What is Market Research and Why Is It Important?
Firstly, you should understand what is market research? It is an act of gathering, analyzing and interpreting information that helps your company conquer the market.
People use this type of research for various reasons. It helps you make the right decision, for instance, determining how many people will show interest in your product before dedicating your budget and time to your new venture. Not to mention, market research plays a vital role in developing a marketing strategy. If you do it accurately, it can help you boost your marketing activities, such as understanding the target audience’s needs and determining what messages you should convey and the best method to communicate them.
Conducting ongoing market research will help you learn more about your business, customers and their desires and needs. The environment in every market is always in motion. This is why you need to understand what factors force it to change and how much you need to change your strategy to keep up.
How Does Market Research Work?
Market research includes various types of primary information and it also depends on secondary information or information collected by outside sources.
The primary information is the data that the company gathers itself or asks its employee to conduct. You can divide this type of data into two categories: specific and exploratory research.
Specific research tries to find answers about the previously noted issues that you have got through exploratory analysis. The exploratory research doesn’t have properly structured functions and options but more open-ended questions, and it shows issues and questions that your organization may need to address.
Secondary information is the data that the outside source has gathered. This can be population information achieved from government census, trade association reports, or research collected by another company within the same market sector.
Market Research Methods
You can use several ways to conduct market research and collect information. Plus, you are free to use more than one research method. There are four common types of research methods. They are:
It involves a short series of closed or open-ended questions that you ask your consumers. You can deliver it via mail or through digital questionnaires. This is the most common research technique, conducted by almost every type of business.
Interviews are a direct conversation with someone who might belong to your target audience. Nothing beats a one-on-one interview to get valuable insights. But if you can’t meet in person, you always have a choice of video conferencing.
The in-depth interviews are great for understanding your target audience and potential customers.
A focus group includes a group of people from one of the company’s target markets. The company selects these people carefully to help with the improvement of their products, provide new ideas or insights, and provide feedback. After that, a trained moderator starts the conversation with the focus group that revolves around the work, user experience or marketing message to achieve more in-depth information.
This is quite different from the other methods. It is a customer observation session. It involves someone taking notes while watching an ideal person engage with your organization. Sometimes, organizations use this method with a competitor’s work to understand people’s views about it.
Market research is an essential tactic for improving your sales. This research involves different methods and procedures that help you understand your product’s flaws, opportunities to improve, and how you can sell it to a potential customer.