. Increasing Strategic, Operational Risk

Instead of making decisions in the dark, performing market research grounds business decisions and reduces the chance of plans going awry. Organizations have precise insights into what works and what doesn’t, both internally and externally. Backed by this information, they can tweak processes and allocate resources to:

• Improve budget cycles
• Enhance decision-making ROI
• Speed up product or service times to market
• Develop stronger market entry or product launch strategies

4. Can’t Make Data-Backed Enterprise Decisions

Just because something has a number to it doesn’t mean it’s infallible. Yet data-backed enterprise decisions inspire more confidence since they’re composed of real-world, reliable data. Stakeholders, therefore, have more confidence in making business decisions, decisions which:

• Contain more preemptive, not reactive, plans, patterns and activities.
• Better predict the competition’s motivations and behaviors.
• Better predict customer’s motivations and behaviors.
• Mitigate risk and respond more effectively when market anomalies do occur.

5. Leaves Business Stones Unturned

It’s impossible for businesses to control every variable across all the inevitable changes in consumer expectations, technology, facilities, product and service lines, marketplace health and general society. With market research, though, business leaders can rest assured their organizations have done due diligence, keeping a pulse on these things as they happen — not after the fact.

What’s more, this “pulse” is scientifically validated, analyzed and put into effect in equally measurable installments — no cut corners, no sloppy implementation. Simply a well-run business crossing and T’s and dotting I’s before making significant strategic moves.

Gain the Advantages of Thorough Market Research With Proactive Worldwide

When an organization seeks new ways to be the best version of itself, Proactive Worldwide provides answers through globally renowned market strategy and analysis services committed to your exact goals.

Proactive Worldwide provides enterprise intelligence services and consulting in three core domains:

• Intelligence-Based Strategic Planning Services
• Competitive and Market Intelligence Consulting
• Customer Insights Research and Reports

Contact us today to see how intelligent market research can propel your organization to be where it should.

What can we help you achieve?

Get in touch with our market intelligence company today to start planning for the future of your organization.

The Pros And Cons Of Market Research

by Hutch | Blog | 0 comments

Customers are at the heart of every marketing campaign. Marketing materials that fail to capture the attention of target customers will fail to lead to profit. Market research can identify which advertising messages are creating unique pain points in potential customers.

Targeted advertising messages can be adjusted to reach the exact individuals most likely to purchase a product or service. By creating customized marketing materials tailored to each customer type, companies can increase their chances of achieving outstanding business success.

This article will help you gather more information about the topic if you’re unfamiliar with market research. You’ll also learn how market research helps a business and what are the downsides of conducting this activity.

What Is Market Research?

Market research is the systematic approach to gather data on potential clients and target markets in an effort to understand them, beginning with who they are. It’s a significant factor in maintaining a competitive advantage and a key ingredient in business strategy.

Market research provides information that’s useful for decision-making and a base of knowledge about how to reach a large audience and build customer loyalty.

There are several ways a company can conduct market research. You can continue reading this to learn about comprehensive research methods. Here are also some of the ways businesses conduct market research:

Field Studies

Field studies rely on consumers’ descriptions of their shopping environment, like eating at a fast-food restaurant or visiting a boutique. Another widely used method is elicitation, where researchers go out into the marketplace and make direct observations of target customers, whether good and bad.

Representative Sampling

Representative sampling is another common type of market research. In this method, researchers randomly choose representative persons from the population; these represent the target consumers. These selected individuals are asked to fill out surveys.

These surveys give researchers valuable insights about buying decisions, such as how buyers decide what products to buy, why they make those decisions, and how much they want to buy.

Focus Groups

Another form of market research uses focus groups. Focus groups are homogenous groups that meet to discuss and exchange ideas. Participants of focus groups may be asked to share their views on a given topic and their overall impressions of a specific product.

These surveys allow researchers to obtain comprehensive information about how and why individual purchases are made and the attitudes and behaviors that guide buying decisions. But, because many purchasers are reluctant to share information, research groups can have low response rates.

Use Of Secondary Information

An alternative to surveys and focus groups is the use of secondary information. Secondary information comes from within the organization itself: from current workers, customers, or competitors. Secondary data can make adjustments to the market research approach that has already been conducted.

Secondary information can show where and how workers, customers, competitors, or other essential factors might have changed if the surveyor had completed the survey differently, for instance.

A straightforward way of collecting this data is to do a survey among your customers or employees. Just email them a link to a   survey form you’ve built on your website  and have them fill it in. A small reward – like a discount for customers, or cash for your workers – can increase response rates significantly.

What Are The Advantages Of Market Research?

Market research is one of the most critical and inevitable factors in every business. Here are ways market research can be beneficial:

Company Growth

Market research helps the company understand, analyze, evaluate, and pinpoint areas with the highest growth potential.

It plays a significant role in understanding consumer behavior or behavioral economics , preferences, buying behavior, and making changes based on the shifting change in all the critical factors of marketing like place, cost, promotion, and product.

With this information, the company can plan its promotion strategies accordingly to achieve its sales targets.

Increases Loyal Customer Base

Marketing research also helps in identifying the customers that have a high probability of increasing sales. This allows the company to build a new strategy to target these customers specifically for further growth.

For instance, it considers how people use a new product or how the current customers are using the product, how the market trends affect the development in terms of sales, how much demand there is for the product in the market, and others.

Development of Effective Marketing Strategies

Apart from analyzing the market trends and consumer behavior, market research also helps plan a marketing strategy. It helps in designing and executing a campaign accordingly that would ultimately help in increasing sales.

It’s also an effective way of understanding the present scenario and the product demands.

It can also provide information on which advertisements or marketing campaigns attracted the most customers and which are the ones that are not as effective. With this information, a business can avoid spending too much on campaigns that aren’t bringing many customers in.

What Are The Disadvantages Of Market Research?

Although market research has some significant advantages for companies, it also has some downsides. Some of the disadvantages of market research include:

One of the main reasons some businesses refuse to conduct market research is that it entails enormous costs. Market research can be intimidating for small companies after knowing all of the tools and processes needed to complete the activities.

It may be cost-effective to research independently, but it won’t benefit them in the long run because they don’t have the tools and strategies to gather essential data.

Targetting A Large Population

One of the challenges for market researchers is the lack of respondents for their studies. Asking people to answer surveys or forms can be tricky. That’s why it’s essential to conduct different strategies to gather as much information as needed for your market research.

Time-Consuming

A small business doesn’t conduct market research because it takes a considerable amount of time. Conducting market research entails a lot of preparation, and the gathering of data should be done extensively.

This is important because when you rush into doing the process, you might not have credible information to help your business.

Market research plays a vital role in businesses. Businesses need to develop a comprehensive understanding of their target market. Market research aims to know how consumers make buying decisions, what factors influence buying decisions, and how to create changes to increase product sales without significantly decreasing service or profit.

There are many methods you can use as part of your marketing research process.

You can ask people to take a survey or interview a focus group. You can also use the Internet, like using social media or Reddit as a marketing resource .

Market research has many advantages. It helps your company grow and become competitive as it finds effective marketing ways to attract more customers. However, market research also comes with a cost. That’s why many smaller businesses avoid conducting this activity because it can be expensive and time-consuming.

As a business owner, it’s essential to weigh out the advantages and disadvantages of doing market research.

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What is Market Research? (Explained With Examples)

Oct 11, 2023

Market research is an essential component of any business strategy. It helps companies understand their target market, identify consumer preferences, and make informed decisions about product development, marketing campaigns, and overall business growth. In this article, we will explore the concept of market research in detail, providing clear definitions, discussing advantages and disadvantages, and providing real-world examples to illustrate its importance

1°) What is Market Research?

Market research is the process of gathering and analyzing relevant data about a target market to gain insights into consumer behavior, preferences, and needs. It involves collecting both qualitative and quantitative data to understand market trends, competitor analysis, and customer satisfaction levels.

Market research plays a crucial role in helping businesses make informed decisions and develop effective strategies. By understanding the market dynamics and customer demands, companies can tailor their offerings to meet the specific needs of their target audience. This not only enhances customer satisfaction but also increases the chances of business success.

1.1 - Definition of Market Research

Market research can be defined as the systematic gathering, interpretation, and analysis of data about a specific target market, industry, or product/service. It helps businesses understand market dynamics, customer demands, and competitor strategies, ultimately enabling them to make informed decisions.

Market research involves various methods and techniques to collect data, such as surveys, interviews, focus groups, and observation. These methods help researchers gather both qualitative and quantitative data, providing a comprehensive understanding of the target market.

1.2 - Advantages of Market Research

There are several advantages of conducting market research:

Market Insights: Market research provides valuable insights into customer preferences, behaviors, and pain points, allowing businesses to tailor their offerings to meet customer needs effectively. By understanding what drives consumer decision-making, companies can develop marketing strategies that resonate with their target audience.

Competitor Analysis: By conducting market research, companies can gain a comprehensive understanding of their competitors, their strengths, weaknesses, and unique selling propositions. This knowledge helps businesses refine their own strategies and stand out in the market. It enables companies to identify opportunities for differentiation and develop competitive advantages.

Product Development: Market research helps businesses identify potential gaps in the market, enabling them to develop innovative products that satisfy unmet consumer needs. By understanding customer preferences and pain points, companies can create products that address specific challenges or provide unique solutions.

Evidence-Based Decision Making: By collecting and analyzing data, market research eliminates guesswork and supports data-driven decision making, reducing the risk of making costly mistakes. It provides businesses with the necessary information to evaluate market opportunities, assess risks, and make informed choices.

1.3 - Disadvantages of Market Research

While market research offers numerous benefits, it also has certain limitations:

Time-consuming: Conducting comprehensive market research can be a time-consuming process, requiring careful planning, data collection, and analysis. It involves identifying research objectives, designing research methodologies, collecting data, and analyzing the findings. This process can take weeks or even months, depending on the scope of the research.

Costly: Market research can be expensive, especially when involving large sample sizes or advanced research techniques. The costs include expenses related to data collection, analysis, and hiring research professionals. Small businesses with limited budgets may find it challenging to invest in extensive market research.

Accuracy Limitations: Despite efforts to ensure reliability, market research results are still subject to bias, sample error, and respondent inaccuracies. Researchers must carefully design their studies to minimize these limitations, but it is impossible to completely eliminate them. The accuracy of market research findings depends on the quality of data collection, sample representativeness, and the honesty of respondents.

2°) Examples of Market Research

Real-world examples can help illustrate the practical application of market research:

2.1 - Example in a Startup Context

Imagine a startup aiming to disrupt the meal delivery industry. Before launching their service, they conduct market research to identify the preferences and demands of their target audience. Through surveys, focus groups, and data analysis, they uncover that convenience, healthy options, and affordability are essential factors for their target market. Armed with this information, they develop a meal delivery service that meets these needs and differentiates themselves from established competitors.

For instance, during their market research, the startup discovers that their target audience values convenience above all else. They find that busy professionals and families are looking for a meal delivery service that can provide them with quick and easy options for their busy lifestyles. Armed with this insight, the startup decides to focus on developing a user-friendly mobile app that allows customers to easily order meals with just a few taps on their smartphones. This innovative approach to convenience sets them apart from their competitors and attracts a loyal customer base.

In addition to convenience, the startup also uncovers a strong demand for healthy meal options. They find that their target audience is health-conscious and actively seeks out nutritious meals that align with their dietary preferences. To cater to this demand, the startup partners with local farms and suppliers to source fresh and organic ingredients for their meals. They also collaborate with nutritionists and chefs to create a menu that offers a variety of healthy and delicious options. This commitment to providing healthy meals not only meets the needs of their target audience but also positions the startup as a trusted and reliable choice in the market.

Lastly, the startup identifies affordability as a key factor for their target market. They discover that price sensitivity is high among their audience, and they are looking for cost-effective meal delivery options that don't compromise on quality. To address this, the startup adopts a pricing strategy that offers competitive prices while still maintaining the quality and value of their meals. They also introduce subscription plans and loyalty programs to incentivize repeat customers and provide additional savings. This focus on affordability allows the startup to attract price-conscious customers and gain a competitive edge in the market.

2.2 - Example in a Consulting Context

A consulting firm specializing in marketing strategy decides to expand its service offerings. To ensure they align with market demand, they conduct market research to identify the most sought-after services and emerging industry trends. By analyzing market data, interviewing industry experts, and conducting competitor analysis, they identify a gap in the market for data-driven digital marketing strategies. This research helps the consulting firm refine their service offerings and attract new clients.

During their market research, the consulting firm uncovers a growing demand for data-driven digital marketing strategies. They find that businesses are increasingly looking for ways to leverage data and analytics to optimize their marketing efforts and drive better results. Armed with this insight, the consulting firm decides to develop a specialized service that focuses on helping businesses harness the power of data in their marketing strategies.

To deliver this service, the consulting firm invests in hiring data analysts and marketing experts with a strong background in data-driven marketing. They also develop proprietary tools and software that can collect, analyze, and interpret marketing data to provide actionable insights and recommendations to their clients. By offering this specialized service, the consulting firm is able to position themselves as industry leaders in data-driven marketing and attract clients who are seeking innovative and effective marketing solutions.

In addition to data-driven marketing, the consulting firm also identifies an emerging trend in influencer marketing. They find that businesses are increasingly turning to influencers and social media platforms to reach their target audience and build brand awareness. Recognizing the potential of this trend, the consulting firm expands their service offerings to include influencer marketing strategies. They develop partnerships with popular influencers in various industries and create comprehensive influencer marketing campaigns for their clients. This expansion allows the consulting firm to tap into a growing market and provide their clients with a holistic approach to digital marketing.

2.3 - Example in a Digital Marketing Agency Context

A digital marketing agency wants to optimize its client's pay-per-click (PPC) advertising campaigns. They conduct market research to understand consumer behavior and identify effective strategies. By analyzing search data, conducting A/B testing, and reviewing industry case studies, they discover that creating personalized ad copy and optimizing landing pages increases click-through rates and conversions. Armed with this knowledge, the agency produces better results for their clients and improves their overall reputation.

During their market research, the digital marketing agency delves into consumer behavior to gain insights into what motivates users to click on PPC ads and convert into customers. They find that personalization is a key factor in capturing the attention of users and driving conversions. Armed with this insight, the agency develops a strategy that focuses on creating personalized ad copy that resonates with the target audience. They conduct extensive research on the target audience's demographics, interests, and preferences to craft ad copy that speaks directly to their needs and desires. This personalized approach increases the relevance and effectiveness of the PPC ads, resulting in higher click-through rates and conversions for their clients.

In addition to personalized ad copy, the digital marketing agency also discovers the importance of optimizing landing pages in maximizing the success of PPC campaigns. They find that a well-designed and user-friendly landing page can significantly impact the conversion rate of PPC ads. Armed with this insight, the agency conducts A/B testing to identify the most effective landing page design and layout. They analyze user behavior, conduct heat map analysis, and gather feedback from users to refine and optimize the landing pages. This meticulous approach to landing page optimization leads to improved conversion rates and a higher return on investment for their clients' PPC campaigns.

2.4 - Example with Analogies

Imagine a chef who wants to create a new dessert recipe. Before experimenting with ingredients, they conduct market research to gather inspiration and understand current dessert trends. By analyzing popular recipes, studying customer reviews, and experimenting with flavors, the chef can develop a unique and delicious dessert that resonates with their target audience.

During their market research, the chef explores various dessert trends and flavors that are currently popular among consumers. They analyze social media platforms, food blogs, and culinary magazines to identify the latest dessert trends and gather inspiration for their own creation. Armed with this knowledge, the chef experiments with different flavor combinations, textures, and presentation styles to develop a dessert that not only satisfies the taste buds but also captures the attention of their target audience.

The chef also pays close attention to customer reviews and feedback on existing dessert recipes. They analyze the strengths and weaknesses of popular recipes and use this information to refine their own creation. By incorporating customer preferences and addressing common complaints or suggestions, the chef ensures that their dessert stands out from the competition and meets the expectations of their target audience.

Market research plays a pivotal role in understanding consumer needs, identifying market opportunities, and driving business success. Whether you are a startup, consulting firm, or digital marketing agency, conducting market research can provide valuable insights, inform decision-making, and improve overall business performance.

About the author

Arnaud Belinga

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• Market Research Company Blog

13 Types of Market Research (+ Pros & Cons)

by Emily Rodgers

Posted at: 10/18/2023 12:30 PM

Today’s business decision-maker has an abundance of marketing research services  available to them.

Understanding what market research is and how best to use research methodologies to your advantage is vital in reaching your target customers and increasing ROI.

There are 13 types of market research, each with their own pros and cons:

• Online Surveys
• Phone Surveys
• Customer Surveys
• Omnibus Surveys
• Mail Surveys
• Intercept Surveys
• Ad Concept Testing
• Mystery Shopping
• Shop-Alongs
• Focus Groups
• In-Depth Interviews
• Feasibility Studies

Interested in hiring a third-party market research company? Consider Drive Research. Get a quote from our team by filling out an online contact form or emailing [email protected] .

Primary vs. Secondary Market Research

Primary and secondary market research are two fundamental categories in the field of market research, each serving distinct purposes when on the hunt for data-driven insights.

Primary research involves the direct gathering of information from original sources.

This method is akin to a first-hand investigation, where data is collected directly from respondents or subjects through methods like surveys, interviews, or observations.

Primary research provides fresh and specific insights tailored to the objectives at hand, offering a firsthand perspective on consumer behaviors, preferences, and trends.

Secondary research involves the analysis of existing data and information that has been previously collected by other sources.

This type of research leverages pre-existing data from a wide array of sources such as industry reports, government publications, academic papers, and market analyses.

Secondary research is particularly useful for gaining broader industry perspectives, historical data trends, and context for understanding market dynamics.

Qualitative vs Quantitative Market Research

Next, it’s important to establish the two categories of market research, qualitative and quantitative, to gain a better understanding of the various primary marketing research methodologies.

Qualitative research is an exploratory type of research, designed to gain a deeper insight into the underlying reasons, opinions, and motivations of a consumer.

Qualitative research allows your target audience to answer questions like:

• How did this commercial make you feel?
• What do you like most about X product?
• Why are you more likely to buy X product over Y?

Quantitative research is a statistical type of research, used to quantify and answer objectives by generating numerical data.

For example, an organization can conduct an online survey to collect statistical data on its brand, through the opinion of its customers.

Quantitative surveys can measure metrics such as:

• Customer satisfaction
• Likelihood to recommend

Recommended Reading: What's the Difference Between Qualitative and Quantitative Market Research?

Types of Market Research

There is no one "best" market research methodology as the most appropriate method depends on the specific research question and the target demographic.

Different research methods have different strengths and limitations.

Below, we cover the most common types of market research and their pros and cons to help determine which methodology is best for your unique needs.

For a short synopsis, I recommend watching the video from our market research company below.

1. Online Surveys

Online surveys are a form of quantitative research aimed at gaining feedback and insight on a specific objective. Web surveys are designed, programmed, and administered – you guessed it – online.

With the rise of technology, most surveys online are equipped to be taken on smartphones and tablets as well.

Pros of surveys online ✅

A major benefit of conducting surveys online is reaching a mass audience at low costs and in little time.

Traditional survey methods like phone or mail often require a large budget to achieve successful and accurate results.

Quick insights

An organization can obtain quick feedback from customers with a web-based questionnaire at little to no cost.

When working with an online survey agency , organizations can create, send, and receive results all in a matter of days.

Here is the process Drive Research follows when conducting online surveys for our clients.

Reduces response bias

Respondents may be more opt to provide honest feedback with online surveys as well.

Being that there is no moderator or interviewer, survey participants feel more inclined to offer up raw emotions and opinions on a company, products, or services.

This eliminates any bias injected by an interviewer.

Cons of online surveys ❌

Technical errors

As much as technology has progressed through the years, it’s nowhere near perfect. Technical mishaps happen every day and online surveys are no exception.

A poor user experience associated with technical problems such as a slow page load time, or worse timing out, can subsequently affect the online survey data.

Unfortunately, these online glitches aren’t always apparent at first sight. Significant errors within online platforms often don’t show up until the survey results are complete.

Less detailed feedback

Oftentimes, our market research company is asked: how many questions should I ask in my survey ?

It’s also a good rule of thumb to keep online surveys short and sweet. 15-20 questions is the sweet spot. 

That's because, unless informed otherwise, participants are less likely to stay fully engaged in a survey that takes more than 10 minutes to complete.

Therefore, with little real estate, it’s difficult to obtain detailed answers to key business questions.

Recommended Reading: How to Make Online Surveys More Engaging for Respondents

2. Phone Surveys

Phone surveys began as a core market research methodology decades ago and still prove to be at the forefront of market research methodologies.

This type of market research centers around collecting deeper feedback from two-way active communication between the interviewer and respondents.

Pros of phone surveys ✅

Two-way communication forum

The advantage of conducting a phone survey lies in the high quality of data it provides.

As opposed to other market research methodologies, phone surveys allow for an active and personable conversation between the interviewer and the participant.

Gather more in-depth insights

In comparison to online surveys, interviewers can receive additional feedback from respondents.

In other words, you are at the mercy of how much or how little participants are going to answer a question online – whereas phone surveys allow interviewers to ask respondents to explain their answers.

Respondents are more likely to answer phone survey questions in greater detail because it takes less time to voice your opinion than it would to type or write.

Survey participants from anywhere

Phone surveys are also at no mercy of the locale.

Especially with the move from landlines to mobile phones, phone survey companies can connect with respondents whether they are traveling, on their lunch break, taking a walk outside, etc.

Cons of phone surveys ❌

More costly

Where phone surveys may provide high-quality and immediate results, it is not as cost-effective or time-efficient as other market research methodologies.

Phone survey companies must collect a long list of participants to speak to, to then spend hours having detailed conversations or leaving voicemails.

Must conduct the research at specific times of day

Another factor driving the collapse of phone surveys is that the study has time constraints to work around. This means phone survey participants will likely only be available to speak outside of business hours.

Other factors such as taking care of children, going to the gym, and running errands can limit the available time respondents have to complete a phone survey.

Recommended Reading: Online Surveys vs. Phone Surveys - Which is Better for Your Business?

3. Customer Surveys

Customer satisfaction surveys measure the level of satisfaction a customer has with a brand. 

This is critical to the success of a brand - how will they know how to cater to customers without asking them? 

With the data gathered from these surveys, brands can implement…

• Improved marketing strategies
• Better customer service techniques 
• Personalized shopping experience

And this last one is super important, as 68% of consumers prefer a personalized shopping experience. 

Below, we'll cover some of the top benefits of running customer surveys, along with potential drawbacks. 

Pros of customer satisfaction surveys ✅

Insight into customer preferences and behaviors

Think of these surveys as a tool to directly tap into your audience. 

Here are some types of insights you can gather from customer surveys:

• How satisfied or dissatisfied customers are with your products or services
• Identify emerging trends and changing customer preferences in the market
• Demographic information such as age, gender, location, occupation, etc. to tailor marketing efforts accordingly
• Insights into the decision-making process of customers, including factors that influence their buying decisions

Identifying areas for improvement

We like to use this scenario: there may be something about your brand that customers dislike, making them less likely to buy from you.

With customer surveys, brands will be able to identify this type of issue straight from the customer. With that information, brands can improve their strategies. 

Measuring customer satisfaction and loyalty

Surveys that measure customer satisfaction metrics such as Net Promoter Score (NPS) offer valuable data about how happy your customers are. 

The key here is to track this data for continued improvement.  

As we always say, market research isn't a one-and-done deal, especially when you're dealing with surveys. Measuring customer opinion through surveys should be an ongoing strategy, as this allows brands to observe current trends and adjust accordingly. 

By continued measurement, brands will always be improving their strategies. This leads to increased customer retention, loyalty, and word-of-mouth referrals. 

Cons of customer surveys ❌

Survey fatigue

This drawback is more related to how the surveys are distributed. 

Put yourself in this position. If a store you've shopped at is continuously sending you links to take a survey, you're probably going to rush through the survey or ignore it. 

This is why it's so important to time your surveys correctly. Sending too many will likely annoy your customers (and maybe even push them away).

Remember, as a brand, you want your customers to know you care, but don't be pushy about it! 

The limited scope of feedback

Depending on the depth of data you want to uncover, surveys may not be the best option. 

One of the benefits of surveys is that they offer structured questions for better-defined responses. 

However, this can backfire and end up limiting you depending on your needs. If you're looking for more detailed insights, surveys may not be the answer.

Instead, methodologies such as customer focus groups or in-depth interviews will be a better fit as they offer more in-depth feedback.

But more on that in a minute!

4. Omnibus Surveys

Omnibus surveys or piggyback surveys are a type of online survey. However, instead of one company sponsoring the market research, the survey includes questions from multiple different organizations.

This type of market research allows several brands and businesses to purchase a few questions as part of a much larger survey.

• Company A wants to ask respondents about their recent car purchases
• Company B wants to ask respondents about home mortgages 
• Company C wants to ask respondents about coffee preferences 

A market research company, like Drive Research, takes these different objectives to create a multi-sponsor survey . When the survey is complete, each company is only given access to results from the questions they sponsored.

This type of market research typically takes 3 to 7 days to complete.

Thought, the length of the timeline depends on how quickly the survey draft is signed off on and how difficult the target audience is to reach.

We'll only just scratch the surface of omnibus market research in this article. For a full overview, read our Ultimate Guide to Conducting Omnibus Surveys .

Advantages of omnibus surveys ✅

Omnibus surveys carry many of the same advantages as online surveys: cost-effective, timely results, and access to a large sample of respondents.

These aspects become even more advantageous being that only a handful of questions are asked in most cases.

Therefore, a significant benefit of omnibus surveys is that Responses from a general population can be gathered in minutes.

If you are looking for a low-budget market research methodology , omnibus surveys are as cheap as they come.

Disadvantages of omnibus surveys ❌

Increased chances of respondent burnout

Because several organizations are purchasing questions to create an omnibus survey, the questionnaire can become quite unruly.

There is no guarantee that your questions will be asked at the beginning of a survey when respondents are most engaged.

There is a chance respondents will have answered 50 questions, before answering yours.

At this point, many respondents are disengaged and are not providing quality feedback. Realistically, they're rushing to complete the omnibus survey to receive an incentive. 

How to avoid respondent burnout in omnibus surveys

To avoid this, find a market research company like Drive Research that creates shorter surveys and can guarantee a goal number of responses.

Oftentimes when a client is looking to conduct an omnibus survey, our market research firm does not wait till other organizations join in.

We can field your survey questions within 24 to 48 hours.

Omnibus survey real-world example

Recently, Drive Research was hired to conduct an omnibus survey. 

The steps to complete an omnibus survey include:

• Finalizing the survey
• Programming the survey
• Creating the deliverables

The following survey was created and approved on a Monday, programmed and launched on a Tuesday, and the results were delivered to the client that Thursday.

Overall, the process took four days to complete.

About the omnibus survey

• The survey took an average of 3 minutes to complete and included 15 questions.
• There were 2 additional screener questions used to confirm the survey reached the specified target audience.
• The survey received 1000 responses.
• Fieldwork for the survey began on February 2 and lasted until February 3, 2021. 

With a probabilistic sample, a total of 1000 responses at the 95% confidence level offers a 3% margin of error.

If the survey were conducted with another random pool of 1000 respondents, the results would yield within +3% or -3% of the stated totals in the reports.

The margin of error can be used as a guideline to understand the reliability of these results.

Results of the omnibus survey

• This client wanted to receive the raw data file for the survey and a question-by-question online report.
• The online report was interactive. By hovering over data in a chart, it will provide more detail.
• Users can also expand the open-ended responses to read each comment by selecting "Show Responses."
• Lastly, users can export the results into several different formats (i.e., PDF, PowerPoint, Excel, and Word).

Example reporting links for omnibus surveys

• Here’s an example of an online report for an omnibus survey. Exports are disabled for this example.
• Here’s an example of an online crosstabulation report for an omnibus survey.

The crosstabulation reports can use any single-response or multiple-response questions (i.e., urbanicity, age group, gender, household income, marital status, race and ethnicity, children in the household, the highest level of education completed, employment status, or state).

The crosstabulation reports help bring more value to the results.

5. Mail Surveys

Emails, text messages, voicemails. Our inboxes are flooded with them. What about physical mail?

What once was labeled as an antiquated form of communication, mail surveys are back with a vengeance.

Mail surveys are a quantitative marketing research data collection method in which respondents complete questionnaires on paper and return them via postal mail.

Mail survey pros ✅

Mail surveys may seem like an archaic methodology, but they do offer some intriguing benefits. 

Best for industries with PII restrictions

Depending on the industry, say banks and credit union market research , businesses cannot reach their audience through online outlets due to organizational restrictions.

Mail surveys offer a personalized, credible solution to this problem.

Good response rates

Direct mail surveys also earn a good response rate.

Where most think direct mailers receive a 1-2% response rate, a mail survey company like Drive Research has seen an average response rate of 10-15%.

When potential participants actually open and hold the mail survey in their hands, many will opt to reply.

An email or online survey is much easier to ignore.

Mail survey cons ❌

Before you run to the post office, it should be noted that the average data quality and time invested in mail surveys deter non-restricted industries from choosing this type of market research methodology.

Timely and costly

The process of conducting mail surveys can be long and strenuous.

Only after you create and format the survey for mail, return for postage, fill and send the direct mail piece, and finally wait for responses to return are you able to start entering data.

Produces less detailed feedback

When choosing to participate in mail surveys, respondents are less likely to provide detailed answers as they would on the phone or online because it takes less time to talk or type a response, than it is to write one.

Recommended Reading: 4 Ways to Save Budget on Your Next Mail Survey 

💡Pro tip: Use a mail survey company

Are you intrigued by the advantages of conducting a mail survey, but don’t have the time required for a successful study?

When partnering with a mail survey company, much of the grunt work will be out of your hands.

A mail survey company handles all aspects of mail surveys, including a customized questionnaire template, data collection, and analysis of results with a detailed report.

6. Intercept Surveys

Intercept surveys are a form of quantitative research focused on capturing " in-the-moment " feedback from respondents.

This type of market research is commonly used after people attend an event or visit an establishment to collect perception information. Although, data can also be collected before or during a participant’s experience.

The feedback received from intercept surveys is usually collected via tablets or paper and pencil interviewing techniques.

If utilizing tablets or other electronic devices, our intercept survey company recommends using a platform with offline functionality.

Do not rely on Wi-Fi offered by large venues such as concerts or sporting events, because you will be fighting to connect to the internet with thousands of people.

Intercept survey example

Compared to other types of market research methods, intercept surveys allow for immediate, top-of-mind feedback from your customers.

For example, to test the success of a digital billboard at a New York Mets game, an intercept survey company representing Pepsi can conduct market research outside of Citi Field.

After the game, interviewers will approach fans as they are leaving the stadium to ask questions like:

• What billboard(s) did you remember seeing inside Citi Field?
• What type of food or beverage did you consume during the game?
• Are you more likely to choose Pepsi or Coca-Cola? What is the reason for this choice?

Drive Research conducted intercept surveys at 5 college football stadiums across the country.

Learn about our objectives, approach, and outcomes of the stadium intercepts.

Intercept survey advantages ✅

By approaching an audience remotely after the experience you are trying to test, the context is top of mind.

Interviewers in turn receive a fresh, candid response. Often times online or email surveys aren’t sent until days/weeks/months after an event has taken place.

This space in time can allow for a misguided representation of what actually happened.

Recommended Reading: Key Benefits of Offline Surveys.

Intercept survey disadvantages ❌

With this specific example, Pepsi would need permission from Citi Field to conduct this survey. Without permission, there is no survey and they’re back to the market research drawing board.

Another drawback to intercept surveys is lower participation rates compared to other market research methodologies. If people are leaving a venue, they are ready to go home or to their next destination.

They likely are not prepared or willing to stop and take an unsolicited survey. Rewards or trinkets are important to offer here.

7. Ad Concept Testing

Ad concept testing can be considered both quantitative and qualitative market research depending on the approach that is used.

F or example, brands can utilize online surveys and/or focus groups to measure consumer feedback regarding a set of advertisements.

The objective of ad concept testing is to compare various advertising or marketing messages to see which of the tested ads resonate most with the brand’s target audience.

For an in-depth overview, I recommend reading The Ultimate Guide to Ad Concept Testing Surveys .

Advantages to ad concept testing ✅

Rely on data-driven marketing strategies 

Ad concept testing is an excellent way to develop and refine marketing campaigns before launching them to the public.

Think of it like this. Buying a house is a huge investment. For this reason, many homebuyers tour and assess the property to limit any unwarranted costs after purchasing it.

The same analogy can be used for data-driven marketing strategies .

Spend marketing dollars more wisely

An ad concept testing survey assures that you are putting your money into the right message and design before investing too much money.

Better yet, this type of market research can help brands increase their return on investment than not conducting any research at all.

Disadvantages to ad concept testing surveys ❌

While I’d say the pros of ad concept testing far outweigh the negatives, I’ll play devil's advocate for just a moment.

Just like any market research study, if done incorrectly concept testing can produce misleading and inaccurate data.

As a result, brands end up making near-useless decisions as they drain more time and resources into a marketing campaign.

How can you ensure it is done correctly so that doesn’t happen? I’ll be frank – stop working with a marketing agency for ad concept testing .

Here’s why.

8. PR Surveys

PR surveys gather public opinion about a certain topic and are a useful type of market research to invest in. 

A quantitative form of research, PR surveys are a fantastic way for businesses to garner publicity as they gather statistical data that can be used by news outlets for various stories. 

These surveys are also referred to as:

• Content surveys
• Public opinion polls

When working with a PR survey company , brands can administer the questionnaire to a specific demographic group or the general population. From there, the standard online survey process is followed. 

Advantages of PR surveys ✅

There are plenty of benefits to conducting public relations surveys . 

We’re stating the obvious here, but journalists are always hungry for the latest findings on any topic. Using data from a PR survey in a press release is a great way to attract attention from journalists. 

Grow brand awareness

PR surveys can draw potential customers and clients to your brand. Say a figure from your custom PR survey catches the eye of a journalist and it ends up in a popular publication. 

Not only will you have your statistics published, but this exposure has the chance to draw several people to your business. 

Generate more backlinks and improve website visibility

All this activity will positively affect your brand’s website, too. 

Your data being referenced on news publication websites has the chance to:

• Generate backlinks
• Increase your domain authority 
• Boost website traffic 

For example, Drive Research often conducts public relations surveys as a link-building strategy . Our research has been featured on USA Today, CNBC, Yahoo News, and more sites. As a result, we've seen thousands more pageviews to our website and an improved domain authority

Be seen as an industry thought leader

When a brand is linked to accurate data, it automatically is seen as a trusted source by the public. People will begin to associate your organization with having reliable information about a specific topic.

Again–this could lead to increased customer activity and loyalty.

Disadvantages of PR surveys ❌

One disadvantage of PR surveys is simply choosing a topic to conduct a study on. 

In a way, this could be seen as a “good” disadvantage–having too many topics is better than having too few.

But to get public attention, you’ll need to choose the perfect topic. This takes time and will require teamwork. 

Conducting a PR survey does not automatically guarantee you will see media attention from the results. It is important to find a topic that is unique and headline-worthy.

9. Mystery Shopping

Mystery shopping is a type of market research using professionally trained shoppers to assess an experience in a natural storefront or retail environment.

Both qualitative and quantitative, mystery shopping is a perfect project to test all areas of customer service.

Mystery shopping examples

Two common best practices of mystery shopping are recruiting actual customers or hiring a market research team to uncover key business findings.

Say you are the owner of an Italian restaurant and you want to test how friendly the wait staff is. You can hire actual customers to eat at your restaurant by providing them with an evaluation form to track their experience.

Another example of mystery shopping could be testing employees’ knowledge of your product or service line.

A bank or financial institution could choose to hire a mystery shopping research company to call and speak with a loan officer as if they were a prospective customer looking to buy a house.

In this example, a bank could evaluate their employer based on:

• Knowledge of home and mortgage loan services
• Ability to communicate and identify a solution
• Speaking in a friendly and professional manner
• Following through on a promise to follow up with the “prospective customer”

Mystery shopping advantages ✅

Compared to survey questions that skew positive answers, mystery shopping can provide informal opinions and feedback on a variety of in-store elements such as cleanliness, product placement displays, and store layout.

The value and results found from partnering with a mystery shopping company , allow organizations to reevaluate their business from the outside looking in.

This type of market research clearly identifies training needs and sales opportunities to ensure a positive customer relationship on the front line.

Mystery shopping disadvantages ❌

When considering mystery shopping as a market research study you must also take into account, that a participant’s experience in a store only represents a single interaction with the staff and store location.

A busy day, short staff, or various other customer service elements can cause a poor experience. This single instance may not truly represent a typical customer visit.

10. Shop-Alongs

A similar market research methodology to mystery shopping is shop-along research .

A shop-along is where an interviewer accompanies a customer while they browse a store for different items, asking a series of questions throughout the consumer’s shopping experience .

This is to likely take place in a grocery store or various retail locations.

Those who participate in a shop-along are either pre-recruited by a shop-along company or intercepted on the spot before entering the store.

In either case, participants are usually rewarded with high cash incentives because of the level of evasiveness during their shopping experience.

Shop-along research advantages ✅

An interviewer can study several different action behaviors during a shop-along to see if a customer interacted with an end cap or what path they took from one department to the next.

The shop-along experience can also be more interactive, with an interviewer asking the participant questions like:

• You looked at this item but put it back on the shelf. What was your reason for this?
• Do you typically visit the produce section first upon entering the store? Why or why not?
• Do sales such as, “buy 2 get 1” influence your buying decision? Why or why not?

Shop-along research disadvantages ❌

A drawback to shop-along research is negatively affected data. Because participants know they’re being studied, they may drift away from their normal purchasing behaviors and decisions.

Customers might choose a product they otherwise would not, like buying name-brand products instead of their typical store products in fear that their purchase will be viewed as cheap.

Example of a shop-along study

Grocery or department store locations aren’t the only markets that can benefit from shop-along research, brands sell their products in these locations too.

Take, for example, Downy. Downy would like to understand the purchasing behaviors behind customers looking to buy laundry detergent.

To blind the study, a shop-along company would intercept customers on the spot.

The interviewer would list different products (eggs, milk, etc.) to determine if laundry detergent is on the customer’s grocery list. For this type of shop-along research, the participant should be shopping in an unbiased and natural environment.

Once reached the laundry detergent aisle, an interviewer will ask the same questions as any other product.

The customer will likely provide honest insight into their purchasing decision because they don’t know this is the purpose of the study.

Recommended Reading: Understanding Accompanied Shopping Trips in Market Research

💡 Pro Tip: Hire a shop-along research company

To avoid misconstrued data, it is important to work with a shop-along company as they will provide experienced interviewers to ease the nerves of the consumer.

Better yet, a shop-along research company will work with your team to design evaluation forms and understand your unique project needs.

11. Focus Groups

Focus groups are a form of qualitative research that involves an open dialogue between 4 to 12 participants and a trained moderator to guide the discussion.

A focus group company will often recommend holding two separate groups to answer the same questions.

If only moderating one focus group, you may have 3 axe grinders steering the discussion in one way, which will lead to inaccurate feedback.

Having a second focus group will act as a gut check to verify the findings from the first group.

Focus group participants often answer questions such as:

• How would you buy X product?
• What would you change about X product?
• What did you like about X product? What didn’t you like about X product?

Focus group discussion advantages ✅

A focus group allows a group of targeted individuals to talk through their opinions, reactions, and feelings surrounding a product, commercial, advertisement, etc.

This targeted group of individuals generally offers insight into how the larger market would react to these same marketing tactics.

These group discussions are best held at a focus group facility equipped with a one-way mirror.

In doing so, you can have an inside look while research is conducted – a quality not a lot of other research methodologies can provide.

Focus group discussion disadvantages ❌

With higher quality research and data, comes a higher price tag. Focus group fees depend on a variety of factors such as time of day, length of the focus group, the demographic of participants, amount of travel, etc.

Oftentimes businesses choose to conduct online focus groups to reduce the cost of market research. Remote focus groups decrease costs associated with qualitative recruitment, travel, facility rental, and more.

You must also be wary of focus group moderator biases. The moderator running the session may subconsciously ask questions in a way that influences the participants of a focus group.

These biased interactions can skew the data of focus group results.

Recommended Reading: Ultimate Guide to Online Focus Groups

12. In-Depth Interviews

In-depth interviews (IDIs) are a qualitative market research method involving a direct, one-on-one engagement with individual participants.

IDIs are not bound to a single location as they can be conducted in person, on the phone, or via webchat.

However, if the study requires visuals or videos to share, then an in-person or web conference interview is best.

In-depth interview example

In recent years, there has been an increase in B2B organizations utilizing in-depth interviews to speak with subject-matter experts who have a career in a specific industry.

For example, Cisco may consider using IDI research to speak with CEOs or IT purchasing managers to understand their buying process for technology equipment.

In-depth interviews can reveal information such as:

• The decision-making process for selecting a product
• Any stakeholders involved in the B2B buying decision
• What factors are considered before making the purchase
• Whether the company is happy with the product they chose

In-depth interview advantages ✅

As opposed to quick phone surveys , IDIs are reserved for deeper conversations lasting anywhere from thirty to ninety minutes.

IDIs also include more than just a survey representative but many roles of a market research company such as a moderator , a senior research analyst, and a project manager.

For this reason, it is important to have a scheduled meeting time for the in-depth interview company and participant to speak.

In-depth interviews disadvantages ❌

The downside to this type of market research is the time commitment and large budget necessary for conducting in-depth interviews.

Because participants tend to be high-level executives, some type of incentive is usually required to encourage participation.

With this in mind, there is a tedious vetting process that is now required to make sure potential respondents aren’t cheating the system to make a quick buck.

Once all qualified participants are chosen and the IDIs are scheduled, in-depth interview companies will then transcribe, analyze, and report back their findings.

Recommended Reading: Higher Rewards Can Equal Lower Market Research Costs - Here's Why

13. Feasibility Studies

A feasibility study is a type of market research that predicts the success or failure of a new business venture.

This could be a new product, service, concept, or location. It utilizes both primary and secondary market research to analyze the outcome of an idea or potential concept.

Drive Research often conducts feasibility studies for: 

• New product development
• New service launches
• New business concepts
• New business locations or an expansion to a new market

Many businesses find it important to work with a feasibility studies company and invest a little money now, before wasting money on a failed business venture down the road.

Advantages of feasibility studies ✅

Before investing too much money and time into a new product, service, or site location, a feasibility study relies on   predictive analytics   to inform better business decisions.

This not only gives business owners peace of mind but is a great study to present to potential investors as well.

Feasibility studies can also provide great insight to help encourage the success of a new concept such as:

• Who is the target audience?
• How likely are they to purchase this product or service?
• What are their main sources of awareness? 
• Who are your competitors?

When introducing a new concept or location to the market it is best to make data-driven decisions. This is not the time to rely on assumptions or what you think will work.

Disadvantages of feasibility studies ❌

Feasibility studies are a more expensive type of market research. Because this methodology requires several components such as secondary research, competitor analysis, and pricing analysis it takes time to accomplish each task.

The more project management time a project takes, the more expensive the project becomes. As a result, new businesses do not have the budget needed for this methodology. 

Benefits of hiring a full-service market research company

There is no one right way to conduct market research.

With different types of market research methodologies growing every year, it is helpful to partner your business objectives with a full-service market research company to make well-informed business decisions about your product offerings.

Whether it be how best to reach your target audience or learning the buying behaviors among current customers, a marketing research firm will work with you to decide what methodology is most beneficial for an organization.

Partnering with a company that knows your industry can give you the best recommendation and make market research a less daunting tactic.

Recommended Reading: 5 Factors to Consider When Choosing a Market Research Firm

Contact Our Full-Service Market Research Company

Drive Research is a national market research company located in Upstate NY . Our team has the knowledge and tools to design a robust market research study for a variety of organizations across the country.

Interested in learning more about our market research services ? Reach out through any of the four ways below.

• Message us on our website
• Email us at  [email protected]
• Call us at  888-725-DATA
• Text us at 315-303-2040

Emily Rodgers

A SUNY Cortland graduate, Emily has taken her passion for social and content marketing to Drive Research as the Marketing Manager. She has earned certificates for both Google Analytics and Google AdWords.

Learn more about Emily, here .

Categories: Market Research Services Category

Need help with your project? Get in touch with Drive Research.

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The Pros & Cons of Market Research

Market research is an essential part of what makes brands successful. Analyzing consumer behavior and market trends allows companies to capitalize on the main factors driving consumers to purchase their products. They can then optimize their strategy accordingly. Three of the many key questions market research aims to answer include: who is the target audience? What makes them buy a certain product? And, how can brands take advantage of trends to increase sales and brand awareness? In this blog, we will take a look at the pros and cons of market research as a whole.

The Pros of Market Research

Trackable return on investment .

The valuable insights that come from market research can allow a company to gain information about the market and make their product successful. For instance, knowledge of customer satisfaction, consumer behaviors, and competitors lead to informed strategic decisions. In the long run, brands can arm themselves with this research. 

Improved Sales

Market research allows a company to see their buyers’ wants and needs and adjust their product to meet those needs. Combining this with an increased awareness surrounding current trends and viral fads empowers a company with all the information they need to optimize their product, advertising, and business plan. Actionable strategy can lead directly to a large uptick in sales.

Increased Brand Awareness 

Knowing what people think about a brand and which audiences are aware of it is valuable information. With awareness research, brands can make decisions to increase awareness in certain target audiences and broaden the company’s reach as a whole. As a result, brands can take full advantage of tapping into markets they may not have known about previously. This can take the shape of anything from a small tweak in a company’s branding and advertising to a full-blown rebrand. Read more about brand awareness, the different kinds, and their benefits in Provoke Insights’ blog post about it.

The Drawbacks of Market Research

Every rose has its thorn, and market research is no exception. The knowledge and insights it provides come at a cost. A market research campaign is pricey. This price tag comes from compensating researchers for the time spent researching, writing reports, and developing insights. The knowledge of target markets and trends gained from market research typically saves companies time and a lot of money in the long run. Due to this, many are willing to budget for market research firms’ services.

DIY Can Be Misleading

Market research doesn’t help a company achieve its goals if it doesn’t produce accurate results. Firms who try to do internal or ‘do-it-yourself’ market research often get faulty insights. This is usually due to a lack of experience and savvy in the field. DIY market researchers lack the necessary experience in several areas that can compromise their ability to conduct market research successfully. For example, a lack of questionnaire development expertise may lead to questions being designed improperly. Incorrectly programmed surveys can produce skewed or incorrect results. In addition, inexperience with sample selection and failure to test properly for validity and reliability of results can lead to biased conclusions. Hiring a market research firm with trained professionals is an easy way of avoiding this.

Final Thoughts

Though there are certain drawbacks with market research, including cost and technicalities surrounding DIY research, the benefits are undeniable. When looking at the pros and cons of market research, it’s clear that brands should outline their needs and goals first. Ultimately, hiring a market research firm can set brands above the competition, better identify targets, and result in short-term and long-term ROI.

Interested in reading more of our Pros/Cons blogs? Check out our other blogs here. 

• The Pros and Cons of Qualitative Research
• The Pros and Cons of Brand Tracking Research
• The Pros and Cons of Online Survey Research

Are you interested in our market research capabilities? 

Take a look at our research strategies here ..

• Email us at [email protected] .

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Market Research: 8 Pros and Cons (Plus Definition and Methods)

Many businesses, especially small ones, frequently struggle with a lack of funding and personnel. Budgets for research are frequently the first to suffer from the need to make cuts. But these days, a lack of resources and expertise is no longer an acceptable justification for subpar market research. Tools for conducting your own market research at home are more common and accessible. It implies that even small businesses can now carry out independent research. Everything is automated and accessible online, including survey templates and visual data reports. Let’s examine the benefits and drawbacks of doing your own market research in more detail.

There’s no need to pay for research firms, hire them, and then wait months for the results. With online research platforms, all tools are at your fingertips. All you require is time and patience to learn them and conduct your own research. Additionally, since only you will be accountable for the outcomes, you will have complete control over the research’s caliber and timeline.

On the one hand, limited budgets constrain the company’s development. However, it encourages teams to look for more original solutions. DIY market research is inexpensive and offers a ton of creative freedom. So, just conduct your own research, and you might be pleasantly surprised by the caliber of your findings.

You already have a better understanding of your company, its requirements, and its priorities than any external research firm. By conducting your own research, you can experiment with any method and use any tool or technology that is available, including biometric technologies (like eye tracking, EEG, emotion measurement, and implicit tests). Even a small startup can increase its capacity and competence while discovering new avenues for growth by learning how to use the DIY research platform to obtain in-depth and priceless insights from customers.

DIY market research is for you if you’re willing to put in the time to learn and practice new, exciting skills that will help your business. DIY neuromarketing research will be useful if you want to start your own research department, are passionate about new technology, or want to diversify the tools you use to test websites and design layouts. Of course, the choice is entirely yours, but if you asked us, we’d say without a doubt that doing your own research is worthwhile. For our part, we’ll make sure that your entry into the field of neuromarketing is both easy and exciting.

Market research pros

Here are the advantages of conducting market research:

1. Managing risks

The first significant benefit of market research is that it will help you to develop a better risk management plan. Understanding consumer behavior patterns will help you determine the likelihood that your goods and services will be successful with your target market. You can decide on future investments more effectively if you know how your key customers are likely to interact with new goods and services. You can conduct research to get the basic information you need to make wise business decisions. When preparing to grow your business, market research gives you the information you need to make decisions while minimizing your risks.

2. Increasing sales

Effective market research frequently serves as the basis for growing your company’s sales. You can learn more about the needs and preferences of your target market thanks to market research. You can more effectively plan and implement services that satisfy your customers’ needs when you are aware of what they anticipate from an exceptional customer service experience. Researching your target market can help you spot emerging trends so you can put strategies in place to take advantage of these opportunities. You can create business strategies that boost your sales by being aware of both general consumer trends and the specific patterns of buying behaviors of your target customers.

3. Improving brand recognition

Enhancing brand recognition is another use for market research. Your marketing and advertising strategy can be improved by researching your target market. You can create advertising strategies that connect with your key market by being aware of the channels your target customers use the most. Knowing which social media platforms your customers use the most, for instance, can help you create a marketing plan to promote your products on those networks. You can use more targeted advertising tactics when you know what types of marketing materials are most effective for grabbing your target audience’s attention.

4. Measuring brand reputation

Finally, market research can give you understanding of the public perception of your brand. Having a good reputation can assist you in retaining current clients and attracting new ones. When people have a positive opinion of your company, you might get more customers and be able to get the attention of important customers. Market research enables you to comprehend how the public currently feels about your company and how to enhance its reputation. Understanding your reputation and your areas for development will help you create strategies for successful public outreach that raise brand awareness and favorability.

What is market research?

A company conducts market research to learn crucial information about its target market and consumer behavior. It entails a number of steps, including formulating a research plan, selecting a target market for analysis, carrying it out, collecting data, processing and interpreting it, and reporting it. Businesses can learn about specific markets, the likelihood that a service or product will succeed, and patterns of consumer behavior that may help them achieve their sales objectives by conducting market research. Businesses use research findings to guide their strategic planning.

Market research cons

Following are some drawbacks of market research and ideas for overcoming them:

1. Can be expensive

It can be expensive to implement a market research strategy, especially for smaller businesses. Employing an outside firm to conduct research on behalf of a business can be very resource-intensive due to the lengthy process. Market research can be expensive for businesses up front, but it has a big impact on growing sales and making money. You might think about limiting your research to the most important market issues in order to save money. For instance, to save money on a more expensive research study, you might focus your research on customer marketing strategies.

2. Requires significant time investment

Along with financial costs, market research frequently takes time to complete. Finding the most crucial research questions to ask, creating a plan to collect data for each, and then processing the data to find results can all be time-consuming steps in the research process. Businesses might not see an immediate benefit from putting a research strategy in place because it can take time to conduct this research.

Concentrating on one aspect at a time can help market researchers produce results more quickly. It may be quicker to start with a single area of interest rather than conducting a comprehensive study. You can more quickly implement strategies to start enhancing your sales strategies based on the findings of this smaller study.

3. May only target a small population

How accurately it can represent your target customers is another potential drawback of market research. Accessing sample populations that fairly reflect the majority of a target market is a challenge for researchers frequently. For instance, researchers are likely to only receive responses from a small sample of participants if they send surveys to a large portion of your current customers. Although this criticism can be useful, it might not accurately reflect the opinions of your clients. Consider any potential biases in the sample respondents as a way to get around this These participants’ feedback can suggest additional areas for future research.

4. Need personnel to conduct research

Businesses must also hire qualified individuals to conduct market research. Many businesses opt to employ outside firms to carry out their research for them, but some larger businesses may have their own internal research team. Both options can be costly for businesses, so knowing how much money you have to spend on hiring experts can help you decide which is best for your requirements. Finding out what kind of market research is most advantageous to your company is a good first step toward figuring out your needs for research personnel. Some companies might require a larger research department than others.

Market research methods

Here are four common methods of market research:

Surveys are a common method for consumer research. Businesses regularly distribute surveys to gain insight into customer satisfaction. Customers may be polled at crucial points during their interactions with the business, such as when browsing its website or right after making a purchase. It’s typical for surveys to include a number of quick questions asking the respondent to rate their overall experience on a numbered scale as well as open-ended inquiries asking for written feedback. Consumer demographic data may also be gathered through surveys so that companies can create useful profiles of their typical customers. Direct customer feedback can give businesses quick, actionable insight.

Surveys are a great way to gather information from many participants quickly. Despite the fact that surveys only allow for general inquiries and may not be able to detect nonverbal cues, they are frequently crucial to market research. You can reach a wide audience and get immediate feedback by regularly sending electronic surveys to customers who interact with your business.

2. Interviews

Individual interviews with important clients are another research technique. An in-person interview with a customer can be a great way to learn more about their intentions, behaviors, and attitudes toward your business. A personal interview may yield more in-depth insight than a survey because it allows you to observe the subject’s verbal and nonverbal cues. Compared to a more generalized survey, you can ask more inquisitive questions and conduct a more thorough analysis of the respondents’ responses when conducting an in-person interview.

Although interviews are a great way to learn about a subject’s attitudes toward a company, it may be challenging to generalize the findings. Individual interviews take time to complete, and it can be more difficult to locate participants for a formal interview than for a more casual survey. Interviews can be excellent for niche or small businesses with a relatively small customer base despite these drawbacks. Since these customers are more likely to have common interests and objectives, conducting individual interviews could provide insightful information about the strengths and weaknesses of your company.

3. Focus groups

Focus groups are conducted to gather information about your target market’s experiences with your company. Participants are chosen from among those who represent your target market. This can be a great way to get opinions from a group of people who are similar to your main target market. Compared to a general survey, having a face-to-face meeting with a group of participants lets you ask more in-depth questions that reveal deeper insights into customer opinions.

The participants in this type of research should be carefully chosen, and the conversation should be framed by neutral questions. A participant with a more dominant personality may sway the opinions of the group in some focus group dynamics, which can bias your results. Similarly, it’s crucial to craft your inquiries in a way that reduces the likelihood of skewed responses. Focus groups can be an excellent way to learn more about the requirements of your core customers by inviting a balanced group of participants and using questions that produce unbiased insights.

4. Observations

An excellent way to comprehend your customers’ interactions with various aspects of your business is through observational studies. For instance, you could invite real customers to take part in an observational study where you watch and record them using your website in order to understand how users interact with it. You can infer from this observation which elements of your site’s design are most functional and which you can improve.

Observational research is crucial for gaining a thorough understanding of how your customers interact with your business, but incorporating it into your research process can be time-consuming and expensive. You must invite subjects to participate in your study and create official structures to conduct it in order to conduct observational research successfully. For instance, you might set up a series of tasks that visitors to your site must complete. You could devise a method for keeping track of how long it takes each participant to finish the tasks, and you could also conduct a follow-up interview.

Primary Research Data Explained: The Pros & Cons of Marketing Research

What are the advantages and disadvantages of market research?

• Managing risks. …
• Increasing sales. …
• Improving brand recognition. …
• Measuring brand reputation. …
• Can be expensive. …
• Requires significant time investment. …
• May only target a small population. …
• Need personnel to conduct research.

What is the disadvantage of market research?

The time needed to conduct the research, complete questionnaires, and conduct interviews is another drawback of market research. Costs and time are directly correlated, with longer research periods potentially costing the company more money.

What are the pros and cons of methods of marketing research?

By conducting market research, you can target the preferences and problems of your customers more precisely. It’s a win-win for your customers and your business. Using a segmentation-targeting-positioning (STP) model in your market research is one of the best ways to focus on the needs of your customers.

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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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The 8 types of market research: definitions, uses and examples.

13 min read What are the different types of market research that can help you stay ahead of the curve with your marketing strategy? Understand how to use each type, and what the advantages and disadvantages are.

Market research (also called marketing research) is the action or activity of gathering information about market needs and preferences. This helps companies understand their target market — how the audience feels and behaves.

There are 8 types of market research, each with their own methods and tools:

• Primary research
• Secondary research
• Qualitative research
• Quantitative research
• Branding research
• Customer research
• Competitor research
• Product research

Let’s start our list by exploring primary and secondary research first.

Free eBook: How to rethink and reinvent market research

1. Primary research

Primary research is research that you collect yourself but going directly to the target market through a range of methods. Because it is data you create, you own the data set.

Two types of results — exploratory information (determines the nature of a problem that hasn’t yet been clearly defined) and conclusive information (carried out to solve a problem that exploratory research identified) — from participants are collected as raw data and then analyzed to gather insights from trends and comparisons.

This method is good for getting the views of a lot of people at one time, especially when time is short, but it comes with its own management issues. The interviewer must prepare a way to gather answers and record these, while engaging in conversation with many people.

Participants may be affected by the group setting, either from acquiescence bias (the desire to say yes to please the interviewer), dominance bias (stronger participants can alter the results from less dominant participants) or researcher bias (where the research leads or impacts the participant responses indirectly).

This provides a structured setting where the interviewer can listen to what’s being said and investigate further into an answer. The interviewer can also pick up on non-verbal cues from body language can help the interview understand where to deep-dive and broaden their understanding.

However, some of the same biases (acquiescence and researcher) still exit in this format. The method is time consuming to do the interviews and collect the data afterwards.

A survey is an excellent method for carrying out primary research as participants do need to be physically present with the interviewer to carry it out. The survey can be completed anywhere there is an internet connection, meaning there is flexibility for the participants to use different devices and for interviewers to contact participants in different geographical time-zones.Preparation is key, however, as the researchers must segment the market and create a list of participants to send the survey to. Hiring a panel or using existing marketing lists can help with this.

2. Secondary research

Secondary research is the use of data that has previously been collected, analysed and published (and therefore you do not own this data). An example of this for market research is:

Most information is freely available, so there are less costs associated with this kind of secondary research over primary research methods.

Secondary research can often be the preparation for primary research activities, providing a knowledge base. The information gathered may not provide the specific information to explain the results, which is where primary market research would be used to enhance understanding.

There is also a logistics planning need for a recording solution that can handle large datasets, since manual management of the volumes of information can be tricky.

Both primary and secondary research have its advantages and disadvantages, as we’ve seen, but they are best used when paired together. Combined, the data can give you the confidence to act knowing that any hypothesis you have is backed up.

Learn more about primary vs secondary research methods

The next market research types can be defined as qualitative and quantitative research types:

3. Qualitative research

Qualitative market research is the collection of primary or secondary data that is non-numerical in nature, and therefore hard to measure.

Researchers collect this market research type because it can add more depth to the data.

This kind of market research is used to summarise and infer, rather than pin-points an exact truth held by a target market. For example, qualitative market research can be done to find out a new target market’s reaction to a new product to translate the reaction into a clear explanation for the company.

4. Quantitative research

Quantitative research is the collection of primary or secondary data that is numerical in nature, and so can be collected more easily.

Researchers collect this market research type because it can provide historical benchmarking, based on facts and figures evidence.

There are a number of ways to collect this data — polls, surveys, desk research, web statistics, financial records — which can be exploratory in nature without a lot of depth at this stage.

Quantitative market research can create the foundation of knowledge needed by researchers to investigate hypotheses further through qualitative market research.

The next four variations of market research are specific to topics areas, that bring about specific information.:

5. Branding research

Branding market research assists a company to create, manage and maintain the company brand. This can relate to the tone, branding, images, values or identity of the company.

Research can be carried out through interviews, focus groups or surveys. For example, brand awareness surveys will ask your participants whether the brand is known to them and whether it is something they would be interested in buying.

Additional areas for brand research is also around brand loyalty, brand perception , brand positioning , brand value and brand identity .

The aim of research will be to understand how to know if:

• Your brand is performing in relation to other competitors
• There are areas to improve your brand activities
• There are positives to showcase to enhance your brand’s image

6. Customer research

Customer market research looks at the key influences on your target customers and how your company can make changes to encourage sales.

The aim of this research is to know your customer inside out, and continuously learn about how they interact with the company. Some themes covered by this include:

• Customer satisfaction – Exploring what keeps customers happy, as higher customer satisfaction is more likely to lead to increased customer retention.
• Customer loyalty – This looks at what experiences have happened to lead to greater customer loyalty across the customer lifecycle.
• Customer segmentation research – Discovering who the customers are, what their behaviour and preferences are and their shared characteristics.

Relevant desk research may look at historical purchase records, customer journey mapping , customer segmentation, demographics and persona templates.

Primary research, such as NPS and customer satisfaction surveys , or customer satisfaction interviews at the end of customer support calls, can also give more details.

7. Competitor research

Competitor market research is about knowing who your competition is and understanding their strengths and weaknesses, in comparison to your organization. It can also be about your competitive offering in the market, or how to approach a new market.

The aim of this research is to find ways to make your organization stand out and future planning through horizon scanning and listening to customer preferences.

For example, for competitive analysis, researchers would create a SWOT for your business and your competitors, to see how your business compares.

Primary research could interview customers about their buying preferences, while secondary sources would look at competitor’s market dominance, sales, structure and so on. With this thorough analysis, you can understand where you can change to be more competitive, and look for ideas that make you stand out.

8. Product research

Product market research is a key way to make sure your products and services are fit for launching in the market, and are performing as well as they can.

The aim of this research is to see how your product is perceived by customers, if they are providing value and working correctly. Ideas can also be formed about upgrades and future product development.

There are a number of avenues within product research:

• Product branding – Does the product brand and design attract customers in the intended way?
• Product feature testing – this can happen at various stages of development with target markets (in early development, between versions, before product launch, etc.) to check if there are positive reaction to new or improved features
• Product design thinking – what solutions would solve your customers’ current or future problems?
• Product marketing – Do the marketing messages help your product’s memorability and saleability, or can they be improved?

Primary research methods have a clear advantage in this kind of market research: Surveys can ask for rankings on the popularity or usefulness of features or conduct conjoint analysis, while in-person observation interviews (where the participant can handle a product) can be particularly useful in seeing what customers do with the product in real time.

How to use market research types in your company

In a good marketing strategy, it’s preferable to have a mixture of data across:

• Qualitative and quantitative research
• Primary and secondary research
• Your specific topic area or area of focus

With these three components, you can make sure your market strategy gives you a complete picture of your market’s operational data and experience data , — what your market does and why .

Economical experience data (O data)

This type of experience data is quantitative in nature (including operations, featuring sales data, finance data and HR data ). As it can be quantified into numerical values, it can be measured over and over, providing datasets.

There is the opportunity to use a data-driven approach to understanding the results and making predictions based on historical trends.

This sort of data can be measured more easily than emotions and feelings. But it can only tell you about past activities and what happened. It can’t tell you what will happen in the future and why things will happen — this is where X data comes in.

Emotional experience data (X data)

This type of experience data seeks to find reasons to explain emotional decisions and how brands ‘sit’ in people’s minds. In this way, this data is qualitative in nature.

Companies that have X data have a ‘mental advantage’ over other companies,  as they are able to understand the perceptions of the customer, their needs and values.

When you have tangible insights on the audience’s needs, you can then take steps to meet those needs and solve problems. This mitigates the risk of an experience gap – which is what your audience expects you deliver versus what you actually deliver.

Related resources

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

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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.

Britannica Money. “ Market Research .”

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

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Market Research: What It Is and How to Do It

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In other words, it’s the process of understanding who your business is targeting so you can better position your marketing strategy.

In this guide, you’ll learn:

• The role of market research in a marketing strategy
• When to conduct market research

Types of market research

• Market research methods and their benefits
• How to conduct market research (example included)
• Market research tools and resources

What is the role of market research in a marketing strategy?

A marketing strategy is a business’s overall game plan for reaching consumers and turning them into customers.

The key word in the above definition is “game plan”. Entering a market with a product is like starting a new game. Since you’re new to the game, you don’t know the rules, and you don’t know who you’re playing against.

This is exactly where market research comes in . Market research allows you to discover the rules of the marketing game by understanding your target audience. Moreover, it allows you to understand who your opponent is by assessing the strengths and weaknesses of your competition.

Research is what marketing pros do to plan their moves, and outperform their competition.  It’s also what marketing pros use to identify the strengths and weaknesses of their own marketing strategy .

But is market research the ultimate business oracle? Unfortunately no. Even companies that specialize in market research admit it - here’s a quote from one of them :

(…) it cannot be assumed that market research is an exact science, as it would be unrealistic and unreasonable to expect market researchers to predict the precise demand for a new concept, given that there are numerous variables that can impact demand outside of the market researchers’ remit.

That’s why market research with all of its significance is “only” a part of marketing, and it’s “only” an experiment.  It’s up to you whether you will conduct your experiment, and when you will end it.

For example, Crystal Pepsi seemed very promising in the market research phase, yet it failed when released onto the market (a similar thing happened to New Coke). Xerox’s idea for a commercial photocopier was a no-go in the eyes of research analysts; Xerox did it anyway, and the rest is history.

When should you conduct market research?

Paul N. Hauge and Peter Jackson in their book “Do Your Own Market Research” point to three specific situations when market research is really useful:

• Setting goals . Knowing things like the size of the market, or defining your potential customers can help you set your sales goals.
• Problem-solving . Low sales? Low profitability? Market research will help you understand whether your problems are internal, like a low-quality product, or external, like aggressive competition.
• Supporting company growth.  Understanding how and why consumers decide on products will help you decide what products to introduce to the market.

Another answer to the “when” is the importance of the decision that you need to make. The more important the marketing issue you’re tackling, the more market research comes in handy.

For example, launching a new car on the market is quite a big event, right? So maybe Ford could have avoided losing 350 million dollars with the Ford Edsel if they had done their research properly. I mean, with the right methods in place it shouldn’t be that hard to predict that consumers will deem the car overpriced and ugly.

That said, market research doesn’t always have to be a large, complex project. The relatively new trend of agile market research  allows you to research the market regularly and in a cost-effective way. This is where you employ bite-size, iterative, and evolutionary methods to react to fast-changing circumstances and adapt to unknown market territories.

Furthermore, if you’re working in startup conditions, especially if you’re developing an innovative product, you may be interested in customer development . In this methodology market research is at its “agilest” and it’s tightly woven into the product development process.

Take Ahrefs for example. We stick to agile market research hacks anyone can use. As you will see later in the article, we use simple (but effective!) stuff like social media polls, crowdsourcing, in-house competitive analysis, or just tracking the pricing of our competitors.

Case in point, just recently we asked our fellow marketers on Twitter how they go about researching the market. It seems that market research comes in all shapes and sizes:

Have you ever performed “market research?“ What was it for? — Tim Soulo (@timsoulo) May 3, 2021

Just because somebody does market research in a certain way doesn’t mean that you need to copy that. You should know your options, and they start with the different types of market research.

Primary research

Whenever the research is done by you or on your behalf, and you need to create the data to solve a given problem, that is called primary market research.

Examples:  Focus groups, interviews, surveys (more on those later in the article).

Key benefits: It’s specific to your brand and products or services, and you can control the quality of the data.

Secondary research

Whenever you’re using already existing data, such as that put together by other businesses and organizations, you’re doing secondary market research.

Examples: Second-party and third-party sources like articles, whitepapers, reports, industry statistics, already collected internal data.

Key benefits: Get a macro perspective of your marketplace, as secondary research includes other players in the market, and most probably utilizes a bigger set of data than your primary sources.

Primary research vs. secondary research

Primary and secondary market research are different but by no means opposite. It’s actually recommended to use both.

While primary sources will give you a focused, micro perspective of your business, secondary research will tell you how other businesses are doing and how your research findings compare to bigger research sample sizes. 

Market research subtypes

A bit more theory for all you marketing geeks out there. Professional market researchers distinguish between the following primary and secondary market research subtypes:

• Qualitative research.  Think interviews, open-ended questions, results expressed in words rather than numbers and graphs. This type of research is used to understand underlying reasons, opinions, and motivations.
• Quantitative research. Think surveys, polls, usually closed-ended questions, results expressed in numbers and statistics. This type of research is used to test or confirm hypotheses or assumptions by quantifying defined variables (such as opinions or behaviours) and generalizing results from larger data samples.

Overview of market research methods

Let’s go over some popular market research methods you can use yourself and/or outsource.

Internal data analysis

The data you’ve already collected in your company is an invaluable secondary research data source. The more time you’re in the business, the more data you have on your hands.

The best thing about your internal data is that it’s been put into practice in real-life market conditions, so you just need to find the patterns and draw conclusions.

Here are some internal data sources you can leverage :

• Website data (like Google Analytics)
• Past campaigns performance data
• Internal interviews with employees

Interviews allow for face-to-face discussions and are great for exploratory qualitative research.

In unstructured interviews, you have an informal, free-flowing conversation on a given set of topics.

In structured interviews, you prepare a detailed, rigorous interview protocol where you list every question you want to ask and you can’t divert from them.

You can also choose the “middle way” with semi-structured interviews which revolve around predefined themes or questions, but allow for open-ended discussion.

A word of advice here would be to always remain neutral and unbiased, even during unstructured interviews. Also, it’s helpful to perform a pilot test of the interview to quickly spot some defects of your protocol.

Recording the interview may influence the answers, so use it wisely.

Focus groups

Focus groups are where 5 to 10 people with common characteristics take part in an interactive discussion with a moderator. They’re used to learn how a particular group thinks about a given issue or to provide feedback on a product.

Now, you might know that Steve Jobs famously hated focus groups. He’s on record saying:

It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.

If you’re trying to create a leapfrog product like the iPhone, there’s probably some validity to this statement. But most of us aren’t wrestling with that level of ambition. We just want to know if customers will like a proposed new feature or not. For this, focus groups are super useful.

Surveys involve polling your audience. They’re usually performed online for customer satisfaction and loyalty research, and are one of the most popular and cost-effective market research methods.

Some of the tried and tested use cases of online surveys  are:

• Product feature desirability
• User satisfaction feedback
• Quantitative analysis of certain issue occurrences
• Identifying friction points in your customer journey
• Discovering the reasons to convert to or cancel your service
• During product onboarding to create a customer profile (and for marketing automation)
• Opinion about a recently made change

An interesting example of surveying the market is crowdsourcing . That’s what Ahrefs does to understand what features to build, how important they are, and what customers expect from them.

What’s unique about crowdsourcing is that it allows the users to add their own ideas, and upvote or comment on existing ideas rather than answer predetermined questions, so this method leaves less room for marketing myopia. You improve your business, and the users get a better product—everybody wins.

How we crowdsource ideas at Ahrefs

Social media is another great place to survey the marketplace.

How many of you have disavowed links in GSC this year? — Tim Soulo (@timsoulo) October 8, 2020

Market segmentation

Market segmentation is the practice of categorizing a market into homogeneous groups based on specific criteria, also called segmentation variables (like age, sex, company size, country, etc.).

If you think you’re building a product for everyone, think again. Not everyone will want to buy from you.

Smart companies pick their target audience carefully. They pinpoint groups of people or organizations that could be valuable customers for the business. That way they also discover their non-ideal customers and develop a plan to attract customer segments gradually. 

Ever wondered why Procter and Gamble creates so many, often competing, brands? You guessed it: market segmentation. P&G simply divides and conquers. Different people have different needs, so they need different products (and possibly brands).

Competitive analysis

Another powerful, yet often overlooked, market research method is the process of understanding one’s market environment. Seriously, if there’s only one thing you could do to learn what works and what doesn’t in your market, you should do a competitive analysis.

“Whenever we discuss building a certain feature, we would definitely research our competitors and see how they do it.” Tim Soulo, CMO

You’d be surprised by how much you can learn about and from your competition and how much of it can be done online. There are certain tried and tested techniques, hacks, and tools for this type of research, and you can find them in this guide .

Analyze commercial data

Secondary market research data is relatively affordable, fast to acquire, and easy to use. Think market reports, industry insights, and a ton of research data someone has already gathered and analyzed so you don’t have to.

The most reputable sources are Gartner , Forrester , and Pew . Apart from those, make sure to check if there is a trustworthy commercial data source specific to your niche.

Sites like G2, Capterra and Trust Pilot also count. Not only do they give you an overview of your industry, but you can also find some real gems in your users’ reviews and your competitors’ reviews as well. Ahrefs uses that data source regularly internally and externally, like for this section of our Ahrefs vs Semrush vs Moz  landing page:

Benefits of market research - a comparison

Let’s quickly summarize the above 7 different methods of market research by their key benefits.

How to do market research process in 5 key steps

So now we know what market research is, why and when to do it, and we’ve learned about all of the important types and methods.

Let’s see how we can use that knowledge to conduct any type of market research in 5 steps.  As an example of market research, I’ll tell you about some of my past experiences with a 3D printing company.

• Identify the market research problem
• Choose the sample and research method
• Collect the data
• Analyze the data
• Interpret and present conclusions

1. Identify the market research problem

This is where every research project starts. You will also find that market research, in general, follows the pattern of the scientific method . First, you need to establish what exactly you are researching.

Do you have a question about your business you want to answer? Maybe you see an opportunity in the market. Or maybe you’ve observed something curious about your product use and you have a hypothesis that you want to validate? State that in the first step of the market research process.

Let me share an example.

In the past, I ran marketing for a few companies, and one of them was a 3D printer manufacturer. Early on I stumbled upon two problems with that company.

First: one of our market segments was saturated with similar products of similar quality at significantly lower price (classic, right?). Second: more and more 3D printing manufacturers seemed to be drifting away from the hobby segment to tackle the professional segments with more expensive products, yet we remained in the hobby/DIY niche. So we were too expensive for hobbyists but too hobbyist for customers who could afford us.

The hypothesis that I wanted to verify was that if the marketplace was showing a trend towards more professional use cases of 3D printing, our company should follow that trend. In other words, I wanted to check the viability of shifting the brand positioning into the professional/premium sector.

2. Choose the sample and research method

We’ve already covered the main types and methods of market research. You should already have a good idea of the differences between primary and secondary research, or whether qualitative or quantitative methods would best suit your needs.

As for the sample of your research, this refers to the portion of the entire data source in question that you will use. For example, if you want to run a survey among your customers, the sample will refer to the selection of customers you will include in your survey. There are a few options for choosing a sample:

• Use the entire data source . Obviously, it’s not a sample per se. Nevertheless, if sending a survey to all of your customers is doable (and reasonable), this is a perfectly good choice.
• Choose a random sample. Systematic sampling is the easiest way to choose a random sample. This is where you select every x/nth individual for the sample, where x is the population, n is the sample. For example, if you want a sample size of 100 from a population of 1000, select every 1000/100 = 10th member of the population.
• Convenience sampling: choose respondents available and willing to take part in the survey.
• Purposive sampling: choose respondents that in your judgement will be representative or possess some other feature that is important to the research.
• Quota sampling:  choose some arbitrary quota of respondents, e.g. 10 non-paying customers, 10 paying small companies and 10 paying large companies.

Back to our example. As a method for verifying my hypotheses, I chose a mix of:

• Surveys sent to all of our resellers.  We wanted to see if they also had seen a paradigm shift in the market and what segment of clients they had encountered the most. We also wanted to know their perspective on the longevity of that trend, and whether they potentially be interested in a more premium version of our product.
• In-depth interviews  on the phone with our resellers conducted by our sales team. We used purposive sampling here. Our sample comprised resellers with which we had the best relations (we knew they would be more eager to share).
• Competitive analysis.  We were mostly interested in market players who tried to penetrate the professional/industrial segment, so this was our sample ( purposive sampling ). We were interested in stuff like: what features were they building into their 3D printers, what was their brand positioning, what was their pricing, what language they used to communicate with their target audience, etc.
• Wohler’s industry report, anything 3D printing from Gartner and the like, reports by 3D printing services providers, and basically any scrape of serious data we could find ( convenience sampling ).
• Internal data:  customer satisfaction issues, and just general current customer profile based on Google Analytics and Facebook data.

3. Collect the data

Once you’ve got your problem, method, and sample nailed, all you need to do is to gather the data. This is the step where you send out your surveys, conduct your interviews, or reach out for industry insights.

A word of advice, choose your market research tool carefully; it will greatly influence the amount of work you will have with analyzing the data. For example, Google Forms  automatically makes graphs out of quantifiable data (plus it’s free).

Here’s the data we collected for the 3D printing company:

• Reseller survey data (both quantitative and qualitative data).
• Reseller interview data (qualitative data).
• Customer satisfaction issues (qualitative data gathered through all customer support channels, we analysed about 200 issues and requests).
• Competitive analysis data (from about 10 competitors).
• We managed to gather 3 comprehensive, independent industry reports, a few smaller reports made by other 3D printing companies, and dozens of scrapes of data, like statistics and noteworthy insights. We pulled out data like: 3D printer manufacturer market share, market growth in time, market segmentation, key 3D printing applications, 3D printing adoption by region, key players’ sales numbers.
• Any demographic, sociographic and psychographic data on customers and website visitors we could find in our internal data.

4. Analyze the data

Now that you have your data collected, the next step is to look for patterns, trends, concepts, or often repeated words—all dependent on whether your method was qualitative or quantitative (or both).

Simple research performed on a small sample will be relatively easy to analyze, or even analyzed automatically, like with the aforementioned Google Forms. Sometimes you will have to use expensive and harder to master software like Tableau , NVivo , PowerBI , or SPSS . Or you can use Python or R for data analysis (if you have a data analyst or data scientist on board, you’re in luck).

Continuing the example: Google Forms made it easy for us to spot patterns in surveys since quantitative data was calculated automatically. The most time-consuming part was reading through all of the responses and manually looking for patterns (back then I wasn’t aware of any tool that could do the job). Both sales and marketing teams worked on analyzing some of the qualitative data to have more than one reference point.

When it comes to researching the competition, coming up with some kind of data structure makes the work more comprehensive (and saner). We put our competitors’ data in specific categories, like products & services (prices included), target market, benefits, values, and brand message. We also used something called a brand positioning map which looks like this:

Analyzing secondary data was probably the easiest part, as the data we needed was already prepared in ready-to-use graphs, statistics and insights. We just had to sift through the contents to look for answers to our questions.

5. Interpret and present conclusions

Analyzing the data is not enough. You need to compile your data in a communicative, actionable way for the decision makers. A good practice is to include in your report: all your information, a description of your research process, the results, conclusions, and recommended actions.

Summing up my 3D printing example, I hypothesised that our market was experiencing a major shift and that the company should follow that trend. The research we did verified that hypothesis positively:

• Our resellers were getting more and more inquiries about professional/industrial use cases and machines. As you can imagine, the budget of this kind of client was significantly higher than hobbyists but so were the expectations.
• Our resellers indicated that this phenomenon is here to stay. Moreover, they declared interest in a new 3D printer tailored to the needs of their more demanding clientele.
• Our customers were outgrowing their early-adopter habits and wanted something easier to use, something plug-and-play that just worked reliably. Tinkering with the printer was something only hardcore makers were interested in.
• The companies we were interested in had already started adapting to the professional/premium market both with their offer and smart marketing communication.
• We also found a ton of other interesting data that we used later on. For example, we found that apart from engineers and designers, an equally interesting segment was educational institutions.

Our initial market research lasted for about two months. We also came back to it whenever we had the chance (or the necessity) and reiterated it to see if we were on the right track.

Was it worth it? Let me tell you this: it saved the company. Our research showed us that this was the last call to reposition the brand and the product. Our original target segment was being gradually dominated by companies we couldn’t compete with.

It took us some time to get buy-in from key stakeholders and implement the conclusions throughout the whole company (eventually, we got it right). As a result, we increased sales, increased customer satisfaction and put ourselves on a more profitable growth track—a win-win for everyone. We even went as far as merging with another manufacturer to shorten the time to get to that sweet market spot.

Looking back, no one from our close competitors survived. They didn’t adapt as we did, and we owed everything to market research.

Whatever you do, avoid these common market research mistakes :

• Poor sampling.
• Ambiguous questions.
• Leading or loaded questions (questions that show bias or contain controversial assumptions).
• Unclear or too many research objectives.
• Mixing correlation with causation.
• Ignoring competitive analysis.
• Allowing biases to influence your research ( confirmation bias  being arguably the most common and the most dangerous one).
• Not tracking data on a regular basis.

Online market research tools and resources

Market research reaches back to the 1930s and it’s probably rooted even “deeper” than the 20th century. Everything you could do then you can do now better, faster and cheaper thanks to these online tools and resources.

SEO tools - research the market with Ahrefs

I’ve put together 3 quick wins that can help with your market research—and that’s only a taste of what you can do with Ahrefs.

1. Brand awareness

In the early 20th century, you’d have to hire market researchers to spend days or even weeks asking people “have you heard about brand X”. Today, you can simply look up the search volume for that brand.

So let’s say you run a drone manufacturing brand, and you want to check out your competitors’ brand awareness in France. Go to Ahrefs Keywords Explorer , input the names of the brands, select “France” as your market, and in a flash you get:

The branded keyword volume indicates the brand awareness of that brand in a particular market. You can also keep track of that data by performing this search regularly to see if there are significant changes over time (for example, impacted by a recent campaign).

2. Feature demand

The next game-changing feature for electric cars will concern batteries, charging time, and charging cost (and not autopilot). How do I know?

Well, I opened Ahrefs Keywords Explorer , typed in “electric cars”, and went to the Questions report to find out what people search for. This gave me an idea of what problems electric car owners have (and potential owners worry about). You can easily perform similar research for your niche.

3. Understand the language of your market

Gerald Zaltman in his popular book “How Customers Think” proposes the idea that one of the major erroneous assumptions of marketing is that consumers think in words.

On the other hand, when consumers Google something they have to think in words. And when we market to those consumers we have to think in words as well. The question is: which words?

Let’s say that you want to enter a new and innovative market in the USA, for example the synthetic fermentation-derived dairy industry, also called animal-free dairy.

To you, this set of words “animal-free dairy” may be the very center of your business and marketing efforts. But let’s see what other people think. Let’s use Keywords Explorer  to see how many people search Google in the U.S. just for that phrase:

Whoops! Looks like your product category has disappointingly low awareness. Does this mean you’re doomed? Not necessarily. 

Let’s try other words. Words that mean something different, but still closely related to your new product.

Now we’re onto something. People search for “vegan dairy” and “lactose free dairy” more often. Not the same, but closely related. Yet, look at the difference in search volume.

Words make a huge difference.  And Google knows that.

The only reason you were able to put all of those three phrases in the same bucket was that you knew the connection between those words. The problem is that your target audience may not know that connection; they may not even know that this kind of product exists. This quick analysis of search volume shows that you may want to make that connection, for example with content marketing .

If you create content around related higher volume keywords, you can potentially get more organic traffic than simply focusing on the keyword designating your product category.  Look, even though you might believe the main benefit of your animal-free product is something unrelated to lactose, e.g., cruelty-free production, you might want to address the problem of lactose intolerance to appeal to people with this condition.

But that’s not all. You may have noticed “low lactose cheese” in the bottom right corner. This refers to the nifty feature of Ahrefs’ Keyword Explorer called “Parent topic”. Parent topic indicates that Google sees a given keyword as part of a broader topic.

If we click on this Parent topic, we uncover even more search demand:

We can see that the search for the topic “low lactose cheese” exceeds the “vegan dairy” topic by almost 300% in the US. Also, uncovering that parent topic gave us 879 potential keyword ideas (some of them have even higher search volume, like “lactose free cheese”).

Want to discover even more topic associations? No problem. You can dive deeper into this research by using other features of Ahrefs’ Keyword explorer. For example,the  Also rank for  report allows you to see which other keywords (and topics) the top 100 ranking pages for your target keyword also rank for.

This market research quick-win ties into the broader topic of keyword research. If you want to uncover even more keyword ideas and learn how to analyze them, read  our keyword research guide .

Source: https://hubspot.com

Customer Relationship Management software is used to manage and track interactions between a company and its customers and prospects. Usually, it works in tandem with sales or marketing automation software (or has integrations for them). If used properly, it is a true cornucopia of market insight.

As I pointed out earlier, it’s one of those primary data sources that you can leverage to discover patterns in your customer behaviour or characteristics. Popular choices are Hubspot, Salesforce, Intercom, but there is a ton of CRM software out there, so check out a software comparison like G2  to see what best suits your needs.

User feedback tools

This type of tool allows you to carry out our aforementioned survey research method online.

Create targeted, user-specific surveys and analyze answers with tools like Google Forms , SurveyMonkey , Typeform , or Qualaroo .  

Sending out your typical email with a survey is not the only option, for example with Qualaroo you can display surveys:

• In your digital product
• In your SaaS product
• Inside your web app
• Inside your mobile app
• On your website
• On your mobile site
• On your prototypes.
• On most public URLs. Even competitor sites

Need more? No problem, check out SurveyMonkey’s Market Research solution . It taps into the agile market research models we’ve discussed. They’ve got 14 online solutions that help you stay on top of your game, including customer segmentation, monitoring market dynamics, brand, creative analysis, feature importance, finding the right price for your products, and more.

So you think you have a tough business challenge? This daring gentleman is trying to disrupt… eggs. Extremely hard, but doable with market research on his side.

Website/app analytics

Tracking your website or app traffic is absolute marketing basics. Just look at some data dimensions Google Analytics offers:

• Demographics

Sounds familiar? Yup, that sounds like good ol’ market segmentation. Here’s the best part: it’s free, quick to perform and it’s based on your primary data.

If you’ve never dug deeper into Google Analytics, or similar analytics software (e.g., Matomo , Woopra ) here are some questions that this marketing technology can answer for you: 

• What do people search for once they’re on my site?
• What differentiates customers who have made a purchase from the ones that haven’t?
• What are my top countries by revenue?
• What are my best selling products?

If you’re already using Google Analytics, see if you’re not making these Google Analytics tracking mistakes. 

User experience research tools

Commonly used by UX designers, but just listen to the value propositions of these tools:

• “See and hear real people using your website, online shop or app.” ( https://userpeek.com/ )
• “Real-time feedback. From real customers. Wherever you work. So you can create experiences that get real results.” ( https://www.usertesting.com/ )
• “Scalable & Customized User Research” ( https://www.userlytics.com/ )
• “Record video and audio of your users, so you see and hear their exact experience with your product.” ( https://www.loop11.com/ )

Again, sounds much like our market research methods, right? And it’s no joke, thousands of companies use these tools.

User experience research tools allow you to get user feedback and insights on your products, prototypes, websites, and apps.

Testing is based on tasks your test-takers perform. You can either use your own user base or define a custom base using their services. You’ll get written reports and even recorded videos that you can incorporate into your market research and make sure you’re properly taking advantage of that market opportunity.

Ad planning tools

That’s right—the Facebook, LinkedIn, and Twitter ad planner you already use for running ads can give you some insight into the numbers behind the market segments you’re interested in.

30+ males with higher education interested in technology gadgets? No problem. Female C-suite decision-makers from Europe? It’s all there.

Census data

The availability of this kind of data may vary based on your target market. For example, in the US the Census Bureau  offers a free resource for searching the country’s census data. You can filter the data by topics, years, geography, surveys, or industry codes. You can also access premade interactive tables (which you can also download) or simply explore certain regions of the country using their maps.

Business intelligence tools

With business intelligence tools like Tableau , Looker or Sisense , you can connect to any data source to perform data cleaning, statistical operations, and data visualization. They are designed to allow you to glean insights into your data, and communicate effectively with your stakeholders. It’s like SQL combined with R, but you don’t need coding skills and you get a user-friendly interface.

Because these tools are overflowing with functionality and because they are usually pricey, they are overkill for small companies with basic market research needs. Often you will find that the tool that you are already using for your research method comes with some data analysis and visualization functions. And if not, you can always import your data to Excel or Google Docs and use Google Data Studio for a shareable interactive presentation.

Other noteworthy tools and services

• Think with Google
• Living Facts

Final thoughts

Market research is no easy feat. If you feel intimidated by it, you’re not the only one. But don’t shy away from it. The benefits of conducting even sporadic market research can have benefits for your business you simply can’t ignore. You won’t turn into a market research pro overnight, but the good news is you don’t have to. You can go the agile way (like Ahrefs), use affordable self-service online tools and resources, or you can even outsource your research. As long as you base your marketing game plan on valid data, you dramatically improve your chances for success.

Got questions? Ping me on Twitter .

Market Research: Need, Advantages and Disadvantages

Meaning of marketing research.

Marketing research may be defined as the mechanism which helps in linking the customers, producers and several other end-user to the marketer and help in finding and communication of all required information. It is the system that leads to the collection of data, analysis of data and then interprets the required information to the users.

Need and Advantages of Market Research

Easy detection of market problems and opportunities.

The first and primary advantage of marketing research is that it give complete information about the market. It give details regarding the marketing opportunities about the product which decides its success or failure. Apart from this it also helps in identifying the competitive nature of the market, whether customers are satisfied or not, the sales level of the company and also the channel of distribution used.

Helps in Marketing Strategies Formulation

Understanding of customer needs.

Today the success of every business depends on its customers and therefore nowadays marketing activities are customer targeted.  Marketing research play a very effective role in collecting the information regarding the customer wants which help in designing the product accordingly so that the customer need and wants can be satisfied easily.

Improve Sales Performance

Helps in launching of new products.

Marketing research plays a very effective role in determining the success or failure of the new product to be launched in the market. It facilitates and makes it possible for testing of the upcoming product in a market on a small scale and also help in getting the response of the customers regarding the new product. So it basically lowers the risk involved in the launching of a new product.

Helps in Evaluating The Export Potential

Support the management in decision making.

Managers at the top-level require all relevant information before making any decision. Unless and until all required relevant information is supplied to the management team their functions are useless. Marketing research plays a very effective role in the supply of all current and accurate information to the management team.

Disadvantages of Market Research

Market research takes time, research is expensive, inaccurate information.

Modern time is changing time, fashion and trends change over the night. So, market research fails to understand fashion and trends of the industry.

Related posts:

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What is Market Research? Definition, Types, Process, Examples and Best Practices

By Nick Jain

Published on: June 21, 2023

Table of Contents

What is Market Research?

Types of market research, market research process, examples of market research, market research methods, best practices for market research in 2023.

Market research is defined as the systematic collection, analysis, and interpretation of data about a specific market, industry, or consumer segment. It involves studying customers, competitors, and market dynamics to identify opportunities, mitigate risks, and make informed business decisions.

Market research provides valuable insights into consumer behavior, preferences, and market trends, helping organizations develop effective marketing strategies, launch new products, and optimize their market positioning.

Key components of market research:

Market research typically involves several key components that contribute to a comprehensive understanding of the market and its dynamics. These components include:

• Market Segmentation: Identifying and dividing the target market into distinct segments based on demographics, psychographics, behavior, or other relevant characteristics. This helps tailor marketing strategies to specific customer groups.
• Data Collection: Gathering relevant data from primary and secondary sources. Primary data refers to information collected directly from the target market through surveys, interviews, observations, or experiments. Secondary data involves leveraging existing research, reports, industry databases, or government sources.
• Research Design: Developing a research plan that outlines the objectives, methodology, and timeline for conducting the research. This includes selecting appropriate research methods, determining the sample size, and defining the sampling technique.
• Qualitative Research: Utilizing techniques like interviews, focus groups , or observations to gain in-depth insights into consumer attitudes, opinions, motivations, and behaviors. Qualitative research helps explore underlying reasons and provides a richer understanding of the market.
• Quantitative Research: Employing surveys, questionnaires, or structured data analysis to gather numerical data on a larger scale. Quantitative research enables statistical analysis, measurement of market trends, and generation of quantitative insights and metrics.
• Competitive Analysis: Assessing competitors’ strategies, strengths, weaknesses, market positioning, and offerings. This helps identify market opportunities, potential threats, and areas for differentiation.
• Consumer Behavior Analysis: Examining consumer decision-making processes, buying habits, preferences, and satisfaction levels. Understanding consumer behavior is crucial for developing effective marketing strategies and targeted campaigns.
• Market Size and Forecasting: Estimating the total market size, growth potential, and future trends. Market sizing helps assess the market’s attractiveness and potential demand for products or services.
• Data Analysis: Applying statistical techniques and tools to analyze collected data and derive meaningful insights. This includes data cleaning, segmentation analysis, correlation analysis, regression analysis, and other statistical methods.
• Reporting and Presentation: Summarizing research findings, insights, and recommendations in a clear and concise manner. Effective communication of research results ensures that stakeholders can make informed decisions based on the findings.

These components work together to provide a holistic view of the market, consumer behavior, and competitive landscape, enabling businesses to make informed decisions and develop effective marketing strategies.

Primary Research: Primary research involves collecting data directly from the target market or consumer segment. It is customized and tailored to address specific research objectives. Primary research methods include surveys, interviews, focus groups , observations, and experiments. Primary research allows for the collection of firsthand data and offers more control over the research process.

Secondary Research: Secondary research involves gathering and analyzing existing data that has been previously collected by other sources. This data can include industry reports, government publications, academic studies, market research reports, and online databases. Secondary research helps to gain a broader understanding of the market, industry trends, and historical data. It is a cost-effective way to access existing information and can provide a foundation for further primary research.

Learn more: What is Customer Experience (CX) Research?

Step 1. Define Research Objectives

The first step in market research is to clearly define the research objectives. This involves identifying the specific information needed, the target audience, and the desired outcomes of the research.

Step 2. Design Research Plan

Once the objectives are defined, the next step is to design a research plan that outlines the methodology, data collection techniques, sample size, and timeline. The research plan should be tailored to address the research objectives and provide reliable and valid data.

Step 3 Data Collection

In this stage, data is collected using primary or secondary research methods. Primary research involves gathering data directly from respondents through surveys, interviews, focus groups , or observations. Secondary research involves gathering existing data from published sources, industry reports, or databases.

Step 4. Market research Analysis

Once the data is collected, it needs to be analyzed to identify patterns, trends, and insights. This can involve quantitative research and analysis, such as statistical techniques, or qualitative research and analysis, such as thematic coding or content analysis. The goal is to derive meaningful insights from the data that can inform decision-making.

Step 5. Final Market Research Insights

After analyzing the data, the next step is to interpret the findings and extract actionable insights. This involves drawing conclusions, identifying key trends, and relating them to the research objectives. The insights should provide valuable information that guides marketing strategies, product development, or business decisions.

Step 6. Reporting Research Findings

The final step is to present the research findings in a clear and concise manner. A market research report is typically prepared, which includes an executive summary, methodology, findings, insights, and recommendations. The report should effectively communicate the research results to stakeholders and provide actionable recommendations based on the insights.

Here are some examples of market research. These examples illustrate the diverse applications of market research across various industries and scenarios:

• Customer Satisfaction Market Research : A company conducts a customer satisfaction survey to gather feedback from its existing customers . The survey includes questions about their experience with the product or service, overall satisfaction, likelihood to recommend, and areas for improvement. The results help the company understand customer satisfaction levels, identify key drivers of satisfaction, and take action to enhance the customer experience .
• Pricing Market Research: A business is considering introducing a new product or service and wants to determine the optimal pricing strategy. They conduct pricing research, which involves surveys or conjoint analysis, to gather data on customer price sensitivity, willingness to pay, and perceptions of value. The research helps the company set competitive pricing that aligns with customer expectations and maximizes profitability.
• Market Trend Research: A market research firm monitors industry trends and analyzes market data to provide insights to clients. They track market size, growth rates, industry dynamics, and consumer preferences through secondary research. The analysis helps businesses understand market trends, identify emerging opportunities or threats, and make informed strategic decisions.
• Concept Testing Market Research: A company has developed several product concepts and wants to evaluate their potential success before investing in product development. They conduct concept testing research, which involves presenting the concepts to a target audience through surveys or focus groups . The research helps assess consumer interest, perceived benefits, and purchase intent for each concept, allowing the company to select the most promising one to pursue further.
• Competitor Market Research: A company wants to assess the strengths and weaknesses of its competitors in the market. They conduct competitor analysis, which involves gathering data on competitors’ products, pricing, distribution channels, marketing strategies, and customer perceptions. The insights obtained help the company benchmark against competitors, identify areas of competitive advantage and develop strategies to differentiate itself in the market.
• Ad Testing Market Research: A company is planning to launch a new advertising campaign and wants to assess its effectiveness. They conduct ad testing research, which involves presenting different versions of the ad to a sample audience and gathering user or customer feedback on message comprehension, brand recall, and emotional response. The research helps the company optimize the ad campaign by identifying the most impactful and persuasive elements.
• Market Segmentation Research: A company wants to understand its target market better and tailor marketing strategies to specific customer segments. They conduct market segmentation research, which involves analyzing demographic, psychographic, and behavioral data to identify distinct customer segments with different needs, preferences, and buying behaviors. The segmentation analysis helps the company develop targeted marketing campaigns, messages, and product offerings for each segment.

Learn more: What is Customer Feedback?

• Qualitative Market Research Methods

Qualitative market research methods focus on non-data intensive methods of information gathering and analysis. These methods focus on a small sample of respondents who are probed for an in-depth understanding of a subject. The goal of such a method is to gain an in-depth understanding of the market and consumer behavior based on open-ended questions and discussions.

For example, focus groups , one-on-one interviews, case studies, etc are popular qualitative methods of market research.

• Quantitative Market Research Methods

Quantitative market research focuses on data-intensive methods that return solid data that can be quantitatively analyzed in bulk. These methods often rely on a large sample of respondents who answer a common questionnaire, which may further have an internal logic to branch out to new questions based on answers to previous questions.

Examples of quantitative market research methods are physical survey questionnaires, online feedback surveys, Twitter polls, Net Promoter Score (NPS) questions after a product purchase, customer satisfaction (CSAT) feedback forms, etc.

Market research is a crucial process that helps businesses understand their target market, consumer preferences, industry trends, and competitive landscape. By gathering and analyzing relevant data, companies can make informed decisions and develop effective marketing strategies. Here are some best practices for market research:

1. Define your research objectives: Clearly articulate the goals and purpose of your research. Identify the specific information you need to gather, such as customer insights, market size, competitor analysis, or product feedback.

2. Identify your target audience: Determine the specific demographic or customer segment you want to study. This will help you tailor your research methods and questions to gather the most relevant data.

3. Choose the right research methods: Select the most appropriate research methods based on your objectives and target audience. Common methods include surveys, interviews, focus groups , observation, secondary research, and data analysis.

4. Develop a research plan: Create a detailed plan outlining the research methodology, timeline, and resource allocation. This will ensure that the research is conducted efficiently and effectively.

5. Use a combination of qualitative and quantitative research: Qualitative research methods , such as interviews and focus groups , provide in-depth insights and opinions, while quantitative methods , like surveys and data analysis, offer statistical data and measurable metrics. Combining both approaches provides a comprehensive understanding of the market.

6. Collect data from multiple sources: Gather information from diverse sources, including primary data (collected directly from customers or target audiences) and secondary data (existing research, industry reports, and government data). This multi-source approach enhances the reliability and accuracy of your findings.

7. Maintain data quality and integrity: Ensure the data collected is accurate, reliable, and relevant to your research objectives. Use standardized measurement scales and survey techniques to maintain consistency.

8. Analyze and interpret the data: Use appropriate statistical analysis tools and techniques to analyze the collected data. Look for patterns, trends, and correlations that can provide valuable insights for decision-making.

9. Keep an eye on competitors: Conduct a competitive analysis to understand your competitors’ strategies, strengths, weaknesses, and market positioning. This information can help you identify opportunities and develop effective marketing plans.

10. Stay ethical and maintain privacy: Adhere to ethical guidelines and protect the privacy of participants and their data. Obtain informed consent and ensure confidentiality throughout the research process.

11. Communicate and act on findings: Present your research findings in a clear and concise manner. Translate the insights into actionable strategies and recommendations that can drive business growth.

12. Continuously monitor the market: Market research is an ongoing process. Keep a pulse on industry trends, consumer preferences, and market dynamics to stay ahead of the competition and identify new opportunities.

By following these best practices, businesses can conduct effective market research that informs decision-making, helps identify growth opportunities, and supports the development of successful marketing strategies.

Learn more: What is Online Focus Group?

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Marketing Research

Table of Content

Marketing research process, benefits of marketing research, disadvantages of marketing research.

The American Marketing Association defines marketing research as “the function that links the consumer, customer, and public to the marketer through information–information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance ; and improve understanding of marketing as a process.

Marketing research identifies the information needed to address business problems. It designs data collection methods, analyzes results, and communicates research outcomes to needy people and organizations.

The marketing research gives insight into customers’ preferences and what they want. These insights can be both qualitative and quantitative and can help a business make better decisions.

Good marketers use a formal process for marketing research that includes the following six steps to maximize the potential of all resources and practices.

Define the Problem, and Research Objective

Determining the problem is the most important step in any marketing research project. Before you can do any research or collect data, it is important to understand what you want to learn. The problem you are trying to solve in marketing research will help you determine the information you need and how to get it.

This will allow your company to identify the root problem or opportunity. For example, how can you best address a loss in market share or launch a product to a particular demographic .

Create the Research Plan

Marketing managers must make decisions about data sources, research methods, research instruments, sampling methods, contact methods, and research tools in order to design a research program.

Data Sources : A researcher can collect secondary data, primary data, or both. Secondary data is data that was collected for another purpose but already exists somewhere. Primary data is first-hand data that has been collected for a particular purpose or project.

Secondary data is often used to initiate marketing research. Researchers will need primary data if the data required is not available or is inaccurate, incomplete, unreliable, or outdated.

Marketers use Five Main Methods to Collect Primary Data : Observation, Focus Groups, Surveys, Behavioral Data, and Experiments.

Research Instruments : Marketing analysts use three main instruments to collect primary data: questionnaires, qualitative measures, and technological devices.

A questionnaire is a collection of questions that are asked to respondents. It is the most commonly used instrument to collect primary data due to its flexibility.

Testing and debugging are essential because of the potential errors in the form, sequence, and wording of the questions to influence the answers. Closed-end questions provide all possible answers.

The responses are easy to understand and tabulate. Open-ended questions allow respondents to respond in their own words. These questions are particularly useful for exploratory research where the researcher wants to gain insight into people’s thinking.

Sample Plan : The marketing researcher must create a sampling plan after deciding on the research method and instruments. Three decisions are required to make this happen:

• Sampling unit : Whom do we survey? American Airlines Survey: Should the sampling unit be made up of first-class business travelers or first-class vacation travellers? Should it include travelers younger than 18 years old? Marketers must then create a sampling framework so that everyone in the target population has equal or known chances of being sampled.
• Sample size : How many people do we need to survey? Although large samples are more reliable, it is not necessary to survey the entire population in order to get reliable results. With a reliable sampling process, even small samples of less than 1% of a population can provide high reliability.
• Sampling procedure : Probability sampling is a way for marketers to estimate confidence limits for sampling error, and it makes the sample more representative.

Contact methods – The researcher must choose the method through which respondents can be reached. You can reach the respondents via email, phone, in person, or online.

Collect the Data

Marketing research’s data collection phase is usually the most costly and error-prone. Some respondents may be unavailable, offline, or far away. They must be contacted again or replaced. Others may refuse to cooperate or give dishonest or biased answers.

Analyze the Data

Next, the researchers will extract the findings by tabulating data and creating summary measures. To find more findings, the researchers will now calculate averages and dispersion of major variables.

They’ll also use advanced statistical techniques and decision modeling to create summary measures. They might test hypotheses or theories and apply sensitivity analysis to verify assumptions and strengthen their conclusions.

Report Findings

The researcher now presents his findings. Researchers are increasingly being asked to take a consultative role in translating data into insights and recommendations. Researchers are also looking at ways to make their findings more understandable and persuasive. If you do not have ideas for report writing then take help from experts.

Take the Decision

The final step in marketing research is to make important marketing decisions based on the research report. Top-level management knows about all alternatives available to them. They consider the pros and cons of each option and make the best decision for the company.

If management is not satisfied with the research report then they can discard it completely and conduct another marketing research from the very beginning.

Use to Find Marketing Opportunities

You might discover that the product you are planning is not what your market needs. Then, you can modify your offer and make it as per market demand to grab marketing opportunities.

Get to Know Your Customer’s Taste

Knowing how clients’ tastes and preferences change is important so that the company can meet their needs, including purchasing habits and income levels. Based on the needs of the consumers, researchers can help determine which products should be manufactured or sold.

Marketing Strategies and Plans

What is your foundation for business strategy ? You can feel confident in your ability to reach your business goals if it is evidence-based. Marketing research provides valuable information to marketers for making marketing strategies and plans.

Reduce Marketing Risk

Marketing research can help you determine whether or not to act on a particular subject. You might find out that the location you want to open a shop is already a highly saturated market for your business. If this happens, it’s best to reconsider and move on to a better spot.

Calculate the Market Size

A researcher can assess the market size that must be covered to sell a product or service and make a reasonable profit for sustaining business.

Help in New Product Launch

Marketing research is a key factor in determining whether a new product will succeed or fail in the market. It allows new product testing on a smaller scale in the market and helps in getting feedback from customers about the product. It basically reduces the risk associated with launching a new product.

Information about Market Trend

Being ahead in business often means being first, best, or doing something no one else has done. It is important to keep an eye on the trends in your industry. Talk to your research agency to learn more about the various techniques that you can use to spot these trends and capitalize on them.

Measurement for Company Position

With the assistance of marketing research, a marketing company can assess its true image. Marketing research can help the management to determine where the company stands in relation to its reputation and its institution image.

Additional Budget

Companies are often turned off by the high costs associated with Marketing Research. It can be costly to hire a company for marketing research. You can also have your current employees conduct the research. It would still be expensive to conduct research, such as interviews, questionnaires, and so forth.

Time is another resource that marketing research needs. It is important to conduct proper research by asking the right questions and reaching the right audience. You will need to spend a lot of time researching if you want reliable information.

Inaccurate Information

False or incorrect feedback can be caused by biased research or poorly designed research. Marketing research may not reveal the customer’s attitudes towards your product, such as their intentions to purchase it. These intentions might not translate into actual sales in the future.

You can also conduct market research with a small group of people, which could provide inconclusive information about your product.

Rapid Change

The market today is experiencing tremendous changes. Everything that is relevant or applicable today will be obsolete tomorrow. Marketing research is not able to serve its purpose due to the rapid pace of change. Results or outcomes of research after a specific time period are irrelevant or meaningless.

Biased Results

A completely objective response or result cannot be achieved when a human being is involved. Research can be affected by personal values, prejudices, attitudes, needs, and other socio-cultural factors. Absolute chaos can result from subjectivity.

Companies can use marketing research to determine the demand for their product, its viability, and how it will perform in the real world.

Marketing research can be done using primary or secondary data, which gives a unique insight into a company’s offerings. Research and development (R&D), is a crucial part of a company’s success and growth.

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Traditional market research is fine, but there’s a better solution.

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CEO at  RightMetric , a searchable library of data-backed case studies for marketers that provides quick answers to tough questions.

It's no secret that marketing has become more competitive than ever before. It's a "dog eat dog world" when it comes to companies fighting over the same consumer base — which is why it's so vital that you use actionable insights to gain an edge in your strategy. As Charlie Munger, the vice chairman of Berkshire Hathaway, once said : "The first rule in fishing has always been: fish where the fish are." The last thing you want to do is waste time and effort "fishing" for customers in the wrong place, or fishing for the wrong customers in the right place. 

Traditionally, businesses have used market research to "find where the fish are." Of course, it's always good to gain a broader, deeper knowledge of your audience. At the same time, there's a newer, more effective process that can really help you streamline your efforts: marketing intelligence. Let's talk about some common issues with traditional market research and why marketing intelligence represents a huge step forward.

The Problems With Traditional Market Research

When you think of traditional market research, what comes to mind? Maybe some of the first things that pop into your head are polls, surveys and focus groups. 

Each one of these tools has its place, but there are two big problems they all have in common:

1. They're not always actionable.

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2. People lie.

Let's break down these two issues one at a time.

A poll or survey may provide you with some general percentages to chew on, but the million-dollar question is: How actionable are those insights?

For example, imagine that the result of a survey is that "35% of Canadians between the ages of 18-35 enjoy eSports." Great! What are you supposed to do with that information? Which eSports do they enjoy? Which social media platforms do they use?

The bottom line? Just because you have an idea of who you're targeting doesn't mean you'll be able to formulate a winning marketing strategy around that insight.

We're not talking about malicious lies here. We're mostly talking about the deeply entrenched, unconscious biases that  everyone  carries around with them. Of course, there's also the deeply human desire to gain approval — even if it's from a complete stranger.

One of my favorite books, appropriately entitled Everybody Lies ,  puts it this way:

"There's often a readiness among respondents to want to impress the person administering the survey. We want to make a good impression, whether we're anonymous or not. To take an extreme example, if you were answering questions from someone who looked like your dad, you might be unwilling to detail college drug experiences. It's a human propensity to tell untruths, which makes surveys unreliable when it comes to trying to understand behavior, thoughts, desires, and beliefs."

The book goes on to extol the virtues of big data — unfiltered data that's collected from online behavior — and points out that people are hardly going to lie, either consciously or unconsciously, when they're entering search terms into Google or browsing the internet. And that's where marketing intelligence comes into the picture.

Marketing Intelligence: A Better Solution

What exactly is marketing intelligence? It's generally defined as " the data — and the process of using it — to guide marketing decisions." That includes data from sources such as:

• Social media platforms

• Search engines

• Mobile apps

• Video platforms

• Email marketing platforms

• Blogs and forums

The basic objective of marketing intelligence is to help company leaders make intelligent (that is, well-informed) business decisions based on data points gleaned across the internet.

Why Is Marketing Intelligence So Valuable?

I could spend hours and hours answering this question. But for the sake of brevity, let's just focus on three important reasons why marketing intelligence is such a useful strategy for marketers to invest in:

• Consumer behavior is changing rapidly. Think about the emergence of platforms like TikTok. Rapidly changing technology is leading to rapidly changing consumer behavior. To keep up, brands must be willing to quickly adapt to give customers what they need and want. Recent history is littered with examples of large companies that resisted change and promptly went out of business . In contrast, marketing intelligence allows you to identify shifting trends as they emerge and make adjustments accordingly.

• Competition is fierce.  Marketing intelligence isn't just about understanding your consumers — it's also about understanding your competitors . Now that consumers have more options than ever before in terms of products, prices, etc., it's vital that you understand the strengths and weaknesses of the other brands in your space — their strengths so that you can emulate them, and their weaknesses so that you can exploit them.

• You're "flying blind" without it.  Or to be more accurate, you're flying half-blind. You see, most marketing teams already have a clear understanding of their existing customers. What they don't have is an understanding of the larger potential audience that lives outside the scope of their current ecosystem — and mining their existing customer base for insights can only go so far, because of those two problems we discussed earlier. Marketing intelligence enables you to see the complete picture by bringing data from external sources into the mix.

Making the Whole Greater Than the Sum of Its Parts

When each component of a system is connected together, the whole entity is stronger than any individual piece by itself — or even all of the pieces combined but not integrated.

That's exactly why marketing intelligence is so powerful. It allows you to look beyond the individual pieces of the marketing puzzle (like polls, surveys and focus groups) and focus on the big picture. When you utilize marketing intelligence, along with supplemental market research, you can merge strengths, cancel weaknesses and identify growth opportunities in a holistic way. Basically, you'll be able to "fish where the fish are."

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

Team Fratzke

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

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

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

Article Overview

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

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

What is market research?

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

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

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

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

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

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

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

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

Why do market research?

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

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

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

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

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

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

Primary vs. Secondary Research

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

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

Primary Research

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

Exploratory Primary Research

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

Specific Primary Research

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

Secondary Research

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

• Public sources
• Commercial sources
• Internal sources

Public Sources

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

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

Commercial Sources

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

Internal Sources

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

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

Types of Market Research

• Interviews (in-person or remote)

Focus Groups

• Product/ Service Use Research

Observation-Based Research

Buyer persona research, market segmentation research, pricing research.

• Competitive Analysis Research

Customer Satisfaction and Loyalty Research

Brand awareness research, campaign research.

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

• Family size 
• Challenges faced at work or in life 

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

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

Product/Service Use Research

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

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

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

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

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

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

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

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

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

Competitive Analysis

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

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

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

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

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

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

How to Do Market Research (Detailed Roadmap)

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

1. Define the problem or objective of the research

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

2. Determine the type of data needed

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

3. Identify the sources of data

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

4. Collect the data

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

5. Analyze the data

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

6. Interpret the results

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

7. Report the findings

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

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

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

8. Take action based on the findings

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

How to Prepare for Market Research Projects

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

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

How to Identify the Right People to Engage for Market Research

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

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

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

Gather a mix of participants

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

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

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

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

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

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

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

Here are a few ways to build your competitor list:

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

Identifying Content Competitors

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

Once you have this list, follow these steps:

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

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

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

Market Research Examples

Mcdonald's focus on customer feedback and profiling.

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

Nike's Extensive Research and Collaboration for Running Shoes Development

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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The takeaway.

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

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

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Advantages and Disadvantages of Market Research

Some advantages and disadvantages of market research are as follows. So let us check out its advantages and disadvantages to learn more about market research.

Some of the Advantages of Market Research are:

• Market research helps you understand your target market.
• Market research allows you to create products or services that meet your customers' needs, which leads to an increase in sales and revenue.
• Market research helps you identify your competition in the industry.
• It allows you to develop new strategies to compete more effectively, which can help you gain more market share. 
• Market research helps you track industry trends.
• This will help you stay ahead of the competition and make sure your products or services are aligned with the latest trends, which helps you maintain a competitive advantage.
• Market research helps you improve overall business performance.
• This can lead to increased customer satisfaction, employee morale, and shareholder value.

Some of the Disadvantages of Market Research are:

• Market research can be expensive and time-consuming.
• It becomes difficult for small businesses to afford market research.
• Market research can be inaccurate.
• Sometimes, because of this, businesses make bad decisions about their products or services.
• It can be biassed.
• Decisions made by businesses are not in the best interest of their customers.
• Sometimes market research studies can be outdated.
• Decisions made by the business are no longer relevant to their target market.
• Market Research

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Skipping a step: The dangers of neglecting market research

Market research is an integral step in a successful business development effort, whether you are part of a startup, launching a new product or rebranding your business. 

When you skip out on market research, you miss valuable opportunities that will help your business in the long run. Successful business owners know their markets, understand their competitors’ and customers’ wants and needs, and gather all the information necessary for their businesses to be competitive. They know why people buy their products and services, not just when or where. Neglecting to do market research can result in indecision and inaction, fear of risk or the truth, and/or too many options, which can lead to paralysis.

Not every product is for every person. When launching a new product, effective market research will help you narrow down your true market potential and your most likely customers. The more specific your survey questions are, the better you will be able to position your new product or service for sales success.

Timing of new product introductions is also critical. When a business waits too long to take advantage of a marketplace opportunity, it can lead to missing out on the opportunity altogether. Trends and consumer needs are ever-changing, and when a business is indecisive because of lack of knowledge about audience preferences, you may miss the boat.

Sometimes businesses skip the market research step because they simply do not know what to look for or they don’t know what’s missing from their thought process. Having a list of burning questions that you want or need answers to is a good starting point instead of blindly researching your industry with the hope of stumbling across something useful.

Classic fails

Here are some classic cases of products that failed due to lack of market research:

1. Toothpaste producer Colgate released frozen dinners in 1982. It was difficult for the company to carry brand association over from oral hygiene to frozen food products. The brand extension simply didn’t translate and reminds us of this important lesson: Do not ask customers to radically shift their understanding of your brand.

2. In 2006, Microsoft released the Zune, a portable media player that was supposed to be a direct competitor to Apple’s iPod. Despite millions of dollars in investment, the Zune was discontinued in 2011 due to a lack of differentiation from the iPod and poor marketing segmentation. Former Microsoft executive Robbie Bach commented on the failed product, saying that the marketing tactics just gave no good reason for customers to buy the Zune over the iPod.

3. Pepsi released a new product called Crystal Pepsi in the mid-1990s when clear beverages were trending. While Pepsi saw the rising trend in crystal clear products, it missed the mark on how its market would respond. People were confused. Is it water? Is it lemon-lime? People were accustomed to cola drinks being brown and clear drinks tasting light and crisp.

4. After the release of the widely successful movie "Avatar," companies such as LG and Sony released 3D televisions with the hopes of gaining the same type of traction and profit as the famous 3D movie. What they didn’t take into consideration was that most people didn’t want to view all of their content in 3D format. Both companies have since discontinued the manufacturing of 3D TVs.

5. Kodak lost its competitive advantage beginning in 1975 when it failed to introduce digital cameras because it was so focused on its current products and the goal of selling film for its cameras. By not recognizing market needs, Kodak missed a prime opportunity, and ultimately lost $10 billion in revenue between 1996 and 2011.

These examples demonstrate that solid market research can make or break a new product release or a new initiative. Companies like Apple utilize their “Apple Customer Pulse” research to gather customer feedback via online surveys that allow it to adjust software features before new product introductions.

Classic success

Another example of effectively gathering customer insight comes from Wayfair. It created an app that allows customers to take photos of furniture and home items they see and like in their daily lives. Wayfair then shows them similar products on its website that it manufactures and sells. This app not only allows customers to find products they like (and buy them!), but it also guides Wayfair in identifying and responding to trends.

Market research is not an optional add-on to your business. It is a necessity. Effective market research also needs to be ongoing, and the most successful businesses are always adjusting their strategies based on that research.

Cathy Ackermann, founder and president of Ackermann Marketing and PR, may be reached at [email protected]. For the online version of this column, please visit www.thinkackermann.com .

6 Market Research Methods & What They Reveal About Your Audience

Market research, when it’s done well, makes sure that you step into any market with your eyes wide open and a strong understanding of what your target customers will best respond to.

But how do you get market research right? What methods should you use, and how can you entice your target market to talk to you?

Today, we’re going to go through everything you need to know about market research, from why it’s important, to the best methods for your brand.

Table of Contents

Why marketers should care about market research

Qualitative vs quantitative research method, 1. consumer behavior observation, 2. market and competitive analysis, social media listening and analytics with keyhole, 4. surveys and online polls, 5. focus groups and market testing, hashtag analytics and tracking with keyhole, final thoughts, 1. what are primary and secondary research methods, 2. what are paid market research surveys, 3. what is the difference between market and user research, 4. what are common mistakes to avoid in market research.

Market research is vital for everything from pitching your marketing messaging to building customer loyalty. Some benefits of good market research include:

• Helping your brand to give customers exactly what they want.
• Strengthening your position in the market.
• Minimizes investment risk by helping to inform decisions.
• Identifies threats to avoid and opportunities to grab.
• Gives insight into competitor strengths and weaknesses.

Qualitative research has qualifiers. Qualifiers are markers of confident uncertainty. Qualifiers are necessary when data is opinion-based, or isn’t underpinned by numerical data.

So, qualitative research tends to deal in opinions and descriptions. In market research terms, qualitative data tends to come in the form of customer opinions and feedback. It’s gathered using open-ended questions such as “What do you like about our product?”.

Qualitative data is very useful for understanding nuances that can’t be revealed by numerical data. That being said, it can be difficult, costly, and time-consuming both to gather and to analyze.

Quantitative data, by contrast, deals in quantities. Quantitative data is all about numbers. Numerical data based on metrical analysis forms the backbone of quantitative market research. Quantitative customer surveys will use answer formats that can easily be entered into a graph or chart, such as “Yes/No” answers or “Rate X on a scale of 1 to 5”.

6 Market research methods to gather audience insights

The best market research will combine qualitative and quantitative methods for a complete, nuanced, and easily understandable picture of their target market and its needs.

When done well, consumer behavior observation takes a ‘fly on the wall’ approach to consumers. As the name suggests, it involves monitoring consumers to see how they behave in natural settings. 

If you run a bricks and mortar shop, consumer observation would involve watching how your customers behave in your store. You might note down things like the displays that catch their eye, which products they linger over, the route they take around the store, how they respond to atmospheric features like scent, lighting, and music. After a while, behavioral patterns will emerge which will help you to arrange your store and products for best effect.

In an online context, consumer behavior observation will rely more on behavioral analytics. For example, you might look for patterns in page traffic, bounce rates, purchasing behavior, and so on. This will yield valuable insights into the pages and products that catch consumers’ eyes, elements of your website they find frustrating, and so on.

Market and competitive analysis involves looking at your wider market context and taking a peek at how your competitors are faring.

Competitive analysis is a very strategic way to improve your position. Learning more about your competitors and the ways that they engage your primary market helps you to gain a competitive advantage, both by utilizing their more successful strategies (but better!) and differentiating yourself so that you stand out.

In order to analyze your competitors, you need to understand your market. So, before you start, define your primary and secondary markets, including the products you’re pitching at them, the consumers that occupy them, and the competitors also in that space. 

Then, you can start competitor analysis. This can involve everything from signing up to competitor marketing materials to reading their case studies, looking up their publically-available metrics, and monitoring their brand mentions.

Less glamorous brands that struggle to make a splash on social media can benefit a lot from market and competitive analysis, especially when it comes to things like SEO. For example, smaller SaaS brands are unlikely to get a statistically significant amount of brand mentions on platforms like Facebook. But they could benefit from reading a relevant SaaS SEO case study.

3. Social media listening

Social media listening is a powerful way to gain deeper insights about your brand and how your target audience thinks about you. Put very simply, social media listening involves monitoring social platforms for mentions of your brands, engagement with your brand materials, and so on. 

Social media is a very qualitative market, so it’s worth bearing in mind that a lot of what you hear will be opinion. Rather than taking everything you learn personally, look for broad patterns in your brand mentions. For example, if a lot of people are raving about a certain feature of your product, build on that in your next marketing campaign.

Social media listening is where Keyhole comes into its own. Keyhole’s Social Listening Analytics Suite will constantly comb the internet and log all mentions of your brand. You can use this to easily see how widespread your brand mentions are, and to take the temperature of discourse about your brand.

Keyhole will also alert you if something changes in your brand mentions. For example, if you suddenly get a spike in mentions and coverage, Keyhole will let you know.

This allows you to take action quickly. If you’re getting traction for good reasons, you can leap on the opportunity. If it’s for bad reasons, you can quickly dive into damage limitation mode and save your brand from a PR disaster.

Social listening is one of the very best ways to understand how your brand is perceived by your audience. With Keyhole, you won’t miss a single mention.

Online surveys and polls are a good way to gain nuanced consumer insights and get a read on general customer satisfaction. There are various different types of surveys, designed for both qualitative and quantitative research.

Many brands use popups to offer quick surveys to customers based on their experience of the product, site etc. Popup surveys are usually quick and easy for customers to complete, and they’re a good way to get a lot of data very quickly. That being said, some consumers find popup surveys frustrating, and they do add an extra layer of friction to your site experience.

Longer-form questions and surveys allow you to get detailed information from your target customers on a wide range of things. However, it’s harder to get responses to these surveys as they take up more time. In order to encourage people to take more detailed surveys, some brands offer incentives like gift cards or entry into a prize draw.

This method involves bringing people who fit your target audience profile together and holding in-depth interviews and discussions about your product, your marketing messages, your competitors, and so on.

Focus group discussions can be very productive. People will reveal personal insights about your product/service and what they’re looking for that would be hard to glean through other market research techniques.

Market testing is a form of market research that sometimes occurs in focus group settings. This involves handing out product samples to your focus group and asking for feedback. It could also involve showing your customers different types of marketing content and asking them to rate or comment on them.

Market testing in a focus group context gives you the opportunity to observe how customers interact with your product or content, and draw insights that might not otherwise be possible. For example, you can observe non-verbal cues like frowning or enthusiastically grabbing a product. These cues might indicate discomfort or delight in ways that a survey can’t express.

6. Online market monitoring

Online market monitoring involves things like following market trends, perusing publically available sales data, watching follower counts, observing fluctuations in customer behavior, and so on.

Online market monitoring is particularly useful for quickly spotting and grabbing trends and opportunities. For example, many successful B2B SEO strategies involve closely monitoring the B2B market and taking advantage of keyword trends as soon as they appear. As B2B SEO is hard to achieve through means like focus groups and online surveys, online market monitoring is crucial to nail this tricky market.

You need a tool like Keyhole to get online market monitoring right. Keyhole’s hashtag analytics and tracking helps you to effortlessly measure every campaign you’re running, across every social platform. It will tell you what’s working, what isn’t, and what trends you could take advantage of.

And that’s not all. Keyhole can generate great-looking reports on your online monitoring with just a few clicks. This is great for seeing success trends at a glance and sharing them with stakeholders.

A good understanding of the market gives you a huge competitive advantage. But understanding doesn’t happen automatically. In order to gain the actionable insights you need, market research is a must.

Keeping track of your market, your target customers, and the ever-changing trends you could use to your advantage. It’s important to conduct regular market research. It’s also a good idea to monitor markets on an ongoing basis.

This is where tools like Keyhole come in. With Keyhole, you can keep close tabs on everything from social media engagement to brand mentions. It’s perfect for social listening and audience analytics. Why not get in touch today and find out what Keyhole can do for you?

Related Articles

Best Practices For Integrating Email Marketing & Social Media Analytics 

How To Use User Generated Content To Bring More Customers 

Frequently Asked Questions

Primary research involves getting data directly from the originator. For example, surveys and focus groups are primary research methods because they involve asking people directly for their own opinions and experiences. Secondary research takes data from a third party source. For example, online market monitoring is usually secondary research, because it uses pre-existing data and analytics gathered by digital platforms.

Paid market research involves rewarding people for completing market research surveys. Monetary incentives are a great way to encourage people to take market research surveys. It also allows you to create longer, more detailed surveys: people are more likely to spend time and effort on a survey they're getting paid for.

Market research studies a broad swathe of consumer behaviors, trends, and needs. User research is more focused on the specific needs and behaviors of product users.

Common market research mistakes include: -Not having clear research goals from the outset. -Asking the wrong questions. -Speaking to the wrong people. -Picking the wrong consumer sample. -Not analyzing your results properly. -Presenting your findings poorly.

Market research What is market research?

Businesses use market research to identify customers’ needs and wants. Each method of market research has advantages and disadvantages for a business.

Part of Business management Management of marketing

What is market research?

Market research close market research Gathering data and information about consumer needs and preferences. provides information about:

• the market itself (size and make-up – i.e. age, gender, income, tastes)
• customer feedback
• promotional methods
• competitors
• effect of price on market

Businesses use the information they gather to design new products and modify existing ones. This approach helps to maximise the potential success of products and services.

There are two main types of market research:

• field research close field research Research conducted by gathering primary or first-hand sources.
• desk research close desk research Research conducted by gathering secondary data from previously published sources.

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