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How to Do Market Research: A Definitive Guide

What's the one common thing that's ruining startups and businesses worldwide?


Hint: Not doing your due diligence (aka market research) before jumping into the fray.


How to do Market Research for Your Business

We, here at WinSavvy, are a startup consultancy. We often work with startups handling their mundane tasks like marketing and legal complicances, while they can focus on developing their core product and service. 


Over the years, we have stumbled across one common pattern. Most startups - and these are startups which are around 1-2 years old (and looking for funding or have just gone through seed funding and now are looking for venture capital) - they think they have a marketing problem.


One - two year after they have released their product, they find that they can't find customers. And, they think it is a marketing problem.


Now, we do have a market research service. We provide an in-depth study in finding out whether your product or service is wanted by customers or if the product you have made is suitable for another market or not.


And, we often find that these products or services are ill-fitted to the market that the startup owners are catering to. Of-course most startups are saved after a quick pivot, but some are not so lucky.


And, this is why, I suggest to all startup owners, before anything, do your market research.


Now, market research is not any rocket science. And in this article, we will go through it all. We will be going through all the facets of market research, such as -

  1. what it is, 
  2. why you need it, 
  3. the types of market research that you can do, as well as, 
  4. the steps to conduct a thorough market research.

With that said, let's get started!

What is Market Research?

 

What is market research. Market research is a process to understand the market environment of a business.

Market Research is a systematic process of gathering information about a market the business operates in. The market, business collects the data about consist of the buyers, target audience and customers of the organization.

 

The data collected allows the business to test the viability and the chances of flourishing of their product. The market research helps the company better understand the needs of its customers and their preferences. It also enables them to make more informed and illuminated decisions about the company’s operations, strategies and practices.

 

Moreover, market research allows the company to get hands on insightful information about its customers such as their wants, needs, trends that are being followed in your industry which are rising up the sales and what are the factors that are influencing the target audience to convert into customers and repeat customers.

Why You Should Always Go for a Market Research

 

Market research is an important step for any and all business.

Entering into any business whatsoever without conducting a thorough market research can be disastrous. You need to be sure that there is proper demand for your product.

 

There are various ways to go about it such as conducting surveys, creating a proof of concept / MVP / Prototype and showing it to people and asking for feedback, and we have listed them in the section – “Types of Market Research” – but the most important thing is you at least do something.

 

That’s because, market research -

  1. Helps in exploring the marketplace.
  2. Helps in identifying upcoming opportunities and trends in the marketplace.
  3. Helps in assessing the standing of a company in the market.
  4. Helps in minimizing the risks associated with launch of new products. (Hint: For 1-4, use Porter's Five Forces Model)
  5. Helps in customizing products as per customer preferences.
  6. Helps the business to plan for the future.
  7. Helps to unearth a competitor’s strengths and opportunities.
  8. Helps in making revenue projections.
  9. Helps in developing unique strategies to beat competitors and stay ahead in the competition.
  10. Helps in tailoring advertising strategies and establish trends amongst the marketplace.

Factors Influencing Market Research 

There is plethora of factors that influence the decision while contemplating upon the modes of market research.

 

There are several factors that influence the manner and how you do your market research

According to Niles Koenigsberg of FiG Advertising + Marketing, “When you're conducting market research, there's a wide wealth of factors that can influence not only your research methods and questions, but also your results and insights.

 

One of the most significant factors that will influence your research is the objective behind the research: what are you specifically trying to learn or understand by conducting this research? Is your market research more geared towards a rebranding strategy or are you looking for insights on your product sales?


The goal of your market research has a wide range of implications for your findings.

 

The research methods are also important factors, alongside the phrasing of your questions. In-depth study groups can lead to some crucial insights about your products or services. In a similar vein, market research surveys can uncover some helpful information, but these brief surveys can be a bit limited in terms of qualitative data.

 

You also need to phrase your questions to be as unbiased as possible, to avoid leading your participants to give one answer over another. The questions you ask need to be appropriately phrased to get the more unbiased answers possible.

 

In addition, the market researcher is an important factor for your results too, especially if you're conducting internal research.

 

An in-house marketing team may not be the most fitting choice for your market research,as employees may feel hesitant to give honest answers out of fear for their jobs and internal marketers can tend to have difficulties viewing their brand without rose-tinted glasses.

 

A third-party market research agency is usually the better way to go, as your employees will feel more comfortable speaking freely with them and those market researchers will be able to approach your brand from an unbiased perspective.”

Eli Diament, founder and director of Azurite Consulting , lists down factors in his view that have an integral impact on a business’s decision,

  • Need for conviction and competitive edge: You or your company want to answer questions that are not common knowledge or validate perspectives to maximize decision making confidence and conviction.

 

Thinking about business and investment, focussed and unique primary data can provide a competitive edge to underpin important decisions.

 

The mark of superior quality research is trustworthy, smart and rigorous data - that allows decision makers to pull the trigger with maximum conviction and certainty.

  • Need for custom primary data: The question you have will determine the need for primary vs secondary research. If the question at hand is very much an internal business question couched strictly in formal reporting and existing off-the-shelf data (e.g. business statements, P&L statements, industry reports so on) then in-house analysis and benchmarking research will suffice.

 

If the questions are people and outward facing (e.g. decision making and purchasing behavior, awareness, KPCs, granular behaviours and expectations), then primary research will help provide clear answers and new insights - and remove ambiguities and doubts.

 

  • Budget: Decision making has cost and profit implications. An incorrect decision leads to backtracking, missed opportunity and costs to recover when possible. On the other hand, research affects your business finances and requires some time investment.

Secondary research is more often than not either free or can be carved out of existing project budget, learning on existing team members to locate, gather and distill the information over days, weeks and months. Primary research will provide more robust and in depth answers, but will tend to be more costly, require process and approval and will take weeks to complete.

 

  • Timing: Research and data science can take some time. The type of questions being answered and the level of conviction required will influence the investment and allowance for the time required to complete the research.

 

The act of making a business decision is ultimately an economic and profit equation. Unanswered questions that require research will take anywhere from minutes to months to answer, however when used strategically can add unparalleled value and edge to the business.”

Types of Market Research Research

 

There are majorly two types of market research that can be undertaken by a business to gather valuable information about its market.

  • Primary Research - It is the first-hand information that a company collects by its own through the medium of telephonic interviews, e-questionnaires, online surveys, etc.
  • Secondary Research – It includes all the data or public records that are available and are just meant to be drawn conclusions from. There are mainly 3 types of secondary research sources: Public, Commercial and Internal. These sources mostly include trend reports, market statistics, industry content and sales data.


How to choose between Primary and Secondary Research when conducting a Market Research?


Deciding the best market strategy for your business might be quite a perplexing task that might involve comparing their pros and cons, while at the same time, taking your business model into consideration.

 

Oliver Andrews of OA Design Services suggests “Most research generally begins in secondary research. This is because secondary research can provide a researcher with a knowledge base of what relevant information has been compiled by other researchers in the past.

 

Primary research closes the following information gaps that a researcher could not collect using secondary research methods. Primary research aims to answer specific questions that relate directly to the project in question. This type of research is extremely valuable, but due to its nature, collecting takes longer than secondary research.”

 

Similarly, Matt Robbins, Vice President of Insight and Research at LEWIS gives an insight on his outlook over the two types of market research - “I’m a big proponent of not duplicating efforts with market research. If there is existing research that can fully or mostly answer your organization’s questions, then it's best to use that data as much as possible. Secondary data sources typically come from three groups:

 

  • Government Sources – Census Data, BLS, SBA.gov, Data.gov, etc.
  • Industry/Trade Groups – Industry Associations, Non-profits, Think Tanks, Chamber of Commerce, etc.
  • Public/Private Businesses – Thought Leadership Research, Paid Industry Syndicated Reports, etc.

 

Typically, Government and Industry/Trade Group research can be easily and freely found. Secondary research generated from companies are either publicly available mainly for media attainment or is behind a paywall for a price.

 

Though, even if the secondary research seems like a good fit and is free to use, it's always best to check the methodology to understand how the data is created. You don’t want to use research that has biased responses or poorly sourced respondents. 

 

Once you realize there may not be secondary data that will help you answer your business questions, it could be time to look at primary research options. Quantitative research options typically involve a survey meant to capture a statistically significant portion of your target respondents.

 

It will allow organizations to broadly understand attitudes/perceptions from the target respondent group, and drill down into topic areas of interest. Surveys will need to have a statistically significant sample size meaning enough people would need to respond to the survey in order for the findings to be representative of the population.

 

Alternatively, qualitative research normally only needs a fraction of respondents to prove beneficial. Talking directly to respondents either over the phone (In-depth Interviews), online (online focus groups and intercepts) or in-person (focus groups, moderated interviews, etc.) can be a good way to understand the “why” behind people's attitudes, feelings or actions. 

 

At LEWIS, we like to conduct mixed mode research when possible, meaning we want to combine qualitative and quantitative research methodologies so that we get the best of both worlds. Our proprietary brand methodology, the LEWIS Brand Heartbeat, allows us to conduct pre/post survey qualitative interviews. The pre-interviews help us understand how we should structure our surveys in order to achieve as usable as data as possible, while the post interviews help us dive into areas that we think need further exploration with our respondents.” 

 

Types of Primary Market Research?

 

As per Muhammed Mateen, Digital Marketing Strategist at PureVPN, “The vast majority of primary research used to be done through direct mail, telephone surveys, or direct observation. These techniques still have value, though digital technologies have certainly altered the sphere of data collection.

 

With this growing array of sophisticated and economical data-collection tools, it’ll be well worth it to you to evaluate all your options. Of course, the method you choose will depend on many factors: resources, timing, budget, the nature of your inquiry, and you're demographic.

 

Below is the list of the most common type of Primary research:

 

  1. Surveys: Surveys can be sent through a variety of channels: direct mail, email, telephone, social media platform. They can even take the form of pop-ups on your business website.

 

Surveys help get data quickly for market research. But it does not let you analyze the data in-depth.

Consumers’ expectations of what those surveys should entail will vary depending on the medium: Website surveys will likely be shorter than direct mail surveys, for example, since the latter can be completed offline, without distractions. 

 

Social media surveys will likely target a different demographic—and therefore, contain differently-posed questions—then telephone surveys do. In general, surveys are cost-effective, and let you ask targeted questions to a hand-picked audience.

 

  1. One-on-One Interviews: These can be conducted over the phone, over video chat (with Zoom, Skype, or Google Hangouts, for example), or in person. The advantage of one-on-one interviews is that—if done well—they take the form of free-flowing conversations.

 

They’re not restricted to a limited number of questions: If an interviewee says something unexpected, or if the natural course of your questioning precipitates a conversation about an aspect of your business you hadn’t considered, you can go down that path together.

 

Moreover, because you’re interacting directly with a customer or prospect, this method gives you a much better feeling for, and understanding of, your target market.

 

  1. Focus Groups: 

Focus groups are like one-on-one interviews. Except they involve a few more “ones.” One-on-one interviews can be particularly valuable when you anticipate your interviewees won’t want to share private information with a larger group (if the market research concerns financial services, or weight-loss programs, or personal hygiene products, for example).

 

Focus group is another key way for conducting primary market research

But if the vulnerability isn’t a concern, there’s a lot to be said for focus groups. Convening a small but intimate group means creating a space for participants to bounce ideas off one another.

 

You’ll get varying points of view. And because you’ll get to watch how participants respond to each other, you’ll have a better sense of what makes your target market tick—and what their buttons are.

 

  1. Direct Observation:

Observation for market research is very important to collect and analyze primary data


Observational research is exactly what it sounds like: a method of market research that involves watching consumer behavior without interacting with them—or, at least, without interfering with their process. 


This could mean anything from watching how a consumer behaves when interacting with a product (How do they handle the device? Is it intuitive for them? What is their overall experience as a user?) to watching how consumers move through your brick-and-mortar store (What products are they initially drawn to? Where do they go from there?). 

 

Other observational techniques include eye-tracking (What are users most drawn to on your website?), mystery shoppers (What do hire shoppers observe about consumers’ behavior in your competitor’s store?), movement tracking, and contextual inquiry (How do consumers work/play/to behave in their natural environment?).

 

Because consumers’ actual behavior doesn’t always square with their reported behavior, direct observation can be a valuable tool for discernment.”

 

A few attributes for a successful primary market research survey one must keep in mind according to Eli Diament, founder and director of Azurite Consulting are:

 

“#1. Sophistication of the survey copy: Translating a common colloquial saying..."bad questions will lead to bad insights". With this in mind, designing the survey to accurately and comprehensively address the research needs is a critical input to a successful primary research survey.

 

In addition to high quality questions couched in research expertise, the answer key and format also requires deliberate and careful design. If either the questions or the answers are imprecise or low quality, then the market research is not set up for success - and will easily lead to unsatisfactory, weak, skewed or biased insights. 

 

#2. Precision of the Respondent Pool: When push comes to shove, everyone can choose a side or have an opinion for any topic. Similarly, if you ask the most sophisticated, highest quality primary research questions to the wrong people, you may very well get a complete response from them, but it will not be worth much.

 

With this in mind, finding the right people is essential robust primary research surveys. Once you identify right person or personas to complete the survey, the next challenge to reliably find these respondents in scale, without ever sacrificing quality. 

 

#3. Obsessive Quality Control: Finally, the first two attributes are only validated once the survey is live. With respondents taking the survey, there will be immediate feedback on the questioning and the type of respondents taking the survey.

 

Obsessive quality control and thought partnership before the survey opens and while it's open (ruthlessly reviewing every response for trust, precision, logic and suitability) are the only ways to reliably complete sophisticated primary research - and ensure that every time, without fail, all of your business questions are answered with conviction.”

Steps to Conduct a Market Research

Now that you know the basics, it’s time for the real question.

 

How do you begin?

 

Well here is a complete step-by-step guide for conducting a successful market research:

 

#1. Determine your goal

 

What is your end goal for your market research

A business might consider conducting a market research maybe to forecast the trends of industry it works in, improve its cash flows, build a stronger brand image, evaluate the performance of its marketing campaigns.

 

Identifying the purpose of the research and the outcome one wants to receive by conducting the same is an important part to understand the nature of the research.

 

The business knowing whether it wants to conduct an internal or external research it would be able to identify the cost associated with it, the reach size, whether it will be able to conduct the research on its own or will a necessity for outsourcing will rise, etc.

 

#2. Identify your buyer’s persona

Identifying your target audience while conducting a research is one of the primary steps as it allows the business to create a customized survey that the target audience identifies with and can easily relate too and thus, would consider filling it.

 

Buyer persona covers the various characteristics of a buyer ranging from its age, income level, behavioral pattern, goals, gender, location, etc. Knowing such characteristics helps in optimizing your research.

 

Buyer Persona lets a business understand its customers which lets them tailor their products, services and content as per the needs and behavior of the market.

 

There are multiple types of buyer personas templates that one can refer to optimize his products and content in order to achieve better results.

 

However, one can also create a buyer persona template as per his company’s parameters and decision criteria’s.

 


#3. List down your competitors

Exploring the industry, you operate in allows you to find out the businesses that you are competing with, allowing you to create more effective and efficient surveys.

 

Through surveys made post considering competitors, you can ask the buyers itself as to what are the features or characteristic of your product that makes them prefer it and what are the innovations or changes you can incorporate which would improve your market size and position as compared to other competitors.

 

You can collect data about your competitors through various secondary research resources.

#4. Prepare your Survey

 

Preparation of the survey is a key step for ideal market research

Having a background knowledge about your buyers and your competitors allows you to create a survey way more efficiently.

 

The survey you prepare should be completely based upon the characteristics of your buyers and your industry type as customers of one market might prefer answering to a comprehensive survey consuming 10-15 minutes while a few others might completely ignore and just prefer answering a 2 minutes survey at most.

 

Also in the opinion of Liz Courtney, Business Development Manager, BBMG -

“The survey should also be detailed but not so long that people give up and don't complete the task.

 

If you're looking to conduct qualitative research like a focus group or one-one-one interviews, you might aim to speak to 10 to 15 people in order to get a variety of perspectives.

 

In all consumer research, whether quantitative or qualitative, it's best to start broadly in the questions -- getting to know who the person is and the context of their life experience -- and then drill down into the specific questions related to your business.”

 

#5. Analyze your findings

Once you have conducted your survey the next step is summarizing and analyzing your findings. Spread your findings across different categories suiting the purpose of your business. A basic outline for your summary could be:

  1. Participants,
  2. Responses,
  3. Your evaluation based on responses,
  4. The way ahead for your business.
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