How to Conduct Market Research for Your Organization

How to Conduct Market Research for Your Organization

How to Conduct Market Research for Your Organization banner

For organizations of all kinds, market research is an essential component of industry viability and competitive leverage. Read on for some essential guidance about how to conduct market research and some market research examples that showcase effective strategies and techniques.

Understanding Market Research

Succinctly defined by Merriam-Webster, “market research” refers to any and all “research into the size, location, and makeup of a product market.” These processes were significantly simpler when the term was first coined in 1920. However, today, market research encompasses numerous sophisticated operations driven by an even larger number of state-of-the-art methodologies and tools.

What Is the Scope of Market Research?

The U.S. Small Business Administration paints a comprehensive picture of market research that includes focuses on the following: 

  • Demand – “Is there a desire for your product or service?”
  • Market size – “How many people would be interested in your offering?”
  • Economic indicators – “What is the income range and employment rate?” 
  • Location – “Where do your customers live and where can your business reach?”
  • Market saturation – “How many similar options are already available to consumers?”
  • Pricing – “What do potential customers pay for these alternatives?”

The Importance of Market Research in Business Strategy

Embarking on a business plan without conducting market research is like starting a long journey with no navigation tools. This is why Rachita Sharma, Special Editor of the Women Entrepreneur Review, calls market research “the compass that guides businesses in the right direction.” Among other things, market research helps organizations identify a practical target audience, understand the needs of that target audience, evaluate evolving market trends, and determine overall market potential.

Types of Market Research

Given the broad scope of market research, it should come as little surprise that it comprises many different facets of operation and areas of concentration. It is extremely important to understand how these market research components differ and how to use these market research examples to the greatest advantage in your pursuit of specific business goals

Competitive Analysis

Beyond identifying the relative strengths and weaknesses of market competitors, competitive analysis provides powerful insights into their business strategies. By conducting competitive analysis, organizations can find better ways to outperform and differentiate themselves from competitors. It is a great way to detect vulnerabilities in competing organizations as well as your own. Common assessment areas of competitive analysis include total market share, indirect/secondary competition, and hindrance to market entry.

Customer Segmentation and Analysis

Most customer segmentation/analysis measures begin with the collection of demographic information that might include characteristics such as gender, age, culture, geographic region, social class, and income level. Depending on the nature of your business and its products/services, any number of factors may be relevant during customer segmentation and analysis. The goal of this analysis is to identify the best target consumer group for your business activities.

Product/Service Testing and Feedback

Few business practices are more important than the creation or refinement of products/services to best meet customer needs and expectations. From focus test groups to random sample surveys, market researchers draw upon numerous strategies to solicit helpful feedback and attain informative results.

Preparing for Market Research

Before conducting market research, you must take a few preliminary steps to make it as effective and efficient as possible. While it may be tempting to skip these steps and launch directly into active research, businesses that rush through preparation do so at their own peril.

Identifying Your Research Objectives

Although market research’s value lies in its focus on speculative investigation, your efforts are likely to go astray if they aren’t centered around a set of clear, measurable, and achievable goals. While you should take care to limit their number and scope, you can work toward multiple market research objectives at the same time if you prioritize them accordingly.

Choosing the Right Market Research Methods

After businesses have set their chosen market research destinations, they must identify the best paths to get there. This means deciding among the best primary and secondary research methods for the task at hand. The step-by-step overview that follows will examine a range of market research methods and identify their various pros and cons.

How to Conduct Market Research: Step-by-Step Guide

While brief, this guide will cover the basics of market research operations and provide actionable advice about effective market research techniques.

Collecting Data: Qualitative vs. Quantitative Methods

Marketing research can be divided into two major data collection and analysis categories: qualitative and quantitative. Each of these categories comes with its own set of strengths and weaknesses. Describing qualities without using numbers, qualitative data can provide tremendous nuance and yield vivid details. Defined by numerical information and statistics, quantitative data is highly empirical and precise by nature.

Identifying Your Target Audience

Leveraging the results of your customer segmentation and analysis efforts, you can determine a target consumer audience for your business. This audience is extraordinarily important because every element of your marketing outreach, from product to pricing to distribution to promotion, should focus firmly on it.

Analyzing Competitors and Industry Trends

Because few organizations are entirely free of competition, you must consider competitive analysis when setting both your target consumer audience and the overarching objectives of your market research efforts. It is also vitally important to stay up to date on industry trends as well as the various technological, legal, regulatory, economic, political, social, and cultural forces that shape them.

Choosing the Right Methodology

Whether you are concentrating on your target audience, market competitors, or industry trends, you must employ the right market research methods to achieve your desired results. These methods might focus on gathering primary or secondary data.

Gathering Data

Organizations must take a highly active role to gather primary data. Arising from direct observation during business operations or conscientious collection from consumer respondents, primary research can be finely tailored to fit your organization and its objectives. However, it can be extremely expensive, labor intensive, and time consuming. While considerably easier, secondary research, which is generally compiled by others and for other purposes, may not fit your organization or its objectives exactly. Secondary research can be conducted online by seeking out relevant sources (often on specialized research platforms) and on-site (by investigating physical records, archives, and libraries in various locations).

Incorporating Customer Feedback

In most cases, primary data collection targets existing or potential customers to solicit feedback directly from them. You simply cannot overestimate the value of incorporating customer feedback into all your efforts throughout the market research process.

Analyzing Market Research Data

No matter how impressive your data collection efforts are, they will likely amount to nothing if you don’t know how to use the data that you collect. This is where the art and science of market data analysis comes in.

Techniques for Data Analysis

Depending on the nature of your organization and its specific market research goals, you may want to employ any number of data analysis techniques. Like your target audience and your data collection techniques, your data analysis techniques must be specifically and precisely developed to meet your objectives. Common approaches to market research data analysis include CLV (customer lifetime value) analysis and attribution modeling. CLV analysis predicts the value of customers over the course of their relationship with a business, while attribution modeling weighs the potential of each marketing touchpoint to contribute to a sale or other conversion metric. A comprehensive market research campaign might also include targeted website and social media analysis.

Interpreting Data to Make Informed Decisions

By using the right technique to analyze your market research data, you can apply your findings to make better business decisions based on sound strategy. But, of course, different analytical techniques require different forms of results-based interpretation. Take, for example, the analysis of quantitative vs qualitative data. While qualitative data lends itself to descriptive analysis and the identification of marketing themes, quantitative data can fuel significant statistical analysis.

Implementing Market Research Findings

It should go without saying that it is just as important to effectively implement your market research findings as it is to effectively collect and analyze the data that fueled those findings.

Strategies for Acting on Research Insights

The most important thing to keep in mind when transforming data-based conclusions and discoveries into decision-making tools is clarity. Ensure all recommendations are clear, realistically actionable, and aligned with your overarching goals. When it comes to leveraging research insights for optimum business gains, you will also want to prioritize your most important/achievable action plans and test each action plan according to stringent criteria.

Measuring the Impact of Changes

Another key strategy for getting the most out of your research insights is to ensure that your action plans deliver measurable results. While the metrics that gauge the impact of your proposed changes will differ depending on the objectives you seek, the business community has standardized a broad spectrum of key performance indicators (KPIs) that can measure relative success and failure with remarkable accuracy. Organizations typically track a range of KPIs that might include revenue generation, conversion rate, churn rate, and the aforementioned customer lifetime value (CLV).

Overcoming Market Research Challenges

From sourcing data from the right places to miscalculating the financial cost of your proposed implementation measures, market research is fraught with unexpected obstacles. However, you can effectively manage the risks associated with market research by both anticipating them and preparing for them.

Dealing With Inaccurate Data

Failing to check the accuracy of your data or using the wrong methods to collect it can easily lead to skewed research conclusions. Fortunately, careful planning and ongoing quality control measures can protect you against inaccurate findings.

Ensuring Research Is Timely and Relevant

Assessments of data timeliness and relevance should be a big part of any thorough research quality control initiative. Because business and consumer markets can change quite rapidly, your research must be constantly updated on a regular basis. But even the best and most up-to-date research will yield no actionable results if you cannot use it to further worthwhile business goals. Therefore, you must tailor your market research to meet specific objectives.

Take a Deep Dive into Market Research Training

If you are ready to learn more about market research as part of a broader college marketing program, you can accomplish this entirely online by enrolling at Johnson & Wales University. Aspiring marketers will want to investigate our Bachelor of Science in Digital Marketing & Social Media program, while marketing professionals considering graduate school will want to take a close look at our Master of Business Administration in Marketing program.

For more information about completing your degree online, complete the Request Info form, call 855-JWU-1881, or email [email protected].

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