The main purpose of market research is to gain an understanding of customer needs and wants in an effort to reveal potential business opportunities. When you have a clear picture of what your target market is and what it wants, you can more effectively design your marketing mix to engage that demographic. Market research also helps you understand who your competitors are and how they serve the target market you want to engage. The more you know about your competition, the easier it will be to determine and differentiate your offerings.
Primary research entails collecting new data for the purpose of answering a specific question or set of questions. While conducting your own research can be resource intense, it is also the best way to get answers specific to your business and products, especially if you want to penetrate niche markets that have not been studied. It also allows you to get specific. By asking the right questions, you can determine people’s feelings and attitudes toward your brand, whether they like your product design, whether they value its proposed benefits, and whether they think it is priced fairly. The diagram below shows the 6 steps common in conducting primary market research.
You should start by defining the goal of your research project.
The more time you take to clarify your research questions, the more likely you will be to achieve your research goals. If you can’t figure out exactly what you’re looking for, that’s okay. Exploratory research using a focus group can help you decide what kind of research questions to ask. A focus group is a gathering of people, typically 6--12 participants, who come together to discuss a topic presented by a moderator, who usually poses questions and collects qualitative data that can be used to answer questions or define research further.
EXAMPLE: a manufacturer of water bottles might know there is a problem with their products as sales have been declining over time. The company doesn’t know exactly why or where to start, so it would use a focus group to better define the research goal or problem. Using focus groups, they might find out that they are targeting the wrong segment or that there is a need for better water bottle designs. Talking to the focus group can uncover possible research questions to undertake.
The next step is to determine which research techniques will most effectively help you answer your questions. Considering what you want to learn and determining what your budget is will help you decide if qualitative or quantitative research best suits your needs. Well-designed research projects often use some combination of both.
EXAMPLE: if you manufactured a water bottle and wanted to design a “better” water bottle, you could watch how people use their water bottles while working, exercising, during their commute, and so on to better understand their needs and habits. This “ethnographic” research can often uncover latent, or unstated, needs that you can use to build your concept. Unstated needs refer to those that are expected from a company, such as a certain level of quality or good customer service. These are default expectations that a customer has based on their experience with products in general.
Sample survey questions
Typically, the more people you survey, the more accurately your data will reflect the demographic you are examining.
Causal research and test marketing
Next, researchers need to determine the sampling method. In terms of research, your sample refers to who you will survey and how many people you will include. In most cases, you will want a sample that reflects your target market, especially if you are trying to figure out your ideal customer’s interests and how to get them to buy your product.
Untargeted samples can be useful when trying to figure out who your target market might be, but they aren’t an efficient way to get to know your ideal customer.
Generally speaking, larger samples provide more accurate data, Surveying all of your population could be time consuming and expensive, so choosing a subset of the right people can yield good results. The sample must be large enough to be statistically significant, meaning that the relationship between variables is not a result of chance. The sample can then show the researcher an accurate depiction of a specific phenomenon.
EXAMPLE: you can test whether men and women actually have different or similar tastes in water bottle attributes. In this case, the significance rests on the gender of the potential customer. If your sample is large enough (say 500 out of 5,000), and you find that men look for different attributes than women do, it is unlikely that the differences found were by chance. The cause of the differences would be the gender.
Keep in mind that errors of reliability and validity can arise if your sample is not thoughtfully selected.
While random samples can be useful for some types of research projects, many researchers intentionally choose their sample participants based on economic and ethnographic factors to make sure they accurately reflect the nature of the demographic they seek to understand.
Once you’ve identified your research goals, chosen your design, and determined your sample, you are ready to start collecting data.
EXAMPLE: if you are trying to figure out if your store layout is yielding the most productive sales, you can observe traffic flow and note what people look at and what they actually purchase. Then, you may change the merchandise layout, or the aisle size or space, to see whether people peruse other merchandise that they hadn’t seen before. Based on your observations and sales data, you can determine the best flow for your floor.
Regardless of what research technique you use, be on the lookout for data collection errors. Recording the wrong answers, failing to convey the right instructions to participants, or having to translate on the fly can all create biases that skew the answers and give you inaccurate results.
Once you collect your data, the next step is to make sense of it. How you analyze the data depends largely on what you want to get out of it. Typically, you will be looking for patterns and trends among the answers. Data analysis is a field unto itself, and when complex analysis is required, seeking the assistance of experts is often worth the extra cost.
At this stage, you will seek to reconcile the results with the goals of the research.
EXAMPLES:
Research should be an opportunity for growth and a roadmap for the refinement of your idea. It is important to be open to what the data say, even the results that are not to what you were hoping for.
Secondary research is research that uses existing data that has been collected by another entity, like a governmental agency, who gathered data to answer a wide range of questions or issues that are common to many organizations and people.
Secondary research often answers more general questions -- such as population information, average purchases, or trends
Some commonly used sources for free data include the
Other useful resources are
