In this article, I’ll explain what market research is all about and provide you with a list of market research methods.
Doing market research helps you as a business owner to understand your target group and know what the market looks like.
By researching the market, companies, organizations, and researchers can collect data that is valuable for their specific industry and target group. This in turn makes it easier to tailor your marketing to get better results and thus increased sales.
Traditional methods such as focus groups and surveys are still an important part of doing market research.
But today there are also new digital tools for collecting relevant data. For example, social media is an increasingly important part of conducting market research for many companies.
In the past, data collection was an expensive and cumbersome process. However, today, in principle, anyone can carry it out.
Below you can read more about the 10 data collection methods you can use to conduct successful market research.
What Is Market Research?
Simply put, market research (or marketing research) is a way for companies to gather valuable information about their market and target audience.
For example, this can be about age, interests, buying behavior, values , and so on. This information can be used by the company to develop its business in the right direction and create a more effective marketing strategy.
Primary vs Secondary Market Research
Before you begin your research, it may be helpful to understand the difference between the two main types: primary and secondary market research.
Primary Market Research
Primary market research involves collecting new information that has not been collected before or that is not already available.
You collect this data by yourself. Surveys, focus groups, and interviews are examples of primary market research.
Secondary Market Research
Secondary market research involves collecting information that already exists. The data has been collected by someone else and you use it to support content in your own opinion.
Financial data from companies, research studies, and databases are examples of secondary market research.
How To Go About Market Research
I’ll go over 10 types of methods. The data collection methods include both primary and secondary surveys.
What market research is best suited for your needs depends on your goal and what you are trying to achieve for your business.
List Of Market Research Methods
1. Focus Groups
Focus groups are an organized form of data collection. This involves you inviting a group of people and asking them different questions or letting them test various products. The process can also include discussions between the participants.
The choice of participants for the focus group is based on certain criteria, such as age, gender, demographics, interests, or profession. A moderator or a group leader controls the discussion.
This is a proven and popular method that can provide important insights about a product, service, needs, or opinions. It is also a good method for tailoring questions and testing methods.
The discussion often flows naturally, which means that you can get detailed and in-depth answers.
It also provides an opportunity for the moderator to ask questions that were not planned from the beginning to gain an even better understanding of the situation.
The disadvantage of focus groups is that it is a time-consuming method. It can also be difficult to implement because it requires a lot of preparatory work.
There is also a risk that the data collected is distorted. This would happen if the moderator or group dynamics cause participants to talk about things they normally would not. It could also result in the participants giving false answers for some reason.
2. Surveys
Surveys are a collection of questions that you give to a larger number of people. This is a common method for market research that is both simple and at the same time can give good results.
The survey can be designed in many different ways. For example, it can be carried out by telephone, via an online form on a website, or via e-mail.
The questions in the survey can also be adapted as needed. They can consist of open and closed questions or a mixture of them.
An open-ended question means that the question has no given answer alternative to choose from. Instead, the participant must fill in their own answer.
Examples of open-ended questions are:
- “Why do you think…”
- “What do you think…”
- “How do you do…”
A closed question is a question that has one or more answer options, such as yes and no. The closed questions can be designed in a number of ways:
- The dichotomous variable has only two answer options, such as yes or no questions.
- Multiple-choice questions with more than two answer options.
- Grading scales for measuring the opinions and behaviors of the respondents in a quantitative manner. They can be done with numbers (for example 1-10) or words (for example, very likely – very unlikely).
- Likert scale that measures the attitude of the respondent. Usually in five steps from “strongly against” to “strongly for” or similar.
- Matrix questions can be used to link several questions on the same subject with one answer. The participant selects only one answer per question. Questions in the matrix can streamline the survey. This is especially useful if you want to ask about different dimensions (price, design, user-friendliness, perceived benefit, etc.) of a service or product.
Think About The Questions
Surveys are a cheap and relatively simple method for conducting market research. They are versatile and can be implemented in different ways.
In addition, it is easy to find many people in the target group. For example, through social media – there are cheap survey tools that are easy to use for a Startup company.
However, you have to be careful about the questions included in the survey and how you choose to ask them.
The participants only answer the questions you ask and therefore the goal of your market research must be clear. There is no room to get side-tracked or go deeper into any topic, as it does in an interview, for example.
Remember not to have too many questions. It is important that the questions are comprehensible and neutral in order to reduce the risk of a skewed answer. Also, avoid leading questions as they may give you distorted results.
3. Social Media
Social media is an important part of many people’s lives. Users share pictures, texts, opinions, and thoughts. As a result, new ways in relation to how to do market research have emerged.
Today, there are various tools that make it possible to identify the topics that are trending on social media. You can also find the topics that are relevant to your survey.
It is possible to find out when and how different brands are mentioned on social media. You can see what consumers have to say about the products or services.
Listening and analyzing activity in social media is a good method for gaining access to a relatively large amount of data.
In addition, the information is unfiltered because users do not know that their shares, posts, and comments will be used in market research.
In other words, this information can be more truthful than the answers given in interviews, focus groups, and sometimes even surveys.
4. Interviews
In an interview, the questions are asked directly to the participant. This can be done either face-to-face or in the form of a telephone interview. The interview usually takes place between two people.
Interviews are more personal and can therefore provide more detailed and in-depth answers. It is also possible to clarify certain questions or topics if there is something that is not clear to the participant.
The person interviewing can see how the participant reacts. You get the opportunity to gain deeper insights into how the participant thinks and feels. This of course can be of great value in conducting market research.
However, this is a time-consuming and expensive method. It can also be difficult to get people to show up for an interview. It is more convenient for people to answer a questionnaire in their own time.
In order for the results to be reliable, it is very important not to ask leading questions. It is better not to include simple questions that could be answered easily in a survey.
5. Experiments And Field Studies
Experiments and field studies are a more active method in market research that is often carried out in the participants’ natural environment.
The purpose of this method is to examine the different behaviors of people. It is common practice to change one or more variables to see what effect they have on the participants and their behaviors.
It is very important to prepare experiments carefully so that it gives accurate results. The goals of the study must be clear in order to be sure that you are actually measuring what you intend to measure.
The advantage of experiments is that they often reflect the natural environment and enable the participants to act as they would normally.
You can get better results if the experiment is conducted discreetly without letting the participants know that they are being examined.
The disadvantage of experiments and field studies is that external factors can affect the result. When it comes to discrete experiments, you have to also consider whether it is ethical to examine people’s behavior without their knowledge.
6. Observation
Observation (also called structured or behavioral observation), is a qualitative survey method. It involves observing a behavior directly, as opposed to, for example, finding out through surveys.
This method is suitable when you want to investigate people’s real behavior. In surveys and interviews, the answers are based on how they state their behavior. This does not always correspond to reality.
This method involves the observer being a fly on the wall. Human behavior can be observed in a natural or controlled environment.
When people don’t know that they are being observed, it makes them behave naturally. There are also observations where participants are aware that they are being observed. This can make the results inaccurate and skewed.
Observations are particularly suitable in areas where customer behaviors can be studied on different days, seasons, and times of the day.
You can also observe the participants’ behavior at sales and other special events. However, it is a time-consuming method with little or no opportunity to influence the observation environment.
7. Competitive Analysis
Competitive analysis is a strategic and specific research method that companies use to identify and evaluate their competitors. The company’s business plan should include some form of competitive analysis.
The competitive analysis gives more insight into the company’s product or service, brand, and market segment. This makes it easier to determine which companies in the market are competitors and the ones that are not.
It is possible to carry out the analysis from a marketing perspective and include factors such as PR, social media, and other forms of content.
It is also possible to carry out the analysis from a product perspective where you compare products and pricing. The so-called SWOT analysis is a good tool for analyzing strengths, weaknesses, opportunities, and threats.
The purpose of the analysis is to identify possible competitive advantages. For example, what the company offers compared to the competitors that provide a higher value for customers.
In this way, you can improve the company’s conditions with regard to competitors and increase the business’s competitiveness.
8. Public information
There are lots of data available to the public and most of it can be found online through a simple search.
Public data is produced every year and covers a number of different factors. However, it is important to know what you are looking for so as not to get lost in the amount of data.
Public information is available in the form of a government database. It is also seen in the so-called “fact tanks” or “think tanks” and in many other places. The advantage of this type of data is that it is often free.
9. Buy Research And Reports
It is possible to buy research, reports, and data from specialized companies, such as B2B International and Nielsen.
It is often sold in the form of a subscription to several reports or as a user license that gives access to a specific report.
This method is very time efficient. Apart from the fact that you do not have to carry out the survey yourself, the report presents all the data in a comprehensible and easy-to-read manner.
The downside is that it is often expensive to purchase this type of report.
10. Analyze Sales Figures
Sales figures contain very useful information that can provide an increased understanding of the market.
Above all, it is effective to combine sales figures with other market information to get a broader overview of things. It provides a better understanding of customer behaviors and how they change over time.
It is important to remember that the figures only reflect existing customers and not the full potential.
This method only works for established companies. It is useful to analyze these metrics if the company is already active and has sales figures for a longer period of time.
Conclusion
What market research is best suited for you depends on the kind of information you want to access. Not all methods are suitable for your specific situation or your business.
It’s a good idea to go through the list and select one or more methods to test. You can always test a small sample first to find a suitable alternative for your research.
Start by deciding what you want to achieve with your market research and the type of data you need. You can then write down the pros and cons of each method based on your goal.
Do not forget to also calculate the time and cost of collecting and analyzing the information from your market research.