Do you want to learn about how market research is done in marketing? Why does market research play 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.
Table of Contents
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 perceptions 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 tastes and preferences of consumers and the 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.
10 Steps to Do Market Research for Startups
1. Defining Your Research Goals
The first step is to find the research objectives. You need to clearly define what you want to achieve through market research. It can be to understand customer preferences, assess demand, or analyze competition.
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.
2. Identifying Your Target Audience
It is advisable to divide your potential customers into segments based on demographics, behaviour, and preferences.
In addition, create detailed profiles of your ideal customers to understand their pain points, needs, and preferences.
3. Analyzing the Competitive Landscape
Another important aspect of market research exercises for startups is competitor analysis. You need to identify and analyze your direct and indirect competitors. It is critical to understand their strengths, weaknesses, and market positioning.
Also, determine how your startup can offer unique value compared to competitors.
4. 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 reports. On the other hand, the secondary data source deals with the information already available in 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. It includes the following:
- Survey Research
- Focus Group Research
- Observational Research
- Behavioral Data Research
- Ethnographic Research
- Experimental Research
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. Some of them are listed below:
- Sampling Unit
- Sample Size
- Sampling Procedure
There are mainly two types of sampling procedures.
- 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.
- Telephonic interview
- Online interview
- Focus groups
- Personal interviews
- Field trials
5. 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.
6. 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 averages and measures of dispersion. For advanced research, researchers also use decision models to analyze the collected data.
7. Validating Your Findings
Test your product or service with a small group of potential customers to validate its appeal and functionality.
In addition, gather feedback periodically and refine your offering based on customer input.
8. 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.
9. Making a Decision
The final step involves making a decision based on the data collected in the marketing research process. Generally, the top management makes a decision based on the findings after discussing it with the marketing department.
10. Refining Your Business Strategy
You might need to adjust your product or service strategy on multiple occasions. It is advised to use research insights to refine your product features, pricing strategy, and positioning.
Market research is carried out to collect all the applicable information about your target market, ongoing operational efficiency and customer behaviour.
Frequently Asked Questions
Is market research necessary for every startup?
Yes, market research is essential for every startup. It helps startups understand their target audience, refine their offerings, and make informed decisions.
What if my startup is in a new or niche market?
Market research is essential for new startups. It helps identify potential customers, assess demand, and understand market dynamics.
What are the main methods of conducting primary research?
The most popular primary research methods include surveys, interviews, focus groups, observations, and online questionnaires.
How do I conduct surveys or interviews effectively?
Clearly define your research goals and craft unbiased questions. Furthermore, ensure your sample size is representative of your target audience.
Can I rely solely on secondary research?
Secondary research generally provides existing data. On the other hand primary research (direct interactions with potential customers) offers deeper insights tailored to your startup’s specific needs.
How often should I conduct market research?
Market research should be an ongoing process. Regularly monitor industry trends, customer preferences, and competitive changes.