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Written by Mary Kate Miller | June 1, 2021

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

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

What Is Market Research?

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

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

The Purposes of Market Research

Why do market research? It can help you…

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

What Are the Benefits of Market Research?

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

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

What Are the Basic Methods of Market Research?

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

Primary vs. Secondary Market Research

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

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

Primary Market Research

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

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

Secondary Market Research

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

Identify Your Goals and Your Audience

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

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

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

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

How to Do Market Research

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

Secondary Data

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

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

Find Your Customers Online

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

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

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

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

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

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

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

Market Surveys

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

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

Who to Include in Market Surveys

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

Example Questions to Include in Market Surveys

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

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

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

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

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

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

Survey Tools

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

Competitive Analysis

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

Social Media Analysis

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

SEO Analysis and Opportunities

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

Ready to Kick Your Business Into High Gear?

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

About Mary Kate Miller

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

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How does market research help a business? Successful 5 ways

This blog will explore the pivotal question, “How does market research help a business?” By delving into its multifaceted advantages, we uncover the essential ways in which market research empowers businesses to make strategic decisions, create tailored offerings, and stay ahead in an increasingly competitive landscape.

As a small business owner, you’ve probably read about market research. You know that understanding your industry’s social, cultural, and economic frameworks is essential to your success. And you’re aware that you need to know about your customers, the area in which you’re selling, and what your competitors are doing.

What is market research?

Market research is the systematic process of collecting, analyzing, and interpreting data about a specific market, industry, or audience to gain insights and understanding. It involves gathering information about various aspects of the market, such as customer preferences, behaviors, trends, competitors, and economic conditions. 

Market research tools aim to provide businesses with actionable information that can inform their strategic decisions, help them identify opportunities, mitigate risks, and develop effective marketing and business strategies.

Conducting a thorough competitive analysis as part of market research revealed key pricing strategies and unique value propositions that set our product apart in the highly competitive tech accessories market. 

Qualitative research in market research involves conducting in-depth interviews with potential customers to uncover their underlying motivations and preferences for eco-friendly products. And by utilizing quantitative research methods such as surveys and data analysis, we were able to quantify customer satisfaction levels and identify specific areas for improvement in our service offerings.

Importance of market research

Market research holds immense importance for businesses across various industries. It serves as a guiding light that helps organizations navigate the complexities of the market, make informed decisions, and achieve sustainable growth. 

Here are some key reasons highlighting the significance of market research:

Customer Understanding

Market research helps businesses gain deep insights into customer preferences, behaviors, and needs. Understanding your target audience’s motivations and pain points allows you to tailor your products, services, and marketing efforts to meet their expectations better.

Strategic Decision-Making

Informed decisions are the foundation of successful businesses. Market research provides data-driven insights that aid in identifying opportunities, mitigating risks, and shaping strategic plans. Market research supports decision-making, whether launching new products, entering new markets, or changing business models.

Market Segmentation

Businesses rarely have a universal customer base. Effective market research allows you to segment your audience based on demographics, behaviors, and preferences. This segmentation enables personalized marketing strategy and enhances customer engagement.

Competitor Analysis

Staying competitive requires a deep understanding of your rivals. Market research helps identify competitors’ strengths and weaknesses, enabling you to differentiate your offerings and create unique value propositions.

Trend Identification

Market trends can make or break businesses. Researching and identifying current and emerging trends helps you adapt to changing customer preferences, technological advancements, and industry shifts, ensuring your business remains relevant.

Risk Mitigation

Every business decision carries inherent risks. Market research minimizes these risks by providing valuable insights into potential challenges and roadblocks. This empowers you to devise contingency plans and make calculated decisions.

Product Development

Creating products or services without understanding customer needs can lead to failure. Market research guides product development by uncovering gaps in the market, enabling businesses to create solutions that resonate with their target audience.

Optimized Marketing Strategies

Effective marketing requires a deep understanding of where, when, and how to reach your audience. Market research aids in identifying the most effective channels, messages, and strategies for connecting with customers.

• Customer Satisfaction

Happy customers are loyal customers. Market research helps improve customer satisfaction by understanding their expectations and addressing their concerns, leading to stronger brand loyalty and positive word-of-mouth.

Resource Allocation

Resources, such as time and money, are finite. Market research ensures efficient resource allocation by providing insights into where to invest for maximum returns and which areas might need less attention.

Business Growth

Ultimately, market research contributes to business growth. With a comprehensive understanding of the market and customer dynamics, you can identify expansion opportunities, tap into new markets, and scale your operations.

Key components of market research

Market research can be conducted through a variety of methods, including surveys, interviews, focus groups, observation, and data analysis from various sources such as public records, social media, and industry reports. The information gathered through conducting market research is used to make informed decisions about product development, pricing, distribution, marketing campaigns, and overall optimal business strategy. 

Key components of market research data include:

Dividing the target market into distinct groups based on shared characteristics such as demographics, behaviors, and preferences. This helps businesses tailor their strategies to meet specific customer segments’ needs better.

Studying competitors’ offerings, strengths, weaknesses, and market positioning to understand the competitive landscape and identify opportunities for differentiation.

Customer Behavior Analysis

Examining how customers interact with products and services, what influences their buying decisions, and their overall satisfaction levels.

Identifying current and emerging trends within the industry helps businesses anticipate shifts in customer preferences and adapt their strategies accordingly.

SWOT Analysis

Evaluating the strengths, weaknesses, opportunities, and threats facing a business within its market environment. This analysis aids in strategic planning and risk assessment.

Data Collection and Analysis

Gathering data from various sources, organizing and analyzing it to derive meaningful insights, and making data-driven decisions.

Market Size and Growth Analysis

Assessing the overall size of the market, its growth potential, and the factors driving or inhibiting its expansion.

Primary and Secondary Research

Conducting original research (primary research) through surveys and interviews or using existing data and resources (secondary research) to gather relevant information.

5 ways of market research to help a business

Market research can be overwhelming for many, and its benefits are hidden in obscurity. To help separate fact from fiction, we’ve outlined five reasons ways effective research can help your business.

1. Market Research Centers Business on the Customer

Market research analyzes data about a market, product, or service. And the most obvious benefit is its ability to help you understand your customer. Who are they? What do they want? What do they expect? 

Through efficient research, businesses are able to establish an open-ended line of communication with their customers. Once you understand your customer’s needs, you will be able to tailor your business to meet them.

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How to start collecting customer feedback today:

• Create a master customer list.  Be sure that this list includes the customer’s first name, last name, and email, and then consider including what products or services they use.  You can easily upload this list to QuestionPro and then use the data to segment your responses .
• Why not collect customer feedback directly from your website?  Use the QuestonPro “embed survey” feature to create a feedback tab or to have a survey pop up to measure your site’s effectiveness after the visitor is ready to leave your site.

2. It Helps Understand Your Competition

Knowing your competitors and what they offer can help make your products, services, and marketing stand out. Sure, research enables you to set your prices competitively, but it also helps you learn from your competition—and do things better.

How to collect competitive information using surveys:

• Check out this article with competitive research basics outlined.
• In this article, we’ve outlined 10 competitive research resources
• Use these basic questions in your competitive research .

3. It Enables You to Test for Success

Need help to judge whether a new product or service will connect with your customer? Research is the most effective way to test ideas before you go full-throttle with them. Through metrics, small business owners are able to see which concepts, campaigns, and messaging resonate best with target customers. The reason to conduct market research is to save money and ensures success.

Got a new idea? 

Here’s how to test your concept:

• Check out QuestionPro’s concept testing surveys in the library.
• Don’t spend money on surveys until you’ve done some secondary research.  Yes, that means trolling the web for existing studies and research.  Why not hit your local library and ask the research librarian?  They are an invaluable resource and have access to databases you don’t.
• Contact industry trade associations and publications.  Have you read an article that’s close to what you need but doesn’t have all the info?  Contact the author and see if they have data that didn’t fit in the article.
• If you need a bigger, broader sample, you can get that through QuestionPro. Just click on “Send survey” and the “Buy Sample” option.

4. It Ensures Your Relevancy

As the old adage goes, change is the only true constant. And in the marketing world, this is especially true. In order to remain successful, all businesses need to anticipate and react to change in order to stay relevant. 

By researching the evolving needs of consumers and analyzing your competition’s reactions, you are securing longevity and relevancy in the market. Market research can help business owners to stay innovative and successful—and change with the times.

How to stay relevant:

• The easiest way to stay relevant is to run a tracking or index survey.  Simply create a basic survey that you send on a regular basis. Then, you can select the date range you want to see in the reporting feature.  You can also create segments of date ranges and compare your progress.

5. It Grows Your Business

All small business owners want to grow their companies—but many are unsure where to begin. Research is your best tool for any type of product development, launch, or business expansion. Solid metrics can help:

• Keep track of trends and future markets
• Identify areas for expansion
• Draft effective strategies for campaigns
• Set realistic targets for business
• Beat competition
• Optimize results

By anticipating the evolving nature of the market, effective research enables business expansion and growth.

Market research is not just an optional step in your business strategy. Rather, it’s a vital tool that can significantly impact your success. By understanding your target audience, validating product ideas, monitoring indirect or secondary competitors, adapting marketing strategies, and minimizing risks, you position your business for growth and sustainability. 

Embracing your own market research as an ongoing process ensures that you remain attuned to changing market dynamics and continue to meet the evolving needs of your customers. In a world where data is power, a market research firm empowers your business to make informed choices and thrive in a competitive environment.

QuestionPro is your strategic partner in unraveling the benefits of market research for business success. With comprehensive survey solutions and advanced analytics, we empower you to uncover customer preferences, industry trends, and competitive insights. Elevate your decision-making with actionable data from QuestionPro’s robust platform.

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How to Do Market Research: The Complete Guide

Learn how to do market research with this step-by-step guide, complete with templates, tools and real-world examples.

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What are your customers’ needs? How does your product compare to the competition? What are the emerging trends and opportunities in your industry? If these questions keep you up at night, it’s time to conduct market research.

Market research plays a pivotal role in your ability to stay competitive and relevant, helping you anticipate shifts in consumer behavior and industry dynamics. It involves gathering these insights using a wide range of techniques, from surveys and interviews to data analysis and observational studies.

In this guide, we’ll explore why market research is crucial, the various types of market research, the methods used in data collection, and how to effectively conduct market research to drive informed decision-making and success.

What is market research?

Market research is the systematic process of gathering, analyzing and interpreting information about a specific market or industry. The purpose of market research is to offer valuable insight into the preferences and behaviors of your target audience, and anticipate shifts in market trends and the competitive landscape. This information helps you make data-driven decisions, develop effective strategies for your business, and maximize your chances of long-term growth.

Why is market research important? 

By understanding the significance of market research, you can make sure you’re asking the right questions and using the process to your advantage. Some of the benefits of market research include:

• Informed decision-making: Market research provides you with the data and insights you need to make smart decisions for your business. It helps you identify opportunities, assess risks and tailor your strategies to meet the demands of the market. Without market research, decisions are often based on assumptions or guesswork, leading to costly mistakes.
• Customer-centric approach: A cornerstone of market research involves developing a deep understanding of customer needs and preferences. This gives you valuable insights into your target audience, helping you develop products, services and marketing campaigns that resonate with your customers.
• Competitive advantage: By conducting market research, you’ll gain a competitive edge. You’ll be able to identify gaps in the market, analyze competitor strengths and weaknesses, and position your business strategically. This enables you to create unique value propositions, differentiate yourself from competitors, and seize opportunities that others may overlook.
• Risk mitigation: Market research helps you anticipate market shifts and potential challenges. By identifying threats early, you can proactively adjust their strategies to mitigate risks and respond effectively to changing circumstances. This proactive approach is particularly valuable in volatile industries.
• Resource optimization: Conducting market research allows organizations to allocate their time, money and resources more efficiently. It ensures that investments are made in areas with the highest potential return on investment, reducing wasted resources and improving overall business performance.
• Adaptation to market trends: Markets evolve rapidly, driven by technological advancements, cultural shifts and changing consumer attitudes. Market research ensures that you stay ahead of these trends and adapt your offerings accordingly so you can avoid becoming obsolete. 

As you can see, market research empowers businesses to make data-driven decisions, cater to customer needs, outperform competitors, mitigate risks, optimize resources and stay agile in a dynamic marketplace. These benefits make it a huge industry; the global market research services market is expected to grow from $76.37 billion in 2021 to $108.57 billion in 2026 . Now, let’s dig into the different types of market research that can help you achieve these benefits.

Types of market research 

• Qualitative research
• Quantitative research
• Exploratory research
• Descriptive research
• Causal research
• Cross-sectional research
• Longitudinal research

Despite its advantages, 23% of organizations don’t have a clear market research strategy. Part of developing a strategy involves choosing the right type of market research for your business goals. The most commonly used approaches include:

1. Qualitative research

Qualitative research focuses on understanding the underlying motivations, attitudes and perceptions of individuals or groups. It is typically conducted through techniques like in-depth interviews, focus groups and content analysis — methods we’ll discuss further in the sections below. Qualitative research provides rich, nuanced insights that can inform product development, marketing strategies and brand positioning.

2. Quantitative research

Quantitative research, in contrast to qualitative research, involves the collection and analysis of numerical data, often through surveys, experiments and structured questionnaires. This approach allows for statistical analysis and the measurement of trends, making it suitable for large-scale market studies and hypothesis testing. While it’s worthwhile using a mix of qualitative and quantitative research, most businesses prioritize the latter because it is scientific, measurable and easily replicated across different experiments.

3. Exploratory research

Whether you’re conducting qualitative or quantitative research or a mix of both, exploratory research is often the first step. Its primary goal is to help you understand a market or problem so you can gain insights and identify potential issues or opportunities. This type of market research is less structured and is typically conducted through open-ended interviews, focus groups or secondary data analysis. Exploratory research is valuable when entering new markets or exploring new product ideas.

4. Descriptive research

As its name implies, descriptive research seeks to describe a market, population or phenomenon in detail. It involves collecting and summarizing data to answer questions about audience demographics and behaviors, market size, and current trends. Surveys, observational studies and content analysis are common methods used in descriptive research. 

5. Causal research

Causal research aims to establish cause-and-effect relationships between variables. It investigates whether changes in one variable result in changes in another. Experimental designs, A/B testing and regression analysis are common causal research methods. This sheds light on how specific marketing strategies or product changes impact consumer behavior.

6. Cross-sectional research

Cross-sectional market research involves collecting data from a sample of the population at a single point in time. It is used to analyze differences, relationships or trends among various groups within a population. Cross-sectional studies are helpful for market segmentation, identifying target audiences and assessing market trends at a specific moment.

7. Longitudinal research

Longitudinal research, in contrast to cross-sectional research, collects data from the same subjects over an extended period. This allows for the analysis of trends, changes and developments over time. Longitudinal studies are useful for tracking long-term developments in consumer preferences, brand loyalty and market dynamics.

Each type of market research has its strengths and weaknesses, and the method you choose depends on your specific research goals and the depth of understanding you’re aiming to achieve. In the following sections, we’ll delve into primary and secondary research approaches and specific research methods.

Primary vs. secondary market research

Market research of all types can be broadly categorized into two main approaches: primary research and secondary research. By understanding the differences between these approaches, you can better determine the most appropriate research method for your specific goals.

Primary market research 

Primary research involves the collection of original data straight from the source. Typically, this involves communicating directly with your target audience — through surveys, interviews, focus groups and more — to gather information. Here are some key attributes of primary market research:

• Customized data: Primary research provides data that is tailored to your research needs. You design a custom research study and gather information specific to your goals.
• Up-to-date insights: Because primary research involves communicating with customers, the data you collect reflects the most current market conditions and consumer behaviors.
• Time-consuming and resource-intensive: Despite its advantages, primary research can be labor-intensive and costly, especially when dealing with large sample sizes or complex study designs. Whether you hire a market research consultant, agency or use an in-house team, primary research studies consume a large amount of resources and time.

Secondary market research 

Secondary research, on the other hand, involves analyzing data that has already been compiled by third-party sources, such as online research tools, databases, news sites, industry reports and academic studies.

Here are the main characteristics of secondary market research:

• Cost-effective: Secondary research is generally more cost-effective than primary research since it doesn’t require building a research plan from scratch. You and your team can look at databases, websites and publications on an ongoing basis, without needing to design a custom experiment or hire a consultant. 
• Leverages multiple sources: Data tools and software extract data from multiple places across the web, and then consolidate that information within a single platform. This means you’ll get a greater amount of data and a wider scope from secondary research.
• Quick to access: You can access a wide range of information rapidly — often in seconds — if you’re using online research tools and databases. Because of this, you can act on insights sooner, rather than taking the time to develop an experiment. 

So, when should you use primary vs. secondary research? In practice, many market research projects incorporate both primary and secondary research to take advantage of the strengths of each approach.

One rule of thumb is to focus on secondary research to obtain background information, market trends or industry benchmarks. It is especially valuable for conducting preliminary research, competitor analysis, or when time and budget constraints are tight. Then, if you still have knowledge gaps or need to answer specific questions unique to your business model, use primary research to create a custom experiment. 

Market research methods

• Surveys and questionnaires
• Focus groups
• Observational research
• Online research tools
• Experiments
• Content analysis
• Ethnographic research

How do primary and secondary research approaches translate into specific research methods? Let’s take a look at the different ways you can gather data: 

1. Surveys and questionnaires

Surveys and questionnaires are popular methods for collecting structured data from a large number of respondents. They involve a set of predetermined questions that participants answer. Surveys can be conducted through various channels, including online tools, telephone interviews and in-person or online questionnaires. They are useful for gathering quantitative data and assessing customer demographics, opinions, preferences and needs. On average, customer surveys have a 33% response rate , so keep that in mind as you consider your sample size.

2. Interviews

Interviews are in-depth conversations with individuals or groups to gather qualitative insights. They can be structured (with predefined questions) or unstructured (with open-ended discussions). Interviews are valuable for exploring complex topics, uncovering motivations and obtaining detailed feedback. 

3. Focus groups

The most common primary research methods are in-depth webcam interviews and focus groups. Focus groups are a small gathering of participants who discuss a specific topic or product under the guidance of a moderator. These discussions are valuable for primary market research because they reveal insights into consumer attitudes, perceptions and emotions. Focus groups are especially useful for idea generation, concept testing and understanding group dynamics within your target audience.

4. Observational research

Observational research involves observing and recording participant behavior in a natural setting. This method is particularly valuable when studying consumer behavior in physical spaces, such as retail stores or public places. In some types of observational research, participants are aware you’re watching them; in other cases, you discreetly watch consumers without their knowledge, as they use your product. Either way, observational research provides firsthand insights into how people interact with products or environments.

5. Online research tools

You and your team can do your own secondary market research using online tools. These tools include data prospecting platforms and databases, as well as online surveys, social media listening, web analytics and sentiment analysis platforms. They help you gather data from online sources, monitor industry trends, track competitors, understand consumer preferences and keep tabs on online behavior. We’ll talk more about choosing the right market research tools in the sections that follow.

6. Experiments

Market research experiments are controlled tests of variables to determine causal relationships. While experiments are often associated with scientific research, they are also used in market research to assess the impact of specific marketing strategies, product features, or pricing and packaging changes.

7. Content analysis

Content analysis involves the systematic examination of textual, visual or audio content to identify patterns, themes and trends. It’s commonly applied to customer reviews, social media posts and other forms of online content to analyze consumer opinions and sentiments.

8. Ethnographic research

Ethnographic research immerses researchers into the daily lives of consumers to understand their behavior and culture. This method is particularly valuable when studying niche markets or exploring the cultural context of consumer choices.

How to do market research

• Set clear objectives
• Identify your target audience
• Choose your research methods
• Use the right market research tools
• Collect data
• Analyze data 
• Interpret your findings
• Identify opportunities and challenges
• Make informed business decisions
• Monitor and adapt

Now that you have gained insights into the various market research methods at your disposal, let’s delve into the practical aspects of how to conduct market research effectively. Here’s a quick step-by-step overview, from defining objectives to monitoring market shifts.

1. Set clear objectives

When you set clear and specific goals, you’re essentially creating a compass to guide your research questions and methodology. Start by precisely defining what you want to achieve. Are you launching a new product and want to understand its viability in the market? Are you evaluating customer satisfaction with a product redesign? 

Start by creating SMART goals — objectives that are specific, measurable, achievable, relevant and time-bound. Not only will this clarify your research focus from the outset, but it will also help you track progress and benchmark your success throughout the process. 

You should also consult with key stakeholders and team members to ensure alignment on your research objectives before diving into data collecting. This will help you gain diverse perspectives and insights that will shape your research approach.

2. Identify your target audience

Next, you’ll need to pinpoint your target audience to determine who should be included in your research. Begin by creating detailed buyer personas or stakeholder profiles. Consider demographic factors like age, gender, income and location, but also delve into psychographics, such as interests, values and pain points.

The more specific your target audience, the more accurate and actionable your research will be. Additionally, segment your audience if your research objectives involve studying different groups, such as current customers and potential leads.

If you already have existing customers, you can also hold conversations with them to better understand your target market. From there, you can refine your buyer personas and tailor your research methods accordingly.

3. Choose your research methods

Selecting the right research methods is crucial for gathering high-quality data. Start by considering the nature of your research objectives. If you’re exploring consumer preferences, surveys and interviews can provide valuable insights. For in-depth understanding, focus groups or observational research might be suitable. Consider using a mix of quantitative and qualitative methods to gain a well-rounded perspective. 

You’ll also need to consider your budget. Think about what you can realistically achieve using the time and resources available to you. If you have a fairly generous budget, you may want to try a mix of primary and secondary research approaches. If you’re doing market research for a startup , on the other hand, chances are your budget is somewhat limited. If that’s the case, try addressing your goals with secondary research tools before investing time and effort in a primary research study. 

4. Use the right market research tools

Whether you’re conducting primary or secondary research, you’ll need to choose the right tools. These can help you do anything from sending surveys to customers to monitoring trends and analyzing data. Here are some examples of popular market research tools:

• Market research software: Crunchbase is a platform that provides best-in-class company data, making it valuable for market research on growing companies and industries. You can use Crunchbase to access trusted, first-party funding data, revenue data, news and firmographics, enabling you to monitor industry trends and understand customer needs.

• Survey and questionnaire tools: SurveyMonkey is a widely used online survey platform that allows you to create, distribute and analyze surveys. Google Forms is a free tool that lets you create surveys and collect responses through Google Drive.
• Data analysis software: Microsoft Excel and Google Sheets are useful for conducting statistical analyses. SPSS is a powerful statistical analysis software used for data processing, analysis and reporting.
• Social listening tools: Brandwatch is a social listening and analytics platform that helps you monitor social media conversations, track sentiment and analyze trends. Mention is a media monitoring tool that allows you to track mentions of your brand, competitors and keywords across various online sources.
• Data visualization platforms: Tableau is a data visualization tool that helps you create interactive and shareable dashboards and reports. Power BI by Microsoft is a business analytics tool for creating interactive visualizations and reports.

5. Collect data

There’s an infinite amount of data you could be collecting using these tools, so you’ll need to be intentional about going after the data that aligns with your research goals. Implement your chosen research methods, whether it’s distributing surveys, conducting interviews or pulling from secondary research platforms. Pay close attention to data quality and accuracy, and stick to a standardized process to streamline data capture and reduce errors. 

6. Analyze data

Once data is collected, you’ll need to analyze it systematically. Use statistical software or analysis tools to identify patterns, trends and correlations. For qualitative data, employ thematic analysis to extract common themes and insights. Visualize your findings with charts, graphs and tables to make complex data more understandable.

If you’re not proficient in data analysis, consider outsourcing or collaborating with a data analyst who can assist in processing and interpreting your data accurately.

7. Interpret your findings

Interpreting your market research findings involves understanding what the data means in the context of your objectives. Are there significant trends that uncover the answers to your initial research questions? Consider the implications of your findings on your business strategy. It’s essential to move beyond raw data and extract actionable insights that inform decision-making.

Hold a cross-functional meeting or workshop with relevant team members to collectively interpret the findings. Different perspectives can lead to more comprehensive insights and innovative solutions.

8. Identify opportunities and challenges

Use your research findings to identify potential growth opportunities and challenges within your market. What segments of your audience are underserved or overlooked? Are there emerging trends you can capitalize on? Conversely, what obstacles or competitors could hinder your progress?

Lay out this information in a clear and organized way by conducting a SWOT analysis, which stands for strengths, weaknesses, opportunities and threats. Jot down notes for each of these areas to provide a structured overview of gaps and hurdles in the market.

9. Make informed business decisions

Market research is only valuable if it leads to informed decisions for your company. Based on your insights, devise actionable strategies and initiatives that align with your research objectives. Whether it’s refining your product, targeting new customer segments or adjusting pricing, ensure your decisions are rooted in the data.

At this point, it’s also crucial to keep your team aligned and accountable. Create an action plan that outlines specific steps, responsibilities and timelines for implementing the recommendations derived from your research. 

10. Monitor and adapt

Market research isn’t a one-time activity; it’s an ongoing process. Continuously monitor market conditions, customer behaviors and industry trends. Set up mechanisms to collect real-time data and feedback. As you gather new information, be prepared to adapt your strategies and tactics accordingly. Regularly revisiting your research ensures your business remains agile and reflects changing market dynamics and consumer preferences.

Online market research sources

As you go through the steps above, you’ll want to turn to trusted, reputable sources to gather your data. Here’s a list to get you started:

• Crunchbase: As mentioned above, Crunchbase is an online platform with an extensive dataset, allowing you to access in-depth insights on market trends, consumer behavior and competitive analysis. You can also customize your search options to tailor your research to specific industries, geographic regions or customer personas.

• Academic databases: Academic databases, such as ProQuest and JSTOR , are treasure troves of scholarly research papers, studies and academic journals. They offer in-depth analyses of various subjects, including market trends, consumer preferences and industry-specific insights. Researchers can access a wealth of peer-reviewed publications to gain a deeper understanding of their research topics.
• Government and NGO databases: Government agencies, nongovernmental organizations and other institutions frequently maintain databases containing valuable economic, demographic and industry-related data. These sources offer credible statistics and reports on a wide range of topics, making them essential for market researchers. Examples include the U.S. Census Bureau , the Bureau of Labor Statistics and the Pew Research Center .
• Industry reports: Industry reports and market studies are comprehensive documents prepared by research firms, industry associations and consulting companies. They provide in-depth insights into specific markets, including market size, trends, competitive analysis and consumer behavior. You can find this information by looking at relevant industry association databases; examples include the American Marketing Association and the National Retail Federation .
• Social media and online communities: Social media platforms like LinkedIn or Twitter (X) , forums such as Reddit and Quora , and review platforms such as G2 can provide real-time insights into consumer sentiment, opinions and trends. 

Market research examples

At this point, you have market research tools and data sources — but how do you act on the data you gather? Let’s go over some real-world examples that illustrate the practical application of market research across various industries. These examples showcase how market research can lead to smart decision-making and successful business decisions.

Example 1: Apple’s iPhone launch

Apple ’s iconic iPhone launch in 2007 serves as a prime example of market research driving product innovation in tech. Before the iPhone’s release, Apple conducted extensive market research to understand consumer preferences, pain points and unmet needs in the mobile phone industry. This research led to the development of a touchscreen smartphone with a user-friendly interface, addressing consumer demands for a more intuitive and versatile device. The result was a revolutionary product that disrupted the market and redefined the smartphone industry.

Example 2: McDonald’s global expansion

McDonald’s successful global expansion strategy demonstrates the importance of market research when expanding into new territories. Before entering a new market, McDonald’s conducts thorough research to understand local tastes, preferences and cultural nuances. This research informs menu customization, marketing strategies and store design. For instance, in India, McDonald’s offers a menu tailored to local preferences, including vegetarian options. This market-specific approach has enabled McDonald’s to adapt and thrive in diverse global markets.

Example 3: Organic and sustainable farming

The shift toward organic and sustainable farming practices in the food industry is driven by market research that indicates increased consumer demand for healthier and environmentally friendly food options. As a result, food producers and retailers invest in sustainable sourcing and organic product lines — such as with these sustainable seafood startups — to align with this shift in consumer values. 

The bottom line? Market research has multiple use cases and is a critical practice for any industry. Whether it’s launching groundbreaking products, entering new markets or responding to changing consumer preferences, you can use market research to shape successful strategies and outcomes.

Market research templates

You finally have a strong understanding of how to do market research and apply it in the real world. Before we wrap up, here are some market research templates that you can use as a starting point for your projects:

• Smartsheet competitive analysis templates : These spreadsheets can serve as a framework for gathering information about the competitive landscape and obtaining valuable lessons to apply to your business strategy.
• SurveyMonkey product survey template : Customize the questions on this survey based on what you want to learn from your target customers.
• HubSpot templates : HubSpot offers a wide range of free templates you can use for market research, business planning and more.
• SCORE templates : SCORE is a nonprofit organization that provides templates for business plans, market analysis and financial projections.
• SBA.gov : The U.S. Small Business Administration offers templates for every aspect of your business, including market research, and is particularly valuable for new startups. 

Strengthen your business with market research

When conducted effectively, market research is like a guiding star. Equipped with the right tools and techniques, you can uncover valuable insights, stay competitive, foster innovation and navigate the complexities of your industry.

Throughout this guide, we’ve discussed the definition of market research, different research methods, and how to conduct it effectively. We’ve also explored various types of market research and shared practical insights and templates for getting started. 

Now, it’s time to start the research process. Trust in data, listen to the market and make informed decisions that guide your company toward lasting success.

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

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

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

Key Takeaways

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

Market Research

How market research works.

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

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

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

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

Primary Market Research vs. Secondary Market Research

Market research usually consists of a combination of:

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

Primary Market Research

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

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

Secondary Market Research

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

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

History of Market Research

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

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

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

Types of Market Research

Face-to-face interviews.

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

Market research and surveys were adapted from these early techniques.

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

Focus Groups

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

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

Phone Research

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

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

Survey Research

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

Online Market Research

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

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

How to Conduct Market Research

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

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

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

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

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

Benefits of Market Research

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

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

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

Example of Market Research

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

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

What Are the Main Types of Market Research?

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

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

What Is Online Market Research?

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

What Are Paid Market Research Surveys?

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

What Is a Market Study?

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

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

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Jan 2, 2024

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

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

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

Table of Contents

What Is Market Research?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1. Interviews

3. Focus Groups

4. Observations

5. AI-Driven Market Research

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

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

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

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

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

3. Focus groups

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

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

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

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

5. AI-driven market research

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

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

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

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

Examples of common market research questions include:

Demographic market research questions

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

Product or service usage market research questions

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

Brand perception market research questions

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

Buying behavior market research questions

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

Customer satisfaction market research questions

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

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

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

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

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

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

Step 1: Define your objectives

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

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

Step 2: Select your market research methods

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

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

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

Step 3: Develop your research tools

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

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

Step 4: Conduct the market research

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

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

Step 5: Analyze and apply your findings

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

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

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

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

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

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

Continue Reading

What Are Consumer Insights? Meaning, Examples, Strategy

How Coca-Cola Collects Consumer Insights

Market Intelligence 101: What It Is & How To Use It

9 Top Consumer Insights Tools & Companies

• Media Center
• E-Books & White Papers
• Knowledge Center

The Critical Role of Market Research in 2021: Experts Weigh In

by Sarah Schmidt , on January 12, 2021

I asked a variety of market research professionals—including executives and founders, research directors, and senior analysts from around the world—to consider what “job” market research will perform and the key benefits it will provide for companies in the coming year.

Some of their responses take a broad outlook, while others focus on the value of market research within specific industries such as energy, pharmaceuticals, or health care. Each viewpoint helps shed light on what the future may hold for the market research industry and the businesses that depend on it.

Understand current market dynamics and the long-term outlook. David Sprinkle, Publisher, Packaged Facts

“As has been the case since the COVID-19 pandemic struck, market research in 2021 will depend not only on expert historical understanding of individual markets, including their distinctive patterns during and after previous economic recessions, but also on steady tracking of market performance throughout the year. The interconnected factors at play—COVID-19 contagion and fatality rates; the corresponding economic slowdown and job loss; the roll-out and effectiveness of COVID-19 vaccines and drugs; federal and state/local fiscal and stimulus responses, including any lock-down policies; and consumer resilience and psychographics in the face of the experience or threat of economic insecurity—mean in aggregate that market sales trajectories may continue to look more like a pinball’s track than a single-direction arrow or clear-cut curve. Quality and objective market research will enable industry players and market analysts to keep their eye on the larger and longer-term picture, as it unfolds.”   

Get ever closer to the consumer and identify growth opportunities. Sarah Boumphrey, Global Research Director, Euromonitor International

“Companies will have to get ever closer to the consumer in 2021. Agility, innovation, and bold choices will be needed in order to identify growth opportunities. In this environment, market research and the actionable insights it provides, are even more crucial than ever.”

Make fact-based decisions for a better future. Joe Newsum, Founder, Kentley Insights

“2021 is all about economic volatility with the virus, shutdowns, vaccines, stimulus, policies, consumer and business demand, bankruptcies, globalization, and more. This volatility will hit every industry in its unique way, and leaders will depend on market research to discern reality from fiction to help drive fact-based decisions for a better future.”

Research customer behavior and pivot to new market niches. John LaRosa, President, Marketdata LLC

"Too many times, during recessions, companies cut their marketing and market research budgets. This is adding fuel to the fire. During periods of slow sales, it's more important than ever to research why you are losing customers and which ones. It's also necessary to pivot to find new market niches and potential new products and services. If you don't do any research, you'll never know what those new niches might be."

Gain vital insights into a radically changed world. Jack W. Plunkett, CEO, Plunkett Research, Ltd.

"Executives today are extremely aware that the world changed abruptly with the onset of the Coronavirus. For example, Plunkett Research estimates that literally 10 years’ worth of growth in digital adoption and behavior were compressed into a few months’ time during 2020, as everything from telemedicine—to online grocery ordering—to streaming entertainment soared.

The question on executives’ minds now should be: how much of this behavior will be permanent in the post-COVID era? What will be the attitudes, needs, and plans of businesses and consumers going forward? Will spending resume at former levels, or will today’s high savings rates and financial conservatism endure? If businesses and consumers spend more freely in the near future, what will they be willing to spend on/invest in? How will business markets in 2021 differ geographically and regionally? These are the critical insights that managers need in order to plan their strategies.

The only effective way for enterprises to gain these vital insights is to utilize accurate, up-to-the-minute research. Market researchers have to work harder than ever, and I mean that literally, to conduct interviews, analyze data, draw conclusions, and make forecasts, because things have changed so much and so radically. Our pipeline of research clients has grown significantly in recent months due to these needs. In particular, we’re doing deep research in such areas as online banking and payments, technology adoption, health care markets, and food markets. The next couple of years will be both exciting and challenging for enterprises and market professionals alike."

Scan the horizon for potential threats. Edwin Bailey, Director of Marketing & Research, Content Catalyst

“In 2021 corporate management teams will be on full alert for events that cause business disruption. This means that competitor intelligence and strategy teams will be taken more seriously and better funded to research potential threats. Companies will be inclined to buy or commission research that will help them understand how a market will shape-up in the event of another pandemic, war, or other ‘unforeseen’ global event. Companies, such as airlines, whose business has been badly affected by the coronavirus pandemic, may seek to diversify into ‘pandemic immune’ sectors and will therefore need support to research and understand market segments unfamiliar to them.”

Identify winners and losers in challenging, fluid conditions. Simeon Pinder, Senior Analyst, GMR Data Ltd

"How we research has shifted fundamentally due to the pandemic. Three questions we have to address—How was a sector operating pre-COVID? How about during? And what is the outlook for post-COVID?

If we take retail as an example—depending on your physical / online mix, it has been feast or famine. The banking sector has had to deal with loan breaks, whilst scaling their digital to encourage customers towards online. The pharmaceutical sector has faced unprecedented demands, not just in headline vaccines trials, but in areas such as PPE, medical devices, and Rx & OTC arenas.

Our research shows us that no one sector has benefitted universally, and within horizontals there are winners and losers. What we see is that in challenging, fluid, conditions independent market research is always welcomed. We also see light at the end of the tunnel, and we expect a busy 2021!"

Evaluate markets where cutting-edge research and development is performed rapidly on a massive scale. Deirdre Kelly, PhD, Managing Director, Kelly Scientific  

“Market research will be imperative in 2021 given the current flux in all markets due to the COVID-19 pandemic. Uncertainties associated with drug availability, key ingredients, global logistics, clinical trials, and new drug launches will rock the pharma industry and demand concrete data from market analysts. We at Kelly Scientific have seen certain markets such as immunotherapies withstand the pandemic pressure of 2020, maintaining robust sales but observing stilted growth. Furthermore, COVID-19 is having a major impact on the anti-infectives, vaccine, and viral therapeutic markets and so thorough evaluation of these areas will be required for business strategies and key industry decisions. Comprehensive market analysis will be critical in 2021 in a global environment where cutting-edge research and development is being performed rapidly and on a massive scale. Industry leaders will be required to have all of this knowledge at their fingertips.”

Light a path through uncertainty and secure your position after the storm. Dan Strempel, Senior Analyst, Simba Information

“The scholarly and professional publishing industry was facing disruption before COVID-19 broke out. But academics, even when pushing for revolutionary changes, are cautious and tend to take incremental steps forward after much research and debate. COVID-19 has created urgency and most feel it has accelerated the movement towards open access, open research—and digital solutions as a means of achieving those goals. In this environment, market research will function as a beacon for those industry competitors who are trying to navigate the uncertainty and secure their place in the market that will exist after the storm.”

Navigate dramatic changes in the energy sector. Sara Peerun, Commercial Director, Visiongain

''The energy industry is facing prominent challenges, and the COVID-19 pandemic has altered the standards of the market, witnessing for the first time in history negative oil prices. Market research and analysis were always essential for businesses navigating in the competitive energy market economic scenery, and they are anticipated to be the key in our future attempts to understand the nature and the pace of the oil and gas market recovery in 2021 as well as the impact of the pandemic to the global energy transition efforts.''

Understand how disruption has impacted your portfolio and what remedies might help in times of uncertainty. Dr. Vishal Agrawal, CEO, DelveInsight Business Research

“The global healthcare market has been busy finding a way to overcome the impact of COVID on business without paralyzing itself. Many patients living with comorbid conditions are at the risk of getting infected by coronavirus and pose a real challenge for the prompt delivery of healthcare services, e.g. dialysis. On top of that, patients are avoiding visiting physicians, creating an opportunity for telemedicine and digital platforms to provide services safely at their home. 

The coming year will witness a dramatic shift in the healthcare market. Digital healthcare and telemedicine offer tremendous opportunities, and it is expected to create an exponential impact as regulators around the globe are looking for viable alternatives. 

The role of competitive monitoring will increase, as companies will require insights post the pandemic to gain footing in the market. Market research will go a long way to benefit companies in understanding how the disruption has impacted their portfolio and what remedies might help in the time of economic uncertainty. To cater to the unforeseen circumstances in the healthcare industry, market research activities that take lessons from historical events and move from a reactive approach towards a proactive approach will help in effective decision-making for strategy building. 

Organizations need to involve themselves in understanding consumers' perceptions, analyze granular events to derive accurate forecasts, and work to understand both short-term and long-term implications for business growth. Evidence-based decision making has become the need of the hour, and market research around these points will drive businesses forward.”

Explore promising international growth opportunities while minimizing risk. Marcello Antonioni, Managing Partner, StudiaBo srl, in charge of ExportPlanning

“Strategic planning has always represented a key driver of growth for companies. Now more than ever, in the extraordinary circumstances we are living due to the current pandemic, taking corporate decisions based on reliable data is and will be essential to bring about recovery and success for any business.

The philosophy behind ExportPlanning has always been the importance of strategy and market research in the process of internationalization. We think that in 2021 this data-driven approach will necessarily spread, in the face of an expanded risk scenario as well as increased competition in international markets.

Carefully chosen foreign markets can represent a powerful tool for growth, all the more so in a context of a stagnant domestic market. Nonetheless, accessing a market without evaluating one’s strengths and weaknesses, as well as risks and opportunities of the project, can constitute a considerable risk. That’s when market research comes into play. Trusted data from open and official sources can help identify the most promising markets for one’s products, through macroeconomic and trade data, combined with modern algorithms and professional expertise in terms of data analysis and internationalization best practices. Market research can therefore constitute a crucial support to minimize the risk while exploring new opportunities, even in these challenging times.”

Find product-market fit in an ever-evolving digital world. Faisal Ahmad, CEO, BIS Research

"The need for understanding and forecasting the market (especially new and emerging markets) is now extended to almost all technology and technology products. Gathering credible intelligence (market research) is no more a luxury but a necessity to find product-market fit in the ever-evolving digital world."

Use actionable insights for business planning, forecasts, and presentations. Gerry Christensen, Founder and CEO, Mind Commerce

“While the market research industry itself has transformed significantly over the last decade, the need for insights, data, and actionable information remain a crucial aspect of business strategy and planning for all companies. Despite the recent market disruptions precipitated by COVID-19, the role and importance of market research in 2021 and beyond will continue to grow.

However, it is important to recognize that the manner in which information is delivered, consumed, and put into action is rapidly evolving. Buyer expectations for premium market research drive the need for content-dense delivery with actionable information. The form in which information is consumed is transforming from static reports to more dynamic information, often delivered as part of a subscription service offering.

In addition, market research users increasingly demand flexible platforms that enable customers to use market research content (narrative, data, and images) for many purposes including various internal business documents such as business plans, forecasts, and presentations. Accordingly, successful market research companies will be those that fulfill these evolving customer expectations through scalable and user-friendly market research as-a-service capabilities."

Want more information? Check out our latest article on predicted market research trends for 2022 . You can also download our free white paper to learn how third-party market research can help you gain a competitive edge.

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Market Research: The Definitive Guide (2023 Update)

Starting a business is a challenging endeavor that requires time, money, and continuous learning. In our blogs, we cover how to start a business with brief overviews. In our hub, we aim to provide you with everything you need to go through each step. Our first step is conducting market research.

Throughout the steps, we’ll provide insights from Paul Akers, the owner of FastCap, and a Lean Expert who has created hundreds of products for woodworkers and cabinet makers.

There are four basic steps to conducting market research:

• Understand “what is marketing research and which type is right for my business?
• Perform market research.
• Analyze the data.
• Use the research to make decisions.

We’ll start by exploring some of the concepts involved in market research analysis to help you perform it yourself.

Step 1: What is market research in business?

Market research is the process of gathering information about target customers to better understand their views about a product or service. The primary ways of classifying market research are:

• The method of the collection
• Common types of market research

Let’s look at each.

The method of collection

Market research normally uses six methods of collection when looking for answers:

Primary market research

Secondary market research.

• Qualitative research

Quantitative research

Exploratory research.

• Specific Research

Primary research is the original research conducted directly by an organization. It is used to find out what customers are interested in. It can be done through questionnaires, interviews, or videos. Primary market research is used for understanding the underlying needs and desires of consumers.

Primary market research helps us to understand the needs, wants, and behaviors of potential buyers. It is the basis for the buyers’ persona. It helps us to formulate marketing strategies that can be used to meet those needs and wants.

Secondary market research is a process of finding information about a product or service through other sources. This includes looking up other companies that are in the same market as your company and finding out what they are doing.

A company should conduct secondary market research to find out if the product or service has been done before, which will help them figure out how they can differentiate their product from competitors.

Secondary research can be used to gain information about competitors, pricing, distribution channels, etc. It also helps the company save time by not having to conduct primary research that has already been performed.

Researching competitors before you start your business is not only crucial for success but essential for survival in the business world where everyone is trying to get ahead.

What is the difference between qualitative and quantitative research?

One is focused on themes while the other is focused on information that can be processed numerically. Let’s look at each.

Qualitative Research

Qualitative research is focused on finding themes that run through interviews and surveys. This type of research is more focused on opinions and is more art than statistical analysis, but in some cases, you can turn this type of research into data that can use statistical analysis.

For instance, a question like the one below converts a qualitative data point into a quantitative data point, making it easier to compare how happy someone was with their food.

You might perform qualitative research along with market validation after you have created a prototype of a new product.

This research is focused on information that can be easily processed with statistical analysis software. For instance, median household income would be easy to statistically calculate if you gather the data for the target customers’ income. Market research analysts love this kind of data because it is easier to process.

Exploratory research is market research that looks for a better understanding. For instance, you may have come to this site doing exploratory research about how to do market research for a startup. After you’ve gained broader information about marketing research methods, you might move on to more specific research.

Specific research

Specific research is when market researchers are looking to answer a very specific question using market data. This research might include searching for a specific concept or item. For example, the lowest cost statistical software for a company that will have ten users of the software. You might also want to research the history of a business location before deciding to sign a lease because some shopping centers have high turnover.

To find the answer, you’ll probably want to go with Google Workspace because Forms, Sheets, and other useful business tools are included in the same package as your email. Google is the primary email provider for small and medium-sized businesses.

Market research may include a combination of primary and secondary data, quantitative and qualitative data, exploratory and specific research. Now that you understand the market research definition, let’s look at the common market research methods and what questions they are trying to answer.

Common types of market research methods

Most companies will perform 13 types of market research:

• Literature reviews

Focus Groups

Observation, customer utilization research.

• Buyer Persona Research

Market Segmentation Research

Pricing research, competitive analysis research, customer satisfaction and loyalty research, brand awareness research, campaign research.

In each of these, market researchers attempt to answer different questions. Let’s discuss each.

Literature Reviews

One of the leanest ways to do market research is a literature review. With your laptop or cell phone, you can easily find vast amounts of data about your market through sources like:

• Statista – Provides graphs that are easy to process for most economic subjects
• Competitors’ research – Your competitors have probably already done the research. Find it so you don’t have to duplicate the effort.
• Industry trade organizations – Companies
• Think with Google – Helps marketers gather information using Google’s extensive database of consumer behaviors
• Census Bureau – The U.S. Census Bureau is a government agency that collects data on a variety of subjects including a full count of the U.S. population every decade.

After you’ve gathered everything available through market research, it’s time to create some surveys.

Surveys are the most common type of market research because they are so easy to conduct and are low-cost. With software like Google Forms and Facebook, you can easily create a survey, distribute it, and analyze the data on your own.

When creating a survey, it is important to be aware of some best principles including:

• Use a variety of style questions: scaled, multiple-choice, and open-ended questions are typically used with success.
• Avoid biased questions that lead the survey participants to a preferred answer. They will harm the validity of your research.
• Be respectful of the participants’ time. Unless you are paying them, try to keep the survey to 10 questions or less. If you are paying them, $50-$100 per hour is typically what market research firms will pay for longer surveys.
• Make sure to gather demographic data and contact information for follow-up.
• Practice proper sampling methods. In most cases, you won’t need more than 1,000 survey participants, but you can use the table below to establish how many people to include in your survey.

You can normally gather the data you need through this method for under $5 per survey participant, making it one of the most effective and lean methods of gathering market research.

Another great tool is a market research interview. They follow the same principles of surveys but have the benefit of the ability to ask follow-up questions. Using these with select survey participants who gave meaningful input might be useful.

Interviews are much more labor and capital intensive than surveys, so only use them for follow-up questions for your target market.

Keep reading to learn about focus groups.

A focus group brings 5-10 people together to discuss a product or service with a moderator. These will typically run $4K-$10K per group, and they are not conducive to being conducted by novices because of the challenges involving focus groups dynamics.

If you are going to use this type of research, we’d suggest hiring a professional market research firm to assist you in the recruiting and managing of a focus group. If you are trying to run lean market research, you should skip focus groups entirely.

Keep reading to learn about observations as a market research tool.

Observation can be an extremely powerful market research tool. Using observation, you can learn how people actually interact with your product and service, but it doesn’t allow you to actually communicate with them.

Observation is particularly powerful for software products because tools like Google Analytics and Crazy Egg help you see how people interact with the software. This makes it easier to fix areas where customers stop interacting with the application.

You can perform market research through observation in different ways. The primary ways of conducting market research through observation are covert observation and overt observation.

Covert observation is collecting market research data without the participants’ knowledge. This type of data collection can be achieved through analytics software on the web or using security cameras in stores where people can test your product.

Overt observation is when the participants are aware of the marketing research and provide feedback to questions. When you conduct market research about a product or service this way you will get more information about potential customers’ opinions, but it may be influenced by their awareness that you are conducting market research.

Effective market research can gain actionable insights from both methods. Overt observation is better when you know who your potential customers are and you want to establish whether they like your business idea, while covert observation is helpful for establishing who naturally gravitates to a product or service.

You’ll want to take notes any time someone performs a desired or undesired action. If the participant is aware of the market research analysts, you’ll also want to ask them what influenced the decision.

Cautionary Tale: During the early stages of FastCap, Paul would gain actionable insights from conventions, but he stopped conducting research at such events because he found them costly to collect data. He also found that competitors would try to steal his ideas.

To truly make the most out of this tool, you’ll need to combine it with other research methods like surveys to gain user input after the observation.

Customer utilization research is focused on how your current customers use your products or services. Marketing professionals will normally use customer surveys to perform this exploratory research. The following questions are questions that an online survey might include:

• How often do you use our product or service?
• What do you like most about our product or service?
• With 1 being highly dissatisfied and 5 being highly satisfied how would you rank our product?
• What do you like least about our product or service?
• With 1 being highly dissatisfied and 5 being highly satisfied how would you rank our customer service?
• Have you tried any of the competitors’ products? If so, which ones? How does our product compare to theirs?
• What features would you like added to our product?
• With 1 being highly dissatisfied and 5 being highly satisfied how would you rank our pricing?

You can replace “product” with “services” in any of the questions above. In addition, it would make sense to include the name of the specific product or service they bought instead of the word product or service.

These questions will help you establish what real customers think of your products and services. This type of market research data provides insight into aspects including competitive advantage and creating buyer personas for potential clients based on the data collected.

FastCap has an interesting take on this type of market research. They actually offer tradesmen a 2-5% royalty for product suggestions that they decide to take to market.

Buyer Persona: Identify Your Target Market

A user persona is a character that represents your target market. A user persona will include aspects including:

• Demographics – age, gender, location, marital status, number of kids (if applicable to your product)
• Financial Information – Employment status, job title, household income, homeowner status
• Behaviors and Interests – Hobbies, products they like, buying habits, where they get information about products and services
• Market size and market trends

You can create similar personas for B2B businesses using stats like:

• Number of employees
• Age of company
• Titles of decision-makers
• Market size

If you are using analytic tools, they collect most of this information. You can add a form to check out or that opens when the user is leaving the site to ask questions about:

• Who are they? In FastCap’s case, they would be carpenters and cabinet makers.
• What are they trying to achieve? They don’t want exposed screw holes in their cabinets.
• What is the main obstacle? The products on the market are ugly, difficult to use, and expensive.

What if you find that your buyer persona is too broad to use to identify potential clients? We’ll discuss how to address that next

A small business might need to do market segmentation research if all their clients don’t fit neatly into a single user persona. For instance, FastCap would have at least three market segments that they might want to prepare marketing materials for:

• Distributors that will be selling their products to carpenters
• Tradespeople who will be using their products
• Coffee shops that buy caps for drinks so people don’t burn themselves (it’s an ancillary use for a FastCap that he decided to market to restaurants with To-Go cups)

As you can guess, each market segment would have characteristics that make them different, and you wouldn’t want to market to them all the same. You’d use market segmentation research to identify what those key characteristics are and create a user persona for each.

The term pricing research is refers to establishing a fair price. Pricing research should be done before you open a business or launch a new product because it can impact whether the business is worth starting.

To understand the benefits of pricing research I should discuss pricing strategies first. Businesses normally use either the value-added method or the cost of doing business.

The value-added method charges a price that is based on the value that is provided to a client. An example of this pricing is how Tesla prices solar roofs. They determine the price using the cost of a comparable roof plus the net present value of 30 years of energy in the target market.

The cost of doing business is calculated by adding up all your expenses (including taxes) and adding the amount of profit you want to make, then dividing by the number of units you want to sell.

Both of these pricing strategies have issues though. In the value-added method, how do you determine the value that is added? In the cost of doing business method, what is the maximum your target market can sustain? Both of these are answered by researching comparable products.

While there may not be something identical on the market, there is always something that serves a similar purpose. For instance, when portable MP3 players were created, the cost of the MP3 player plus downloading songs should have been compared to the cost of a portable CD player plus the cost of all the CDs.

Competitive analysis research is focused on developing a thorough understanding of the market and identifying how you want to differentiate yourself in a market of comparable competitors. This type of research will be included in a business plan . You’ll want to focus on aspects of the industry including:

• Identify competitors and the products they offer. This can be done through their websites.
• Analyze sales trends. You can use industry resources and company quarterly reports.
• Research how economic indicators impact the industry. For instance, consumer staples tend to do better during a recession, while consumer discretionary products tend to do better as an expansionary cycle matures.
• Understand the impact government agencies have on the industry.
• Has the industry reached market saturation? If 9 out of 10 people have already purchased the product you are selling, you are probably late to the game. Before you spend money in an industry that is at capacity, you should review the following bullet point.
• What is the job outlook for the industry? The Bureau of Labor Statistics (BLS) creates an occupational outlook handbook for every industry. You want to be aware of the growth prospects. If both of the last two bullet points are going in the wrong direction stay clear.

The document you create from this research should be detail-oriented, contain lots of external links to prove sources, and show analytical skills that show an understanding of the industry. This research and the communication skills used to present it are often deciding factors when applying for loans.

Customer satisfaction and loyalty research are focused on building relationships that increase the lifetime value of your existing customers. With big data and rewards programs becoming more affordable, small business owners can now offer similar types of rewards to what people see at major chains.

You’ll want to use the market research process to establish the answer to questions like:

• Should I use a point system or a number-of-purchases reward system?
• How big of a reward should I offer for repeat customers?
• Should I offer referral bonuses? If so, how much is meaningful?
• What are my competitors doing?

To answer these questions, you’ll need to establish:

• How often your average customer buys your product or services. You can find this in Customer Relationship Management (CRM) software. Alternatively, you can sort receipts by credit card if you don’t already have an app or loyalty program that people sign up for.
• If you have a CRM, establish what percent of customers interact with your business daily, weekly, monthly, or irregularly. Also, calculate the first two bullet points for each group to see if different promotions make sense.
• How much your average customer spends on each trip. Calculate revenue or number of receipts.

For example, you might target people differently by offering daily customers a free upgrade every $50 spent, while weekly customers you might want to offer every 5th visit they get a free product. In both scenarios, this can reward customer loyalty and encourage more spending in the future by slightly shifting their habits.

Let’s look at how to understand brand awareness.

Brand awareness research is focused on establishing what your target audience knows about your business, how they perceive it and giving you input on improving brand awareness.

Facebook has a feature for brands running ads that is really useful for establishing brand awareness called Brand Survey Tests . It is currently an experimental stage, but here’s how it works:

• Divides target market into two groups, one that is shown ads and one that is not shown ads.
• Collects data on both groups’ clicks, purchases, and other actions with your company
• Required: “Do you recall seeing an ad for [page name] online or on a mobile device in the last two days?”
• “Have you heard of [page name]?”
•  “How would you describe your overall opinion of [page name]?”
• “Are you familiar with [Page name]?”
• “Will you recommend [page name] to a friend?”
• Provides an analysis of what the market research process found.

This can be a great tool for understanding if people recognize your brand name .

Campaign research is focused on reviewing past business strategies to promote your products and services so that you can establish what worked, what didn’t, and why. In today’s marketing boom, people often forget the importance of including lessons learned when closing a project.

During this process, you’ll want to look at questions like:

• Did we reach enough people to be a representative sample? Typically, over 500 will be enough to count as a representative sample,
• What was the return on investment?
• Where did people drop out of the sales funnel?
• Did the campaign have a favorable reception?
• Should we try to duplicate the content in future campaigns?
• What should we avoid in future campaigns?

Now that you know about some of the types of market research techniques, keep reading to learn why market research is so important.

Why is market research important?

Because market research is the act of investigating consumer preferences as well as economic, social, and statistical data, it helps to better understand the customer and guides business decisions in the areas of:

• Customer insights – Market research can be used to gain insight into how customers behave, what they like and dislike about products, and what they think about different marketing strategies.
• Marketing strategy development – Market research can be used to develop a marketing strategy by identifying the needs of the market, target audience, and competitors in the industry.
• Product development – Market research is key for product development because it helps companies discover what customers want to buy or use next. It also helps companies see how their product will fare against other similar products on the market today or in the future.
• Product pricing considerations – Market research helps companies determine prices for their products by understanding expenses to continue production.

Now that you understand why market research matters so much to businesses, let’s take a look at how to conduct market research.

Step 2: Conduct market research

As you begin to get a handle on your goals and the questions you need to answer, it’s time to do the market research. At UpFlip, we are fans of Lean methodologies , so we figured we’d give you an introduction to lean market research.

• Put together the list of questions you are trying to answer based on the previous sections. Structure them in a way that answers can be analyzed easily.
• Seek out data that is already available and document the findings that impact you under each question.
• Establish the minimum number of online surveys or observations needed for a statistically accurate sample using our calculator.
• Find participants and gather data. When possible use software for collecting data.
• Proceed to analyze data.
• Implement business strategies.

Using these strategies will make it easier to do effective market research quicker and at a lower cost. No need for costly market research analysts.

If you’d like to learn more about how one of the United State’s most successful Lean practitioners approaches market research check out our interview with Paul below.

Keep reading to learn about analyzing the results

Step 3: Analyze the results

Market research analysts look for trends in data gathered from market research. The analysis involves both statistics and looking for patterns. To make it easier to analyze data, it is helpful to use software while gathering the data. If you don’t, you’ll have to input it into a spreadsheet manually.

The first step is to clean up data. This means fixing misspellings and other improper collection like zip codes where state names should be. Next, remove obvious deviations from the sample. (If someone says they buy your products 100 times per day, that’s probably not right.)

After that, you can do data analysis using functions like:

• Mean – sum divided by the number of surveys
• Median – (Number of surveys+1)/2
• Mode – Most common answer
• These can also use conditional statements such as “IF male and Under 45 mean”

With some forms of data, you might find visualization easier, so we are providing some market research examples of visualization of data. Let’s look at some common visualization methods.

The flow model is simply a visual representation of how interactions occur. Check out the behavioral flow for website visitors in Google Analytics. This model can be useful for establishing where issues occur and how processes work.

Affinity Diagram

An affinity diagram is used to group people, businesses, or other items together by a common feature. For instance, you might group by male and female, profession, or age. This can make it easier to tell whether one group tends to prefer your product or service more than another group does.

If you want to learn how to do this in Microsoft Excel, check out the video below.

Lucidcharts is another software you can use for affinity diagrams.

Customer Journey Map

A customer journey map is a visual representation of the path people take from being unaware of your product to becoming a paying customer, and eventually a potential advocate. Customer journeys are typically broken into five steps in the process:

• Awareness – The customer knows about the product
• Consideration – When the customer starts researching the product
• Purchase – The customer buys the product
• Retention –Keeping the customer happy, repeating purchases
• Advocacy – When the customer goes from being a satisfied customer to singing your praises to others.

The stages can vary for different groups of people, but awareness is typically a matter of advertising. This can be in the form of an online ad, a coming soon sign when preparing to open up a location, or even current customers (or influencers) advocating for your brand.

Consideration begins when the customer starts researching your company. This phase might  be:

• Short : Searching “gas stations near me” and immediately going to get gas
• Long : Spending hours researching the best shoe, best price, and best place to buy it.

The point of understanding a journey map is to be able to understand how many points of reference a person has before buying your product. Then you can use that to speed up the awareness and consideration phases while encouraging advocacy by your long-term customers.

Now that you understand “what is market research?” how to perform the market research, and how to analyze the research, there’s only one thing left…

Step 4: Use the info for decision making

The final and most important part of performing your own market research is converting the research into business practices to improve revenue. Depending on what you find in the research, this step may include:

• Adding new user personas and marketing campaigns
• Narrowing your target audience
• Discontinuing marketing campaigns
• Investing in software to increase customer loyalty or lifetime value
• Documenting the planned strategies for a business plan
• Rejecting the business idea completely

Thank you for reading!

Wherever the research leads you, UpFlip is here to help you run a better business. We use your feedback to create content that helps you build a better business. Which sections of this did you find beneficial and which would you like to learn more about?

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5 Tips to Market Research Like a Pro

A thriving business requires constant market research to improve your products and continually appeal to customers.

Table of Contents

Market research provides businesses with valuable insights into their competitors, customers and industry trends. Do it well and you can spot new opportunities before others. You’ll also be better able to anticipate future trends and improve profitability. But where to get started? Five simple strategies can form the basis of your market research plan .

How to conduct effective market research

Most effective market research strategies don’t cost anything but time and labor. Others, however, may require spending some ad dollars or ponying up for a survey platform. All are worthwhile, however, for better understanding the market your business is in and the customers you want to reach. We specifically recommend the following research methods.

1. Develop buyer personas.

Buyer personas, also known as customer personas , give you a much more thorough understanding of your customers and who they are. They are essentially fictional creations based in reality — you imagine your ideal customer and build a realistic persona around them.

Market research tools can help you develop buyer personas based on your target customers’ interests, problems and lifestyles. The more personas you have, the better, as understanding why customers buy from you is perhaps the most valuable piece of information any business owner could have. Do they buy to meet a need or desire, address a problem, or exploit an opportunity to its fullest? Your marketers can zero in on this information to create advertising campaigns that generate inquiries by appealing to customers’ needs and wants. Likewise, this insight will help your sales team sell more and your development team iterate better in the future.

As you build buyer personas, harnessing demographic details like age, location, education level, parental status and income levels is very useful. These details can help you develop a communication style and tone of voice that connects with customers. An appreciation of cultural nuances, especially in a diverse country like America, can also benefit you through a better understanding of consumption patterns, attitudes, and product or service preferences.

Buyer personas can also shed light on the people, organizations and institutions that shape customers’ views and opinions. Take influencer marketing as an example. Partnering with an influencer your customers like and respect can generate a lot of sales. Identifying the influences, values and psychology of your audience can help you understand how emotions play a part in their decision-making. [Read related article: The Psychology of Sales ]

2. Conduct a survey.

A problem that many new businesses face is they don’t have a lot of customer information to use for their own market research. To gather more information about the people who buy — or may buy — your product, consider adding a survey form to your website or sending a survey to email addresses you collect.

Surveys allow you to solicit feedback from prospective and existing customers. When you create a questionnaire, try to include a few questions with text boxes so respondents can type in their own answers. You want to solicit as much information as possible — without making your survey so overwhelming that people won’t want to take it — so you can use the answers to build successful, accurate profiles for your market research.

You can also use surveys as a means to get more sales. Some business owners find that adding the option to do a survey in exchange for a discount, such as giving 10 percent off an order, is enough incentive for customers to answer your questions. Everybody benefits. You learn more about your customers and generate revenue at the same time.

3. Upload your lead list to Facebook Ads.

Social media marketing tools, specifically the Facebook Ads program, are an effective way to carry out market research on your audience.

Look for a feature called “Custom Audiences” on your Meta Business Manager dashboard and upload your customer email list to it. The platform then automatically finds the profiles of the people on your list. After analyzing their Facebook pages, it builds charts that showcase trends among the people you added. You can see what habits and interests these people have and use this information to conduct more precise market research. 

For example, Facebook may tell you that many of your customers use YouTube. If that’s the case, you may want to advertise on it as well as create video content and a YouTube channel for your target audience.

4. Study your competitors.

All businesses benefit from a better understanding of their competitors. That’s especially so with larger companies that offer similar products to you. They didn’t get big by accident — they must have done something very well consistently over an extended period to grow so large. You want to learn what that is.

Competitors’ websites are a good place to start when researching why they have a greater market share. You can use tools like Ahrefs and SEMRush to understand the aspects of their content marketing that cause their sites to rank so highly. This is great for technical SEO planning , and it’s also good for getting an idea of why their content resonates so well with the target audiences you have in common. 

There are certain things your rivals do better than you that their customers appreciate. Try to uncover what their clients value the most and make those products or services part of your proposition. On the flip side, there are some things you do better than everyone else in the minds of consumers. Find out from your customers what they are and then build on them further to retain your competitive advantage.

On an operational level, there are important insights you can extract by studying your competition. Where are they advertising? What new products or improvements for existing products are they working on? They may have spotted an opportunity before you did.

5. Set up multiple small email campaigns.

Another way to enhance your market research is through conducting small email campaigns. Once you’ve gathered customer data using the above strategies, you can develop applicable email marketing campaigns and gauge their performance. [See our top picks for high-quality email marketing and survey software .]

Segment your email database into groups that share certain characteristics (like average spend, frequency of purchase, age, annual income, internet habits and so on). Market to each group separately to see who interacts with your emails more by clicking through to your site and making a purchase.

These small tests can provide detailed insight into what kind of marketing works with your audience. While you’re likely to make sales from all segments of customers you contact, you can focus more time on experimenting with the most active groups to incrementally increase engagement with each subsequent campaign.

Why market research is important

Market research is time-consuming, yet it’s important for launching and expanding a successful business. When you know your customers and what they want — and you understand the market you’re competing in — the information you collect can help you grow your company, win sales, and build strong relationships with the people who buy your product.

As you conduct your market research, you’ll discover that people are complex and diverse. They have specific wants and needs that they want someone to solve for them. If you use your data properly, you can build great products that truly help people.

Take the five strategies above and start to implement them in your market research activities. Gather data, keep notes, learn what people like, and you could soon build in future success and stability to your business. 

Syed Balkhi contributed to this article. 

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The Importance of Market and Marketing Research in Business

Learn the difference between market research and marketing research

Laura Lake is a marketing professional and author of "Consumer Behavior for Dummies."

When it comes to running a business, making assumptions about your customers, market, competitors, or systems can cause you to waste time, money , and effort.

To make effective decisions that will grow your business and use your resources wisely, you will need to put some of those resources toward conducting market and marketing research.

Market Research vs. Marketing Research

Market research involves identifying a specific "target," and focusing exclusively on that group. It is research into a narrow group of consumers to understand their behavior and motivation.

Marketing research has a broader scope that market research. It is used to examine the entire marketing process of a company, rather than only looking at the consumers that the company is targeting.

The Importance of Market Research

Successfully running and growing your business depends on understanding your target customers. Once you have a clear picture of their goals, needs, and values, you are more able to drive them towards purchasing your products or services.

Market research is one of the best tools you have for understanding your customers. It gives you hard data that you can use to drive your marketing strategy, making both marketing and selling easier and more effective. 

Market research helps you:

• Improve communication.  It drives your communication not only with your current customer base but with target prospects as well. Market research shows you where your customers can be reached, as well as what language will be most effective in attracting their attention and resonating with them on an emotional level.
• Identify opportunity.  Market research helps you identify both high-level and more accessible opportunities for reaching and converting new customers. It can be the best way to discover new platforms for advertising, consumer concerns you were unaware of, and gaps within your market that you can fill.
• Lower your risk.  Concrete data keeps you focused on the real opportunities and helps you avoid unproductive effort. When you understand your customers, you can use your resources to reach them more effectively, with less risk of wasting time, money, and effort on marketing initiatives that don't work. Market research also helps you identify low-risk, high-reward areas where your company can expand or offer new services,

The Importance of Marketing Research

Marketing research is important for evaluating what is and is not working in your business model. It includes research into your target market, as well as the systems in your business that make up your marketing conditions.

Marketing research looks at every aspect of the Four Ps of marketing: product, price, place, and promotion. This includes:

• Public Relations
• Modes of distribution
• Development of new products/services
• Promotions and advertising
• Market conditions

Marketing research helps you learn not just what your customers want, but how successful your business is at reaching and connecting with them. It helps you identify problems and opportunities, refine your systems, and evaluate your marketing strategy.

How to Conduct Research for Your Business

Though they look at different aspects of your business, both market research and marketing research should follow the same pattern of data collection and analysis.

• Define the problem.  Start by identifying the focus of your research. Knowing what question you are trying to answer will help you structure your research effectively.
• Determine your budget and timeframe.  How much can you afford to spend on the research process? How soon will you need to have data collection completed? Like all the strategies that you use to grow your business, research should be conducted within your available resources. However, depending on the urgency of the questions you are answering, it may be worth spending more money to get the most comprehensive results possible.
• Design your method and needs.  Identify what data needs to be collected and how you will gather it. Some options are observation, surveys, telephone calls, or focus groups. If you are unsure how to structure your data collection, consider working with a professional research firm.
• Choose a sampling method. How will you select the participants for your research? You may need a random sampling from the general population of consumers, a group that all have a single lifestyle factor in common, or responses only from people who are already your customers. Create a plan for identifying and contacting your participants.
• ​​ Plan for data analysis. Decide how you will analyze your data. Will you need quantitative data for statistical analysis or qualitative, observational data to give you a broad picture? Will you use software or do it by hand? Take time to learn about various methods of analysis to find the one that will best answer your research question.
• Data collection.  Once you know what question you want to answer and have designed a research method to answer it within the constraints of your available budget and time, it's time to collect data. Many businesses work with professional firms or consultants to conduct their actual research.
• Analysis of the data. No matter how straightforward your data seems at first glance, you'll want to use specific methods of analysis to ensure that you understand what it is telling you. The methods of analysis that you use will depend on the type of data you collected. This should also be when you check for errors, which can occur in your sampling method, data collection, and analysis.
• Create your report.  The final step of the research process is drafting a report on your findings. Your report should outline the entire research process, from developing your problem statement to the results of your data analysis.

No matter what type of research you are conducting, you will need to follow the full research method to arrive at a conclusion that will benefit your business. If your findings lead to a solution to your problem statement, you will be able to decide on the next steps for your business.

If you were unable to answer your research question, that doesn't mean your research was done incorrectly. You may discover that you need to ask different questions or that the situation was more complicated than you anticipated. When that happens, it's time to continue your research until you've arrived at a solution.

PWW Insights and Intelligence Blog

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.

How To Conduct Marketing Research That Improves Business Outcomes

Would you send marketing emails about retirement home options to people who have just graduated college? Or run beer commercials during Saturday morning cartoons? Probably not, because the people who would see those emails and ads are not the audience for those products. 

Marketing research helps you target the best audiences for your product and identify the types of campaigns that will appeal to them. Observing demographic trends and competitor strategies will provide you with valuable insights that can innovate and expand your product offerings.

Depending on their budgets and requirements, every organization will conduct their market research uniquely. However, they generally include the following steps (though they may differ in name or approach):

• Identify your target audience
• Analyze your competitors’ marketing activities
• Find opportunities for stronger markets
• Evaluate engagement
• Identify problems and create solutions
• Run tests based on your findings
• Restructure your marketing efforts based on your results

1. Identify Your Target Audience

Say you have a coffee brand and you want to maximize your marketing dollars. Targeting the entirety of the coffee-drinking population is too wide-reaching to be an effective strategy, and you’ll end up wasting money trying to engage people who are unlikely to want your product. Fans of frozen, heavily sweetened coffee drinks aren’t likely to resonate with an advertisement for a simple, unsweetened shot of espresso, after all.

Start identifying your target audience by using primary data (also known as direct data) and secondary data. Focus groups, surveys, interviews, and questionnaires are forms of primary data that give you control over who you talk to and the questions you ask.

There are plenty of sources you can use for secondary research , such as census data, articles and reports in industry publications, and online databases. You can also search and monitor social media platforms to see what people are saying about products and services similar to yours. 

After analyzing and segmenting this data, you can create buyer personas —fictional representations of your target markets that incorporate their demographic information, pain points, and preferred methods of communication. These will be useful guides to help you develop your strategies and messaging.

2. Analyze Your Competitors’ Marketing Activities 

See what other businesses in your industry are doing by conducting a competitive analysis to get an overview of the landscape and identify trends and tactics you may be able to leverage in your own efforts. Study what their ads are like and where they appear. Who do they seem to be targeting? What social media platforms do they use? What kinds of content do they create, and how often? Do they get a lot of mentions and pieces in the press? What is their overall brand profile and market share?

3. Find Opportunities for Stronger Markets

Consider functionality, features, pricing, performance, customer service, and brand reputation. Brainstorm strategies to position your product or service in a way that will appeal to an underserved or overlooked target market. One way you might do this is by offering a low-cost option targeted toward people facing socioeconomic hardship. There may even be an opportunity to provide a complementary product or service, which is not only a kind and generous thing to do, but also a great opportunity for brand awareness and perception.

4. Evaluate Engagement

Different audiences prefer to engage with brands on different platforms. Some consumers spend a lot of time on X or Instagram, while others prefer reading newsletters via email. The social management platform Sprout Social has some useful information on the demographics of various social media platforms . 

Content formats play a part in engagement as well. Some audiences like reading copy, while others prefer short-form video. If your target audience isn’t very active in certain channels, pull back and invest in the ones they do use.

5. Identify Problems and Create Solutions

If you find areas where your efforts are falling short and you’re not seeing the response or conversion rate you’d hoped for, check whether the problem might be your messaging, the format, timing, or other factors. For example, you might be using an ineffective channel. 

If you’re struggling with consumer engagement or creating products that aren’t optimized for your market, you may be facing a value proposition issue. The Pace University MBA offers Value Creation as an elective or Marketing Management course that will teach you how to find innovative opportunities for consumer engagement through the use of technology. 

6. Run Tests Based on Your Findings

Rather than spend a lot of marketing dollars on a tweak that might not work, test it first. A/B testing is everywhere in digital marketing—these tests are easy and cheap to run, and they can deliver valuable results quickly.

For example, try A/B tests by sending emails with two different subject headings or creating two slightly different landing pages to see which one gets more engagement. 

7. Restructure Your Marketing Efforts to Better Connect to Your Target Audience

You may only need to make small changes, such as emphasizing a certain feature of your product in messaging or focusing more on social channels with a wider audience of younger users, such as TikTok. Or you may need to completely rethink your marketing strategy or even adapt your product or service to meet customer needs and preferences. In our hypothetical coffee example, you may find that your target audience prizes convenience. That may lead you to offer your coffee in pods and adapt your messaging to highlight the ease and speed of making your coffee in a pod machine. 

The Value of Marketing Research

Marketing research is a critical part of strategic planning. It helps business leaders make informed decisions that minimize risks, maximize returns, and ensure that resources are allocated efficiently.

Marketing isn’t static, especially in a crowded and competitive business landscape. Businesses must engage in market research activities consistently to A) add or refine products and services and B) monitor how their target market might be changing. Customer tastes and needs evolve, and external factors such as new technologies , economic developments, and changes in cultural norms can completely shift the market. Well-executed marketing research can help ensure you always know who your target audience is, what they want, and what you need to do to attract them.

How an MBA Prepares You To Make an Impact

An MBA can provide you with an advanced understanding of business operations, including marketing, to prepare you for leadership and management roles. Pace University’s MBA program offers a Marketing Management concentration that enables you to dive deeper into marketing research, including learning frameworks for gathering and analyzing information. All of the marketing-focused courses in the program will integrate research in some way, and the concentration overall is dedicated to teaching you how to create and improve the performance of your marketing campaigns. Armed with this expertise, you can make an ongoing impact on organizational objectives as well as the trajectory of your career over a lifetime.

About the Pace University Online MBA and Lubin School of Business

The Pace University online Master of Business Administration (MBA) gives professionals a hands-on learning experience to master the ins and outs of business theory through real world application. This 100% online program has been handcrafted by expert faculty to ensure that students are career-ready upon completion. Choose a Corporate Finance, Marketing Management, or general business concentration.

For over a century, Pace University’s Lubin School of Business has been preparing professionals for fulfilling careers in business. From responsive professor communication to hands-on, project-based learning, we do everything we can to help students succeed.

Pace’s Lubin School of Business has dual accreditation by the Association to Advance Collegiate Schools of Business (AACSB) International, an elite distinction shared by fewer than 2% of business schools in the world. With graduates thriving in companies like AIG, Nickelodeon, L’Oreal, Tesla, and many others, Pace equips students with vital business knowledge, while also creating innovative thinkers that companies want.

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How To Connect Market Research To Business Impact

Summary: connecting marketing research to business results is not easy, but it is feasible with a systematic approach is adopted in order to get key stakeholders involved in the research process, share research insights and track their impact on the business..

3 minutes to read. By author Michaela Mora on January 26, 2011 Topics: Business Strategy , Market Research , Market Research Cartoons

It is often difficult to connect market research to business impact and outcomes, This frequently leads organizations to allocate a smaller budget and staff to the market research function (if any) or just get rid of it.

Among the reasons why this happens, we often find:

• Unclear research objectives.
• Misalignment of research objectives and business goals.
• Lack of a track system to monitor how investments in market research correlate with business results.
• Management’s little exposure to market research and lack of experience with how to use it.
• Poor execution of business and marketing strategies, despite accurate insights.
• Changes in the market driven by competitors’ actions that invalidate research results.

In order to understand market research’s ROI and connect it to the business impact, it ought to have, follow this approach

Establish a Formal Process

A formal process forces end-users of market research to think through what they want to achieve with the research . Steps in this process should include:

• What business problem triggered the need for the research?
• How will the research impact the overall business strategies for customer acquisition and retention? What is the priority?
• What decisions will be made based on the research?
• What hypotheses, if any, need to be tested?
• What type of information is expected to be gathered through the research?
• What recommendations for action are expected?
• Discuss with the research end-users how certain methodological issues such as sample source, sample size, and analytical approach will impact the research outcome.
• Get the end-user involved in the design of the data collection instrument (surveys, focus groups/IDI discussion guide, secondary data source, etc.) that will be used to answer these questions.
• Lay out how the final report would look like, how the information will be presented, and, once the data is in, provide a draft of the report to the end-user for review before final publication.

Although this step is designed for discussing specific research requests, the first point can also be used to identify the market research needs of different groups within an organization in order to craft an overall marketing research plan the organization should follow. This would help with project prioritization and resource allocation. Of course, the marketing research plan should be communicated to key stakeholders within the different groups in the organization, so they take ownership in the process and are open to using market research to advance the business.

Create a Research Socialization System

A distribution system to disseminate the research results is essential in the implementation of insights . This could include:

• An electronic library of research reports where users can find current and past research (which would avoid duplication of efforts).
• Mini-workshops with key stakeholders of the research to discuss the research results and how they could be implemented.
• A newsletter providing distilled insights and a summary of research available with links to reports. Use the newsletter to also give visibility to the groups that have commissioned research, which elevates the status of market research within the organization

Monitor Insights Implementation

Establish a feedback system to monitor how the research results are being used and what impact they have on the business . This system could include:

• Follow-up surveys, in-person, or phone interviews with key stakeholders to track the decisions made based on the research.
• Track the amount of money spent on research and compare it with the business outcomes (sales, savings, retention, etc.) based on decisions guided by the research.
• Track key performance metrics using internal data (sales, operations, customer service, etc.) and analyze how they correlate with results from the research.

Connecting market research to business impact is not easy, but it can be done with the help of a systematic approach is adopted in order to get key stakeholders involved in the research process, share research insights and track their impact on the business.

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How does market research help a business: 5 key benefits.

By Haley Noble

Tags: Research

Before we can dive into how market research helps a business, we first need context around the concept of “market research” itself. Some define it narrowly as “the act of gathering information about customers’ preferences and habits.” Others define it a bit more broadly to include the processes, policies, techniques and tools that are utilized to solicit, collect, analyze and interpret that information. At KL Communications, we uphold the broader definition, which includes both digital and in-person approaches to market research. In fact, we were one of the first to provide a market research online community (MROC).

Market research helps a business by informing strategy. As reported by Teradata, more than 60% of marketers do not conduct market research. As a result, they do not have data-informed marketing strategies. That’s a missed opportunity to deepen the engagement with consumers and drive loyalty. There are numerous benefits to conducting market research but we have identified the most critical ones.

Here are five key areas where market research will help your business.

1. You will understand your customers better.

Empathy is not a skill that every business considers. Even fewer businesses have mastered the art of studying and implementing improvements based on customer experience. Businesses should study what their customers do to make a purchasing decision. This includes all their considerations such as what savings they might obtain, how they evaluate competing options, the actual act of making the purchase, as well as any resulting feelings or actions after the purchase. Tapping into the mindset of your customers affords your business new opportunities.

Invite your customers to open up, but be prepared to take action on what they say as they will hold you accountable. Lose your bias, be transparent and authentic. Let them tell you what they want, need and what their pain-points are. Let them share how they feel about your brand, your competitors and what they think you should be doing differently. Only then can your business truly tailor products, services and marketing to them.

2. You will understand your non-customers better.

Non-customers may be the most important resource of all when it comes to market research. In contrast, loyal customers are already won over. They may not have a negative perception of your offering or they may not choose to voice it. Instead, tapping into those people who are not yet invested in your brand may provide your business with a fresh perspective you’ve never considered before

What’s keeping these non-customers from using your services or products? Ask former customers the critical questions regarding why they abandoned your product or brand. Ask them what changed and what would it take to win them back. Asking open-ended questions can be insightful and may serve as the key to harvesting valuable information which can be translated into actionable insights.

3. You will understand your industry and marketplace better.

That adage, “a bird in the hand is worth two in the bush” rings particularly true when it comes to how market research helps your business better understand your industry. Using online search tools is effective in helping break your industry down into discrete categories to refine your own classification and niche, but you need more. Sure, you can hire analysts to benchmark your brand, assess whether your messaging is current and if your strategy is on the same path that the industry is headed. However, it’s not quite the same as hearing it from your customers.

You can ask – and learn – where are the opportunities? The pitfalls? Who is stumbling and why? You’ll learn about the related activities, initiatives and products that your customers are excited about. There may be some new information that could spark innovation.

4. You will understand your competition better.

It can be challenging to understand what your competition is doing and downright difficult to predict their next moves. That said, asking consumers what they like versus dislike about your competitors’ products and brands gives you a window into your competitors’ own market research. Surely, they are hearing the same things that you are from their customers. This type of “social listening” is encouraged to enhance your business’s strategic planning.

Consumers know what they want and market research provides tools and techniques to help them articulate it. Once you have that knowledge, you can adjust your positioning, as you will likely learn more about your competition’s value proposition. Market research helps businesses understand their competition better and affords an opportunity to then “double down” on whatever makes your own business unique.

5. You will understand your business better.

It seems a bit counterintuitive that outsiders, both customers and non-customers, can tell you more about your own business. But, the truth is that they can, and they do so through an unfiltered lens. Cultivating conversation to secure that outsider’s perspective helps businesses do better.

Market research uncovers strengths and weaknesses that may or may not be known internally. If those gaps are known, employees may withhold sharing what they know for fear of retaliation or some other negative reaction. Even more importantly, market research will shine the light on what makes your business special, what makes your business better, what makes your business more interesting and better. Market research helps businesses see, with tremendous clarity, how their messages, products and brand resonate with their customers first-hand. Customers can see through any veil, perceived or real, that a business projects and they will, in very clear terms, call you out for a lack of transparency or a misfire.

What does all this mean? The message here goes well beyond how market research helps businesses do better, be better and grow. It means more customers, happier customers and growth for your business which makes shareholders happy, too.

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How technology is transforming market research

Head of Product Management, Kantar Marketplace

At its core, market research is a discipline designed to help us keep up with change. But at times, even market research itself must transform to keep up with the market.

The need for faster and more robust insights has been growing due to continued pressure on budgets and timelines; and has only been accelerated by the coronavirus pandemic . These factors have been critical in driving the transformation of market research – with technology at its core. The average market research toolkit has now expanded to include everything from automated, do-it-yourself market research platforms to artificial intelligence (AI)/machine learning  and neuroscience.

These technologies have become an essential part of the global consumer insights machine, enabling brands to keep up with accelerating change in consumer behavior.

Technology enhances what market research can already do

Technology has made it possible to accelerate traditional market research processes, making them more efficient and streamlining costs through innovative approaches that can be used as either an alternative or supplement to traditional methods. It is also helping brands find new ways to answer one of the fundamental questions that market research seeks to answer: what do consumers really think?

Here are some examples of the different technologies fueling a transformation in market research practices.

Automation has benefitted insights-seekers by drastically shortening the time between putting a survey in-field and retrieving valuable consumer feedback. With automated market research , deliverables that once took weeks can now be completed in as little as a few hours. Automation has also streamlined the market research process  by making survey research more repeatable. For example, brands can get feedback on innovation concepts or test their creative faster by inputting a few simple parameters into a templated online survey , rather than recreating the survey each time.

DIY market research platforms

Demand for DIY market research is exploding; in fact, last year ESOMAR predicted that the sector would grow to $1.3billion by the close of 2021. DIY market research platforms like Kantar Marketplace  are democratizing insights, making it possible to get consumer feedback much more quickly and cost-effectively than in the past.

DIY platforms also facilitate greater agility, allowing market research teams to bring smaller projects in-house and execute as soon as needs emerge.

Simulated environments

One other area where technology has enhanced market research is using simulated environments. Take packaging tests , for example. By displaying your packaging on simulated store shelving, you get a better sense of how consumers would experience your product – at a much lower cost than using a mock shelf. You can still get an understanding of which packaging will stand out on shelf despite the nature of the simulated environment you’re exposing your sample audience to.

Consumer neuroscience

One of these growing in popularity approaches is the application of neuroscience to online market research, which enhances our understanding of consumers’ emotional responses. Within the neuroscience field, one of the key insights tools is facial coding. When applied to ad testing, facial coding technology allows marketers to observe how people react to their creative by analyzing their facial expressions and eye movements – decoding these expressions to predict overall sentiment with a high degree of accuracy. The transformative power of this approach is that it overcomes implicit biases that are often found in self-reported measures of emotional response.

Artificial intelligence

Another technological innovation is the ability to process vast quantities of unstructured data at scale. Because we now have so much data about consumer behavior (often created by consumers themselves in the form of social media posts, online reviews and other digital content), market researchers can analyze larger and more complex datasets with much faster turnaround times.

Market research tools powered by AI can make fast work of this data, with the potential to deliver new insight into what consumers are thinking – and to identify trends that were previously difficult to pinpoint. When applied to a traditional market research task like ad testing, AI and machine learning can quickly compare creative to a database of ads, identifying whether the ad will perform based on what has performed well in the past. For example, Kantar’s LINK AI  can predict creative effectiveness in just 15 minutes, allowing you to analyze higher volumes of ads more cost-effectively. This offers new opportunities in terms of competitive research and meta-analysis.

Improving marketing research, one technological advancement at a time

Want more like this.

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Using Market Research to Inform Strategic Decision Making

• Market Research

At Alchemer, we often discuss technical market research best practices that enable our audience to get the most insight possible out of their research data. However, every once in a while it’s important to take a step back and address things from a higher-level perspective. 

In this post, we will discuss the overall impact that market research can have on strategic decision making in today’s business landscape, and why market research is absolutely critical to business success. 

Market Research is Critical to Business Success

Due to the rate of progression that we are experiencing with technology in modern times, business landscapes and markets are rapidly changing at all times.

This means that decisions and strategies that were implemented in the past — and have proven to be successful for business growth — must be consistently re-evaluated to determine if there is a newer, better, or more effective strategy that can be implemented today. 

This is where market research can be leveraged to evaluate strategies, and to make smarter business decisions. 

Data resulting from market research should drive strategic decision-making processes across the organization.

By proactively performing market research on a routine basis, various teams and organizational leaders across departments will have access to data they can leverage when making a final decision. 

Imagine a CEO that is considering making an acquisition of a separate company in order to enter a new market. This CEO would certainly want to do their due diligence by performing market research that will inform him or her of the current conditions of the target market. 

Another great example of when market research is imperative to business success is when launching a new product. 

Product developers must examine market research data thoroughly to ensure that the investments required to develop and promote a new product are worth it. As markets continuously shift and evolve, these product developers must constantly examine trends to determine how they can best impact the market. 

Market research can also benefit an organization internally.. 

For example, by digging into market research data, a marketing team can develop specific and unique buyer personas, off of which the business’ marketing strategy can be based. 

Performing market research to understand the archetypal personas that typically purchase a product then allows companies to market directly to their true audience, which enhances the efficacy of their promotional communications.

Using Market Research to Avoid Personal Biases

The examples above of how market research can benefit a business by allowing them to make more strategically informed decisions all have one thing in common: They leverage market research data as their strategic compass in the marketplace and to avoid personal biases.

Whether it’s a CEO considering an acquisition of a competitor, a marketing leader building out buyer personas, or a product developer looking for their next best product, personal biases always play a factor in decision making.

An aggressive and revenge-driven CEO could have the dream of acquiring a particular competitor after the competitor’s leadership team slandered him or her in an interview. While this is an extreme example, it highlights how personally motivating biases can cloud effective judgement during decision making. 

If a product developer has been nurturing and growing the idea for a new product, they might grow personally attached to their own idea. Even if there is not a true need or desire for the new product in the market, the product developer may push to have the product launched just because they want to see the project that they have invested so much in finally come to fruition. 

These are cases in which objective market research data can either qualify or disqualify particular insights, goals, or motivations that people might personally maintain. 

Personal biases and motivations should always be considered as part of the overall decision making process. While people will always get their emotions involved in decision making, and that is not always a bad thing, it is absolutely imperative to perform thorough market research so that the resulting data can either support your idea, or suggest that you find another strategical avenue to venture down. 

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• How To Conduct Financial Market Research Like a Pro

How To Conduct Financial Market Research Like A Pro

Financial services providers need to integrate financial market research into their business strategy. This research supplies providers in this vertical with meaningful insights on their target market, market products, and services.

Moreover, this data grants and gives financial services providers a framework for decision-making. As these institutions have to deal with money, there’s a lot at stake for banks and money lending companies. 

In 2019 alone, the global financial services industry spent an estimated $50 billion extracting raw data to support their trading activities and transactions. 

This is because financial market research data enables them to forecast and analyze any trends or aspects of the organization that needs changes. Not only this, market research offers opportunities for investments that increase the profits for an organization.

Even in 2020, when the pandemic brought the entire world to a standstill and disrupted the global economy, financial market research helped finance leaders and the financial services industry to support the economy’s financial recovery. 

The Rising Importance Of Financial Services Industry

As aforementioned, the financial services industry is the main driver of a country’s economy, mainly dominated by large organizations. With a strong financial services sector, the nation’s economy grows, and the consumers earn more, thereby increasing their purchasing power.

The uncertainty brought about by the global pandemic means that potentially every company and organization is likely to make smart and bold financial decisions. Unlike the financial crisis of 2008, the 2020 pandemic has disrupted all aspects of the economy. This means that finance leaders and the financial services industry are strategically positioned to support the economy’s financial recovery. 

With the recent changes in technologies, the rise of new investment trends, and the significant shift in consumer behavior, financial services companies are forced to tap into valuable information to approach these changes. 

Moreover, companies need to leverage relevant data and insights to make the most of these opportunities to keep up with the recent digitization and innovation in the financial services industry. 

This means that market research is as crucial for the finance sector as any other industry. 

The Importance of Conducting Financial Market Research 

Financial markets play a crucial role in driving a country’s economy and offering countless opportunities for investors to tap into specific markets and services. But with changing regulatory demands and consumer requirements, financial services companies and organizations need unique insights to keep up with this changing industry.

Financial market research is essential because it can help break down market data and trends into a broader context that offers finance companies a clear perspective of the risks and benefits of a particular service.

Therefore, several financial services providers invest in data analytics and market research to gain valuable information about their customers. 

However, conducting accurate research is not easy. Lenders, bankers, real estate brokers, and all other kinds of financial services providers need to know precisely what kind of information will help them in decision making. 

For commercial banks and investment companies, market research is essential as it determines which business proposition can benefit them in the long run. Moreover, it helps brokerage firms assess which products are in demand by their customer base so that they can suggest them based on the individual requirements of their customers.

The following expounds on  why a financial market analysis is important for banks and other businesses for their decision-making process:

Reduced Business Risks

When it comes to investing money, businesses need to know the right time to invest. With financial market research, they can predict the value of their investment to reduce business risks. Developing a financial plan that outlines all the risks and benefits that a firm may incur can give financial services providers an idea of which opportunities to invest in. 

Understanding these trends is also important so firms know exactly how to respond to market changes. Some frequent research areas for financial services providers include: 

• Business Banking 
• Personal Loans  
• Property Management

Effective Forecasting And Analysis

Accurate financial forecasting is crucial for financial service providers to strategize in the face of any uncertainties that may affect their business. Thus, financial market research equips businesses and institutions in their strategic planning process . 

This kind of research also provides deep insights into customer behavior and market shifts due to external factors and variations in market trends. With thorough finance market research, supported with effective survey campaigns , businesses can tap into what their customers are doing to offer something unique that sets them apart in the industry.

 It enables financial service institutions to set realistic and feasible goals and helps them predict their annual budgets. 

Accurate Demographic Targeting

To know their ideal demographic, businesses need effective financial market research to assess their target market and what they require from their business. This kind of research is also useful for understanding the distribution of consumer spending over a particular period and how customers feel about their financial situations. 

Financial service providers should inquire of their target market as such : are its members willing to make financial deals with your business at this time of crisis? How have their spending and saving plans changed?

Adequate financial research will delve into all these behaviors and trends at length to help institutions make better decisions. It also provides insights into demographic spending trends, where customers look for financial guidance and receptivity to media. 

Internal Audit Assistance

Businesses can evaluate the trading activities, existing credits, and regulatory reports for a successful internal audit by assessing financial market conduct.

The interconnectedness within the financial system has made it necessary for institutions to analyze their vulnerability to systemic risk s by assessing and analyzing macro-economic factors, industry trends, changes in regulations, risks materializing at other entities, and innovation by peers.

Carrying out an internal audit for a company offers a detailed report on the market’s existing and predicted financial risks . The interconnectedness of different industries and systematic risks in the economy brought about by the pandemic have made it imperative for financial services providers to put forward a dynamic audit plan. And the only way an audit plan will be successful in pointing out a company’s vulnerabilities is with adequate financial market research . 

How To Conduct  Financial Market Research

The following are two foremost methods for conducting financial market research:

Primary market research methods for the finance industry

Primary market research for the finance industry involves the direct participation of financial services providers in the research. It offers valuable data on different market areas that providers may require, as obtaining firsthand data provides them with unique insights , particularly their study. This is of utmost importance as secondary research providers do not provide data into the particular inquiries and topic s of study that a financial services provider seeks. 

Some of the methods to conduct primary market research for the finance industry include:

• Interviews – Financial services providers can hold interviews with industry participants to ask questions that require deep understanding. This is important to assess the changing preferences of clients for different financial services
• Observations – This is a qualitative, no-interaction technique used by financial advisors that can help them gain useful insights regarding the practices followed by finance companies, their competitors, and customer trends
• Email surveys – Financial advisors can contact industry participants and get feedback through a survey that includes short questions. These responses can then be analyzed and compiled as a report to understand market trends
• Online Surveys – They prove to be an essential tool within market research techniques as they collect data and insights on the exact amount of respondents to use in a survey pool. Online surveys can also support a company’s decision-making processes and offer them a competitive advantage through fast quality data. By accessing the right platform for generating online surveys, the financial services providers access qualitative and quantitative surveys.

Secondary market research methods for the finance industry

Secondary market research for the finance industry relies on data and information that researchers extract, meaning that the data has already been conducted by a third party and made available. 

Some of the methods to conduct secondary market research include:

• Industry Reports – Industry reports identify any opportunities or risks that the industry might face and present scenarios from the past that can help financial advisors deal with threats in a better way 
• Case Studies – Case studies illustrate how industries dealt with financial crises in the past and can provide a detailed, in-depth investigation into a complex situation. They are perfect for providing you with real-life examples of industries and actionable insights
• Statistics sites – Statistical research can help you decide which data collection methods would garner maximum results, what decisions to make, and how to predict behavioral response based on past statistical reports
• Research papers – Research papers provide in-depth knowledge on a particular topic that helps financial services providers understand and make better decisions
• Research agencies – Research agencies know all the proper tactics for conducting market research. They can help financial advisors with information such as client preferences, the right target market, predicting future financial conditions, etc

However, the type of research method financial advisors choose depends highly on time and available data. Qualitative market research like interviews and participant observation offers detailed, rich information and takes some time to collect. On the other hand, surveys and online feedback are easy to collect and lack necessary details. 

Secondary Market Research For The Finance Industry

The following is the list of the best secondary market resources on important data and insights on the finance industry.

• Business Insider – Financial Services Industry Overview  

It offers a general overview of the financial services industry, from money management to digital banking technologies. Also, it outlines all the major trends, topics, and behaviors needed for companies to climb up the ladder in the financial sector. 

• MarketResearch. Com – Financial Market Research Reports and Industry Analysis

Includes reports on the latest financial market research and provides analytical data on different financial subjects such as insurance management and consumer spending/saving patterns.

• IBIS World – Finance and Insurance Industry in the US

Compiled by IBIS World, this website is a massive database of thousands of industries. It presents useful information on economic changes, demographic data and helps organizations make better financial decisions. 

• MarketsAndMarkets – Banking and Financial Services Market Research Reports and Consulting

This website provides press releases, publications, and reports on banking and financial services. Given the devastating impact of the pandemic on the financial sector, the reports on MarketsAndMarkets also offer strategic, tactical advice on using financial services to help companies recover from their losses. 

• The Business Research Company – Financial Services Global Market report

The Business Research Company is the most authentic report on the internet that provides detailed reports on different industries in the market. It presents past trends and how markets have changed in the past decade and predicts statistical information on financial services providers. 

Financial market research enables the finance industry to gain meaningful insights into different products and services. This increases sales opportunities and offers businesses all the information they need to design effective financial strategies. 

Carrying Out Effective Research in the Financial Sector  

Online surveys are the most convenient method for collecting data owing to their accessibility and accuracy. This is why financial services providers need to leverage the power of an online survey platform or market research experts so that they can target a vast audience base and generate reliable survey responses.

To improve data quality, advanced online surveys leverage machine-learning to highlight and eliminate poor quality responses. AI in market research reduces the chances of error and eliminates duplicate entries of data that might result in outdated information and poor data quality. 

These online surveys are then used in random device engagement sampling (RDE)to engage a huge customer base on devices they are already using. Whether these surveys are posted on mobile apps or gaming interfaces, they are placed where the business’s audience can easily respond to them. This way, they can tap into unique and high-quality market research data that drives their decision-making process. 

Frequently asked questions

What is financial market research.

Financial market research offers useful insights into financial trends and strategies and gives statistical information on the leading finance companies. It also provides actionable insights regarding various financial instruments like portfolio pricing, risk management, etc.

Why do businesses need to conduct financial market research?

Financial market research minimizes the risk for financial services providers and identifies new business opportunities for them. It also gives them insights into market trends, identifies problem areas in the market and untapped resources.

How can an online survey platform help businesses with financial market research?

Online surveys are a reliable way of getting insights directly from consumers. They are also affordable and require minimal to no investment.

What are some of the resources to find secondary research on the finance market?

Secondary market research sources include the web, media sources, industry reports, case studies, press releases, publications, and company compiled data.

Do businesses need a financial advisor?

Even though many business owners choose to conduct their research, financial advisors can offer a solid, strategic plan that takes all their previous, present, and future investments into account and provide them with the most feasible plan. Moreover, financial advisors are experienced in their job and know a lot more about financial market trends than business owners that can help in effective decision making.

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How interest rates could affect you and your business.

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Reco McCambry, CEO @ Novae , a black-owned fintech providing greater access to credit, capital & entrepreneurship for underserved communities

For anyone considering borrowing money—whether to finance a business or buy a home—interest rates are crucial. Low interest rates make borrowing affordable, with borrowers paying back only slightly more than they borrowed in the first place. For many, this investment is well worth it: When interest rates are low, they’re a small price to pay for the ability to borrow money to invest in one's future.

When interest rates are high, however, it’s another story. Interest rates over 2.5% make borrowing money expensive and discourage lenders and borrowers alike from engaging in loans. Borrowers worry about their ability to pay back a much larger amount of interest—and as of the time of writing, the federal funds rate is at 5.25% to 5.5% , more than twice the 2.5% rate that is often regarded as favorable for lending and borrowing.

How powerful are interest rates? Well, someone who borrows $100,000 with a 30-year repayment term at an interest rate of 2.5% will end up paying the lender $42,243 in interest, in addition to paying back the $100,000 they originally borrowed. For the same loan at an interest rate of 5.5%, a borrower will pay $104,404 just in interest , in addition to the $100,000 they are paying back to the lender.

So why are interest rates so high right now?

Federal interest rates are controlled by the Federal Reserve, the federal bank of the United States. Created in 1913 , the Fed’s job is to look after the welfare of the American economy. Its directors, called “governors,” are nominated by the U.S. president and confirmed by the Senate, and they serve a maximum of 14 years, ensuring that the Fed won’t rapidly change membership when presidential administrations change.

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At the moment, the Fed is keeping interest rates high. This can encourage caution. In the wake of the Covid-19 pandemic and unprecedented stock market growth , a recession and high inflation, which raises the cost of basic survival goods, could be more likely. For that reason, high interest rates can make people think twice before they borrow or spend money. The logic is that lowering the demand for goods and services should cause prices to drop.

Where does that leave business owners and entrepreneurs who may depend on loans to fund their businesses?

Well, at a time like the present, it can pay to be cautious. While I am ordinarily a big proponent of using loans to finance one’s business, today’s high interest rates plus the elevated risk of a recession mean that, if you don’t already have an established business cash flow, it may be worth holding off on making your next big move until inflation and interest rates decrease.

That doesn’t mean there’s nothing you can do if sales are slowing in the midst of inflation. Hard times are seasons of collaboration: Look for ways you can partner with other companies or platforms to grow your audience and your sales. But during a time of high interest rates, the key is to look for ways to increase sales without increasing debt.

One way to do this is to find businesses and platforms to partner with that serve a similar target audience to your own. In my field, for example, a business that offers personal loans and credit lines may see mutual benefit from partnering with a business that offers business loans and credit lines, since the same target audiences who are interested in learning about finance and credit may have an interest in both personal and business credit. This logic can be applied to any two businesses that do not directly compete but that serve similar target audiences.

Through collaboration with your fellow businesses, there are ways to grow without the need to borrow money.

If the Fed’s strategy works and the market stabilizes in the near future, better times for business loans will likely be coming, too. If the Fed’s strategy doesn’t work and a recession occurs, it may become even harder to make enough sales to pay off high-interest business loans.

Predicting the Fed’s future moves is difficult because the Fed strives to be responsive to market conditions. That means that if inflation improves, the Fed might drop interest rates considerably in 2025—but if inflation keeps getting worse, interest rates might rise higher still. In a complex system like the global economy, there is no surefire way to predict what will happen next. And so it is with the Fed’s interest rates.

My advice from my April article still stands: If you are a small business owner, especially from a traditionally underserved area, it may be a good time to apply for government contracts and Small Business Administration loans. With a presidential election coming up, it is uncertain whether Biden’s increases in funding for SBA loans and his goal of awarding around 25% of government contract money to small businesses will be continued into 2025.

But if you’re not looking at a government contract or an SBA loan, this may be the time to hold onto your cards until interest rates decrease. Consider your situation carefully.

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

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The Housing Market Is Weird and Ugly. These 5 Charts Explain Why.

Home prices have held up better than expected amid high interest rates. But that doesn’t mean the housing market is healthy.

By Ben Casselman

When the Federal Reserve began raising interest rates in 2022, most economists thought the housing market would be the first to suffer the consequences: Higher borrowing costs would make it more expensive to buy and to build, leading to reduced demand, less construction and lower prices.

They were right — at first. Construction slowed, but then picked up. Prices hiccuped, then resumed their upward march. Higher rates made homes harder to afford, but Americans still wanted to buy them.

The result is a housing market that is different, and stranger, than the one described in economics textbooks. Parts have proved surprisingly resilient. Other parts have seized up almost completely. And some seem perched on a precipice, at risk of tumbling if rates stay high too long or the economy weakens unexpectedly.

It is also a market of stark divides. People who locked in low rates before 2022 have, in most cases, had their home values soar but have been insulated from higher borrowing costs. Those who didn’t already own, on the other hand, have often had to choose between unaffordable rents and unaffordable home prices.

But the situation is nuanced. Homeowners in some parts of the country face skyrocketing insurance costs. Rents in some cities have moderated. Builders are finding ways to make new homes affordable for first-time buyers.

No one indicator tells the full story. Rather, economists and industry experts say understanding the housing market requires looking at an array of data shedding light on different pieces of the puzzle.

Existing single-family homes for sale

Income needed to buy median-value house vs. median household income

New homes for sale as a share of total single-family inventory

Change in cost of rent from a year earlier

New single-family homes completed but not yet sold

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What you need to know about the DJI drone ban in the U.S.

The future of DJI (Da Jiang Innovations) drones is metaphorically up in the air as the Countering CCP Drones Act, introduced by Representative Elise Stefanik (R-NY), gains more support in Congress, raising the possibility of a nationwide ban in the U.S.

Proponents of the bill cite national security concerns, alleging DJI drones are providing data on critical infrastructure in the United States to the Chinese Communist Party. If passed, the bill could significantly impact the drone industry in the U.S. and potentially affect consumers who rely on DJI drones for recreation, commercial applications and public safety initiatives like search and rescue missions. DJI is fighting the ban through lobbying efforts and more.

In a nutshell:

• The U.S. government may ban DJI drones, concerned that China is collecting information through them.
• This would impact several areas of the consumer market and commercial drone market.

The legislative effort to ban DJI drones

Following unanimous approval by the House Energy and Commerce Committee, the bill is making its way through Congress and could later land on President Joe Biden’s desk. The legislation proposes adding DJI to a list maintained by the Federal Communications Commission (FCC) under the Secure and Trusted Communications Networks Act of 2019. This would block DJI’s drones from running on communications infrastructure in the U.S., according to “ The New York Times ,” effectively rendering them unusable. While the bill has received wide bipartisan support, DJI has vehemently voiced its opposition.

DJI’s opposition

In a blog post titled “ Get the Facts ,” DJI denounced what it calls “inaccurate and unsubstantiated allegations” against its operations. The company argues that such measures not only stifle competition but also perpetuate xenophobic narratives while hindering innovation in the drone industry. The company claims users can opt out of a feature that allows DJI drones to collect flight logs, photos or videos. It also suggests operators turn on a Local Data Mode feature, disconnecting the flight app from the internet.

DJI has also insisted it “follows the rules and regulations in the markets it operates in,” adding that it’s “not a military company." “We remain one of the few drone companies to clearly denounce and actively discourage use of our drones in combat. DJI does not manufacture military-grade equipment, nor does it pursue business opportunities for combat use or operations.”

DJI’s dominance of consumer and commercial markets

Over the past decade, DJI has solidified its position as the leading global manufacturer of consumer drones, boasting an estimated 58% market share as of 2022, according to “The New York Times.” The brand’s ascent to prominence can be attributed to a strategic blend of affordability, accessibility and cutting-edge features, making it easy for beginners to learn how to fly a drone . This combination has empowered DJI users to capture breathtaking aerial perspectives in both photography and videography. Consequently, DJI drones have become the go-to choice for travelers, event organizers and real estate agents, offering an experience you can’t get from even the best mirrorless cameras .

Beyond the consumer market, DJI has become indispensable in industries like construction, energy and agriculture. Their drones, equipped with some of the best professional cameras available, enable faster and safer assessments of buildings, infrastructure and crops. These drones are also routinely employed to help generate detailed maps and surveys of land, buildings and construction sites, providing invaluable data for urban planning and environmental monitoring initiatives.

Additionally, search and rescue operations benefit from the capabilities of DJI’s drones, enabling teams to cover large areas and navigate challenging terrain when locating missing persons.

Concerns about data security

Despite their popularity among consumers and in commercial sectors, DJI is still considered a security threat. According to Irina Tsukerman, a geopolitical analyst and president of Scarab Rising, Inc. , DJI drones may be used for espionage.

“Recent intelligence reports point to a high possibility that Chinese technology in UAVs, automotive technology and other types of widely used tech could be used for espionage,” says Tsukerman. “Collection of private and public data could assist Chinese efforts in achieving technological and military dominance against the U.S. and could also be used to target American citizens and industries in various areas, ranging from more advanced intelligence gathering, profiling for recruitment purposes and industrial espionage or sabotage.”

Previous legislation regarding DJI drones

DJI has come under increasing scrutiny from the U.S. government in recent years. In 2020, the Department of Commerce added DJI to its Entity List, preventing U.S.-based companies from exporting technology to DJI. The following year, the Department of Treasury raised concerns that DJI drones were being used to surveil China’s Uyghur Muslim minority. Most recently, in 2022, the Department of Defense added DJI to its own blacklist, further limiting the company’s ability to do business with the U.S. government.

Modern drones are critically dependent on communication infrastructure for core functionalities like GPS navigation, control signal transmission and a real-time video feed. Denial of access to this infrastructure for DJI drones would effectively sever their ability to receive the continuous flow of data and instructions necessary for stable flight, precise control and real-time visual feedback. This critical connection serves as the lifeblood of these drones, and its severance would render them largely inert.

DJI isn’t the only Chinese company raising concerns in Washington, of course. President Biden recently signed a bill that would ban TikTok from operating in the U.S. unless its Chinese parent company, ByteDance, sells the app entirely within a year.

DJI’s efforts to avoid the ban

To counter attempts to prohibit its products, DJI has invested heavily in lobbying efforts and has sought grass roots support from drone operators. The company has financed the Drone Advocacy Alliance website, which aims to collaborate with industry players and lawmakers, while empowering end-users to select the drone of their choice. Additionally, the website offers resources for contacting elected officials to further advocate for these goals.

The pros and cons of a DJI drone ban

“Simply banning Chinese-made drones is not enough,” says Tsukerman. “The U.S. still remains helpless if a portion of its tech industry and UAV ownership sinks with the ship. An economic sinkhole would serve China's geopolitical strategy just as much as handicapping or controlling U.S. businesses and entire sectors of technology through active surveillance.”

DJI’s dominance in the drone market means a ban could potentially stifle innovation. With less competition, there may be less pressure for companies to develop new features and improve existing technology. A ban could also make it harder for U.S. companies to access DJI’s advanced drone technology, hindering their ability to develop new products or improve upon existing ones. Conversely, a ban could push companies to invest more heavily in developing advanced alternatives.

Ultimately, a ban will mean fewer drone options for consumers overall — at least in the beginning. This could potentially limit a customer’s ability to find a drone that meets their needs and budget. With fewer options available, companies might have less incentive to offer competitive prices, potentially leading to higher costs for consumers. Meanwhile, a ban could disrupt several businesses and organizations that rely on DJI drones for agriculture, construction and search and rescue.

There are those who believe otherwise, of course: Representative John Moolenaar (R-MI) argues that a DJI drone ban will foster a more robust and competitive drone industry. Skydio, an American company based in California, is one of the strongest alternatives to DJI and makes some of the best drones on the market. The company’s products are designed, assembled and supported in the U.S., according to its About Us page.

DJI drone alternatives

The AP Buyline roundup:

The U.S. government has introduced a law that would ban DJI drones to prevent data collection by China, but could have an impact on public safety initiatives, commercial applications and more.

Frequently asked questions (FAQs)

Are dji drones getting banned.

While nothing is concrete yet, DJI drones may be banned in the future. A bill named the Countering CCP Drones Act is making its way through Congress, which would effectively ban the use of the company’s drones in the U.S. moving forward. The bill previously passed a committee vote and could be voted on by the House of Representatives this summer. If it passes there, it would then go to the Senate and could eventually be signed by the president.

How probable is a U.S. ban on DJI drones?

The future of DJI drones in the U.S. remains uncertain. While the Countering CCP Drones Act, which proposes a ban on these drones, has gained significant support from lawmakers, it faces several hurdles before becoming law. The bill must pass through both the House of Representatives and the Senate before reaching the president’s desk. If enacted, the legislation would likely include a transition period, potentially lasting three years or more, to allow for adjustments before the ban fully takes effect.

How will a ban affect consumers outside the U.S.?

It’s unclear what the larger implications will be on consumers outside the U.S. A ban in the U.S. is unlikely to directly restrict consumers across the globe from buying DJI drones due to existing drone laws in their own countries.

However, the ban could have some indirect effects: The global supply and demand might be disrupted, leading to price fluctuations. It could also impact DJI’s ability to innovate without revenue from the U.S. market, although this could create an opportunity for alternative brands to fill the gap.The bigger question is whether a U.S. ban will inspire similar bans in other countries, since a U.S. ban could set a precedent and influence other countries to consider similar restrictions.

Has DJI faced other government bans in the U.S.?

As mentioned above, the U.S. government has previously taken steps to restrict DJI. In 2020, the Department of Commerce placed DJI on its Entity List. While it doesn’t completely ban DJI products, it restricts U.S.-based companies from exporting certain technologies to DJI without a license. This limits DJI’s access to potentially sensitive U.S. technology. The following year, the Department of Treasury added DJI to its “Chinese Military-Industrial Complex Companies List.” This list restricts U.S. investment in entities it deems to be involved in human rights abuses. Finally, in 2022, the Department of Defense implemented other internal restrictions on DJI. These actions highlight a cautious and layered approach by the U.S. government.

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