In an increasingly competitive environment and with technology constantly on the cutting edge, market research is now an indispensable weapon. Indeed, no company can do without data and insights into market dynamics and conditions if it is going to dominate in its industry. So, our advice to you is to invest in effective market research and let it guide your next moves. We’re sure you won’t regret it!
What is market research?
The term “market research” refers primarily to the activity of systematically collecting data about a target audience consisting mainly of people and companies. The next stage, on the other hand, is the processing, analysis, and interpretation of this data in order to understand the needs of that target audience.
Why is market research so important?
Because its aim is to understand the needs and interests of the target audience, market research proves to be a key support for business decision-making processes. If it’s conducted properly. Its results, in fact, can help corporate executives and managers make informed choices about your company’s strategies, operations, and potential clientele. Such results in fact provide useful insights regarding, for example:
- Size of the market you want to attack or in which you already operate
- Income bracket of the target audience
- Occupancy rate
- Location in which you want to start or expand your business
The last three points, in particular, allow you to make an assessment regarding the purchasing power of consumers, both current and potential.
On the one hand, obtaining this information in advance is crucial for understanding what potential opportunities you can seize and what relative challenges to face. On the other hand, it is useful for understanding, possibly before your competitors, what the market trends will be. Consequently, whether you are a start-up or a well-established company, you can use this information to plan and implement the ideal strategy for your business. You will then be able to establish or maintain your competitive advantage and identify new opportunities for growth.
How is market research classified?
As much as the term “market research” is used in a general sense, it is good to know that there are different types of it. There is a distinction between primary market research and secondary market research. Let us see together what these are.
Primary market research
Primary market research involves gathering data, either personally or with the help of a specialized agency, on the conditions of the industry in which you operate or want to attack. There are several ways to conduct primary market research. If you are curious to find out what they are, don’t give up reading this article!
Polls
Surveys consist of a list of questions to be asked of a set of people, generally referred to as a “sample.” Such questions can be asked by telephone, live, in written form, or online, following the advent of technology. Indeed, there are special programs that often require respondents to fill out a form.
A company, for example, could take advantage of this mode when dealing with its customers. The sales or marketing area could in fact use surveys to ask their target audience for feedback on their products in terms of quality or functionality, for example. Based on the responses obtained, it is then possible to figure out which aspects you need to strengthen and which ones to improve.
Focus groups
Focus groups are precisely groups of people who share one or more characteristics, such as age, gender, or buying habits. Each group, if selected judiciously, is representative of a larger population that your company is targeting.
You can rely on this classification primarily to understand what each group values more and what less relative to, for example, a new product, new features, or a new advertising campaign.
This mode often requires the presence of a moderator. This figure, as the first thing, is in charge of asking questions to the group members. At the same time, however, he or she ensures that the results are as legitimate and objective as possible, mitigating any biases that may arise during discussions.
Give Katrium the chance to share its experience with you! Click here to learn more about this technique.
Observations
In this case, information is gathered simply through observation. In fact, the person in charge of conducting the research is simply concerned with observing how people interact with a particular product or service. At the same time, he collects information based on his eyewitness testimony. The purpose, again, is to understand which aspects you can enhance and which improve.
Individual interviews
Another very common way to conduct market research is through an individual interview. The interviewee is questioned through a series of in-depth, mostly open-ended questions. The main objective is to understand his or her opinion regarding a product or service offered by the company.
Secondary market research
Alongside primary market research is precisely secondary market research. Unlike the former, in this case you are working with existing data, often available from public sources such as magazines, websites, or reports concerning the industry in which your company operates.
The distinction between primary and secondary market research, however, is not the only one that can be made. In fact, there is a second classification that features qualitative market research and quantitative market research. Let us find out together what the difference between the two is.
Qualitative market research
It is based on subjective aspects such as behaviors and reasons behind consumer choices. You can conduct this type of research through interviews, observations, or textual analysis aimed at gaining a deeper understanding of the target audience. These methods, for example, can be useful in:
- Gather opinions on a certain product or service to understand whether it is destined for success or whether you should make changes before it is too late.
- Identify emerging trends through studies about the interests of individuals.
- Assess how your company’s brand is perceived externally.
Learn more about this type of market research by clicking here!
Quantitative market research
In contrast to qualitative analysis, quantitative analysis is based on numbers and statistics that provide a more objective view of the market. Through surveys and questionnaires with more pointed questions, we are able to obtain more specific information, such as:
- The potential of a product in the target market;
- The level of competitiveness in the market of your interest;
- The degree of customer satisfaction with a product or service in quantitative terms;
- The price you can charge in the market
Although they are different, these two types of market research complement each other. In fact, only through a combined approach can companies get an integral picture of their business.
If you feel you don’t have adequate experience in this field, leave it to us! At Katrium, we offer versatile services related to both qualitative and quantitative market research. We evaluate, plan, and measure your results through studies such as customer satisfaction and feedback, international market research, or market and consumer research.
How to conduct market research?
Have you come this far and decided to invest in market research to start or grow your business, but have no idea where to start? Don’t worry! Stay tuned to find out what steps to follow to make your market research as effective as possible.
Define the goal
First, it is good to have in mind what results you want to achieve through your research. Possible goals to achieve are:
- Get to know a new market segment whose relative needs you want to satisfy.
- Develop a new product from scratch or innovate the functionality of an existing one.
- Improve the satisfaction level of your customers.
Define the sample for your research
Once you have established the target, you should be clear about the audience to whom you are going to ask your questions. However, sometimes you run the risk of identifying the wrong population, from which the wrong information is then derived. To avoid this, it is important that the sample is representative, that is, it reflects as accurately as possible the larger group you want to target.
Collect data for your market research
To collect the data you need, choose the method you consider most valuable for conducting your research. Don’t remember what these methods are? Don’t worry, scroll up, and you’ll find them where you left off!
Do market analysis
Once you collect, analyze, and interpret the results obtained, this step is crucial because it allows you to turn that data into information. Often, these two terms are used synonymously, but this is incorrect. In fact, information is the result of the interpretive process the data went through and through which it acquired meaning. It is then the information produced that will be exploited by executives and business managers when they need to make decisions.
Report your findings
Report your results in a research report. But make it effective. So the suggestion we give you is:
- Start with a summary that summarizes all aspects of your market research.
- Make a brief introduction, explaining the rationale behind the research conducted.
- Explain the methods you used to do your research.
- Describe the results you obtained and provide your own interpretation.
- End the report with a brief conclusion that encapsulates all the points touched on previously.
Let your market research support your decisions
Show and explain your results to those charged with making decisions. But take care! For executives and managers to make the right choices, all the previous steps must be executed correctly. Otherwise, you not only risk compromising this last step but also jeopardizing the success of your company. Since this is a crucial stage, you focus on it. We’ll take care of the rest!
Some data
To validate the theory about the importance of market research within companies, we report here some data. They are the result of research conducted by two large multinationals engaged in the consulting and accounting industries, McKinsey & Company and Deloitte.
Research conducted by McKinsey
As mentioned at the outset, one of the goals of market research is to identify the needs and preferences of your customers. In doing so, you have the opportunity to create increasingly personalized offerings and thus improve each customer’s experience.
Well! McKinsey’s research on leading CX companies reveals how they were able to achieve twice as much revenue as companies that, in contrast, did not invest in research and analysis of their target audience’s data.
Research conducted by Deloitte
Another purpose associated with research is to understand what direction the market is moving in. How can this benefit your company? Simple. Once you learn about new trends, you can seize the opportunity to innovate your offering and gain a competitive advantage over others. The advantage then translates into economic terms.
The study conducted by the British multinational company states how companies that invest in market research to implement innovative programs find an increase in their revenues of more than 20%.
Conclusion
In a world where the business landscape has reached unprecedented levels of competitiveness, it is unthinkable to be able to operate in the market without being aware of the dynamics that move it. Being able to grasp the changes within an industry, such as new customer needs and preferences, is a determining factor in the choice of investments you can make in the company in terms of money and resources. These are reasons why it is good to rely on market research and its results before making hasty decisions that are detrimental to your business.
If, after reading this article, you have decided to start your own research but think you need help, don’t worry! You are in the right place! Katrium offers professional services in market research to guide your business to success!
If you would like to learn more, click here to contact us and schedule an appointment together!
