It’s no secret that introducing a new product to the market can be extremely difficult. Coming up with the product idea feels like the first big hurdle, but the true challenge comes from a different step—doing your homework.
It’s important that you gain a deep understanding of your customer base. Who are they? Are they happy with your products? What drives them to make purchases?
Don’t get caught searching for a market that fits your product; craft a new product that is created specifically for your target customers and fills in the pre-existing gaps in your current market.
What Is Market Research?
Market research is a type of market intelligence that involves gathering information about your target audience in order to determine if your product is viable for the current market. This can be done in-house but is often sourced through a third-party for better clarity and impartial information.
This research can provide a business with beneficial information about similar products currently on the market and where a new product might fit in. What’s popular right now? Is anything missing from the market? What could your product bring to the table?
There are two main factors to consider here:
- Your competitors are likely doing their own market research. Is yours as accurate, relevant, and informative as theirs?
- Your current customers are not the end-all be-all of the market. You want to find a balance between keeping your current shoppers happy and bringing in potential customers that will make more purchases. Consider seeking larger sample sizes from your focus groups so you don’t overlook any potential gaps in the market.
Why Should You Be Doing Marking Research?
The most successful brands rely on data when making their big decisions.
How can you understand your customers if you don’t understand the market they’re shopping in? You might have a general idea of who they are and what they need, but what about the specifics? If there are things about your products that they’re unhappy with or qualities they are missing, you should know about it. If they are choosing competitor products over yours, you should know why.
Market research can help you to meet your customers where they are. By gaining an understanding of their needs, problems, and pain points you can begin to develop the solutions.
On top of this, market research can provide data on a wide range of topics, such as:
- How are your shoppers doing their own product research?
- What’s currently trending in your industry and on social media?
- Who exactly is in your market and what are their most common challenges?
- Consumer attitudes toward certain products, brands, trends, etc.
- What influences purchases and conversions?
Market research allows you to gather information about your target customers on a large-scale and with a wide range of responses from different demographics so you can make clearer, better business decisions.
When Does Market Research Come Into Play?
You can use market research for almost anything, but there are a few areas where it can be the most useful.
The best method of product development involves a lot of research and a lot of testing.
Conducting market research during the development of your product can tell you ahead of time what’s working and not working. Test the product with a sample group of your target market and gain feedback on their likes and dislikes toward the product. How’s the packaging? The wording?
Never shy away from learning your weaknesses, as these are the areas with the most room for improvement and growth.
Market research can guide your business decisions when it comes to price as well, not just the product itself. How does your sample group feel it should be priced? What the most and the least they’d pay for it? How does this align with your profit margins?
All of this valuable data you can gain before going live with the product, saving your business from wasting time and effort where it matters most.
Regularly conducted market research can help you track consumer perceptions of your brand.
It’s important to track this constantly, so you can make any necessary changes as they come. Shoppers love a brand that listens to their complaints and adjusts accordingly. Responding to your consumer feedback allows you to build better customer relationships and maintain loyalty.
Advertisement and Copy Testing
Advertising campaigns and other marketing strategies can be expensive, so don’t jump the gun too early without doing your research. Consider testing your campaign messaging for both readability and creativity. Are people able to read your advertising? Do they feel drawn to it?
Find out if your campaigns are effective before going live so you can make adjustments with the least amount of difficulty.
A key component of proper product development is having a clear understanding of your competitors and how they’re perceived by shoppers. Simply browsing their websites and looking at a few of their products isn’t enough. It’s important that you gather information directly from customers in order to truly understand how you are sticking up against them in the eyes of the consumer.
Primary and Secondary Research—What’s the Difference?
Though there are many ways to do market research, most of these can be put into one of two main categories: primary and secondary research. There are key differences between the two.
Primary research is collected directly by you. This can be done with surveys, focus groups, data analysis and reporting, interviews, etc. The advantage of this type of research is that it’s raw data presented to you in its most authentic form. This data can be collected specifically to target your business’ needs.
The goal of primary research is to analyze your current sales and strategy effectiveness.
There are two types of Primary Research:
- Exploratory Research – Made up of open-ended questions, less structured. Can involve interviewing individual customers or focus groups. This type of research usually relies on qualitative data (non-numerical).
- Specific Research – More precise, often used to solve a particular issue that might have come up during exploratory research. Involves deep diving on specified topics or problems. This research often relies on quantitative data (numerical).
Secondary research uses data that has already previously been collected, analyzed, and published by someone else. This data can come from government census info, trade association reports, or other businesses from the same sector as you.
This type of research can be particularly beneficial to small businesses who might not possess the means to do their own primary research. Secondary research can often be used to support the findings of primary research.
Both types of research have their own advantages but using them together will give you the best results.
Conducting market research can be an eye-opening experience for any business, big or small.
Different Types of Market Research
There are many ways to conduct your market research, and the best research strategy will often include a few different means of collection. Here are some types to consider:
Face-to-face interviews give you the advantage of natural flow of conversation and allow you to see the consumer’s body language. This research is often used for building buyer personas. By asking the interviewee questions about themself and their shopping preferences, you’ll have an accurate picture of who is buying your products and can market directly toward that target demographic.
One of the most popular ways of doing market research, surveys usually consist of a series of multiple choice or open-ended questions provided to a customer, usually by email. They’re so common because of how inexpensive and easy they are to implement. The data generated is usually straightforward and easy to analyze, and there are many templates out there that companies can purchase and customize to fit their needs.
Focus groups are usually composed of carefully chosen individuals that represent a wide breadth of your demographic. You want people there from several different categories of age so you can gain as many perspectives as possible in one session. These groups will usually test your product(s), watch demos, provide feedback, and answer any questions you have. This is where you can find out about the look and application of your product and if there’s any changes that need to be made.
It only makes sense to turn your market research toward online retail since that’s where so much of the market takes place nowadays. Observational research usually involves just watching how your customers interact with and use your products. Many shoppers post reviews and questions online. These would be perfect for checking if there are any pain points or questions you could address.
Running a competitive analysis can be extremely valuable because it provides you with insights into your competition in the market. This is how you learn what’s working and not working, current trends, what other products similar to yours are out there, competitor strategies, and more. Knowing all this information helps you strategize how you can separate yourself from the competition.
How to Get Started
No. 1: Create Your Buyer Personas
Before you can start to analyze why shoppers are making decisions, you need to know who they are. This is where your buyer personas come in.
Buyer personas are generalized, fictional representations of your target market. They help you to visualize your shoppers and better anticipate their needs, wants, and purchases. There are several characteristics you may choose to include in your buyer personas, including:
- Geographic location
- Family size
You may find that your particular market allows for multiple personas. That’s great! Just make sure to take these different types of shoppers into consideration when implementing strategies.
No. 2: Determine Your Preferred Research Methods
If you’re still new to conducting your own market research, you might want to stick with surveys, interviews, and focus groups at first to ensure you get both qualitative and quantitative data. A wider scope of the market can only help you, especially when your products and brand are still a bit green.
There will be other factors to consider when choosing your methods, like budget, team bandwidth, and how quickly you need to have the new data. You can always mix and match your methods to best suit your business.
No. 3: Decide on a Research Topic
Smaller brands are more likely to keep tabs on a little bit of everything, but more established brands could actually stand to benefit more from focusing on a few specific topics of interest. Research topics can cover many different areas, including:
- Product features
- Brand identity
- Campaign effectiveness
- New markets
- Shopper experiences
Make sure to have your questions and discussion topics prepared ahead of time. These can be shared in many different formats depending on the research method you choose. You want to ensure you can gather the information you need in a timely manner.
Remember that open-ended questions often provide you with a truer picture of your customer’s thoughts as yes/no questions can sometimes sway answers.
No. 4: Conduct Your Research
If you have completed all the previous steps, then this part should be fairly straightforward.
The research team will collect all the data from their research and compile it in an organized, easy to read, way. They should make sure to keep track of the characteristics of each respondent, such as age, gender, location, etc.
No. 5: Organize and Analyze Your Findings
Keeping your research topics at the forefront, analyze your data and determine what you have discovered. Make sure to look for any ways you can organize your data to make interpreting it even easier.
For example, you might notice some major trends when looking through your results. Consider converting data like this into lists, diagrams, tables, or graphs for easier reading.
Once you have organized all your findings, you need to figure out what they are trying to tell you. Ask:
- What does your data show about your brand? Your products?
- How can you fix any issues that are popping up?
Your conclusions should ideally line up with the research topics you set beforehand.
Conducting market research can be an eye-opening experience for any business, big or small.
Often, the data you uncover will open brand new doors for you. No matter how well you think you understand your shoppers and how they feel about you and your products, there will always be new ways to reach them and create even better products than before.