Do you want to learn about how market research is done in marketing? Why market research plays an important role in marketing? Why do companies invest millions in market research? From process to sampling to making a decision, here’s an in-depth article about everything you need to know about marketing research.
Market research is carried out to understand the change in consumer behaviour.
The change may be related to anything included in the marketing mix. Be it a change in product, increase in price, availability or promotional activities.
Often marketers find it difficult to understand and find suitable marketing elements. This is where an organisation needs to carry out market research to find out a potential market.
Companies either carry out their own research or outsource it to third-party professional MR agencies.
With the data, marketers can minutely understand the changing trends in the market starting from customers changing behaviour, tastes and preferences, pricing, promotions, competitor’s product, close substitutes, availability and more.
Let’s get into the details.
Market Research Objectives: Why Market Research Is Done?
External factors should be actively analysed to maintain a sustainable and systematic market research process. The information collected in a marketing research process should also be updated from time to time to understand the changing perception of customers.
Firstly, marketing research helps you to plan production, estimate sales and determine marketing programmes
Secondly, it helps to forecast sales effectively based on data collected from the market.
Thirdly, marketing research allows an organisation to gather information about where a product should be marketed.
Fourthly, it assists in understanding the taste and preferences of consumers and purchasing power of buyers.
Fifthly, marketing research helps to ascertain the actual needs of the consumers for a specific product or service.
Sixthly, marketing strategies are to be adopted to sell the products effectively in target markets.
Finally, it is a useful tool to control the costs of advertising, marketing, promotional activities, selling and distribution.
Here are the 6 Steps to do Market Research for Startups
It’s important to follow each step carefully to carry out a successful market research process. These are the following steps.
Step 1. Defining The Problem
The most crucial decision in a market research process is to comprehensively define what the problem is. Understanding the basics of the problem is really important. You get the whole idea of what are you searching for. Any firm or individual carrying out a market research process should define the problem adequately.
This will help to narrow down the process and chalk out the exact plan that has to be carried out.
Start with framing questions and answer each appropriately. This could be why the research is being carried out, what is to be researched, how to carry it out, who’s the target market and more. Also, make sure you have a detailed list of the objectives of the research.
Step 2. Developing The Research Plan
With all the important questions answered, you have a clear idea of what has to be done. You will have to start working on the research plan now. Begin by collecting information and resources available relevant to the research objective.
These are the following sub-steps you need to follow.
A. Data Sources
You have to select the sources from which you will be collecting the data. The data sources can be further classified into primary data sources and secondary data sources. You can either depend on either of these data sources or a mix of both sources.
The primary data source generally gathers data that does not exist, be it in any books or research report.
While the secondary data source deals with the information already available in the books, published journals, published reports and more.
The secondary data used in research are readily available. So following a secondary source approach is not advised unless it’s of no high importance. On the other hand, the primary data source has information that was never recorded nor available, making it more authentic in nature.
Suggested Read: Understanding Consumer Behaviour: How It is Used In Marketing
B. Research Approaches
Once you chalk out the data sources, you now have to choose an approach you wish to follow. There are multiple research approach methods available such as:
Survey Research: In survey research, the research is carried out among the target sample directly. A few questions are fixed up and customers reply directly. These are generally related to something they have knowledge including their preferences and experience.
Focus Group Research: In Focus Group research, a target group is formed up of certain people and they discuss a common topic overseen by a moderator. The moderator helps the members to stay focused on the topic and makes sure maximum relevant information is obtained.
Observational Research: Here, the target sample is given the job to do and the researcher collects the information by just observing them. The data is collected by observing what’s happening and how are they reacting to it. Also, often researchers directly converse with the sample to know about their past experiences with such relevant products and services.
Behavioral Data Research: Without directly going into research, often researchers use customers’ actual purchases behaviour at the store to carry out marketing research. Actual action reflects the real behaviour and the choice a customer is making. The data obtained in such research are often considered to be more accurate than planned answers and replies.
Ethnographic Research: In ethnographic research, the researcher carries out a test on an individual in a real-life situation. Similar to observational data research, the primary purpose is to know their actual lifestyle. While in the former the customer doesn’t know about it, here the customer does that research is being carried out.
Experimental Research: In experimental research, the data is collected via sorting out cause and effect relationships. The research primarily focuses on the effects of change on the customer’s behaviour. The researcher observes how the customer reacts to the change in a product’s attributes or a changing an existing service.
C. Sampling Plan
Coming to the crucial part of a market research process, a researcher has to decide and design a sampling plan. The sampling plan includes all the important data related to the sample.
The sampling plan comprises of –
1. Sampling Unit
Decide who you want to survey.
2. Sample Size
Select where to carry out the survey.
3. Sampling Procedure
Choose how to pick respondents for the survey.
There are mainly two types of sampling procedures: Probability and Non-probability Sampling.
Probability Sampling: Simple Random Sampling, Stratified Random Sampling, Systematic Sampling etc.
Non-probability Sampling: Purposive Sampling, Convenience Sampling, Snowball Sampling etc.
D. Contact Methods
Now you need to choose a medium through which the respondents can be contacted. You can use a mix of the following methods or any one of them via which respondents can be contacted.
Step 3. Collecting the Information
As you start contacting people, you will start to collect data and information. You need to keep gathering the most relevant information based on your research objectives.
Step 4. Organizing & Analyzing the Information
As you finish collecting data, the next step is to organize it in such a way that analysis and interpretations can be started. With the collected data, it’s time to start analysing the information for results.
There are multiple statistical techniques available to perform such analysis, like average and measures of dispersion.
For advanced research, researchers also use decision models to analyze the collected data.
Step 5. Present the Findings
With the findings of the research, it’s time to hand them over to the relevant team. It could be your management or marketing department. The decisions further to be taken depend on top management.
Step 6. Making A Decision
The final step involves making a decision based on the data collected in the marketing research process. Generally, the top management takes a decision based on the findings after discussing it with the marketing department.
Market research is carried out to collect all the applicable information about your target market, ongoing operational efficiency and customer behaviour!
Editorial Staff at NextWhatBusiness is a team of Business Consultants having years of experience in small and medium scale businesses.