how to conduct the market research

How to Do Market Research: The Complete Guide

Learn how to do market research with this step-by-step guide, complete with templates, tools and real-world examples.

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Market research is the systematic process of gathering, analyzing and interpreting information about a specific market or industry.

What are your customers’ needs? How does your product compare to the competition? What are the emerging trends and opportunities in your industry? If these questions keep you up at night, it’s time to conduct market research.

Market research plays a pivotal role in your ability to stay competitive and relevant, helping you anticipate shifts in consumer behavior and industry dynamics. It involves gathering these insights using a wide range of techniques, from surveys and interviews to data analysis and observational studies.

In this guide, we’ll explore why market research is crucial, the various types of market research, the methods used in data collection, and how to effectively conduct market research to drive informed decision-making and success.

What is market research?

The purpose of market research is to offer valuable insight into the preferences and behaviors of your target audience, and anticipate shifts in market trends and the competitive landscape. This information helps you make data-driven decisions, develop effective strategies for your business, and maximize your chances of long-term growth.

Why is market research important? 

By understanding the significance of market research, you can make sure you’re asking the right questions and using the process to your advantage. Some of the benefits of market research include:

• Informed decision-making: Market research provides you with the data and insights you need to make smart decisions for your business. It helps you identify opportunities, assess risks and tailor your strategies to meet the demands of the market. Without market research, decisions are often based on assumptions or guesswork, leading to costly mistakes.
• Customer-centric approach: A cornerstone of market research involves developing a deep understanding of customer needs and preferences. This gives you valuable insights into your target audience, helping you develop products, services and marketing campaigns that resonate with your customers.
• Competitive advantage: By conducting market research, you’ll gain a competitive edge. You’ll be able to identify gaps in the market, analyze competitor strengths and weaknesses, and position your business strategically. This enables you to create unique value propositions, differentiate yourself from competitors, and seize opportunities that others may overlook.
• Risk mitigation: Market research helps you anticipate market shifts and potential challenges. By identifying threats early, you can proactively adjust their strategies to mitigate risks and respond effectively to changing circumstances. This proactive approach is particularly valuable in volatile industries.
• Resource optimization: Conducting market research allows organizations to allocate their time, money and resources more efficiently. It ensures that investments are made in areas with the highest potential return on investment, reducing wasted resources and improving overall business performance.
• Adaptation to market trends: Markets evolve rapidly, driven by technological advancements, cultural shifts and changing consumer attitudes. Market research ensures that you stay ahead of these trends and adapt your offerings accordingly so you can avoid becoming obsolete. 

As you can see, market research empowers businesses to make data-driven decisions, cater to customer needs, outperform competitors, mitigate risks, optimize resources and stay agile in a dynamic marketplace. These benefits make it a huge industry; the global market research services market is expected to grow from $76.37 billion in 2021 to $108.57 billion in 2026 . Now, let’s dig into the different types of market research that can help you achieve these benefits.

Types of market research 

• Qualitative research
• Quantitative research
• Exploratory research
• Descriptive research
• Causal research
• Cross-sectional research
• Longitudinal research

Despite its advantages, 23% of organizations don’t have a clear market research strategy. Part of developing a strategy involves choosing the right type of market research for your business goals. The most commonly used approaches include:

1. Qualitative research

Qualitative research focuses on understanding the underlying motivations, attitudes and perceptions of individuals or groups. It is typically conducted through techniques like in-depth interviews, focus groups and content analysis — methods we’ll discuss further in the sections below. Qualitative research provides rich, nuanced insights that can inform product development, marketing strategies and brand positioning.

2. Quantitative research

Quantitative research, in contrast to qualitative research, involves the collection and analysis of numerical data, often through surveys, experiments and structured questionnaires. This approach allows for statistical analysis and the measurement of trends, making it suitable for large-scale market studies and hypothesis testing. While it’s worthwhile using a mix of qualitative and quantitative research, most businesses prioritize the latter because it is scientific, measurable and easily replicated across different experiments.

3. Exploratory research

Whether you’re conducting qualitative or quantitative research or a mix of both, exploratory research is often the first step. Its primary goal is to help you understand a market or problem so you can gain insights and identify potential issues or opportunities. This type of market research is less structured and is typically conducted through open-ended interviews, focus groups or secondary data analysis. Exploratory research is valuable when entering new markets or exploring new product ideas.

4. Descriptive research

As its name implies, descriptive research seeks to describe a market, population or phenomenon in detail. It involves collecting and summarizing data to answer questions about audience demographics and behaviors, market size, and current trends. Surveys, observational studies and content analysis are common methods used in descriptive research. 

5. Causal research

Causal research aims to establish cause-and-effect relationships between variables. It investigates whether changes in one variable result in changes in another. Experimental designs, A/B testing and regression analysis are common causal research methods. This sheds light on how specific marketing strategies or product changes impact consumer behavior.

6. Cross-sectional research

Cross-sectional market research involves collecting data from a sample of the population at a single point in time. It is used to analyze differences, relationships or trends among various groups within a population. Cross-sectional studies are helpful for market segmentation, identifying target audiences and assessing market trends at a specific moment.

7. Longitudinal research

Longitudinal research, in contrast to cross-sectional research, collects data from the same subjects over an extended period. This allows for the analysis of trends, changes and developments over time. Longitudinal studies are useful for tracking long-term developments in consumer preferences, brand loyalty and market dynamics.

Each type of market research has its strengths and weaknesses, and the method you choose depends on your specific research goals and the depth of understanding you’re aiming to achieve. In the following sections, we’ll delve into primary and secondary research approaches and specific research methods.

Primary vs. secondary market research

Market research of all types can be broadly categorized into two main approaches: primary research and secondary research. By understanding the differences between these approaches, you can better determine the most appropriate research method for your specific goals.

Primary market research 

Primary research involves the collection of original data straight from the source. Typically, this involves communicating directly with your target audience — through surveys, interviews, focus groups and more — to gather information. Here are some key attributes of primary market research:

• Customized data: Primary research provides data that is tailored to your research needs. You design a custom research study and gather information specific to your goals.
• Up-to-date insights: Because primary research involves communicating with customers, the data you collect reflects the most current market conditions and consumer behaviors.
• Time-consuming and resource-intensive: Despite its advantages, primary research can be labor-intensive and costly, especially when dealing with large sample sizes or complex study designs. Whether you hire a market research consultant, agency or use an in-house team, primary research studies consume a large amount of resources and time.

Secondary market research 

Secondary research, on the other hand, involves analyzing data that has already been compiled by third-party sources, such as online research tools, databases, news sites, industry reports and academic studies.

Here are the main characteristics of secondary market research:

• Cost-effective: Secondary research is generally more cost-effective than primary research since it doesn’t require building a research plan from scratch. You and your team can look at databases, websites and publications on an ongoing basis, without needing to design a custom experiment or hire a consultant. 
• Leverages multiple sources: Data tools and software extract data from multiple places across the web, and then consolidate that information within a single platform. This means you’ll get a greater amount of data and a wider scope from secondary research.
• Quick to access: You can access a wide range of information rapidly — often in seconds — if you’re using online research tools and databases. Because of this, you can act on insights sooner, rather than taking the time to develop an experiment. 

So, when should you use primary vs. secondary research? In practice, many market research projects incorporate both primary and secondary research to take advantage of the strengths of each approach.

One rule of thumb is to focus on secondary research to obtain background information, market trends or industry benchmarks. It is especially valuable for conducting preliminary research, competitor analysis, or when time and budget constraints are tight. Then, if you still have knowledge gaps or need to answer specific questions unique to your business model, use primary research to create a custom experiment. 

Market research methods

• Surveys and questionnaires
• Focus groups
• Observational research
• Online research tools
• Experiments
• Content analysis
• Ethnographic research

How do primary and secondary research approaches translate into specific research methods? Let’s take a look at the different ways you can gather data: 

1. Surveys and questionnaires

Surveys and questionnaires are popular methods for collecting structured data from a large number of respondents. They involve a set of predetermined questions that participants answer. Surveys can be conducted through various channels, including online tools, telephone interviews and in-person or online questionnaires. They are useful for gathering quantitative data and assessing customer demographics, opinions, preferences and needs. On average, customer surveys have a 33% response rate , so keep that in mind as you consider your sample size.

2. Interviews

Interviews are in-depth conversations with individuals or groups to gather qualitative insights. They can be structured (with predefined questions) or unstructured (with open-ended discussions). Interviews are valuable for exploring complex topics, uncovering motivations and obtaining detailed feedback. 

3. Focus groups

The most common primary research methods are in-depth webcam interviews and focus groups. Focus groups are a small gathering of participants who discuss a specific topic or product under the guidance of a moderator. These discussions are valuable for primary market research because they reveal insights into consumer attitudes, perceptions and emotions. Focus groups are especially useful for idea generation, concept testing and understanding group dynamics within your target audience.

4. Observational research

Observational research involves observing and recording participant behavior in a natural setting. This method is particularly valuable when studying consumer behavior in physical spaces, such as retail stores or public places. In some types of observational research, participants are aware you’re watching them; in other cases, you discreetly watch consumers without their knowledge, as they use your product. Either way, observational research provides firsthand insights into how people interact with products or environments.

5. Online research tools

You and your team can do your own secondary market research using online tools. These tools include data prospecting platforms and databases, as well as online surveys, social media listening, web analytics and sentiment analysis platforms. They help you gather data from online sources, monitor industry trends, track competitors, understand consumer preferences and keep tabs on online behavior. We’ll talk more about choosing the right market research tools in the sections that follow.

6. Experiments

Market research experiments are controlled tests of variables to determine causal relationships. While experiments are often associated with scientific research, they are also used in market research to assess the impact of specific marketing strategies, product features, or pricing and packaging changes.

7. Content analysis

Content analysis involves the systematic examination of textual, visual or audio content to identify patterns, themes and trends. It’s commonly applied to customer reviews, social media posts and other forms of online content to analyze consumer opinions and sentiments.

8. Ethnographic research

Ethnographic research immerses researchers into the daily lives of consumers to understand their behavior and culture. This method is particularly valuable when studying niche markets or exploring the cultural context of consumer choices.

How to do market research

• Set clear objectives
• Identify your target audience
• Choose your research methods
• Use the right market research tools
• Collect data
• Analyze data 
• Interpret your findings
• Identify opportunities and challenges
• Make informed business decisions
• Monitor and adapt

Now that you have gained insights into the various market research methods at your disposal, let’s delve into the practical aspects of how to conduct market research effectively. Here’s a quick step-by-step overview, from defining objectives to monitoring market shifts.

1. Set clear objectives

When you set clear and specific goals, you’re essentially creating a compass to guide your research questions and methodology. Start by precisely defining what you want to achieve. Are you launching a new product and want to understand its viability in the market? Are you evaluating customer satisfaction with a product redesign? 

Start by creating SMART goals — objectives that are specific, measurable, achievable, relevant and time-bound. Not only will this clarify your research focus from the outset, but it will also help you track progress and benchmark your success throughout the process. 

You should also consult with key stakeholders and team members to ensure alignment on your research objectives before diving into data collecting. This will help you gain diverse perspectives and insights that will shape your research approach.

2. Identify your target audience

Next, you’ll need to pinpoint your target audience to determine who should be included in your research. Begin by creating detailed buyer personas or stakeholder profiles. Consider demographic factors like age, gender, income and location, but also delve into psychographics, such as interests, values and pain points.

The more specific your target audience, the more accurate and actionable your research will be. Additionally, segment your audience if your research objectives involve studying different groups, such as current customers and potential leads.

If you already have existing customers, you can also hold conversations with them to better understand your target market. From there, you can refine your buyer personas and tailor your research methods accordingly.

3. Choose your research methods

Selecting the right research methods is crucial for gathering high-quality data. Start by considering the nature of your research objectives. If you’re exploring consumer preferences, surveys and interviews can provide valuable insights. For in-depth understanding, focus groups or observational research might be suitable. Consider using a mix of quantitative and qualitative methods to gain a well-rounded perspective. 

You’ll also need to consider your budget. Think about what you can realistically achieve using the time and resources available to you. If you have a fairly generous budget, you may want to try a mix of primary and secondary research approaches. If you’re doing market research for a startup , on the other hand, chances are your budget is somewhat limited. If that’s the case, try addressing your goals with secondary research tools before investing time and effort in a primary research study. 

4. Use the right market research tools

Whether you’re conducting primary or secondary research, you’ll need to choose the right tools. These can help you do anything from sending surveys to customers to monitoring trends and analyzing data. Here are some examples of popular market research tools:

• Market research software: Crunchbase is a platform that provides best-in-class company data, making it valuable for market research on growing companies and industries. You can use Crunchbase to access trusted, first-party funding data, revenue data, news and firmographics, enabling you to monitor industry trends and understand customer needs.

• Survey and questionnaire tools: SurveyMonkey is a widely used online survey platform that allows you to create, distribute and analyze surveys. Google Forms is a free tool that lets you create surveys and collect responses through Google Drive.
• Data analysis software: Microsoft Excel and Google Sheets are useful for conducting statistical analyses. SPSS is a powerful statistical analysis software used for data processing, analysis and reporting.
• Social listening tools: Brandwatch is a social listening and analytics platform that helps you monitor social media conversations, track sentiment and analyze trends. Mention is a media monitoring tool that allows you to track mentions of your brand, competitors and keywords across various online sources.
• Data visualization platforms: Tableau is a data visualization tool that helps you create interactive and shareable dashboards and reports. Power BI by Microsoft is a business analytics tool for creating interactive visualizations and reports.

5. Collect data

There’s an infinite amount of data you could be collecting using these tools, so you’ll need to be intentional about going after the data that aligns with your research goals. Implement your chosen research methods, whether it’s distributing surveys, conducting interviews or pulling from secondary research platforms. Pay close attention to data quality and accuracy, and stick to a standardized process to streamline data capture and reduce errors. 

6. Analyze data

Once data is collected, you’ll need to analyze it systematically. Use statistical software or analysis tools to identify patterns, trends and correlations. For qualitative data, employ thematic analysis to extract common themes and insights. Visualize your findings with charts, graphs and tables to make complex data more understandable.

If you’re not proficient in data analysis, consider outsourcing or collaborating with a data analyst who can assist in processing and interpreting your data accurately.

7. Interpret your findings

Interpreting your market research findings involves understanding what the data means in the context of your objectives. Are there significant trends that uncover the answers to your initial research questions? Consider the implications of your findings on your business strategy. It’s essential to move beyond raw data and extract actionable insights that inform decision-making.

Hold a cross-functional meeting or workshop with relevant team members to collectively interpret the findings. Different perspectives can lead to more comprehensive insights and innovative solutions.

8. Identify opportunities and challenges

Use your research findings to identify potential growth opportunities and challenges within your market. What segments of your audience are underserved or overlooked? Are there emerging trends you can capitalize on? Conversely, what obstacles or competitors could hinder your progress?

Lay out this information in a clear and organized way by conducting a SWOT analysis, which stands for strengths, weaknesses, opportunities and threats. Jot down notes for each of these areas to provide a structured overview of gaps and hurdles in the market.

9. Make informed business decisions

Market research is only valuable if it leads to informed decisions for your company. Based on your insights, devise actionable strategies and initiatives that align with your research objectives. Whether it’s refining your product, targeting new customer segments or adjusting pricing, ensure your decisions are rooted in the data.

At this point, it’s also crucial to keep your team aligned and accountable. Create an action plan that outlines specific steps, responsibilities and timelines for implementing the recommendations derived from your research. 

10. Monitor and adapt

Market research isn’t a one-time activity; it’s an ongoing process. Continuously monitor market conditions, customer behaviors and industry trends. Set up mechanisms to collect real-time data and feedback. As you gather new information, be prepared to adapt your strategies and tactics accordingly. Regularly revisiting your research ensures your business remains agile and reflects changing market dynamics and consumer preferences.

Online market research sources

As you go through the steps above, you’ll want to turn to trusted, reputable sources to gather your data. Here’s a list to get you started:

• Crunchbase: As mentioned above, Crunchbase is an online platform with an extensive dataset, allowing you to access in-depth insights on market trends, consumer behavior and competitive analysis. You can also customize your search options to tailor your research to specific industries, geographic regions or customer personas.

• Academic databases: Academic databases, such as ProQuest and JSTOR , are treasure troves of scholarly research papers, studies and academic journals. They offer in-depth analyses of various subjects, including market trends, consumer preferences and industry-specific insights. Researchers can access a wealth of peer-reviewed publications to gain a deeper understanding of their research topics.
• Government and NGO databases: Government agencies, nongovernmental organizations and other institutions frequently maintain databases containing valuable economic, demographic and industry-related data. These sources offer credible statistics and reports on a wide range of topics, making them essential for market researchers. Examples include the U.S. Census Bureau , the Bureau of Labor Statistics and the Pew Research Center .
• Industry reports: Industry reports and market studies are comprehensive documents prepared by research firms, industry associations and consulting companies. They provide in-depth insights into specific markets, including market size, trends, competitive analysis and consumer behavior. You can find this information by looking at relevant industry association databases; examples include the American Marketing Association and the National Retail Federation .
• Social media and online communities: Social media platforms like LinkedIn or Twitter (X) , forums such as Reddit and Quora , and review platforms such as G2 can provide real-time insights into consumer sentiment, opinions and trends. 

Market research examples

At this point, you have market research tools and data sources — but how do you act on the data you gather? Let’s go over some real-world examples that illustrate the practical application of market research across various industries. These examples showcase how market research can lead to smart decision-making and successful business decisions.

Example 1: Apple’s iPhone launch

Apple ’s iconic iPhone launch in 2007 serves as a prime example of market research driving product innovation in tech. Before the iPhone’s release, Apple conducted extensive market research to understand consumer preferences, pain points and unmet needs in the mobile phone industry. This research led to the development of a touchscreen smartphone with a user-friendly interface, addressing consumer demands for a more intuitive and versatile device. The result was a revolutionary product that disrupted the market and redefined the smartphone industry.

Example 2: McDonald’s global expansion

McDonald’s successful global expansion strategy demonstrates the importance of market research when expanding into new territories. Before entering a new market, McDonald’s conducts thorough research to understand local tastes, preferences and cultural nuances. This research informs menu customization, marketing strategies and store design. For instance, in India, McDonald’s offers a menu tailored to local preferences, including vegetarian options. This market-specific approach has enabled McDonald’s to adapt and thrive in diverse global markets.

Example 3: Organic and sustainable farming

The shift toward organic and sustainable farming practices in the food industry is driven by market research that indicates increased consumer demand for healthier and environmentally friendly food options. As a result, food producers and retailers invest in sustainable sourcing and organic product lines — such as with these sustainable seafood startups — to align with this shift in consumer values. 

The bottom line? Market research has multiple use cases and is a critical practice for any industry. Whether it’s launching groundbreaking products, entering new markets or responding to changing consumer preferences, you can use market research to shape successful strategies and outcomes.

Market research templates

You finally have a strong understanding of how to do market research and apply it in the real world. Before we wrap up, here are some market research templates that you can use as a starting point for your projects:

• Smartsheet competitive analysis templates : These spreadsheets can serve as a framework for gathering information about the competitive landscape and obtaining valuable lessons to apply to your business strategy.
• SurveyMonkey product survey template : Customize the questions on this survey based on what you want to learn from your target customers.
• HubSpot templates : HubSpot offers a wide range of free templates you can use for market research, business planning and more.
• SCORE templates : SCORE is a nonprofit organization that provides templates for business plans, market analysis and financial projections.
• SBA.gov : The U.S. Small Business Administration offers templates for every aspect of your business, including market research, and is particularly valuable for new startups. 

Strengthen your business with market research

When conducted effectively, market research is like a guiding star. Equipped with the right tools and techniques, you can uncover valuable insights, stay competitive, foster innovation and navigate the complexities of your industry.

Throughout this guide, we’ve discussed the definition of market research, different research methods, and how to conduct it effectively. We’ve also explored various types of market research and shared practical insights and templates for getting started. 

Now, it’s time to start the research process. Trust in data, listen to the market and make informed decisions that guide your company toward lasting success.

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How to do market research: The complete guide for your brand

Written by by Jacqueline Zote

Published on  April 13, 2023

Reading time  10 minutes

Blindly putting out content or products and hoping for the best is a thing of the past. Not only is it a waste of time and energy, but you’re wasting valuable marketing dollars in the process. Now you have a wealth of tools and data at your disposal, allowing you to develop data-driven marketing strategies . That’s where market research comes in, allowing you to uncover valuable insights to inform your business decisions.

Conducting market research not only helps you better understand how to sell to customers but also stand out from your competition. In this guide, we break down everything you need to know about market research and how doing your homework can help you grow your business.

Table of contents:

What is market research?

Why is market research important, types of market research, where to conduct market research.

• Steps for conducting market research
• Tools to use for market research

Market research is the process of gathering information surrounding your business opportunities. It identifies key information to better understand your audience. This includes insights related to customer personas and even trends shaping your industry.

Taking time out of your schedule to conduct research is crucial for your brand health. Here are some of the key benefits of market research:

Understand your customers’ motivations and pain points

Most marketers are out of touch with what their customers want. Moreover, these marketers are missing key information on what products their audience wants to buy.

Simply put, you can’t run a business if you don’t know what motivates your customers.

And spoiler alert: Your customers’ wants and needs change. Your customers’ behaviors today might be night and day from what they were a few years ago.

Market research holds the key to understanding your customers better. It helps you uncover their key pain points and motivations and understand how they shape their interests and behavior.

Figure out how to position your brand

Positioning is becoming increasingly important as more and more brands enter the marketplace. Market research enables you to spot opportunities to define yourself against your competitors.

Maybe you’re able to emphasize a lower price point. Perhaps your product has a feature that’s one of a kind. Finding those opportunities goes hand in hand with researching your market.

Maintain a strong pulse on your industry at large

Today’s marketing world evolves at a rate that’s difficult to keep up with.

Fresh products. Up-and-coming brands. New marketing tools. Consumers get bombarded with sales messages from all angles. This can be confusing and overwhelming.

By monitoring market trends, you can figure out the best tactics for reaching your target audience.

Not everyone conducts market research for the same reason. While some may want to understand their audience better, others may want to see how their competitors are doing. As such, there are different types of market research you can conduct depending on your goal.

Interview-based market research allows for one-on-one interactions. This helps the conversation to flow naturally, making it easier to add context. Whether this takes place in person or virtually, it enables you to gather more in-depth qualitative data.

Buyer persona research

Buyer persona research lets you take a closer look at the people who make up your target audience. You can discover the needs, challenges and pain points of each buyer persona to understand what they need from your business. This will then allow you to craft products or campaigns to resonate better with each persona.

Pricing research

In this type of research, brands compare similar products or services with a particular focus on pricing. They look at how much those products or services typically sell for so they can get more competitive with their pricing strategy.

Competitive analysis research

Competitor analysis gives you a realistic understanding of where you stand in the market and how your competitors are doing. You can use this analysis to find out what’s working in your industry and which competitors to watch out for. It even gives you an idea of how well those competitors are meeting consumer needs.

Depending on the competitor analysis tool you use, you can get as granular as you need with your research. For instance, Sprout Social lets you analyze your competitors’ social strategies. You can see what types of content they’re posting and even benchmark your growth against theirs.

Brand awareness research

Conducting brand awareness research allows you to assess your brand’s standing in the market. It tells you how well-known your brand is among your target audience and what they associate with it. This can help you gauge people’s sentiments toward your brand and whether you need to rebrand or reposition.

If you don’t know where to start with your research, you’re in the right place.

There’s no shortage of market research methods out there. In this section, we’ve highlighted research channels for small and big businesses alike.

Considering that Google sees a staggering 8.5 billion searches each day, there’s perhaps no better place to start.

A quick Google search is a potential goldmine for all sorts of questions to kick off your market research. Who’s ranking for keywords related to your industry? Which products and pieces of content are the hottest right now? Who’s running ads related to your business?

For example, Google Product Listing Ads can help highlight all of the above for B2C brands.

The same applies to B2B brands looking to keep tabs on who’s running industry-related ads and ranking for keyword terms too.

There’s no denying that email represents both an aggressive and effective marketing channel for marketers today. Case in point, 44% of online shoppers consider email as the most influential channel in their buying decisions.

Looking through industry and competitor emails is a brilliant way to learn more about your market. For example, what types of offers and deals are your competitors running? How often are they sending emails?

Email is also invaluable for gathering information directly from your customers. This survey message from Asana is a great example of how to pick your customers’ brains to figure out how you can improve your quality of service.

Industry journals, reports and blogs

Don’t neglect the importance of big-picture market research when it comes to tactics and marketing channels to explore. Look to marketing resources such as reports and blogs as well as industry journals

Keeping your ear to the ground on new trends and technologies is a smart move for any business. Sites such as Statista, Marketing Charts, AdWeek and Emarketer are treasure troves of up-to-date data and news for marketers.

And of course, there’s the  Sprout Insights blog . And invaluable resources like The Sprout Social Index™  can keep you updated on the latest social trends.

Social media

If you want to learn more about your target market, look no further than social media. Social offers a place to discover what your customers want to see in future products or which brands are killin’ it. In fact, social media is become more important for businesses than ever with the level of data available.

It represents a massive repository of real-time data and insights that are instantly accessible. Brand monitoring and social listening are effective ways to conduct social media research . You can even be more direct with your approach. Ask questions directly or even poll your audience to understand their needs and preferences.

The 5 steps for how to do market research

Now that we’ve covered the why and where, it’s time to get into the practical aspects of market research. Here are five essential steps on how to do market research effectively.

Step 1: Identify your research topic

First off, what are you researching about? What do you want to find out? Narrow down on a specific research topic so you can start with a clear idea of what to look for.

For example, you may want to learn more about how well your product features are satisfying the needs of existing users. This might potentially lead to feature updates and improvements. Or it might even result in new feature introductions.

Similarly, your research topic may be related to your product or service launch or customer experience. Or you may want to conduct research for an upcoming marketing campaign.

Step 2: Choose a buyer persona to engage

If you’re planning to focus your research on a specific type of audience, decide which buyer persona you want to engage. This persona group will serve as a representative sample of your target audience.

Engaging a specific group of audience lets you streamline your research efforts. As such, it can be a much more effective and organized approach than researching thousands (if not millions) of individuals.

You may be directing your research toward existing users of your product. To get even more granular, you may want to focus on users who have been familiar with the product for at least a year, for example.

Step 3: Start collecting data

The next step is one of the most critical as it involves collecting the data you need for your research. Before you begin, make sure you’ve chosen the right research methods that will uncover the type of data you need. This largely depends on your research topic and goals.

Remember that you don’t necessarily have to stick to one research method. You may use a combination of qualitative and quantitative approaches. So for example, you could use interviews to supplement the data from your surveys. Or you may stick to insights from your social listening efforts.

To keep things consistent, let’s look at this in the context of the example from earlier. Perhaps you can send out a survey to your existing users asking them a bunch of questions. This might include questions like which features they use the most and how often they use them. You can get them to choose an answer from one to five and collect quantitative data.

Plus, for qualitative insights, you could even include a few open-ended questions with the option to write their answers. For instance, you might ask them if there’s any improvement they wish to see in your product.

Step 4: Analyze results

Once you have all the data you need, it’s time to analyze it keeping your research topic in mind. This involves trying to interpret the data to look for a wider meaning, particularly in relation to your research goal.

So let’s say a large percentage of responses were four or five in the satisfaction rating. This means your existing users are mostly satisfied with your current product features. On the other hand, if the responses were mostly ones and twos, you may look for opportunities to improve. The responses to your open-ended questions can give you further context as to why people are disappointed.

Step 5: Make decisions for your business

Now it’s time to take your findings and turn them into actionable insights for your business. In this final step, you need to decide how you want to move forward with your new market insight.

What did you find in your research that would require action? How can you put those findings to good use?

The market research tools you should be using

To wrap things up, let’s talk about the various tools available to conduct speedy, in-depth market research. These tools are essential for conducting market research faster and more efficiently.

Social listening and analytics

Social analytics tools like Sprout can help you keep track of engagement across social media. This goes beyond your own engagement data but also includes that of your competitors. Considering how quickly social media moves, using a third-party analytics tool is ideal. It allows you to make sense of your social data at a glance and ensure that you’re never missing out on important trends.

Email marketing research tools

Keeping track of brand emails is a good idea for any brand looking to stand out in its audience’s inbox.

Tools such as MailCharts ,  Really Good Emails  and  Milled  can show you how different brands run their email campaigns.

Meanwhile, tools like  Owletter  allow you to monitor metrics such as frequency and send-timing. These metrics can help you understand email marketing strategies among competing brands.

Content marketing research

If you’re looking to conduct research on content marketing, tools such as  BuzzSumo  can be of great help. This tool shows you the top-performing industry content based on keywords. Here you can see relevant industry sites and influencers as well as which brands in your industry are scoring the most buzz. It shows you exactly which pieces of content are ranking well in terms of engagements and shares and on which social networks.

SEO and keyword tracking

Monitoring industry keywords is a great way to uncover competitors. It can also help you discover opportunities to advertise your products via organic search. Tools such as  Ahrefs  provide a comprehensive keyword report to help you see how your search efforts stack up against the competition.

Competitor comparison template

For the sake of organizing your market research, consider creating a competitive matrix. The idea is to highlight how you stack up side-by-side against others in your market. Use a  social media competitive analysis template  to track your competitors’ social presence. That way, you can easily compare tactics, messaging and performance. Once you understand your strengths and weaknesses next to your competitors, you’ll find opportunities as well.

Customer persona creator

Finally, customer personas represent a place where all of your market research comes together. You’d need to create a profile of your ideal customer that you can easily refer to. Tools like  Xtensio  can help in outlining your customer motivations and demographics as you zero in on your target market.

Build a solid market research strategy

Having a deeper understanding of the market gives you leverage in a sea of competitors. Use the steps and market research tools we shared above to build an effective market research strategy.

But keep in mind that the accuracy of your research findings depends on the quality of data collected. Turn to Sprout’s social media analytics tools to uncover heaps of high-quality data across social networks.

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Market Research: A How-To Guide and Template

Discover the different types of market research, how to conduct your own market research, and use a free template to help you along the way.

MARKET RESEARCH KIT

5 Research and Planning Templates + a Free Guide on How to Use Them in Your Market Research

Published: 02/21/24

Today's consumers have a lot of power. As a business, you must have a deep understanding of who your buyers are and what influences their purchase decisions.

Enter: Market Research.

Whether you're new to market research or not, I created this guide to help you conduct a thorough study of your market, target audience, competition, and more. Let’s dive in.

Table of Contents

What is market research?

Primary vs. secondary research, types of market research, how to do market research, market research report template, market research examples.

Market research is the process of gathering information about your target market and customers to verify the success of a new product, help your team iterate on an existing product, or understand brand perception to ensure your team is effectively communicating your company's value effectively.

Market research can answer various questions about the state of an industry. But if you ask me, it's hardly a crystal ball that marketers can rely on for insights on their customers.

Market researchers investigate several areas of the market, and it can take weeks or even months to paint an accurate picture of the business landscape.

However, researching just one of those areas can make you more intuitive to who your buyers are and how to deliver value that no other business is offering them right now.

How? Consider these two things:

• Your competitors also have experienced individuals in the industry and a customer base. It‘s very possible that your immediate resources are, in many ways, equal to those of your competition’s immediate resources. Seeking a larger sample size for answers can provide a better edge.
• Your customers don't represent the attitudes of an entire market. They represent the attitudes of the part of the market that is already drawn to your brand.

The market research services market is growing rapidly, which signifies a strong interest in market research as we enter 2024. The market is expected to grow from roughly $75 billion in 2021 to $90.79 billion in 2025 .

Free Market Research Kit

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• Survey Template
• Focus Group Template

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Why do market research?

Market research allows you to meet your buyer where they are.

As our world becomes louder and demands more of our attention, this proves invaluable.

By understanding your buyer's problems, pain points, and desired solutions, you can aptly craft your product or service to naturally appeal to them.

Market research also provides insight into the following:

• Where your target audience and current customers conduct their product or service research
• Which of your competitors your target audience looks to for information, options, or purchases
• What's trending in your industry and in the eyes of your buyer
• Who makes up your market and what their challenges are
• What influences purchases and conversions among your target audience
• Consumer attitudes about a particular topic, pain, product, or brand
• Whether there‘s demand for the business initiatives you’re investing in
• Unaddressed or underserved customer needs that can be flipped into selling opportunity
• Attitudes about pricing for a particular product or service

Ultimately, market research allows you to get information from a larger sample size of your target audience, eliminating bias and assumptions so that you can get to the heart of consumer attitudes.

As a result, you can make better business decisions.

To give you an idea of how extensive market research can get , consider that it can either be qualitative or quantitative in nature — depending on the studies you conduct and what you're trying to learn about your industry.

Qualitative research is concerned with public opinion, and explores how the market feels about the products currently available in that market.

Quantitative research is concerned with data, and looks for relevant trends in the information that's gathered from public records.

That said, there are two main types of market research that your business can conduct to collect actionable information on your products: primary research and secondary research.

Primary Research

Primary research is the pursuit of first-hand information about your market and the customers within your market.

It's useful when segmenting your market and establishing your buyer personas.

Primary market research tends to fall into one of two buckets:

• Exploratory Primary Research: This kind of primary market research normally takes place as a first step — before any specific research has been performed — and may involve open-ended interviews or surveys with small numbers of people.
• Specific Primary Research: This type of research often follows exploratory research. In specific research, you take a smaller or more precise segment of your audience and ask questions aimed at solving a suspected problem.

Secondary Research

Secondary research is all the data and public records you have at your disposal to draw conclusions from (e.g. trend reports, market statistics, industry content, and sales data you already have on your business).

Secondary research is particularly useful for analyzing your competitors . The main buckets your secondary market research will fall into include:

• Public Sources: These sources are your first and most-accessible layer of material when conducting secondary market research. They're often free to find and review — like government statistics (e.g., from the U.S. Census Bureau ).
• Commercial Sources: These sources often come in the form of pay-to-access market reports, consisting of industry insight compiled by a research agency like Pew , Gartner , or Forrester .
• Internal Sources: This is the market data your organization already has like average revenue per sale, customer retention rates, and other historical data that can help you draw conclusions on buyer needs.
• Focus Groups
• Product/ Service Use Research
• Observation-Based Research
• Buyer Persona Research
• Market Segmentation Research
• Pricing Research
• Competitive Analysis Research
• Customer Satisfaction and Loyalty Research
• Brand Awareness Research
• Campaign Research

1. Interviews

Interviews allow for face-to-face discussions so you can allow for a natural flow of conversation. Your interviewees can answer questions about themselves to help you design your buyer personas and shape your entire marketing strategy.

2. Focus Groups

Focus groups provide you with a handful of carefully-selected people that can test out your product and provide feedback. This type of market research can give you ideas for product differentiation.

3. Product/Service Use Research

Product or service use research offers insight into how and why your audience uses your product or service. This type of market research also gives you an idea of the product or service's usability for your target audience.

4. Observation-Based Research

Observation-based research allows you to sit back and watch the ways in which your target audience members go about using your product or service, what works well in terms of UX , and which aspects of it could be improved.

5. Buyer Persona Research

Buyer persona research gives you a realistic look at who makes up your target audience, what their challenges are, why they want your product or service, and what they need from your business or brand.

6. Market Segmentation Research

Market segmentation research allows you to categorize your target audience into different groups (or segments) based on specific and defining characteristics. This way, you can determine effective ways to meet their needs.

7. Pricing Research

Pricing research helps you define your pricing strategy . It gives you an idea of what similar products or services in your market sell for and what your target audience is willing to pay.

8. Competitive Analysis

Competitive analyses give you a deep understanding of the competition in your market and industry. You can learn about what's doing well in your industry and how you can separate yourself from the competition .

9. Customer Satisfaction and Loyalty Research

Customer satisfaction and loyalty research gives you a look into how you can get current customers to return for more business and what will motivate them to do so (e.g., loyalty programs , rewards, remarkable customer service).

10. Brand Awareness Research

Brand awareness research tells you what your target audience knows about and recognizes from your brand. It tells you about the associations people make when they think about your business.

11. Campaign Research

Campaign research entails looking into your past campaigns and analyzing their success among your target audience and current customers. The goal is to use these learnings to inform future campaigns.

• Define your buyer persona.
• Identify a persona group to engage.
• Prepare research questions for your market research participants.
• List your primary competitors.
• Summarize your findings.

1. Define your buyer persona.

You have to understand who your customers are and how customers in your industry make buying decisions.

This is where your buyer personas come in handy. Buyer personas — sometimes referred to as marketing personas — are fictional, generalized representations of your ideal customers.

Use a free tool to create a buyer persona that your entire company can use to market, sell, and serve better.

SWOT Analysis: How To Do One [With Template & Examples]

28 Tools & Resources for Conducting Market Research

What is a Competitive Analysis — and How Do You Conduct One?

TAM, SAM & SOM: What Do They Mean & How Do You Calculate Them?

How to Run a Competitor Analysis [Free Guide]

5 Challenges Marketers Face in Understanding Audiences [New Data + Market Researcher Tips]

Causal Research: The Complete Guide

Total Addressable Market (TAM): What It Is & How You Can Calculate It

What Is Market Share & How Do You Calculate It?

3 Ways Data Privacy Changes Benefit Marketers [New Data]

Free Guide & Templates to Help Your Market Research

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How to Conduct Market Research: A Step-By-Step Guide

Figuring out how to do market research for the first time can be intimidating and confusing. There are so many categories and different methods to choose from. It often seems like an endless list of organizational tasks and preparations.

However cumbersome as it might seem, research has an irreplaceable value for every company, be it a startup or a big corporation. It’s an instrument that leaders must use to keep themselves informed and up-to-date with market changes and make smart choices.

By observing your customers, you gain valuable insights into their personalities, motivations, challenges, and consumer behavior.

Furthermore, the data you gather gives you a glimpse of the processes that control the marketplace. You can gain a strategic edge over seemingly random or meaningless situations by learning more about them.

To sum up, doing your research helps you make better data-based business choices. This leads to better products, satisfied customers, and crushed competition. Sounds good, right?

If you follow through with your research with precision and discipline, you will soon be able to scale your company’s success rate significantly.

Before you read this guide and start your efforts, we advise you to brush up on the basics first and go through our other articles on market research:

• Market Research 101: From Beginner to Advanced
• Conducting Market Research: 6 Methods to Explore
• 15 Essential Market Research Tips for Businesses

Digging deeper into the process will give you the necessary background and confidence to go forth without any concerns.

So, without further ado, let’s roll our sleeves and get started on how to conduct market research. Read on and take notes!

1. Define the Research Goal

The first step of the process is defining your goal. It is important to start with a clear idea of why you are doing the research and what you want to accomplish. If your motivation is vague, you risk straying from your objectives and becoming distracted by irrelevant information.

During your study, you may find other important topics that are not closely related to the problem you are addressing. You should record them and save them for later research in different projects.

Mixing questions regarding too many problems in one survey can confuse the respondents and affect the accuracy of their answers. It can also make the research results too inconsistent. And it’s hard to conclude a bunch of random facts.

By stating the purpose and the problems of your research, you can establish a clear goal guiding everyone throughout the process.

This way, you’ll concentrate your efforts, and, in the end, you’ll be able to make informed decisions based on data.

For example, if you are choosing the pricing model for a new SaaS product, you should perform market research to make sure you’ll pick out the best one for your business. In this case, it should be something like “ Find out the best pricing strategy for the product ”. Some of the objectives can be:

• Identify the target audience.
• Find out what products they are currently using.
• Learn how much they are paying for them.
• Understand how much they are willing to pay.
• Research how they are using similar products.
• Discover what features they’d pay more for.
• Compare your product to the competition, etc.

Ultimately, your goal should be what you want to see accomplished in the future. That’s why it’s best to focus on your plans and targets, rather than on your current problems. Otherwise, you risk being stuck with unsolvable issues rather than with creative solutions.

2. Create Client Personas

When doing market research, you need a group of people who’ll answer your questions and whose opinions are important to your business. To identify these people, you should first create profiles that fit your target audience.

Client personas, or buyer personas , are collective profiles representing your ideal customers’ common qualities. They can be based on your top buyers in an attempt to attract more people like them to your business, or if you are just starting, they can be the product of separate market research.

Every business should have market personas. If you have already created yours – way to go, you are one step ahead! If you have not yet done it, now is a good time.

When building the buyer persona’s profile, you should include the following basic information, and add other specific factors, if there are any:

• Demographic – Age, gender, location, etc.
• Personal Information – Family status, income, interests, etc.
• Work-related details – Company, position, decision-making level, etc.
• Pain Points – Work and personal life struggles, barriers to achieving goals, etc.

For further reference on how to build buyer persona profiles, you can read DevriX’s article:

An Advanced Guide to Creating and Using Buyer Personas to Convert Leads

3. Identify the Sample

A market research sample is a representative group of people who match your client persona profiles. Depending on the scope of the study, you might include in it people who fit one or multiple personas.

Ideally, if you want the results to be representative, you should focus on a single profile. However, if you feel that you will get more information from different types of customers, you can define separate samples for every participating persona and compare the results at the end.

Defining and identifying a representative sample is the foundation of accumulating accurate results. If your participants don’t match the profile you need, their answers will not be relevant to your goals.

Participants for samples can be identified in:

• Your customer database . Clients should be divided into groups matching your buyer persona profiles. If you haven’t already implemented the segmentation , doing it will help you sift through who to invite to participate in the research.
• Competitors’ clients. People who use products similar to yours and fit the profile, but are not currently your customers, are a great addition to your research. By learning about their opinions and preferences, you can attract them as clients in the future.
• Your lead database . Every lead you have in your email list or CRM tool can be a potential candidate for the survey sample. As with existing customers, leads should be segmented not only for research but also for better marketing.
• Social media profiles . Your network of followers on different social media platforms can be a valuable resource in every survey. By announcing the desired profiles participants should fit and encouraging people to share with acquaintances, you can reach many more potential participants.

Your sample must be large enough and also representative of the population you are targeting. Choosing an audience too small or an ill-targeted group of people can make the results of the research biased.

Although there is not a universal minimal number of people to include in your study, it is generally accepted amongst scientists that less than 100 people is insufficient to make up a statistically relevant conclusion. Therefore, to ensure you’ll reach this number, you’ll have to distribute your questions to at least 150 people.

However, if you want to research only your existing customers and they are less than 100 in total, you can still carry out your study but you’ll have to accept a larger error margin .

4. Perform Your Chosen Research Methods

Once your sample is clear, you can move forward to conducting market research. Depending on your goals, you can explore different methods, but we will be using a strategy combining a few of them for this article. This is usually the safest way to guarantee that your results will be comprehensible and on point.

Prep Your Questions

The goals and objectives you set in the initial stages of your research should be organized and formulated into questions you can ask your participants.

Although the phrasing and scope of these will probably change and be refined throughout the different stages of the research, you should consider testing them at the beginning on a small sample. This will allow you to eliminate rookie mistakes and save you some trouble further on in the research.

Do Secondary Research

Before you start studying your audience, you should consider doing secondary research to build a general idea of the market.

You can find paid and free data available in government databases, private research companies, educational institutions, and public libraries.

There is a chance that the information you go through has nothing to do with the goals of your particular research. But it can still help you identify market patterns at scale and configure your following moves.

Try Various Exploratory Methods

The next step is to dive into your specific target audience and see how things are. This can be done via different exploratory research methods.

1. Observation. At this stage, consider starting with observation. This will give you an idea of how your customers act in real-life situations in their natural environment.

2. Focus Group Meetings. You can continue by consolidating your initial impressions in focus group meetings. The moderator can ask the participants about the subjects that got their attention and the discussion that follows can give you additional insights.

3. Personal Interviews. Interviewing individual representatives of your sample will allow you to ask even more follow-up questions and have a chance to learn about your customers’ preferences, goals, and pain points.

Distribute Customer Surveys

You can leverage all the information you’ve gathered in the previous steps to design customer surveys . They will help you acquire the answers to your questions at scale and prove or disprove the hypothesis built in the exploratory stage.

The questions in the surveys should be as simple and easy to understand as possible. Avoid answers that lead the customer in the direction you’d like. This might influence their responses and compromise the results.

5. Analyze the Data and Organize It Into a Report

The data you obtain should be analyzed and organized at the end of every stage of your market research. These preliminary reports will serve you in the process of the study and will make building the final report easier.

Results from the research will be both qualitative and quantitative and should be properly visualized to make sense to everyone to whom they would be presented.

Cold statistics can be overwhelming, but presenting the data in an engaging format can make it more appealing and clear.

Some forms of reporting are customer journey maps and affinity diagrams . Even users who are not technically advanced can take advantage of modern data visualization tools and make research data interesting to the audience of their presentation.

Step-by-Step Market Research

Conducting market research is complicated. It takes a lot of preparation and can seem intimidating at first. But once you become familiar with the basics, you will be able to do it yourself and reap its success.

By using this guide, you can study different aspects of your target market, and get to know your audience on a different level. Leveraging the data and insights you gather will give you a strategic advantage and empower you to make more informed data-based decisions for your business.

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Our marketing experts specialize in the complete spectrum of inbound marketing strategies. As an accredited HubSpot Agency Partner and a Semrush Partner, we engage in meticulous research, blending our extensive experience with the unique insights of our highly skilled team.

We set benchmarks in content creation by incorporating cutting-edge marketing trends, leveraging in-depth industry research, and utilizing state-of-the-art AI tools for data segmentation and captivating content hooks. Our proficiency extends across a diverse range of sectors, including working with SMEs, Fortune 1000 companies, global B2B brands, major publishing entities, WooCommerce platforms, business directories, and affiliate networks.

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Market research definition

Market research – in-house or outsourced, market research in the age of data, when to use market research.

• Types of market research 

Different types of primary research

How to do market research (primary data), how to do secondary market research, communicating your market research findings, choose the right platform for your market research, try qualtrics for free, the ultimate guide to market research: how to conduct it like a pro.

27 min read Wondering how to do market research? Or even where to start learning about it? Use our ultimate guide to understand the basics and discover how you can use market research to help your business.

Market research is the practice of gathering information about the needs and preferences of your target audience – potential consumers of your product.

When you understand how your target consumer feels and behaves, you can then take steps to meet their needs and mitigate the risk of an experience gap – where there is a shortfall between what a consumer expects you to deliver and what you actually deliver. Market research can also help you keep abreast of what your competitors are offering, which in turn will affect what your customers expect from you.

Market research connects with every aspect of a business – including brand , product , customer service , marketing and sales.

Market research generally focuses on understanding:

• The consumer (current customers, past customers, non-customers, influencers))
• The company (product or service design, promotion, pricing, placement, service, sales)
• The competitors (and how their market offerings interact in the market environment)
• The industry overall (whether it’s growing or moving in a certain direction)

Free eBook: 2024 market research trends report

Why is market research important?

A successful business relies on understanding what like, what they dislike, what they need and what messaging they will respond to. Businesses also need to understand their competition to identify opportunities to differentiate their products and services from other companies.

Today’s business leaders face an endless stream of decisions around target markets, pricing, promotion, distribution channels, and product features and benefits . They must account for all the factors involved, and there are market research studies and methodologies strategically designed to capture meaningful data to inform every choice. It can be a daunting task.

Market research allows companies to make data-driven decisions to drive growth and innovation.

What happens when you don’t do market research?

Without market research, business decisions are based at best on past consumer behavior, economic indicators, or at worst, on gut feel. Decisions are made in a bubble without thought to what the competition is doing. An important aim of market research is to remove subjective opinions when making business decisions. As a brand you are there to serve your customers, not personal preferences within the company. You are far more likely to be successful if you know the difference, and market research will help make sure your decisions are insight-driven.

Traditionally there have been specialist market researchers who are very good at what they do, and businesses have been reliant on their ability to do it. Market research specialists will always be an important part of the industry, as most brands are limited by their internal capacity, expertise and budgets and need to outsource at least some aspects of the work.

However, the market research external agency model has meant that brands struggled to keep up with the pace of change. Their customers would suffer because their needs were not being wholly met with point-in-time market research.

Businesses looking to conduct market research have to tackle many questions –

• Who are my consumers, and how should I segment and prioritize them?
• What are they looking for within my category?
• How much are they buying, and what are their purchase triggers, barriers, and buying habits?
• Will my marketing and communications efforts resonate?
• Is my brand healthy ?
• What product features matter most?
• Is my product or service ready for launch?
• Are my pricing and packaging plans optimized?

They all need to be answered, but many businesses have found the process of data collection daunting, time-consuming and expensive. The hardest battle is often knowing where to begin and short-term demands have often taken priority over longer-term projects that require patience to offer return on investment.

Today however, the industry is making huge strides, driven by quickening product cycles, tighter competition and business imperatives around more data-driven decision making. With the emergence of simple, easy to use tools , some degree of in-house market research is now seen as essential, with fewer excuses not to use data to inform your decisions. With greater accessibility to such software, everyone can be an expert regardless of level or experience.

How is this possible?

The art of research hasn’t gone away. It is still a complex job and the volume of data that needs to be analyzed is huge. However with the right tools and support, sophisticated research can look very simple – allowing you to focus on taking action on what matters.

If you’re not yet using technology to augment your in-house market research, now is the time to start.

The most successful brands rely on multiple sources of data to inform their strategy and decision making, from their marketing segmentation to the product features they develop to comments on social media. In fact, there’s tools out there that use machine learning and AI to automate the tracking of what’s people are saying about your brand across all sites.

The emergence of newer and more sophisticated tools and platforms gives brands access to more data sources than ever and how the data is analyzed and used to make decisions. This also increases the speed at which they operate, with minimal lead time allowing brands to be responsive to business conditions and take an agile approach to improvements and opportunities.

Expert partners have an important role in getting the best data, particularly giving access to additional market research know-how, helping you find respondents , fielding surveys and reporting on results.

How do you measure success?

Business activities are usually measured on how well they deliver return on investment (ROI). Since market research doesn’t generate any revenue directly, its success has to be measured by looking at the positive outcomes it drives – happier customers, a healthier brand, and so on.

When changes to your products or your marketing strategy are made as a result of your market research findings, you can compare on a before-and-after basis to see if the knowledge you acted on has delivered value.

Regardless of the function you work within, understanding the consumer is the goal of any market research. To do this, we have to understand what their needs are in order to effectively meet them. If we do that, we are more likely to drive customer satisfaction , and in turn, increase customer retention .

Several metrics and KPIs are used to gauge the success of decisions made from market research results, including

• Brand awareness within the target market
• Share of wallet
• CSAT (customer satisfaction)
• NPS (Net Promoter Score)

You can use market research for almost anything related to your current customers, potential customer base or target market. If you want to find something out from your target audience, it’s likely market research is the answer.

Here are a few of the most common uses:

Buyer segmentation and profiling

Segmentation is a popular technique that separates your target market according to key characteristics, such as behavior, demographic information and social attitudes. Segmentation allows you to create relevant content for your different segments, ideally helping you to better connect with all of them.

Buyer personas are profiles of fictional customers – with real attributes. Buyer personas help you develop products and communications that are right for your different audiences, and can also guide your decision-making process. Buyer personas capture the key characteristics of your customer segments, along with meaningful insights about what they want or need from you. They provide a powerful reminder of consumer attitudes when developing a product or service, a marketing campaign or a new brand direction.

By understanding your buyers and potential customers, including their motivations, needs, and pain points, you can optimize everything from your marketing communications to your products to make sure the right people get the relevant content, at the right time, and via the right channel .

Attitudes and Usage surveys

Attitude & Usage research helps you to grow your brand by providing a detailed understanding of consumers. It helps you understand how consumers use certain products and why, what their needs are, what their preferences are, and what their pain points are. It helps you to find gaps in the market, anticipate future category needs, identify barriers to entry and build accurate go-to-market strategies and business plans.

Marketing strategy

Effective market research is a crucial tool for developing an effective marketing strategy – a company’s plan for how they will promote their products.

It helps marketers look like rock stars by helping them understand the target market to avoid mistakes, stay on message, and predict customer needs . It’s marketing’s job to leverage relevant data to reach the best possible solution  based on the research available. Then, they can implement the solution, modify the solution, and successfully deliver that solution to the market.

Product development

You can conduct market research into how a select group of consumers use and perceive your product – from how they use it through to what they like and dislike about it. Evaluating your strengths and weaknesses early on allows you to focus resources on ideas with the most potential and to gear your product or service design to a specific market.

Chobani’s yogurt pouches are a product optimized through great market research . Using product concept testing – a form of market research – Chobani identified that packaging could negatively impact consumer purchase decisions. The brand made a subtle change, ensuring the item satisfied the needs of consumers. This ability to constantly refine its products for customer needs and preferences has helped Chobani become Australia’s #1 yogurt brand and increase market share.

Pricing decisions

Market research provides businesses with insights to guide pricing decisions too. One of the most powerful tools available to market researchers is conjoint analysis, a form of market research study that uses choice modeling to help brands identify the perfect set of features and price for customers. Another useful tool is the Gabor-Granger method, which helps you identify the highest price consumers are willing to pay for a given product or service.

Brand tracking studies

A company’s brand is one of its most important assets. But unlike other metrics like product sales, it’s not a tangible measure you can simply pull from your system. Regular market research that tracks consumer perceptions of your brand allows you to monitor and optimize your brand strategy in real time, then respond to consumer feedback to help maintain or build your brand with your target customers.

Advertising and communications testing

Advertising campaigns can be expensive, and without pre-testing, they carry risk of falling flat with your target audience. By testing your campaigns, whether it’s the message or the creative, you can understand how consumers respond to your communications before you deploy them so you can make changes in response to consumer feedback before you go live.

Finder, which is one of the world’s fastest-growing online comparison websites, is an example of a brand using market research to inject some analytical rigor into the business. Fueled by great market research, the business lifted brand awareness by 23 percent, boosted NPS by 8 points, and scored record profits – all within 10 weeks.

Competitive analysis

Another key part of developing the right product and communications is understanding your main competitors and how consumers perceive them. You may have looked at their websites and tried out their product or service, but unless you know how consumers perceive them, you won’t have an accurate view of where you stack up in comparison. Understanding their position in the market allows you to identify the strengths you can exploit, as well as any weaknesses you can address to help you compete better.

Customer Story

See How Yamaha Does Product Research

Types of market research

Although there are many types market research, all methods can be sorted into one of two categories: primary and secondary.

Primary research

Primary research is market research data that you collect yourself. This is raw data collected through a range of different means – surveys , focus groups,  , observation and interviews being among the most popular.

Primary information is fresh, unused data, giving you a perspective that is current or perhaps extra confidence when confirming hypotheses you already had. It can also be very targeted to your exact needs. Primary information can be extremely valuable. Tools for collecting primary information are increasingly sophisticated and the market is growing rapidly.

Historically, conducting market research in-house has been a daunting concept for brands because they don’t quite know where to begin, or how to handle vast volumes of data. Now, the emergence of technology has meant that brands have access to simple, easy to use tools to help with exactly that problem. As a result, brands are more confident about their own projects and data with the added benefit of seeing the insights emerge in real-time.

Secondary research

Secondary research is the use of data that has already been collected, analyzed and published – typically it’s data you don’t own and that hasn’t been conducted with your business specifically in mind, although there are forms of internal secondary data like old reports or figures from past financial years that come from within your business. Secondary research can be used to support the use of primary research.

Secondary research can be beneficial to small businesses because it is sometimes easier to obtain, often through research companies. Although the rise of primary research tools are challenging this trend by allowing businesses to conduct their own market research more cheaply, secondary research is often a cheaper alternative for businesses who need to spend money carefully. Some forms of secondary research have been described as ‘lean market research’ because they are fast and pragmatic, building on what’s already there.

Because it’s not specific to your business, secondary research may be less relevant, and you’ll need to be careful to make sure it applies to your exact research question. It may also not be owned, which means your competitors and other parties also have access to it.

Primary or secondary research – which to choose?

Both primary and secondary research have their advantages, but they are often best used when paired together, giving you the confidence to act knowing that the hypothesis you have is robust.

Secondary research is sometimes preferred because there is a misunderstanding of the feasibility of primary research. Thanks to advances in technology, brands have far greater accessibility to primary research, but this isn’t always known.

If you’ve decided to gather your own primary information, there are many different data collection methods that you may consider. For example:

• Customer surveys
• Focus groups
• Observation

Think carefully about what you’re trying to accomplish before picking the data collection method(s) you’re going to use. Each one has its pros and cons. Asking someone a simple, multiple-choice survey question will generate a different type of data than you might obtain with an in-depth interview. Determine if your primary research is exploratory or specific, and if you’ll need qualitative research, quantitative research, or both.

Qualitative vs quantitative

Another way of categorizing different types of market research is according to whether they are qualitative or quantitative.

Qualitative research

Qualitative research is the collection of data that is non-numerical in nature. It summarizes and infers, rather than pin-points an exact truth. It is exploratory and can lead to the generation of a hypothesis.

Market research techniques that would gather qualitative data include:

• Interviews (face to face / telephone)
• Open-ended survey questions

Researchers use these types of market research technique because they can add more depth to the data. So for example, in focus groups or interviews, rather than being limited to ‘yes’ or ‘no’ for a certain question, you can start to understand why someone might feel a certain way.

Quantitative research

Quantitative research is the collection of data that is numerical in nature. It is much more black and white in comparison to qualitative data, although you need to make sure there is a representative sample if you want the results to be reflective of reality.

Quantitative researchers often start with a hypothesis and then collect data which can be used to determine whether empirical evidence to support that hypothesis exists.

Quantitative research methods include:

• Questionnaires
• Review scores

Exploratory and specific research

Exploratory research is the approach to take if you don’t know what you don’t know. It can give you broad insights about your customers, product, brand, and market. If you want to answer a specific question, then you’ll be conducting specific research.

• Exploratory . This research is general and open-ended, and typically involves lengthy interviews with an individual or small focus group.
• Specific . This research is often used to solve a problem identified in exploratory research. It involves more structured, formal interviews.

Exploratory primary research is generally conducted by collecting qualitative data. Specific research usually finds its insights through quantitative data.

Primary research can be qualitative or quantitative, large-scale or focused and specific. You’ll carry it out using methods like surveys – which can be used for both qualitative and quantitative studies – focus groups, observation of consumer behavior, interviews, or online tools.

Step 1: Identify your research topic

Research topics could include:

• Product features
• Product or service launch
• Understanding a new target audience (or updating an existing audience)
• Brand identity
• Marketing campaign concepts
• Customer experience

Step 2: Draft a research hypothesis

A hypothesis is the assumption you’re starting out with. Since you can disprove a negative much more easily than prove a positive, a hypothesis is a negative statement such as ‘price has no effect on brand perception’.

Step 3: Determine which research methods are most effective

Your choice of methods depends on budget, time constraints, and the type of question you’re trying to answer. You could combine surveys, interviews and focus groups to get a mix of qualitative and quantitative data.

Step 4: Determine how you will collect and analyze your data.

Primary research can generate a huge amount of data, and when the goal is to uncover actionable insight, it can be difficult to know where to begin or what to pay attention to.

The rise in brands taking their market research and data analysis in-house has coincided with the rise of technology simplifying the process. These tools pull through large volumes of data and outline significant information that will help you make the most important decisions.

Step 5: Conduct your research!

This is how you can run your research using Qualtrics CoreXM

• Pre-launch – Here you want to ensure that the survey/ other research methods conform to the project specifications (what you want to achieve/research)
• Soft launch – Collect a small fraction of the total data before you fully launch. This means you can check that everything is working as it should and you can correct any data quality issues.
• Full launch – You’ve done the hard work to get to this point. If you’re using a tool, you can sit back and relax, or if you get curious you can check on the data in your account.
• Review – review your data for any issues or low-quality responses. You may need to remove this in order not to impact the analysis of the data.

A helping hand

If you are missing the skills, capacity or inclination to manage your research internally, Qualtrics Research Services can help. From design, to writing the survey based on your needs, to help with survey programming, to handling the reporting, Research Services acts as an extension of the team and can help wherever necessary.

Secondary market research can be taken from a variety of places. Some data is completely free to access – other information could end up costing hundreds of thousands of dollars. There are three broad categories of secondary research sources:

• Public sources – these sources are accessible to anyone who asks for them. They include census data, market statistics, library catalogs, university libraries and more. Other organizations may also put out free data from time to time with the goal of advancing a cause, or catching people’s attention.
• Internal sources – sometimes the most valuable sources of data already exist somewhere within your organization. Internal sources can be preferable for secondary research on account of their price (free) and unique findings. Since internal sources are not accessible by competitors, using them can provide a distinct competitive advantage.
• Commercial sources – if you have money for it, the easiest way to acquire secondary market research is to simply buy it from private companies. Many organizations exist for the sole purpose of doing market research and can provide reliable, in-depth, industry-specific reports.

No matter where your research is coming from, it is important to ensure that the source is reputable and reliable so you can be confident in the conclusions you draw from it.

How do you know if a source is reliable?

Use established and well-known research publishers, such as the XM Institute , Forrester and McKinsey . Government websites also publish research and this is free of charge. By taking the information directly from the source (rather than a third party) you are minimizing the risk of the data being misinterpreted and the message or insights being acted on out of context.

How to apply secondary research

The purpose and application of secondary research will vary depending on your circumstances. Often, secondary research is used to support primary research and therefore give you greater confidence in your conclusions. However, there may be circumstances that prevent this – such as the timeframe and budget of the project.

Keep an open mind when collecting all the relevant research so that there isn’t any collection bias. Then begin analyzing the conclusions formed to see if any trends start to appear. This will help you to draw a consensus from the secondary research overall.

Market research success is defined by the impact it has on your business’s success. Make sure it’s not discarded or ignored by communicating your findings effectively. Here are some tips on how to do it.

• Less is more – Preface your market research report with executive summaries that highlight your key discoveries and their implications
• Lead with the basic information – Share the top 4-5 recommendations in bullet-point form, rather than requiring your readers to go through pages of analysis and data
• Model the impact – Provide examples and model the impact of any changes you put in place based on your findings
• Show, don’t tell – Add illustrative examples that relate directly to the research findings and emphasize specific points
• Speed is of the essence – Make data available in real-time so it can be rapidly incorporated into strategies and acted upon to maximize value
• Work with experts – Make sure you’ve access to a dedicated team of experts ready to help you design and launch successful projects

Trusted by 8,500 brands for everything from product testing to competitor analysis, Our Strategic Research software is the world’s most powerful and flexible research platform . With over 100 question types and advanced logic, you can build out your surveys and see real-time data you can share across the organization. Plus, you’ll be able to turn data into insights with iQ, our predictive intelligence engine that runs complicated analysis at the click of a button.

Related resources

Market intelligence 10 min read, marketing insights 11 min read, ethnographic research 11 min read, qualitative vs quantitative research 13 min read, qualitative research questions 11 min read, qualitative research design 12 min read, primary vs secondary research 14 min read, request demo.

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What Is Market Research?

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• Primary vs. Secondary
• How to Conduct Research

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Market research examines consumer behavior and trends in the economy to help a business develop and fine-tune its business idea and strategy. It helps a business understand its target market by gathering and analyzing data.

Market research is the process of evaluating the viability of a new service or product through research conducted directly with potential customers. It allows a company to define its target market and get opinions and other feedback from consumers about their interest in a product or service.

Research may be conducted in-house or by a third party that specializes in market research. It can be done through surveys and focus groups, among other ways. Test subjects are usually compensated with product samples or a small stipend for their time.

Key Takeaways

• Companies conduct market research before introducing new products to determine their appeal to potential customers.
• Tools include focus groups, telephone interviews, and questionnaires.
• The results of market research inform the final design of the product and determine how it will be positioned in the marketplace.
• Market research usually combines primary information, gathered directly from consumers, and secondary information, which is data available from external sources.

Market Research

How market research works.

Market research is used to determine the viability of a new product or service. The results may be used to revise the product design and fine-tune the strategy for introducing it to the public. This can include information gathered for the purpose of determining market segmentation . It also informs product differentiation , which is used to tailor advertising.

A business engages in various tasks to complete the market research process. It gathers information based on the market sector being targeted by the product. This information is then analyzed and relevant data points are interpreted to draw conclusions about how the product may be optimally designed and marketed to the market segment for which it is intended.

It is a critical component in the research and development (R&D) phase of a new product or service introduction. Market research can be conducted in many different ways, including surveys, product testing, interviews, and focus groups.

Market research is a critical tool that companies use to understand what consumers want, develop products that those consumers will use, and maintain a competitive advantage over other companies in their industry.

Primary Market Research vs. Secondary Market Research

Market research usually consists of a combination of:

• Primary research, gathered by the company or by an outside company that it hires
• Secondary research, which draws on external sources of data

Primary Market Research

Primary research generally falls into two categories: exploratory and specific research.

• Exploratory research is less structured and functions via open-ended questions. The questions may be posed in a focus group setting, telephone interviews, or questionnaires. It results in questions or issues that the company needs to address about a product that it has under development.
• Specific research delves more deeply into the problems or issues identified in exploratory research.

Secondary Market Research

All market research is informed by the findings of other researchers about the needs and wants of consumers. Today, much of this research can be found online.

Secondary research can include population information from government census data , trade association research reports , polling results, and research from other businesses operating in the same market sector.

History of Market Research

Formal market research began in Germany during the 1920s. In the United States, it soon took off with the advent of the Golden Age of Radio.

Companies that created advertisements for this new entertainment medium began to look at the demographics of the audiences who listened to each of the radio plays, music programs, and comedy skits that were presented.

They had once tried to reach the widest possible audience by placing their messages on billboards or in the most popular magazines. With radio programming, they had the chance to target rural or urban consumers, teenagers or families, and judge the results by the sales numbers that followed.

Types of Market Research

Face-to-face interviews.

From their earliest days, market research companies would interview people on the street about the newspapers and magazines that they read regularly and ask whether they recalled any of the ads or brands that were published in them. Data collected from these interviews were compared to the circulation of the publication to determine the effectiveness of those ads.

Market research and surveys were adapted from these early techniques.

To get a strong understanding of your market, it’s essential to understand demand, market size, economic indicators, location, market saturation, and pricing.

Focus Groups

A focus group is a small number of representative consumers chosen to try a product or watch an advertisement.

Afterward, the group is asked for feedback on their perceptions of the product, the company’s brand, or competing products. The company then takes that information and makes decisions about what to do with the product or service, whether that's releasing it, making changes, or abandoning it altogether.

Phone Research

The man-on-the-street interview technique soon gave way to the telephone interview. A telephone interviewer could collect information in a more efficient and cost-effective fashion.

Telephone research was a preferred tactic of market researchers for many years. It has become much more difficult in recent years as landline phone service dwindles and is replaced by less accessible mobile phones.

Survey Research

As an alternative to focus groups, surveys represent a cost-effective way to determine consumer attitudes without having to interview anyone in person. Consumers are sent surveys in the mail, usually with a coupon or voucher to incentivize participation. These surveys help determine how consumers feel about the product, brand, and price point.

Online Market Research

With people spending more time online, market research activities have shifted online as well. Data collection still uses a survey-style form. But instead of companies actively seeking participants by finding them on the street or cold calling them on the phone, people can choose to sign up, take surveys, and offer opinions when they have time.

This makes the process far less intrusive and less rushed, since people can participate on their own time and of their own volition.

How to Conduct Market Research

The first step to effective market research is to determine the goals of the study. Each study should seek to answer a clear, well-defined problem. For example, a company might seek to identify consumer preferences, brand recognition, or the comparative effectiveness of different types of ad campaigns.

After that, the next step is to determine who will be included in the research. Market research is an expensive process, and a company cannot waste resources collecting unnecessary data. The firm should decide in advance which types of consumers will be included in the research, and how the data will be collected. They should also account for the probability of statistical errors or sampling bias .

The next step is to collect the data and analyze the results. If the two previous steps have been completed accurately, this should be straightforward. The researchers will collect the results of their study, keeping track of the ages, gender, and other relevant data of each respondent. This is then analyzed in a marketing report that explains the results of their research.

The last step is for company executives to use their market research to make business decisions. Depending on the results of their research, they may choose to target a different group of consumers, or they may change their price point or some product features.

The results of these changes may eventually be measured in further market research, and the process will begin all over again.

Benefits of Market Research

Market research is essential for developing brand loyalty and customer satisfaction. Since it is unlikely for a product to appeal equally to every consumer, a strong market research program can help identify the key demographics and market segments that are most likely to use a given product.

Market research is also important for developing a company’s advertising efforts. For example, if a company’s market research determines that its consumers are more likely to use Facebook than X (formerly Twitter), it can then target its advertisements to one platform instead of another. Or, if they determine that their target market is value-sensitive rather than price-sensitive, they can work on improving the product rather than reducing their prices.

Market research only works when subjects are honest and open to participating.

Example of Market Research

Many companies use market research to test new products or get information from consumers about what kinds of products or services they need and don’t currently have.

For example, a company that’s considering starting a business might conduct market research to test the viability of its product or service. If the market research confirms consumer interest, the business can proceed confidently with its business plan . If not, the company can use the results of the market research to make adjustments to the product to bring it in line with customer desires.

What Are the Main Types of Market Research?

The main types of market research are primary research and secondary research. Primary research includes focus groups, polls, and surveys. Secondary research includes academic articles, infographics, and white papers.

Qualitative research gives insights into how customers feel and think. Quantitative research uses data and statistics such as website views, social media engagement, and subscriber numbers.

What Is Online Market Research?

Online market research uses the same strategies and techniques as traditional primary and secondary market research, but it is conducted on the Internet. Potential customers may be asked to participate in a survey or give feedback on a product. The responses may help the researchers create a profile of the likely customer for a new product.

What Are Paid Market Research Surveys?

Paid market research involves rewarding individuals who agree to participate in a study. They may be offered a small payment for their time or a discount coupon in return for filling out a questionnaire or participating in a focus group.

What Is a Market Study?

A market study is an analysis of consumer demand for a product or service. It looks at all of the factors that influence demand for a product or service. These include the product’s price, location, competition, and substitutes as well as general economic factors that could influence the new product’s adoption, for better or worse.

Market research is a key component of a company’s research and development (R&D) stage. It helps companies understand in advance the viability of a new product that they have in development and to see how it might perform in the real world.

Britannica Money. “ Market Research .”

U.S. Small Business Administration. “ Market Research and Competitive Analysis .”

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How to do market research in 4 steps: a lean approach to marketing research

From pinpointing your target audience and assessing your competitive advantage, to ongoing product development and customer satisfaction efforts, market research is a practice your business can only benefit from.

Learn how to conduct quick and effective market research using a lean approach in this article full of strategies and practical examples. 

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A comprehensive (and successful) business strategy is not complete without some form of market research—you can’t make informed and profitable business decisions without truly understanding your customer base and the current market trends that drive your business.

In this article, you’ll learn how to conduct quick, effective market research  using an approach called 'lean market research'. It’s easier than you might think, and it can be done at any stage in a product’s lifecycle.

How to conduct lean market research in 4 steps

What is market research, why is market research so valuable, advantages of lean market research, 4 common market research methods, 5 common market research questions, market research faqs.

We’ll jump right into our 4-step approach to lean market research. To show you how it’s done in the real world, each step includes a practical example from Smallpdf , a Swiss company that used lean market research to reduce their tool’s error rate by 75% and boost their Net Promoter Score® (NPS) by 1%.

Research your market the lean way...

From on-page surveys to user interviews, Hotjar has the tools to help you scope out your market and get to know your customers—without breaking the bank.

The following four steps and practical examples will give you a solid market research plan for understanding who your users are and what they want from a company like yours.

1. Create simple user personas

A user persona is a semi-fictional character based on psychographic and demographic data from people who use websites and products similar to your own. Start by defining broad user categories, then elaborate on them later to further segment your customer base and determine your ideal customer profile .

How to get the data: use on-page or emailed surveys and interviews to understand your users and what drives them to your business.

How to do it right: whatever survey or interview questions you ask, they should answer the following questions about the customer:

Who are they?

What is their main goal?

What is their main barrier to achieving this goal?

Pitfalls to avoid:

Don’t ask too many questions! Keep it to five or less, otherwise you’ll inundate them and they’ll stop answering thoughtfully.

Don’t worry too much about typical demographic questions like age or background. Instead, focus on the role these people play (as it relates to your product) and their goals.

How Smallpdf did it: Smallpdf ran an on-page survey for a couple of weeks and received 1,000 replies. They learned that many of their users were administrative assistants, students, and teachers.

Next, they used the survey results to create simple user personas like this one for admins:

Who are they? Administrative Assistants.

What is their main goal? Creating Word documents from a scanned, hard-copy document or a PDF where the source file was lost.

What is their main barrier to achieving it? Converting a scanned PDF doc to a Word file.

💡Pro tip: Smallpdf used Hotjar Surveys to run their user persona survey. Our survey tool helped them avoid the pitfalls of guesswork and find out who their users really are, in their own words. 

You can design a survey and start running it in minutes with our easy-to-use drag and drop builder. Customize your survey to fit your needs, from a sleek one-question pop-up survey to a fully branded questionnaire sent via email. 

We've also created 40+ free survey templates that you can start collecting data with, including a user persona survey like the one Smallpdf used.

2. Conduct observational research

Observational research involves taking notes while watching someone use your product (or a similar product).

Overt vs. covert observation

Overt observation involves asking customers if they’ll let you watch them use your product. This method is often used for user testing and it provides a great opportunity for collecting live product or customer feedback .

Covert observation means studying users ‘in the wild’ without them knowing. This method works well if you sell a type of product that people use regularly, and it offers the purest observational data because people often behave differently when they know they’re being watched. 

Tips to do it right:

Record an entry in your field notes, along with a timestamp, each time an action or event occurs.

Make note of the users' workflow, capturing the ‘what,’ ‘why,’ and ‘for whom’ of each action.

Don’t record identifiable video or audio data without consent. If recording people using your product is helpful for achieving your research goal, make sure all participants are informed and agree to the terms.

Don’t forget to explain why you’d like to observe them (for overt observation). People are more likely to cooperate if you tell them you want to improve the product.

💡Pro tip: while conducting field research out in the wild can wield rewarding results, you can also conduct observational research remotely. Hotjar Recordings is a tool that lets you capture anonymized user sessions of real people interacting with your website. 

Observe how customers navigate your pages and products to gain an inside look into their user behavior . This method is great for conducting exploratory research with the purpose of identifying more specific issues to investigate further, like pain points along the customer journey and opportunities for optimizing conversion .

With Hotjar Recordings you can observe real people using your site without capturing their sensitive information

How Smallpdf did it: here’s how Smallpdf observed two different user personas both covertly and overtly.

Observing students (covert): Kristina Wagner, Principle Product Manager at Smallpdf, went to cafes and libraries at two local universities and waited until she saw students doing PDF-related activities. Then she watched and took notes from a distance. One thing that struck her was the difference between how students self-reported their activities vs. how they behaved (i.e, the self-reporting bias). Students, she found, spent hours talking, listening to music, or simply staring at a blank screen rather than working. When she did find students who were working, she recorded the task they were performing and the software they were using (if she recognized it).

Observing administrative assistants (overt): Kristina sent emails to admins explaining that she’d like to observe them at work, and she asked those who agreed to try to batch their PDF work for her observation day. While watching admins work, she learned that they frequently needed to scan documents into PDF-format and then convert those PDFs into Word docs. By observing the challenges admins faced, Smallpdf knew which products to target for improvement.

“Data is really good for discovery and validation, but there is a bit in the middle where you have to go and find the human.”

3. Conduct individual interviews

Interviews are one-on-one conversations with members of your target market. They allow you to dig deep and explore their concerns, which can lead to all sorts of revelations.

Listen more, talk less. Be curious.

Act like a journalist, not a salesperson. Rather than trying to talk your company up, ask people about their lives, their needs, their frustrations, and how a product like yours could help.

Ask "why?" so you can dig deeper. Get into the specifics and learn about their past behavior.

Record the conversation. Focus on the conversation and avoid relying solely on notes by recording the interview. There are plenty of services that will transcribe recorded conversations for a good price (including Hotjar!).

Avoid asking leading questions , which reveal bias on your part and pushes respondents to answer in a certain direction (e.g. “Have you taken advantage of the amazing new features we just released?).

Don't ask loaded questions , which sneak in an assumption which, if untrue, would make it impossible to answer honestly. For example, we can’t ask you, “What did you find most useful about this article?” without asking whether you found the article useful in the first place.

Be cautious when asking opinions about the future (or predictions of future behavior). Studies suggest that people aren’t very good at predicting their future behavior. This is due to several cognitive biases, from the misguided exceptionalism bias (we’re good at guessing what others will do, but we somehow think we’re different), to the optimism bias (which makes us see things with rose-colored glasses), to the ‘illusion of control’ (which makes us forget the role of randomness in future events).

How Smallpdf did it: Kristina explored her teacher user persona by speaking with university professors at a local graduate school. She learned that the school was mostly paperless and rarely used PDFs, so for the sake of time, she moved on to the admins.

A bit of a letdown? Sure. But this story highlights an important lesson: sometimes you follow a lead and come up short, so you have to make adjustments on the fly. Lean market research is about getting solid, actionable insights quickly so you can tweak things and see what works.

💡Pro tip: to save even more time, conduct remote interviews using an online user research service like Hotjar Engage , which automates the entire interview process, from recruitment and scheduling to hosting and recording.

You can interview your own customers or connect with people from our diverse pool of 200,000+ participants from 130+ countries and 25 industries. And no need to fret about taking meticulous notes—Engage will automatically transcribe the interview for you.

4. Analyze the data (without drowning in it)

The following techniques will help you wrap your head around the market data you collect without losing yourself in it. Remember, the point of lean market research is to find quick, actionable insights.

A flow model is a diagram that tracks the flow of information within a system. By creating a simple visual representation of how users interact with your product and each other, you can better assess their needs.

You’ll notice that admins are at the center of Smallpdf’s flow model, which represents the flow of PDF-related documents throughout a school. This flow model shows the challenges that admins face as they work to satisfy their own internal and external customers.

Affinity diagram

An affinity diagram is a way of sorting large amounts of data into groups to better understand the big picture. For example, if you ask your users about their profession, you’ll notice some general themes start to form, even though the individual responses differ. Depending on your needs, you could group them by profession, or more generally by industry.

We wrote a guide about how to analyze open-ended questions to help you sort through and categorize large volumes of response data. You can also do this by hand by clipping up survey responses or interview notes and grouping them (which is what Kristina does).

“For an interview, you will have somewhere between 30 and 60 notes, and those notes are usually direct phrases. And when you literally cut them up into separate pieces of paper and group them, they should make sense by themselves.”

Pro tip: if you’re conducting an online survey with Hotjar, keep your team in the loop by sharing survey responses automatically via our Slack and Microsoft Team integrations. Reading answers as they come in lets you digest the data in pieces and can help prepare you for identifying common themes when it comes time for analysis.

Hotjar lets you easily share survey responses with your team

Customer journey map

A customer journey map is a diagram that shows the way a typical prospect becomes a paying customer. It outlines their first interaction with your brand and every step in the sales cycle, from awareness to repurchase (and hopefully advocacy).

The above  customer journey map , created by our team at Hotjar, shows many ways a customer might engage with our tool. Your map will be based on your own data and business model.

📚 Read more: if you’re new to customer journey maps, we wrote this step-by-step guide to creating your first customer journey map in 2 and 1/2 days with free templates you can download and start using immediately.

Next steps: from research to results

So, how do you turn market research insights into tangible business results? Let’s look at the actions Smallpdf took after conducting their lean market research: first they implemented changes, then measured the impact.

Implement changes

Based on what Smallpdf learned about the challenges that one key user segment (admins) face when trying to convert PDFs into Word files, they improved their ‘PDF to Word’ conversion tool.

We won’t go into the details here because it involves a lot of technical jargon, but they made the entire process simpler and more straightforward for users. Plus, they made it so that their system recognized when you drop a PDF file into their ‘Word to PDF’ converter instead of the ‘PDF to Word’ converter, so users wouldn’t have to redo the task when they made that mistake. 

In other words: simple market segmentation for admins showed a business need that had to be accounted for, and customers are happier overall after Smallpdf implemented an informed change to their product.

Measure results

According to the Lean UX model, product and UX changes aren’t retained unless they achieve results.

Smallpdf’s changes produced:

A 75% reduction in error rate for the ‘PDF to Word’ converter

A 1% increase in NPS

Greater confidence in the team’s marketing efforts

"With all the changes said and done, we've cut our original error rate in four, which is huge. We increased our NPS by +1%, which isn't huge, but it means that of the users who received a file, they were still slightly happier than before, even if they didn't notice that anything special happened at all.”

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Market research (or marketing research) is any set of techniques used to gather information and better understand a company’s target market. This might include primary research on brand awareness and customer satisfaction or secondary market research on market size and competitive analysis. Businesses use this information to design better products, improve user experience, and craft a marketing strategy that attracts quality leads and improves conversion rates.

David Darmanin, one of Hotjar’s founders, launched two startups before Hotjar took off—but both companies crashed and burned. Each time, he and his team spent months trying to design an amazing new product and user experience, but they failed because they didn’t have a clear understanding of what the market demanded.

With Hotjar, they did things differently . Long story short, they conducted market research in the early stages to figure out what consumers really wanted, and the team made (and continues to make) constant improvements based on market and user research.

Without market research, it’s impossible to understand your users. Sure, you might have a general idea of who they are and what they need, but you have to dig deep if you want to win their loyalty.

Here’s why research matters:

Obsessing over your users is the only way to win. If you don’t care deeply about them, you’ll lose potential customers to someone who does.

Analytics gives you the ‘what’, while research gives you the ‘why’. Big data, user analytics , and dashboards can tell you what people do at scale, but only research can tell you what they’re thinking and why they do what they do. For example, analytics can tell you that customers leave when they reach your pricing page, but only research can explain why.

Research beats assumptions, trends, and so-called best practices. Have you ever watched your colleagues rally behind a terrible decision? Bad ideas are often the result of guesswork, emotional reasoning, death by best practices , and defaulting to the Highest Paid Person’s Opinion (HiPPO). By listening to your users and focusing on their customer experience , you’re less likely to get pulled in the wrong direction.

Research keeps you from planning in a vacuum. Your team might be amazing, but you and your colleagues simply can’t experience your product the way your customers do. Customers might use your product in a way that surprises you, and product features that seem obvious to you might confuse them. Over-planning and refusing to test your assumptions is a waste of time, money, and effort because you’ll likely need to make changes once your untested business plan gets put into practice.

Lean User Experience (UX) design is a model for continuous improvement that relies on quick, efficient research to understand customer needs and test new product features.

Lean market research can help you become more...

Efficient: it gets you closer to your customers, faster.

Cost-effective: no need to hire an expensive marketing firm to get things started.

Competitive: quick, powerful insights can place your products on the cutting edge.

As a small business or sole proprietor, conducting lean market research is an attractive option when investing in a full-blown research project might seem out of scope or budget.

There are lots of different ways you could conduct market research and collect customer data, but you don’t have to limit yourself to just one research method. Four common types of market research techniques include surveys, interviews, focus groups, and customer observation.

Which method you use may vary based on your business type: ecommerce business owners have different goals from SaaS businesses, so it’s typically prudent to mix and match these methods based on your particular goals and what you need to know.

1. Surveys: the most commonly used

Surveys are a form of qualitative research that ask respondents a short series of open- or closed-ended questions, which can be delivered as an on-screen questionnaire or via email. When we asked 2,000 Customer Experience (CX) professionals about their company’s approach to research , surveys proved to be the most commonly used market research technique.

What makes online surveys so popular?  

They’re easy and inexpensive to conduct, and you can do a lot of data collection quickly. Plus, the data is pretty straightforward to analyze, even when you have to analyze open-ended questions whose answers might initially appear difficult to categorize.

We've built a number of survey templates ready and waiting for you. Grab a template and share with your customers in just a few clicks.

💡 Pro tip: you can also get started with Hotjar AI for Surveys to create a survey in mere seconds . Just enter your market research goal and watch as the AI generates a survey and populates it with relevant questions. 

Once you’re ready for data analysis, the AI will prepare an automated research report that succinctly summarizes key findings, quotes, and suggested next steps.

An example research report generated by Hotjar AI for Surveys

2. Interviews: the most insightful

Interviews are one-on-one conversations with members of your target market. Nothing beats a face-to-face interview for diving deep (and reading non-verbal cues), but if an in-person meeting isn’t possible, video conferencing is a solid second choice.

Regardless of how you conduct it, any type of in-depth interview will produce big benefits in understanding your target customers.

What makes interviews so insightful?

By speaking directly with an ideal customer, you’ll gain greater empathy for their experience , and you can follow insightful threads that can produce plenty of 'Aha!' moments.

3. Focus groups: the most unreliable

Focus groups bring together a carefully selected group of people who fit a company’s target market. A trained moderator leads a conversation surrounding the product, user experience, or marketing message to gain deeper insights.

What makes focus groups so unreliable?

If you’re new to market research, we wouldn’t recommend starting with focus groups. Doing it right is expensive , and if you cut corners, your research could fall victim to all kinds of errors. Dominance bias (when a forceful participant influences the group) and moderator style bias (when different moderator personalities bring about different results in the same study) are two of the many ways your focus group data could get skewed.

4. Observation: the most powerful

During a customer observation session, someone from the company takes notes while they watch an ideal user engage with their product (or a similar product from a competitor).

What makes observation so clever and powerful?

‘Fly-on-the-wall’ observation is a great alternative to focus groups. It’s not only less expensive, but you’ll see people interact with your product in a natural setting without influencing each other. The only downside is that you can’t get inside their heads, so observation still isn't a recommended replacement for customer surveys and interviews.

The following questions will help you get to know your users on a deeper level when you interview them. They’re general questions, of course, so don’t be afraid to make them your own.

1. Who are you and what do you do?

How you ask this question, and what you want to know, will vary depending on your business model (e.g. business-to-business marketing is usually more focused on someone’s profession than business-to-consumer marketing).

It’s a great question to start with, and it’ll help you understand what’s relevant about your user demographics (age, race, gender, profession, education, etc.), but it’s not the be-all-end-all of market research. The more specific questions come later.

2. What does your day look like?

This question helps you understand your users’ day-to-day life and the challenges they face. It will help you gain empathy for them, and you may stumble across something relevant to their buying habits.

3. Do you ever purchase [product/service type]?

This is a ‘yes or no’ question. A ‘yes’ will lead you to the next question.

4. What problem were you trying to solve or what goal were you trying to achieve?

This question strikes to the core of what someone’s trying to accomplish and why they might be willing to pay for your solution.

5. Take me back to the day when you first decided you needed to solve this kind of problem or achieve this goal.

This is the golden question, and it comes from Adele Revella, Founder and CEO of Buyer Persona Institute . It helps you get in the heads of your users and figure out what they were thinking the day they decided to spend money to solve a problem.

If you take your time with this question, digging deeper where it makes sense, you should be able to answer all the relevant information you need to understand their perspective.

“The only scripted question I want you to ask them is this one: take me back to the day when you first decided that you needed to solve this kind of problem or achieve this kind of a goal. Not to buy my product, that’s not the day. We want to go back to the day that when you thought it was urgent and compelling to go spend money to solve a particular problem or achieve a goal. Just tell me what happened.”

— Adele Revella , Founder/CEO at Buyer Persona Institute

Bonus question: is there anything else you’d like to tell me?

This question isn’t just a nice way to wrap it up—it might just give participants the opportunity they need to tell you something you really need to know.

That’s why Sarah Doody, author of UX Notebook , adds it to the end of her written surveys.

“I always have a last question, which is just open-ended: “Is there anything else you would like to tell me?” And sometimes, that’s where you get four paragraphs of amazing content that you would never have gotten if it was just a Net Promoter Score [survey] or something like that.”

What is the difference between qualitative and quantitative research?

Qualitative research asks questions that can’t be reduced to a number, such as, “What is your job title?” or “What did you like most about your customer service experience?” 

Quantitative research asks questions that can be answered with a numeric value, such as, “What is your annual salary?” or “How was your customer service experience on a scale of 1-5?”

 → Read more about the differences between qualitative and quantitative user research .

How do I do my own market research?

You can do your own quick and effective market research by 

Surveying your customers

Building user personas

Studying your users through interviews and observation

Wrapping your head around your data with tools like flow models, affinity diagrams, and customer journey maps

What is the difference between market research and user research?

Market research takes a broad look at potential customers—what problems they’re trying to solve, their buying experience, and overall demand. User research, on the other hand, is more narrowly focused on the use (and usability ) of specific products.

What are the main criticisms of market research?

Many marketing professionals are critical of market research because it can be expensive and time-consuming. It’s often easier to convince your CEO or CMO to let you do lean market research rather than something more extensive because you can do it yourself. It also gives you quick answers so you can stay ahead of the competition.

Do I need a market research firm to get reliable data?

Absolutely not! In fact, we recommend that you start small and do it yourself in the beginning. By following a lean market research strategy, you can uncover some solid insights about your clients. Then you can make changes, test them out, and see whether the results are positive. This is an excellent strategy for making quick changes and remaining competitive.

Net Promoter, Net Promoter System, Net Promoter Score, NPS, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld, and Satmetrix Systems, Inc.

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Market research is a cornerstone of all successful, strategic businesses. It can also be daunting for entrepreneurs looking to launch a startup or start a side hustle . What is market research, anyway? And how do you…do it?

We’ll walk you through absolutely everything you need to know about the market research process so that by the end of this guide, you’ll be an expert in market research too. And what’s more important: you’ll have actionable steps you can take to start collecting your own market research.

What Is Market Research?

Market research is the organized process of gathering information about your target customers and market. Market research can help you better understand customer behavior and competitor strengths and weaknesses, as well as provide insight for the best strategies in launching new businesses and products. There are different ways to approach market research, including primary and secondary research and qualitative and quantitative research. The strongest approaches will include a combination of all four.

“Virtually every business can benefit from conducting some market research,” says Niles Koenigsberg of Real FiG Advertising + Marketing . “Market research can help you piece together your [business’s] strengths and weaknesses, along with your prospective opportunities, so that you can understand where your unique differentiators may lie.” Well-honed market research will help your brand stand out from the competition and help you see what you need to do to lead the market. It can also do so much more.

The Purposes of Market Research

Why do market research? It can help you…

• Pinpoint your target market, create buyer personas, and develop a more holistic understanding of your customer base and market.
• Understand current market conditions to evaluate risks and anticipate how your product or service will perform.
• Validate a concept prior to launch.
• Identify gaps in the market that your competitors have created or overlooked.
• Solve problems that have been left unresolved by the existing product/brand offerings.
• Identify opportunities and solutions for new products or services.
• Develop killer marketing strategies .

What Are the Benefits of Market Research?

Strong market research can help your business in many ways. It can…

• Strengthen your market position.
• Help you identify your strengths and weaknesses.
• Help you identify your competitors’ strengths and weaknesses.
• Minimize risk.
• Center your customers’ experience from the get-go.
• Help you create a dynamic strategy based on market conditions and customer needs/demands.

What Are the Basic Methods of Market Research?

The basic methods of market research include surveys, personal interviews, customer observation, and the review of secondary research. In addition to these basic methods, a forward-thinking market research approach incorporates data from the digital landscape like social media analysis, SEO research, gathering feedback via forums, and more. Throughout this guide, we will cover each of the methods commonly used in market research to give you a comprehensive overview.

Primary vs. Secondary Market Research

Primary and secondary are the two main types of market research you can do. The latter relies on research conducted by others. Primary research, on the other hand, refers to the fact-finding efforts you conduct on your own.

This approach is limited, however. It’s likely that the research objectives of these secondary data points differ from your own, and it can be difficult to confirm the veracity of their findings.

Primary Market Research

Primary research is more labor intensive, but it generally yields data that is exponentially more actionable. It can be conducted through interviews, surveys, online research, and your own data collection. Every new business should engage in primary market research prior to launch. It will help you validate that your idea has traction, and it will give you the information you need to help minimize financial risk.

You can hire an agency to conduct this research on your behalf. This brings the benefit of expertise, as you’ll likely work with a market research analyst. The downside is that hiring an agency can be expensive—too expensive for many burgeoning entrepreneurs. That brings us to the second approach. You can also do the market research yourself, which substantially reduces the financial burden of starting a new business .

Secondary Market Research

Secondary research includes resources like government databases and industry-specific data and publications. It can be beneficial to start your market research with secondary sources because it’s widely available and often free-to-access. This information will help you gain a broad overview of the market conditions for your new business.

Identify Your Goals and Your Audience

Before you begin conducting interviews or sending out surveys, you need to set your market research goals. At the end of your market research process, you want to have a clear idea of who your target market is—including demographic information like age, gender, and where they live—but you also want to start with a rough idea of who your audience might be and what you’re trying to achieve with market research.

You can pinpoint your objectives by asking yourself a series of guiding questions:

• What are you hoping to discover through your research?
• Who are you hoping to serve better because of your findings?
• What do you think your market is?
• Who are your competitors?
• Are you testing the reception of a new product category or do you want to see if your product or service solves the problem left by a current gap in the market?
• Are you just…testing the waters to get a sense of how people would react to a new brand?

Once you’ve narrowed down the “what” of your market research goals, you’re ready to move onto how you can best achieve them. Think of it like algebra. Many math problems start with “solve for x.” Once you know what you’re looking for, you can get to work trying to find it. It’s a heck of a lot easier to solve a problem when you know you’re looking for “x” than if you were to say “I’m gonna throw some numbers out there and see if I find a variable.”

How to Do Market Research

This guide outlines every component of a comprehensive market research effort. Take into consideration the goals you have established for your market research, as they will influence which of these elements you’ll want to include in your market research strategy.

Secondary Data

Secondary data allows you to utilize pre-existing data to garner a sense of market conditions and opportunities. You can rely on published market studies, white papers, and public competitive information to start your market research journey.

Secondary data, while useful, is limited and cannot substitute your own primary data. It’s best used for quantitative data that can provide background to your more specific inquiries.

Find Your Customers Online

Once you’ve identified your target market, you can use online gathering spaces and forums to gain insights and give yourself a competitive advantage. Rebecca McCusker of The Creative Content Shop recommends internet recon as a vital tool for gaining a sense of customer needs and sentiment. “Read their posts and comments on forums, YouTube video comments, Facebook group [comments], and even Amazon/Goodreads book comments to get in their heads and see what people are saying.”

If you’re interested in engaging with your target demographic online, there are some general rules you should follow. First, secure the consent of any group moderators to ensure that you are acting within the group guidelines. Failure to do so could result in your eviction from the group.

Not all comments have the same research value. “Focus on the comments and posts with the most comments and highest engagement,” says McCusker. These high-engagement posts can give you a sense of what is already connecting and gaining traction within the group.

Social media can also be a great avenue for finding interview subjects. “LinkedIn is very useful if your [target customer] has a very specific job or works in a very specific industry or sector. It’s amazing the amount of people that will be willing to help,” explains Miguel González, a marketing executive at Dealers League . “My advice here is BE BRAVE, go to LinkedIn, or even to people you know and ask them, do quick interviews and ask real people that belong to that market and segment and get your buyer persona information first hand.”

Market research interviews can provide direct feedback on your brand, product, or service and give you a better understanding of consumer pain points and interests.

When organizing your market research interviews, you want to pay special attention to the sample group you’re selecting, as it will directly impact the information you receive. According to Tanya Zhang, the co-founder of Nimble Made , you want to first determine whether you want to choose a representative sample—for example, interviewing people who match each of the buyer persona/customer profiles you’ve developed—or a random sample.

“A sampling of your usual persona styles, for example, can validate details that you’ve already established about your product, while a random sampling may [help you] discover a new way people may use your product,” Zhang says.

Market Surveys

Market surveys solicit customer inclinations regarding your potential product or service through a series of open-ended questions. This direct outreach to your target audience can provide information on your customers’ preferences, attitudes, buying potential, and more.

Every expert we asked voiced unanimous support for market surveys as a powerful tool for market research. With the advent of various survey tools with accessible pricing—or free use—it’s never been easier to assemble, disseminate, and gather market surveys. While it should also be noted that surveys shouldn’t replace customer interviews , they can be used to supplement customer interviews to give you feedback from a broader audience.

Who to Include in Market Surveys

• Current customers
• Past customers
• Your existing audience (such as social media/newsletter audiences)

Example Questions to Include in Market Surveys

While the exact questions will vary for each business, here are some common, helpful questions that you may want to consider for your market survey. Demographic Questions: the questions that help you understand, demographically, who your target customers are:

• “What is your age?”
• “Where do you live?”
• “What is your gender identity?”
• “What is your household income?”
• “What is your household size?”
• “What do you do for a living?”
• “What is your highest level of education?”

Product-Based Questions: Whether you’re seeking feedback for an existing brand or an entirely new one, these questions will help you get a sense of how people feel about your business, product, or service:

• “How well does/would our product/service meet your needs?”
• “How does our product/service compare to similar products/services that you use?”
• “How long have you been a customer?” or “What is the likelihood that you would be a customer of our brand?

Personal/Informative Questions: the deeper questions that help you understand how your audience thinks and what they care about.

• “What are your biggest challenges?”
• “What’s most important to you?”
• “What do you do for fun (hobbies, interests, activities)?”
• “Where do you seek new information when researching a new product?”
• “How do you like to make purchases?”
• “What is your preferred method for interacting with a brand?”

Survey Tools

Online survey tools make it easy to distribute surveys and collect responses. The best part is that there are many free tools available. If you’re making your own online survey, you may want to consider SurveyMonkey, Typeform, Google Forms, or Zoho Survey.

Competitive Analysis

A competitive analysis is a breakdown of how your business stacks up against the competition. There are many different ways to conduct this analysis. One of the most popular methods is a SWOT analysis, which stands for “strengths, weaknesses, opportunities, and threats.” This type of analysis is helpful because it gives you a more robust understanding of why a customer might choose a competitor over your business. Seeing how you stack up against the competition can give you the direction you need to carve out your place as a market leader.

Social Media Analysis

Social media has fundamentally changed the market research landscape, making it easier than ever to engage with a wide swath of consumers. Follow your current or potential competitors on social media to see what they’re posting and how their audience is engaging with it. Social media can also give you a lower cost opportunity for testing different messaging and brand positioning.

SEO Analysis and Opportunities

SEO analysis can help you identify the digital competition for getting the word out about your brand, product, or service. You won’t want to overlook this valuable information. Search listening tools offer a novel approach to understanding the market and generating the content strategy that will drive business. Tools like Google Trends and Awario can streamline this process.

Ready to Kick Your Business Into High Gear?

Now that you’ve completed the guide to market research you know you’re ready to put on your researcher hat to give your business the best start. Still not sure how actually… launch the thing? Our free mini-course can run you through the essentials for starting your side hustle .

About Mary Kate Miller

Mary Kate Miller writes about small business, real estate, and finance. In addition to writing for Foundr, her work has been published by The Washington Post, Teen Vogue, Bustle, and more. She lives in Chicago.

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How to Do Market Research

Noah Parsons

18 min. read

Updated May 10, 2024

One of the biggest and most expensive mistakes I’ve made in my business career could have been avoided by doing a little homework.

In the late 2000s, my team and I came up with what we thought was a great idea for a product . Tons of businesses would need it, and it was almost guaranteed to be a huge hit!

But, we neglected to do our market research. 

We ended up with a product searching for a market instead of figuring out who our ideal customer was and building a product specifically for them.

You can avoid making this same mistake. 

Let’s learn from my experience and go over the basics of how to conduct market research. 

• What is market research?

Market research is the process of gathering information about your potential customers. 

It helps you define your target market, craft customer personas , and understand the viability of your business, by answering questions like: 

• Who are your customers?
• What are their buying and shopping habits?
• How many of them are there? 

By exploring your ideal customers’ problems, desires, and current solutions, you can build your product, service, and overall business strategy to better serve them.

• Why is market research important?

When starting a business , conducting market research to get to know your customers is one of the most important things you can do. 

If you don’t understand your customer, you don’t know:

• How you can solve their problems . 
• What kind of marketing messages and advertising work. 
• If your product or service is actually something your customers will spend money on.

Beyond that, market research can help you:

• Reduce risk: Inform critical decisions with real-world data.
• Understand your competitors: Know how competitors and alternatives to your business represent themselves in pricing, quality, and placement.
• Identify market trends: Stay ahead by spotting emerging trends and shifts in the market.
• Enhance customer experience: Improve customer satisfaction by addressing their pain points.

Gathering data on your customers should become a regular practice for your business. 

The more in tune you are with your customers, the better you can serve them and the more likely you are to grow your business. You should never just let assumptions about your customers drive business decisions.

Developing primary and secondary data through market research is how you get an accurate reflection of your customers’ needs.

Further Reading: 6 things to consider before entering a market

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Things to consider before conducting market research

Market research can be incredibly time-consuming (and even a waste of time) when done without the right preparation.

Here are a few questions to answer to help ensure you make the most of your efforts.

What are your objectives?

A research objective is a stated purpose that explains why you’re doing market research. It should include a specific result you intend to achieve, using available resources within a certain time frame. 

Without an objective, you’ll pour over a sea of data without knowing what you’re looking for. And if you speak to customers without a goal, you’ll struggle to ask useful questions and dig deeper.

Don’t overthink it.

Your objective should be easy to understand and connected to your business needs. 

For example, if you’re just starting, your objective may be to verify before investing in production if your chosen customer base is interested and willing to purchase your product or service.

What research methods will you use?

You don’t need to have every question prepped or a list of people to interview at the start—but you should know what research methods you intend to use.

The research options you choose will impact the data you collect, and the time it will take to complete it. By doing this ahead of time, you’ll be better prepared to create a timeline of when to take specific actions and what milestones to hit to stay on track.

What tools and resources do you need?

You likely won’t know every resource you’ll need until you start doing research. However, that doesn’t mean you can’t be proactive. 

If you know the methods you’ll be using, research what tools you’ll need to:

• Conduct interviews
• Create surveys
• Observe customer behavior

If you use third-party data, identify reputable sources to provide the information you want.

• How to conduct market research

Every business will do market research differently. The sources, the methods of data collection, and how you’ll use that data are entirely up to you. 

However, the core steps you should take remain the same. Here’s my recommendation for how to structure your research efforts:

1. Start by identifying your target market

Imagine that someone walks into your business, reaches out online, or picks up the phone and calls you. 

It’s your perfect customer: someone who has the problem that you solve and is willing to spend money on your solution. 

Now imagine the details about this person. Who are they? Can you describe them?

Ideal customers and common traits

This “ideal customer” is your target market . Your business might have several target markets, but it will usually serve you best to keep your list of target customers to two or three.

Each of your target markets should share common traits . These might be demographic traits such as: 

• Income levels
• Locations 

They might be psychographic traits—groups of people that like the same things or have similar interests. Or, your target market might be a certain type of employee at another company, such as a Chief Technology Officer or head of marketing.

Most often, target markets are blends of demographic and psychographic groups. For example, you might develop a new type of shoe targeted at female triathletes. Or you might be opening a hair salon targeting urban, hipster men.

Further Reading: Why niche audiences are important and how to find yours

Market segmentation

Creating multiple target markets for your company is doing what’s called “ market segmentation .” 

This sounds complex, but all you’re doing is dividing your target markets into different groups you hope to sell to. Each market segment might have different characteristics and buy your product or service for different reasons.

You might create different marketing campaigns or customize your product or service for each segment.

Further Reading:

Target marketing explained

Your target market is your ideal customer who needs your solution. They share common traits like age, gender, income, interests, or job roles. To start, focus your efforts on one target customer.

Consider focusing on a younger audience

Younger consumers are often overlooked in favor of older customers who currently make purchasing decisions. However, if you can crack the interests of a younger audience, it may lead to long-term loyalty.

2. Find out if your market is big enough

Are there enough potential customers to sustain you and your competitors? If the answer is no, then you need to consider changing your product or service offering.

Use the attributes you defined in the target market step and determine how many people meet your demographic, psychographic, or location criteria. I’ve got some links to resources to help you figure this out at the end of this article.

For example: If your target market only has a few thousand potential customers, you must either sell to them frequently or at a fairly high price to create a sustainable, profitable business.

Further Reading: How to use TAM, SAM, SOM to determine market size

If you are targeting an existing market with established competitors, you do what’s called industry research . 

For example, perhaps you are building a new company in the market for sports drinks or the market for cell phones. In cases like this, understanding how much people buy of existing offerings will give you the best sense of your potential market size. 

In this case, you want to look for industry reports and read trade publications for your industry. These publications often summarize the market size.

Further Reading: Differences between industry and market research explained

3. Talk to your potential customers

Once you have identified your target market, or at least made a good guess at who your target market is, you need to take the most important step in this entire market research process. 

You need to get up from your desk, leave behind your computer, and go outside. That’s right, you need to go and talk to people in your potential target markets. 

Yes, you can do online surveys and other research, but that’s no substitute for actually talking to potential customers. 

You’ll gain more insight into your customers through first-hand accounts than any survey will ever tell you.

Do this one thing, and you’ll be miles ahead of your competition. Why? Because most people skip this step. It’s intimidating to talk to strangers. What if they don’t want to buy what you plan on making?

So, don’t be like most entrepreneurs (including me!) and skip this critical step. 

It can mean the difference between success and failure. Getting this step done early will help you refine your business model and make a clear impact on your future success.

Further Reading: How to Create a Market Penetration Strategy  

4. Identify and analyze your competitors

Part of understanding your customers is knowing what solutions they already use. 

These are your competitors, and they may directly compete with you or provide a reasonable substitution customers settle for. 

You’ll understand how to position your business to take advantage of potential opportunities and mitigate risks by analyzing who they are, what they do, and how customers respond.  

Document your known competitors

To keep things simple, start by listing your known competitors . Account for businesses that offer a similar product/service, and those that indirectly compete with their solution or industry expertise. 

Example:   You operate an outdoor goods retail store. Your mission is to provide hands-on direction for customers to find camping, hiking, and survival gear that they will love. You offer a wide selection of well-known brands, local options, and in-house creations.

Your direct competitors are the large brands themselves, less niche retail stores, and online sellers. You must also account for other businesses that provide expert-level information on outdoor activities. 

They likely don’t sell the products, but may provide guided tours, reviews, or other insights that overlap with your business. 

Analyze your competitors

Once you have your list, it’s time to get to know the competition. Check out their websites, social media, customer reviews, and news stories from the last year. 

Sign up for their email lists, visit their stores (if they have them), and track down any industry reports that give you an idea of their size, performance, and strategic direction.

You don’t have to do everything I just listed. But you must go deep enough to clearly understand your competitors and why potential customers may choose them over you. 

It may even be useful to use the SWOT analysis framework to provide additional structure for your research. 

Further Reading: 10 ways to determine what your competitors are doing

5. Document your findings

The final (and easiest) step is to document your findings. How formal your documentation is will depend on how you plan on using it.

If you only need to share your findings with business partners and others in your business, then you can probably communicate fairly informally. 

However, if you’re looking for investors for your business, you may need to write a more formal market analysis and do a market forecast.

Presenting your market research

The single piece of documentation that every business should create is a buyer persona . 

A persona is a description of a person that hits on all of the key aspects of your target market. And, just like you might have several target markets for your business, you might have several different buyer personas.

Creating a buyer persona converts your target marketing information from dry research into a living, breathing person. 

For LivePlan , we’ve created a persona named Garrett, who drives much of our product development. Garrett embodies the attributes of our ideal customer.

When we think about creating a new marketing campaign or developing a new feature for our products, we ask, “Would Garrett like this?” You can read about the process we used to create Garrett in this article.

How to create a detailed user or buyer persona

Visualizing your customers when reviewing a sea of data can be tricky. So, create a customer persona and turn that data into the living, breathing person you imagine your customer to be.

LivePlan customer persona example

Check out this real-world customer persona used by the business planning and management software LivePlan.

When should you conduct market research?

Market research is vital when starting a business. It will improve your product or service and help you avoid starting a business without customers.

However, market research shouldn’t be exclusive to new businesses. Conditions are bound to change, and you must stay up-to-date on your industry , competitors, and emerging trends. 

Here are a few other business events where market research can make a difference:

• Launching a new product/service or updating current features.
• Expanding into a new market.
• Consistent dips in financial performance. 
• Widespread market changes.
• New competitors enter the market.

Primary vs secondary market research explained

No matter how you decide to gather information, the methods can be boiled down to primary and secondary research. As a business owner, it’s worth understanding the basics of each type of research and how they work together.

What is primary research?

Primary research is the first-hand information collected (by you or someone you’ve hired) from customers within your market. Primary research cuts out the middleman and ensures that the results you are gathering are straight from the source. 

That’s why you should conduct primary research when validating your business idea. 

Furthermore, it can be broken down into two result categories — exploratory and specific.

Exploratory primary research

Exploratory primary research involves non-quantifiable customer feedback. This means you’re not trying to measure results but to record interest or an emotional response. You’ll accomplish this by asking open-ended questions in formats like focus groups or 1:1 interviews.

Asking for open-ended feedback ensures that the results are unfiltered and honest. You aren’t unintentionally leading or hindering their responses. 

Specific primary research

Specific research allows you to dig deeper into issues or opportunities you identified through your exploratory research. 

You may target a smaller segment of customers from the larger group you’ve spoken to, conduct additional interviews, or shift to more quantifiable research such as beta-testing or surveys.

What is secondary research?

Secondary research covers every other piece of data you have available. This includes resources such as:

• Public sources: Typically free and highly accessible information gathered through government-sponsored research projects. 
• Commercial sources: Research studies conducted by private organizations regarding the state of specific markets, industries, or innovations. 
• Internal sources: Data you have collected through everyday business operations. Everything from financial statements to Analytics reports can qualify.

Which is better: primary or secondary research?

Neither primary nor secondary research is better than the other. They simply have different use cases. So, aim for a healthy mix.

When starting, focus on conducting primary research to ensure you get the necessary information to validate your business. 

Compare those findings to secondary resources such as industry benchmarks , market reports, and internal data you’ve collected. 

You’ll likely leverage secondary research more consistently as you grow—but it’s wise to run primary research initiatives occasionally, especially when approaching a strategic decision. Only with both types of research will you fully understand the story of your place in the market. 

Further Reading: Types of market research explained and how to use them

Types of market research to try

1. face-to-face, remote, or phone interviews.

I mentioned this before, but the best thing you can do is get out and talk to your potential or current customers, virtually or in person. 

Be sure you have a refined set of closed and open-ended questions ready, and consider the interviewee’s tone, body language, and interest alongside their answers.

2. Focus groups

Similar to interviews, focus groups can provide direct feedback from your customer mix. Rather than receiving answers or reactions in a bubble, you get to see how customers may act when influenced by others in the market. You can simply ask questions, run product tests, or have them watch a demo.

3. Observational research

Observational research is about watching how potential customers engage with your product or service. You’re attempting to understand what roadblocks or frustrations they may be hitting, what functionality seems to resonate, what they want from your business, etc.

To conduct observational research, you can set up an official testing environment that you control. Or you can just go out and observe your potential customers and see how they shop, make purchases, and what factors encourage or deter them from purchasing.

4. Pricing research

You may include questions about pricing when conducting interviews or focus groups, but you can also specifically develop research around pricing. 

This can be anything from testing different pricing options on your website ( A/B testing ), offering discounts to exclusive segments, or running ad campaigns with different pricing positions. The goal is to understand what your customers are willing to pay and what they consider a fair price .

5. Brand awareness research

This type of research is about understanding if your target market knows about your brand and how much they happen to know. What do they associate with your brand? What competitors come to mind first?

It’s a great way to understand your current market penetration and who your competitors are. You can integrate this type of questioning within your other tests or conduct surveys to get this data.

6. Customer interest

As part of your initial validation process, you should try to understand current customer interest. At its most basic, you’re asking: Are customers willing to buy your product or service? 

You can simply ask questions and look for yes or no answers, but it may be wise to run a limited-time sale or pre-sale to actually line up initial revenue for your business. 

You can offer the chance to purchase during your interviews or focus groups, as well as run pre-orders through a simple landing page or by measuring engagement with a paid ad campaign.

7. Customer satisfaction

This research will help you understand current customer loyalty and what it will take to get customers to come back. Again, you can do this research within focus groups or interviews. 

Still, you can also test loyalty programs, limited-time promotions, customer service initiatives, and other ways to improve customer loyalty. 

Market research tools and resources

Finding market research data depends on the market you are targeting and the industry you are in. 

Here are a few of my go-to sources for market research:

• U.S. Census : If you’re opening a business in the U.S., the U.S. Census site is a goldmine of information. Check out the Census Business Builder to get population data and data on how much people spend in a given area on your type of business.
• Bureau of Labor Statistics : Another U.S.-centric resource, but a fantastic site for information on specific industries: hiring and expense trends as well as industry sizes. If your target market is other businesses, this is a good place to look for data.
• Consumer Expenditure Survey : If you want to know what people spend their money on, this is your source.
• SBDCNet Business Snapshots : You’ll find a great collection of industry profiles that describe how industries are growing and changing, who their customers are, and what typical startup costs are. You should also check out their list of market research resources, sorted by industry .
• ChatGPT : All data generated from AI models like ChatGPT must be verified. But it can still be an excellent market research assistant. With the right prompting, you can generate customer segments, understand their nuances, and prioritize them based on your needs.

Further Reading: 21 best market research resources for small businesses

Market research informs your startup decisions

Effective market research can help you avoid costly mistakes early on in the life of your business. 

However, it should remain a core practice that you regularly implement when approaching crucial business decisions, growth opportunities, or just to reaffirm your understanding of the market. 

Revisit this framework whenever you’re approaching a key strategic decision . Confirm that you still understand your customers, competitors, and where the market is headed.

Then use this information to inform your planning and adjust your strategy if necessary.

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Before conducting market research
• When to conduct market research
• Primary vs secondary research
• Types of market research
• Tools and resources
• Market research informs your decisions

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How to do Market Research: a Step-by-Step Guide

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Looking for the best way to do market research? From framing your initial question to extracting valuable customer insights, we’ll walk you through the lean market research process step-by-step. You will learn effective techniques for collecting and analyzing data , with practical tips on applying your findings to benefit your SaaS. Get ready to empower your decisions with real-world market intelligence.

• Market research is vital for making informed business decisions, enabling companies to understand the market, target audience, and competitors, reducing risks, and optimizing marketing communications and product strategies .
• Effective market research requires clear and measurable objectives, guiding decision-making and ensuring relevance to the project’s needs, and should be accompanied by appropriate methods , including both primary and secondary research .
• Applying insights from market research to product development and marketing strategies can significantly enhance business growth. This allows businesses to tailor their offerings and engage more effectively with their target market.

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What is market research

Essentially, market research is the process of understanding one’s target audience’s needs and wants to validate a new product, feature, or service idea. It involves probing and extracting answers based on empirical evidence instead of relying on hunches or speculative judgment.

Why should you do market research?

Understanding your consumers’ behavior and needs well through methodical market research is vital for informed decision-making when it comes to your product roadmap. These choices can make or break your SaaS company. Without thorough market research, you’re navigating blindly, basing crucial judgments on antiquated notions of customer habits, imprecise economic gauges, or untested assumptions rather than solid competitive analysis.

The outcome? Sharper marketing messages, savvy product development strategies, and an intimate grasp of both prospective buyers and existing customers’ preferences and needs.

Identifying your market research goals

Before you do anything – you need to determine specific and actionable goals of your market research project. Setting SMART (specific, measurable, achievable, relevant and time-bound) goals will help you stay on track, come up with better market research questions and achieve more reliable results faster.

For effective market research outcomes, your goals must be:

• Quantifiable .
• Attainable.
• Directly aligned with project requirements.

Having established unambiguous goals prior to delving into data analysis sets up a solid foundation ensuring pivotal questions, hypotheses, and indicators are systematically tackled during effective market research.

Market research methods

Now that you understand the role of well-defined research objectives, let’s examine the different types of market research and research techniques for realizing these goals. These methods are essentially your toolkit for extracting valuable insights and they fall into two broad categories: primary research and secondary research . Choosing between them depends on many factors such as your budget, time availability, and whether you’re looking for more exploratory research data or concrete answers.

Engaging in primary research is comparable to unearthing precious metals—it requires gathering new information straight from sources through several approaches including:

• Focus groups.

This approach gives you first-hand insight into your target audience.

Conversely, secondary research uses already established datasets of primary data – which can add depth and reinforcement to your firsthand findings. For a 360 view of your market trends, combine both techniques – exploratory primary research and secondary channels of inquiry.

Let’s look a bit deeper into them now.

What is primary market research?

Market research uses primary market research as an essential tool. This involves collecting new data directly from your target audience using various methods, such as surveys , focus groups, and interviews.

Each method has its benefits. For example, observational studies allow you to see how consumers interact with your product.

There are many ways to conduct primary research.

Focus Groups : Hold discussions with small groups of 5 to 10 people from your target audience. These discussions can provide valuable feedback on products, perceptions of your company’s brand name, or opinions on competitors.

Interviews : Have one-on-one conversations to gather detailed information from individuals in your target audience.

Surveys : These are a common tool in primary market research and can be used instead of focus groups to understand consumer attitudes. Surveys use structured questions and can reach a broad audience efficiently.

Navigating secondary market research

While market research using primary methods is like discovering precious metals, secondary market research technique is like using a treasure map. This approach uses data collected by others from various sources, providing a broad industry view. These sources include market analyses from agencies like Statista, historical data such as census records, and academic studies.

Secondary research provides the basic knowledge necessary for conducting primary market research goals but may lack detail on specific business questions and could also be accessible to competitors.

To make the most of secondary market research, it’s important to analyze summarized data to identify trends, rely on reputable sources for accurate data, and remain unbiased in data collection methods.

The effectiveness of secondary research depends significantly on how well the data is interpreted, ensuring that this information complements the insights from primary research.

The role of qualitative and quantitative data in market research

In market research, there are two main types of data: qualitative and quantitative. Qualitative data explores the reasons behind consumer actions, collecting non-numeric information to understand consumer behaviors and motivations. For more on gathering and analyzing qualitative data, see How to Analyse Qualitative Data . On the other hand, quantitative data uses numeric data to measure consumer preferences, behaviors, and market sizes. To learn more about handling this type of data, check out User Analytics .

A thorough market analysis usually combines both qualitative and quantitative data. This approach provides a full view of the market by merging detailed qualitative insights with concrete quantitative statistics. For more on combining these approaches, refer to Generative vs. Evaluative Research .

Gathering qualitative insights

Qualitative research involves direct engagement with customers, like having detailed discussions. It includes observational studies that capture genuine consumer reactions. This type of research provides deep insights into consumer perceptions, brand comparisons, consumer behavior, and feedback on specific product features.

Studies on customer satisfaction and loyalty reveal effective strategies for keeping customers and what keeps them loyal, such as loyalty programs and quality customer service. The strength of qualitative research lies in its ability to dig deeper than just numbers, reaching insights that quantitative data might miss. By using qualitative data to customize experiences, businesses can increase customer satisfaction, interaction , and loyalty, leading to greater business growth.

Analyzing quantitative data

Quantitative research provides precision and the ability to measure findings using structured data collection methods like polls and surveys. Product analytics tools such as Userpilot , Amplitude , Heap , and Mixpanel are highly effective for collecting and organizing quantifiable data. This type of data is crucial for identifying trends and insights, which can help businesses track important performance indicators such as conversion rates or customer lifetime value , supporting their growth strategies.

Quantitative research data is divided into two types: discrete data, which includes countable numbers, and continuous data, which consists of numbers that can have fractions or decimals. These are vital for revealing important demographic information.

Segmenting your target market

Market research plays a key role in segmenting your target audience into manageable segments.

These market segments are typically grouped by similar needs or attributes, and display similar responses in marketing research surveys and initiatives. The full market segmentation process is vital for comprehensively grasping and satisfying the requirements of your targeted consumer base.

Accumulating demographic information forms the basis for executing effective market segmentation strategies. Businesses prioritize obtaining user data such as:

• Job functions.
• Organizational scale.
• Customer demographics profiles.
• Lifestyle choices.
• Values systems.
• Product usage patterns.

This information can be collected in the initial sign-up flow (through a signup flow survey; see the Asana example below) or by conducting comprehensive market research surveys .

At its core, successful market segmentation enables businesses to communicate effectively in their target customers’ dialects while catering explicitly to their distinct demands.

Userpilot allows you to easily segment your users not only by demographic information, company size, plan, or role – but also by their in-app engagement ( behavioral segmentation ):

In summary, the techniques used to create detailed analyses, like conducting specialized surveys and carefully collecting relevant participant information, are crucial for identifying groups within a larger target population. These groups are defined by usage patterns and broad demographic and economic indicators, enabling companies to not only reach but also deeply connect with each niche market they aim to capture.

Creating buyer personas based on your market research

Creating buyer personas is a strategic process that helps businesses better understand and cater to their target customers. Here’s how you can systematically approach creating effective buyer personas:

• Gather Initial Data : Start by collecting basic demographic information such as age, gender, location, and education level. This can come from existing customer databases, market research, or industry reports.

• Segment the Audience : Based on the collected data, segment your audience into distinct groups. Each segment should represent a type of customer with similar characteristics and behaviors. This segmentation helps in personalizing marketing and sales strategies effectively.
• Build Detailed Personas : For each segment, create a detailed persona that includes not only demographic and behavioral traits but also psychographics like interests, values, and lifestyle. Each persona should tell the story of an ideal customer, making them relatable for your marketing team.
• Refine Over Time : Buyer personas are not static. As you gather more data and the market evolves, revisit and refine your personas to keep them relevant and accurate.
• Utilize Tools Like Userpilot : Tools such as Userpilot can enhance this process by providing analytics that reveal how users interact with your product. This can confirm hypotheses or uncover new insights about user preferences and behaviors, which can be integrated into existing personas to make them even more accurate.

By carefully crafting and continually updating buyer personas, businesses can achieve a deeper understanding of their customers. This enables them to tailor their offerings and communications effectively, thereby enhancing customer engagement and satisfaction.

Recruiting participants for primary research

Choosing the right participants for primary research is a crucial step in market research. It’s important to find individuals who can provide relevant and meaningful consumer feedback, on your product or service, as this feedback is key to developing accurate user personas.

Userpilot can be instrumental in this process. It collects data on how users interact with and use your products, helping you identify who might be the best candidates for more detailed studies, such as interviews.

To efficiently recruit participants for interviews, Userpilot’s in-app features, such as in-app modals with embedded surveys can be extremely useful. You can use these tools to engage directly with users who meet your specific criteria, right within your app.

This method not only simplifies the recruitment process but also ensures that you’re interacting with the most relevant users. By leveraging these features, you can gather deep insights that significantly enhance the development of your user personas, ensuring your research is both timely and informed.

Competitive analysis for strategic advantage

Competitive analysis helps businesses understand their rivals’ strategies. It involves identifying which industries or markets to target and listing key competitors to gain a clear view of the competitive environment. This includes evaluating competitors’ market share, strengths, weaknesses, and potential entry barriers, often using tools like SWOT analysis.

By understanding competitors’ operations and past marketing efforts, businesses can craft new strategies, pinpoint opportunities, and learn from competitors’ mistakes. Employing market research, brand perception surveys, and market statistics, alongside analytical frameworks like Porter’s Five Forces Model, helps businesses uncover new opportunities and maintain a competitive advantage.

Ultimately, competitive analysis uses the understanding of competition to fuel business growth.

Conducting effective market research surveys

Primary market research often uses surveys as a cost-effective way to gather data. These surveys reach wide audiences and provide quick feedback. It’s crucial to carefully plan the creation and distribution of these surveys to ensure they are effective. Given the high amount of web traffic from mobile devices, it’s particularly important to make surveys mobile-friendly.

To get the most comprehensive data, include both quantitative (closed-ended) and qualitative (open-ended) questions in your survey . Offering incentives like financial compensation or vouchers can encourage participation, but it’s important to manage these carefully to avoid biasing the responses.

Well-designed surveys are like direct interviews with your target audience and are key to obtaining valuable insights about their views and experiences.

Userpilot offers over 50 in-app survey templates along with a bespoke builder, which are important tools for collecting the right responses. These features allow you to tailor surveys precisely to your needs, ensuring you gather accurate and relevant data directly from your users. By leveraging these templates and customizing them with the bespoke builder, you can effectively engage your audience and enhance the quality of insights you receive. This setup is crucial for conducting efficient and effective market research.

Analyzing and interpreting market research data

Once you have collected data through surveys, market research data analysis is the next critical step. It involves identifying patterns, establishing connections, and extracting insights that inform business decisions.

Userpilot’s analytics suite offers deep and easily accessible insights into your market research data:

This process starts with preparing the data by cleaning and organizing it to ensure accuracy and ease of analysis. Depending on the study’s goals, various analytical methods can be used, from simple descriptive statistics to complex multivariate analyses, all chosen to provide meaningful insights.

The core of this analysis aims to uncover market trends and understand industry specifics, which can highlight key factors such as impactful customer experiences, profitable products or services, and effective marketing strategies. Communicating these findings effectively involves presenting them in clear reports and using visual aids while making practical recommendations and addressing any limitations in the research scope or methods. Ultimately, data analysis transforms raw data into compelling narratives that offer actionable business intelligence.

Applying market research to product or service development

Market research is much more than just collecting data and uncovering insights; it’s a vital tool for driving business growth and guiding product development at every stage. Here’s how market research supports business throughout the product lifecycle:

• Concept Creation : Helps identify market needs and opportunities to inform the initial product idea.
• Building a Business Case : Provides evidence and data to justify investment in the new product.
• Product Development : Offers insights into customer preferences and feedback for refining product features.
• Market Introduction : Aids in strategizing the launch, targeting the right audience, and setting the right price.
• Lifecycle Management : Continuously gathers data on customer usage and satisfaction to enhance the product over time.

Consider a B2B SaaS company that develops project management software. By engaging in targeted market research activities like surveys and doing focus group call groups among its business clients, the company can:

• Understand Business Needs : Gain insights into the specific project management challenges and needs of different industries.
• Refine Product Features : Discover which software features are most valued by businesses, such as integration capabilities, user-friendliness, or specific tools for collaboration.
• Tailor Marketing Strategies : Identify the most effective communication channels and messaging that resonate with business clients, such as emphasizing efficiency gains or return on investment.

Market research guides businesses from the initial idea through to launch and beyond, acting as a strategic tool that ensures all actions are aligned with market demands and customer needs , ultimately aiming for successful business outcomes.

Utilizing tools for efficient market research

Using tools like Userpilot, SurveyMonkey, Google Forms, and Typeform, market researchers can reach a wide audience and get fast responses. These platforms help to design, distribute, and analyze surveys efficiently.

Userpilot stands out by allowing businesses to create targeted in-app experiences that engage users directly where they are most active—within the app itself. This direct engagement method improves the quality of the feedback collected as it relates to specific features or user experiences.

Userpilot also offers features such as demographic filtering and behavioral-based segmentation, which speeds up the process of finding and recruiting the right participants for market research.

These tools are essential for performing detailed and effective market research. They break down geographic and cultural barriers, offer access to diverse user groups, and enable businesses to conduct deep, actionable analyses across different market segments.

Translating research findings into business growth

Market research does more than just gather and analyze data; it aims to transform these insights into tangible business improvements. This process is crucial in guiding product development and helping increase a company’s market share by informing targeted strategies. For instance, a B2B SaaS company could use market research to:

• Tailor marketing strategies specifically for key user personas.
• Identify the most valued features for your users.
• Develop pricing strategies that appeal to companies of different sizes.
• Gain insight into the specific needs and expectations of their customers.

By implementing effective market research techniques, companies can customize their products or services to better serve their target audience’s needs, fundamental for stimulating company growth . Conducting personalized market research adds value, while collaborating with specialized firms may yield additional profound insights.

Market research is not just about collecting data; it’s about deeply understanding your customers, spotting opportunities, and making informed decisions that drive your business forward. It provides essential insights into the market and business environment, influencing how potential clients perceive your company.

By conducting competitor analysis and market research, organizations can:

• Connect with their target audience.
• Understand their competitive position.
• Plan strategically for future initiatives.
• Gain insights into customer perceptions of their brand, uncovering new perspectives or opportunities for improvement.

Since competitors also use market research to their advantage, engaging in these analytical processes is crucial for a comprehensive marketing strategy, aimed at business growth.

Start your own market research and journey today to pave the way to success.

Frequently asked questions

What is market research and why is it important.

Understanding their target market through collected information and insights, businesses can make informed decisions, diminish risks, and enhance marketing strategies with the aid of market research. This ensures that choices are based on reliable data, which is crucial for business success.

What is the difference between primary and secondary research?

To summarize, primary research entails the gathering of original data directly from the source, whereas secondary research utilizes previously compiled data sources to add perspective and reinforce conclusions derived from primary research.

How does market research guide product development?

By offering critical data on consumer habits and preferences, market research steers the enhancement of product features, thereby influencing decisions across all stages of a product’s life cycle and aiding in the evolution of product development.

What tools can be used for efficient market research?

Platforms such as Userpilot, SurveyMonkey, Google Forms, and Typeform can be leveraged alongside technologies that are driven by data to simplify the process of crafting, disseminating, and examining online surveys which play a crucial role in conducting market research effectively.

How can market research translate into business growth?

By informing product development, marketing strategies, and identifying opportunities for growth through enlightened decision-making, market research results can propel business expansion.

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How to Conduct Market Research for a Startup

• 17 Mar 2022

With every innovative product idea comes the pressing question: “Will people want to buy it?”

As an entrepreneur with a big idea, what’s the best way to determine how potential customers will react to your product? Conducting market research can provide the data needed to decide whether your product fits your target market.

Before launching a new venture, you should understand market research. Here’s how to conduct market research for a startup and why it’s important.

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What Is Market Research?

Market research is the process of gathering information about customers and the market as a whole to determine a product or service’s viability. Market research includes interviews, surveys, focus groups, and industry data analyses.

The goal of market research is to better understand potential customers, how well your product or service fits their needs, and how it compares to competitors’ offerings.

There are two types of research you can conduct: primary and secondary.

• Primary research requires collecting data to learn about your specific customers or target market segment. It’s useful for creating buyer personas, segmenting your market, and improving your product to cater to customers’ needs .
• Secondary research is conducted using data you didn’t collect yourself. Industry reports, public databases, and other companies’ proprietary data can be used to gain insights into your target market segment and industry.

Why Is Market Research Important for Entrepreneurs?

Before launching your venture, it’s wise to conduct market research to ensure your product or service will be well received. Feedback from people who fall into your target demographics can be invaluable as you iterate on and improve your product.

Performing market research can also help you determine a pricing strategy by gauging customers’ willingness to pay for your product. Additionally, it can improve the user experience by revealing what features matter most to potential customers.

When assessing which startups to fund, investors place heavy importance on thorough market research that indicates promising potential. Providing tangible proof that your product fulfills a market need and demonstrating you’ve taken the time to iterate on and improve it signal that your startup could be a worthwhile investment.

Related: How to Talk to Potential Investors: 5 Tips

How to Do Market Research for a Startup

1. form hypotheses.

What questions do you aim to answer through market research? Using those questions, you can make predictions called hypotheses . Defining your hypotheses upfront can help guide your approach to selecting subjects, researching questions, and testing designs.

An example question you may ask is: “How much are people in my target demographic willing to pay for the current version of my product?” Your hypothesis could be: “If my product contains all its current features, customers will be willing to pay $500 for it.”

Another example question you may ask is: “What’s the user’s biggest pain point, and is my product meeting their needs?” Your hypothesis could be: “I believe the user’s biggest pain point is needing an easy, unintimidating way to learn basic car maintenance, and I predict that my product meets that need.”

You can and should test multiple hypotheses, but try to select no more than a few per test, so the research stays focused.

Related: A Beginner’s Guide to Hypothesis Testing in Business

2. Select the Type of Research Needed to Test Hypotheses

Once you’ve formed your hypotheses, determine which type of research to conduct.

If your hypotheses focus on determining your startup’s place in the broader market, start with secondary research. This can include using existing data to determine market size, how much of that market your startup could reasonably own, who your biggest competitors are, and how your brand and product compare to theirs.

If your hypotheses require primary research, decide which data collection method best fits your needs. These can include one-on-one interviews, surveys, focus groups, and polls. Primary research allows you to gather insights into customer satisfaction and loyalty, brand awareness and perception, and real-time product usability.

3. Identify Target Demographics and Recruit Subjects

To gather meaningful insights, you need to understand your target demographic. Do you aim to cater to working parents, young athletes, or pet owners? Determine the type of person who can benefit from your product.

If you conduct primary research, you need to recruit subjects. This can be done in several ways, including:

• Word of mouth: The simplest but least reliable way to recruit participants is by word of mouth. Ask people you know to refer others to be research subjects, then screen them to confirm they fit your target demographic.
• Promoting the study on social media: Many social media platforms enable you to show an ad to people who fall into specific demographic categories or have certain interests. This allows you to get the word out to a large number of people who qualify.
• Hiring a third-party market research company: Some companies provide full market research services and recruit participants and conduct research on your behalf.

However you recruit subjects, ensure they take a screener survey beforehand, which allows you to determine whether they fit the specific demographic you want to study or have a trait that eliminates them from the research pool. It also provides demographic data—such as age and race—that enables you to select a diverse subset of your target demographic.

In addition, you can offer compensation to boost participation, such as money, meal vouchers, gift cards, or early access to your product. Make it clear that compensation is in appreciation for subjects’ time and honest feedback.

4. Conduct the Research

Once you’ve determined the type of research and target demographic necessary to test your hypotheses, conduct your research. To reduce bias, enlist someone unfamiliar with your hypotheses to perform interviews or lead focus groups.

Ask questions based on your audience and hypotheses. For instance, if you’re aiming to test existing customers’ purchase motivations, you may ask: “What challenge were you trying to solve when you first bought the product?”

If examining brand perception, your audience should consist of potential customers who don’t yet know your brand. Present them with a list of competitor logos—with yours in the mix—and ask them to rank the brands by perceived reliability.

While the questions you ask are vehicles to prove or disprove hypotheses, ensure they don’t lead subjects in one direction. To craft unbiased research questions , use neutral language and vary the order of options in multiple-choice questions. This can keep subjects from selecting the same option each time if they sense the third option is always mapped to a certain outcome. It also helps account for primacy bias (the tendency to select the first option in a list) and recency bias (the tendency to select the final option in a list).

Once you’ve collected data, ensure it’s organized efficiently and securely so you can protect subjects’ identities .

Related: 3 Examples of Bad Survey Questions and How to Fix Them

5. Gather Insights and Determine Action Items

After you’ve organized your data, analyze it to extract actionable insights. While some of the data will be qualitative rather than quantitative, you can detect patterns in responses to make it quantifiable. For instance, noting that 15 of 20 subjects mentioned feeling overwhelmed when attempting to assemble your product.

Once you’ve analyzed the data and communicated emerging trends using data visualizations , outline action items.

If the majority of users in your target demographic reported feeling overwhelmed while assembling your product, action items might include:

• Creating different versions of assembly instructions to test with other groups, varying diagrams and instructional language
• Researching instruction manual best practices

Each round of market research can offer more information about how your product is perceived and experienced by potential users.

Market Research as an Ongoing Endeavor

While it’s useful to conduct market research before launching your product, you should revisit your hypotheses and form new ones over the course of building your venture.

By conducting market research with each version of your product, you can gradually improve it and ensure it continues to fit target customers’ needs.

Are you interested in bolstering your entrepreneurship skills? Explore our four-week online course Entrepreneurship Essentials and our other entrepreneurship and innovation courses to learn to speak the language of the startup world.

About the Author

The Ultimate Guide to Market Research: Types, Benefits, and Real-World Examples

Team Fratzke

Today's consumers hold a lot of power when making purchase decisions. With a quick inquiry in a search engine or search bar within a social media platform, they can access genuine reviews from their peers without relying on sales reps.

Considering this shift in consumer behavior, adjusting your marketing strategy so it caters to the modern-day buying process is essential . To achieve this, you must thoroughly understand your target audience, the market you operate in, and the factors influencing their decision-making.

This is where market research can be leveraged so you stay current with your audience and industry. 

Article Overview

In this article, we’ll walk you through everything you need to know about how to conduct market research, including:

• Why market research is essential for understanding your target audience, the market you operate in, and factors influencing decision-making
• What are the different types of market research, such as primary and secondary market research
• How to collect information about your customers and target market to determine the success of a new or existing product, improve your brand, and communicate your company's value
• Real-world examples of companies leveraging market research

What is market research?

Market research is a necessary process that involves collecting and documenting information about your target market and customers. This helps you determine the success of a new product, improve an existing one, or understand how your brand is perceived. You can then turn this research into profits by  developing marketing strategies and campaigns to effectively communicate your company's value .

While market research can provide insights into various aspects of an industry, it is not a crystal ball that can predict everything about your customers. Market researchers typically explore multiple areas of the market, which can take several weeks or even months to get a complete picture of the business landscape.

Even by researching just one of those areas, you can gain better insights into who your buyers are and what unique value proposition you can offer them that no other business currently provides.

Of course, you can simply use your industry experience and existing customer insights to make sound judgment calls. However, it's important to note that market research provides additional benefits beyond these strategies. There are two things to consider:

• Your competitors also have experienced individuals in the industry and a customer base. Your immediate resources may equal those of your competition's immediate resources. Seeking a larger sample size for answers can provide a better edge.
• Your brand's customers do not represent the entire market's attitudes, only those who are attracted to your brand.

The market research services industry is experiencing rapid growth , indicating a strong interest in market research as we enter 2024. The market is expected to grow from approximately $75 billion in 2021 to $90.79 billion in 2025, with a compound annual growth rate of 5%. 

Your competitors have highly skilled individuals within the industry, meaning your available personnel resources are likely similar to those of your competitors. So what are you going to do to get ahead?

You’re going to do thorough market research, which is why seeking answers from a larger sample size is essential. Remember that your customers represent only a portion of the market already attracted to your brand, and their attitudes may not necessarily reflect those of the entire market. You could be leaving money on the table by leaving out untapped customers .

Why do market research?

Market research helps you meet your buyers where they are. Understanding your buyer's problems, pain points, and desired outcomes is invaluable as our world becomes increasingly noisy and demanding. This knowledge will help you tailor your product or service to appeal to them naturally. 

What’s even better is when you're ready to grow your business, market research can also guide you in developing an effective market expansion strategy.

Market research provides valuable insights into factors that impact your profits and can help you to :

• Identify where your target audience and current customers are conducting their product or service research
• Determine which competitors your target audience looks to for information, options, or purchases
• Keep up with the latest trends in your industry and understand what your buyers are interested in
• Understand who makes up your market and what challenges they are facing
• Determine what influences purchases and conversions among your target audience
• Analyze consumer attitudes about a particular topic, pain, product, or brand
• Assess the demand for the business initiatives you're investing in
• Identify unaddressed or underserved customer needs that can be turned into selling opportunities
• Understand consumer attitudes about pricing for your product or service.

Market research provides valuable information from a larger sample size of your target audience, enabling you to obtain accurate consumer attitudes. By eliminating any bias or assumptions you have about your target audience, you can make better business decisions based on the bigger picture. 

As you delve deeper into your market research, you will come across two types of research: primary and secondary market research . Simply put, think of two umbrellas beneath market research - one for primary and one for secondary research. In the next section, we will discuss the difference between these two types of research. That way, if you work with a market who wants to use them, you’ll be ready with an understanding of how they can each benefit your business.

Primary vs. Secondary Research

Both primary and secondary research are conducted to collect actionable information on your product. That information can then be divided into two types: qualitative and quantitative research. Qualitative research focuses on public opinion and aims to determine how the market feels about the products currently available. On the other hand, quantitative research seeks to identify relevant trends in the data gathered from public records. 

Let's take a closer look at these two types.

Primary Research

Primary research involves gathering first-hand information about your market and its customers. It can be leveraged to segment your market and create focused buyer personas . Generally, primary market research can be categorized into exploratory and specific studies.

Exploratory Primary Research

This type of primary market research is not focused on measuring customer trends; instead, it is focused on identifying potential problems worth addressing as a team. It is usually conducted as an initial step before any specific research is done and may involve conducting open-ended interviews or surveys with a small group of people.

Specific Primary Research

After conducting exploratory research, businesses may conduct specific primary research to explore issues or opportunities they have identified as necessary. Specific research involves targeting a smaller or more precise audience segment and asking questions aimed at solving a suspected problem. Specific primary research reveals problems that are unique to your audience so you can then offer a unique (and valuable) solution.

Secondary Research

Secondary research refers to collecting and analyzing data that has already been published or made available in public records. This may include market statistics, trend reports, sales data, and industry content you already can access. Secondary research really shines when you go to your competitors . The most commonly used sources of secondary market research include:

• Public sources
• Commercial sources
• Internal sources

Public Sources

When conducting secondary market research, the first and most accessible sources of information are usually free . That’s right–these public sources are free and at your fingertips so there’s no reason for you to not be checking them out and leveraging them for your own gain.

One of the most common types of public sources is government statistics. According to Entrepreneur, two examples of public market data in the United States are the U.S. Census Bureau and the Bureau of Labor & Statistics. These sources offer helpful information about the state of various industries nationwide including:

Commercial Sources

Research agencies such as Pew, Fratzke, Gartner, or Forrester often provide market reports containing industry insights from their own in-depth studies . These reports usually come at a cost if you want to download and obtain the information, but these agencies are experts at what they do, so the research is most likely valuable.

Internal Sources

Internal sources of market data can include average revenue per sale, customer retention rates, and other data on the health of old and new accounts. They are often overlooked when it comes to conducting market research because of how specific the data is; however, these sources can be valuable as they provide information on the organization's historical data.

By analyzing this information, you can gain insights into what your customers want now . In addition to these broad categories, there are various ways to conduct market research. Let’s talk about them.  

Types of Market Research

• Interviews (in-person or remote)

Focus Groups

• Product/ Service Use Research

Observation-Based Research

Buyer persona research, market segmentation research, pricing research.

• Competitive Analysis Research

Customer Satisfaction and Loyalty Research

Brand awareness research, campaign research.

Interviews can be conducted face-to-face or virtually, allowing for a natural conversation flow while observing the interviewee's body language. By asking questions about themselves, the interviewee can help you create buyer personas , which are made by using information about the ideal customer, such as:

• Family size 
• Challenges faced at work or in life 

And other aspects of their lifestyle. This buyer profile can shape your entire marketing strategy , from the features you add to your product to the content you publish on your website. Your target audience will feel that the marketing was made just for them and will be drawn to your product or service.

Focus groups are market research involving a few carefully selected individuals who can test your product, watch a demonstration, offer feedback, and answer specific questions. This research can inspire ideas for product differentiation or highlight the unique features of your product or brand that set it apart from others in the market.  This is a great market research option to gain specific feedback, which you can use to improve your services .

Product/Service Use Research

Product or service usage research provides valuable insights into how and why your target audience uses your product or service.  This research can help in various ways including:

•  Identifying specific features of your offering that appeal to your audience. 
• Allowing you to assess the usability of your product or service for your target audience. 

According to a report published in 2020, usability testing was rated the most effective method for discovering user insights, with a score of 8.7 out of 10. In comparison, digital analytics scored 7.7, and user surveys scored 6.4.

Observation-based research is a process that involves observing how your target audience members use your product or service. The way that you intended your product or service to be used may not be the actual way that it is used. Observation-based research helps you understand what works well in terms of customer experience (CX) and user experience (UX), what problems they face, and which aspects of your product or service can be improved to make it easier for them to use.

To better understand how your potential customers make purchasing decisions in your industry, it is essential to know who they are. This is where buyer persona research comes in handy. Buyer or marketing personas are fictional yet generalized representations of your ideal customers. They give you someone to whom you want your marketing efforts to empathize and move, even though they don’t really exist. 

Gathering survey data and additional research to correctly identify your buyer personas will help you to visualize your audience so you can streamline your communications and inform marketing strategy . Key characteristics to include in a buyer persona are:

• Job title(s)
• Family size
• Major challenges

Market segmentation research enables you to classify your target audience into various groups or segments based on specific and defining characteristics. This method allows you to understand their needs, pain points, expectations, and goals more effectively.

Pricing research can provide valuable insights about the prices of similar products or services in your market. It can help you understand what your target audience expects to pay for your offerings and what would be a reasonable price for you to set. Correct pricing is important because if you set it too high, consumers will go to your cheaper competitor; but if you set it too low, your consumers may become suspicious of your product or service and still end up with your competitor. This information allows you to develop a solid pricing strategy aligning with your business goals and objectives. 

Competitive Analysis

Competitive analyses are incredibly valuable as they provide a deep understanding of your market and industry competition. Through these analyses, you can gain insights like: 

• What works well in your industry 
• What your target audience is already interested in regarding products like yours
• Which competitors you should work to keep up with and surpass 
• How you can differentiate yourself from the competition

Understanding customer satisfaction and loyalty is crucial to encouraging repeat business and identifying what drives customers to return (such as loyalty programs, rewards, and exceptional customer service). Researching this area will help you determine the most effective methods to keep your customers coming back again and again. If you have a CRM system, consider further utilizing automated customer feedback surveys to improve your understanding of their needs and preferences.

Brand awareness research helps you understand the level of familiarity your target audience has with your brand. It provides insights into your audience members' perceptions and associations when they think about your business.This type of research reveals what they believe your brand represents. This information is valuable for developing effective marketing strategies, improving your brand's reputation, and increasing customer loyalty .

To improve your marketing campaigns, you need to research by analyzing the success of your past campaigns among your target audience and current customers. This requires experimentation and thoroughly examining the elements that resonate with your audience. By doing so, you can identify the aspects of your campaigns that matter most to your audience and use them as a guide for future campaigns. 

Now that you understand the different market research categories and types let's look at how to conduct your market research.  Using our expertise and experience, we’ve created a step-by-step guide to conducting market research.

How to Do Market Research (Detailed Roadmap)

• Define the problem or objective of the research. 
• Determine the type of data needed. 
• Identify the sources of data. 
• Collect the data. 
• Analyze the data. 
• Interpret the results. 
• Report the findings. 
• Take action based on the findings.

1. Define the problem or objective of the research

Defining the problem or objective of the research is the first step in conducting market research. This involves identifying the specific issue that the research is trying to address. It is essential to be clear and specific about the research problem or objective, as it will guide the entire research process.

2. Determine the type of data needed

After defining the research problem or objective, the next step is determining the data type needed to address the issue. This involves deciding whether to collect primary or secondary data. Primary data is collected directly from the source, while secondary data is collected from existing sources such as government reports or market research studies.

3. Identify the sources of data

Once the data type has been determined, the next step is identifying the data sources. This involves identifying potential sources of primary and secondary data that can be used to address the research problem or objective. Primary data sources can include surveys, focus groups, and interviews, while secondary data sources can include government reports, industry publications, and academic journals.

4. Collect the data

After identifying the data sources, the next step is to collect the data. This involves designing and implementing a data collection plan consistent with the research problem or objective. The data collection plan should specify the methods and procedures for collecting data, sample size, and sampling method.

5. Analyze the data

Once the data has been collected, the next step is to analyze the data. This involves organizing, summarizing, and interpreting the data to identify patterns, relationships, and trends. The research problem or objective should guide the data analysis process and be conducted using appropriate statistical methods and software.

6. Interpret the results

After analyzing the data, the next step is to interpret the results. This involves drawing conclusions from the data analysis and using the results to address the research problem or objective. It is essential to analyze the results objectively and to avoid making assumptions or drawing conclusions that are not supported by the data.

7. Report the findings

Try identifying common themes to create a story and action items.To make the process easier, use your favorite presentation software to create a report, as it will make it easy to add quotes, diagrams, or call clips.

Feel free to add your flair, but the following outline should help you craft a clear summary:

• Background: What are your goals, and why did you conduct this study?
• Participants: Who you talked to? A table works well to break groups down by persona and customer/prospect.
• Executive Summary: What were the most exciting things you learned? What do you plan to do about it?
• Key Findings: Identify the key findings using data visualizations and emphasize key points.
• Recommendations + Action Plan: Your analysis will uncover actionable insights to fuel strategies and campaigns you can run to get your brand in front of buyers earlier and more effectively. Provide your list of priorities, action items , a timeline, and its impact on your business.

8. Take action based on the findings

The final step in conducting market research is to take action based on the findings. This involves using the results to make informed decisions about the marketing strategy, product development, or other business decisions. It is important to use the findings to drive action and to monitor and evaluate the effectiveness of the action taken continuously.

How to Prepare for Market Research Projects

Identify a persona group to engage, prepare research questions for your market research participants, list your primary competitors.

The idea is to use your persona as a reference point for understanding and reaching out to your industry's audience members. Your business might cater to more than one persona, and that's completely acceptable! However, you must be mindful of each persona while strategizing and planning your content and campaigns. 

How to Identify the Right People to Engage for Market Research

When selecting a group on which to conduct market research , it is essential to consider individuals with the same characteristics as your target audience. 

If you need to research multiple target audiences, recruit separate groups for each one. Select people who have recently interacted with you by looking through social media for post interactions or seeing if they’ve made recent purchases from you.

If you are planning to conduct an evaluation, it is recommended that you focus on people who have completed it within the last six months. However, if you have a longer sales cycle or a specific market, you can extend the period up to a year. It is crucial to ask detailed questions during the evaluation, so the participants' experience must be fresh.

Gather a mix of participants

If you want to expand your customer base, you’re going to want to get viewpoints of your product or service from every angle. Consider getting this mix by recruiting individuals who have already purchased your product, those who have bought a competitor's product, and those who haven't purchased anything. While targeting your existing customers may be the easiest option, gathering information from non-customers can help you gain a more balanced market perspective .

We recommend taking the following steps to select a mix of participants:

• Create a list of customers who made a recent purchase . This is usually the most accessible group to recruit. If you have a CRM system with list segmentation capabilities, run a report of deals that closed within the past six months and filter it for the characteristics you're looking for. Otherwise, work with your sales team to get them a list of appropriate accounts.
• Create a list of customers who were in an active evaluation but didn't make a purchase. You should get a mix of buyers who either purchased from a competitor or decided not to purchase. Again, you can obtain this list from your CRM or your Sales team's system to track deals.
• Use social media to call for participants. Try reaching out to people who follow you on social media but decided not to buy from you. Some may be willing to talk to you and explain why they did not purchase your product.
• Leverage your network . Spread the word that you're conducting a study to your coworkers, former colleagues, and LinkedIn connections. Even if your direct connections don't qualify, some will likely have a coworker, friend, or family member who does.
• Choose an incentive to motivate participants to spend time on your study. If you're on a tight budget , you can reward participants for free by giving them exclusive access to content. 

Related Resources:

• Digital Marketing Strategy: Keep It Simple
• 5 Marketing Predictions for the Looming Recession
• Recession Proof Marketing Strategies for Your Business
• Marketing Operations Framework - The Five Ps
• Biggest Marketing Challenges Leaders Face
• Digital Marketing Benchmarks & KPIs - How To Compare Your Performance

Preparation is key when conducting research in hopes of gaining productive and informative conversations. This involves creating a discussion guide, whether it is for a focus group, an online survey, or a phone interview. The guide should help you cover all the relevant topics and manage your time efficiently.

The discussion guide should be in an outline format, with an allocated time and open-ended questions for each section. All the questions must be open-ended, as asking closed questions may lead the interviewee to respond with a simple "yes" or "no" answer. You may need more detailed answers to make informed decisions, so be sure to ask follow-up questions as necessary.  Also leave out any leading questions as they may unintentionally influence the interviewee's response, skewing your research results.

It's essential to identify your competitors accurately and you may even have some hidden in plain sight.  There are some instances where your company's business division might compete with your main product or service, even though that company's brand might have a different focus. Take a look at Apple:  the company is known primarily for its laptops and mobile devices, but Apple Music competes with Spotify over its music streaming service.

From a content perspective, you might compete with a blog, YouTube channel, or similar publication for inbound website visitors — even though their products don't overlap with yours. An example of this is when a toothpaste company might compete with publications like Health.com or Prevention on specific blog topics related to health and hygiene, even though the magazines don't sell oral care products.

Here are a few ways to build your competitor list:

• Check your industry quadrant on G2 Crowd: This is a significant first step for secondary market research in some industries. G2 Crowd aggregates user ratings and social data to create "quadrants" that show companies as contenders, leaders, niche players, or high performers in their respective industries. G2 Crowd specializes in digital content, IT services, HR, e-commerce, and related business services.
• Download a market report: Companies like Forrester and Gartner offer free and gated market forecasts yearly on the vendors leading their industry. On Forrester's website, for example, you can select "Latest Research" from the navigation bar and browse Forrester's latest material using a variety of criteria to narrow your search. These reports are good assets to save on your computer.
• Use social media : Social networks can be excellent company directories if you use the search bar correctly. On LinkedIn, for example, select the search bar and enter the name of the industry you're pursuing. Then, under "More," select "Companies" to narrow your results to the businesses that include this or a similar industry term on their LinkedIn profile.

Identifying Content Competitors

Search engines can be beneficial when it comes to secondary market research . To identify the online publications competing with your business, start with the overarching industry term you identified earlier, and then come up with more specific industry terms that are related to your company . For example, if you run a catering business, you might consider yourself a "food service" company, as well as a vendor in "event catering," "cake catering," "baked goods," and so on.

Once you have this list, follow these steps:

• Google it: Running a search on Google for the industry terms that describe your company can be very beneficial. You may come across a mix of product developers, blogs, magazines, and other websites.
• Compare your search results against your buyer persona: Remember the persona you created during the primary research stage? You can use it to evaluate whether a publication you found through Google could steal website traffic from you. If the website's content aligns with what your buyer persona would want to see, it is a potential competitor and should be added to your list of competitors.

After a series of similar Google searches for the industry terms you identify with, look for repetition in the website domains that have come up.

When searching, examine the first two or three pages of results. These websites are considered reputable sources of content in your industry and should be monitored closely as you create your collection of videos, reports, web pages, and blog posts.

Market Research Examples

Mcdonald's focus on customer feedback and profiling.

McDonald's invests in developing a detailed consumer profile to attract and retain customers, including parents of young children who appreciate the family-friendly atmosphere and menus. The brand seeks feedback from customers through surveys and questionnaires in stores, social media, and its mobile app. It also monitors customer feedback on digital channels.

Nike's Extensive Research and Collaboration for Running Shoes Development

Nike invests heavily in creating running shoes that cater to the needs of its customers, which it determines through extensive market research and customer surveys. The brand goes to great lengths to understand its customers' preferences, such as the type of running surface, the distance they run, and their running style, to develop shoes that meet their specific needs.

In addition to customer surveys, Nike also collaborates with athletes to develop shoes that cater to their specific requirements. This research helps Nike improve its existing running shoe models and innovate new ones, ensuring that the brand stays ahead of the competition.

Disney employs focus groups that specifically cater to children to test out their new characters and ideas.

The Walt Disney Company invests millions of dollars in creating captivating stories tested for their effectiveness with children, the intended audience. Disney executives hold focus groups with preschoolers and kindergartners several times a year to gather their opinions and feedback on TV episodes, Disney characters, and more. 

This market research strategy is effective because children are the ultimate audience that Disney aims to please. The collected feedback helps the company improve existing content to meet the preferences of its audience and ensure continued success as a multi-billion dollar enterprise.

KFC tested its meatless product in specific markets before launching it nationwide.

In 2019, KFC began developing and testing a meatless version of its famous chicken. However, instead of immediately launching the product nationwide, they decided to test it in select stores in the Atlanta, Georgia area. 

This is an innovative and practical approach to market research, as it allows the company to determine the product's sales performance on a smaller scale before committing too many resources to it. If the meatless chicken fails to gain popularity in Georgia, KFC can make the necessary changes to the product before introducing it to the broader market.

Yamaha conducted a survey to determine whether to use knobs or sliding faders on the Montage keyboard.

Yamaha is a Japanese corporation that produces various products, from motorcycles to golf cars to musical instruments. When it began developing its new Montage keyboard, the team was unsure whether to use knobs or sliding faders on the product. 

To address this dilemma, Yamaha used Qualtrics to send a survey to their customers. Within just a few hours , they received 400 responses. By using survey feedback, Yamaha ensured that it was designing a product that would perfectly meet the preferences of its audiences.

The Body Shop used social listening to determine how to reposition brand campaigns based on customer feedback.

The Body Shop is a well-known brand that offers ethically sourced and natural products. They take pride in their core value of sustainability. The Body Shop team tracked conversations to understand the sustainability subtopics that were most important to their audiences. 

They found that their customers cared a lot about refills. Based on this information, the Body Shop team confidently relaunched their Refill Program across 400 stores globally in 2021, with plans to add another 400 in 2022. Market research confirmed that their refill concept was on the right track and also highlighted the need for increased efforts to demonstrate how much the Body Shop cares about its customers' values .

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The takeaway.

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How To Do Market Research: Definition, Types, Methods

Jul 25, 2024

11 min. read

Market research isn’t just collecting data. It’s a strategic tool that allows businesses to gain a competitive advantage while making the best use of their resources. Research reveals valuable insights into your target audience about their preferences, buying habits, and emerging demands — all of which help you unlock new opportunities to grow your business.

When done correctly, market research can minimize risks and losses, spur growth, and position you as a leader in your industry. 

Let’s explore the basic building blocks of market research and how to collect and use data to move your company forward:

Table of Contents

What Is Market Research?

Why is market research important, market analysis example, 5 types of market research, what are common market research questions, what are the limitations of market research, how to do market research, improving your market research with radarly.

Market Research Definition: The process of gathering, analyzing, and interpreting information about a market or audience.

Market research studies consumer behavior to better understand how they perceive products or services. These insights help businesses identify ways to grow their current offering, create new products or services, and improve brand trust and brand recognition .

You might also hear market research referred to as market analysis or consumer research .

Traditionally, market research has taken the form of focus groups, surveys, interviews, and even competitor analysis . But with modern analytics and research tools, businesses can now capture deeper insights from a wider variety of sources, including social media, online reviews, and customer interactions. These extra layers of intel can help companies gain a more comprehensive understanding of their audience.

With consumer preferences and markets evolving at breakneck speeds, businesses need a way to stay in touch with what people need and want. That’s why the importance of market research cannot be overstated.

Market research offers a proactive way to identify these trends and make adjustments to product development, marketing strategies , and overall operations. This proactive approach can help businesses stay ahead of the curve and remain agile as markets shift.

Market research examples abound — given the number of ways companies can get inside the minds of their customers, simply skimming through your business’s social media comments can be a form of market research.

A restaurant chain might use market research methods to learn more about consumers’ evolving dining habits. These insights might be used to offer new menu items, re-examine their pricing strategies, or even open new locations in different markets, for example.

A consumer electronics company might use market research for similar purposes. For instance, market research may reveal how consumers are using their smart devices so they can develop innovative features.

Market research can be applied to a wide range of use cases, including:

• Testing new product ideas
• Improve existing products
• Entering new markets
• Right-sizing their physical footprints
• Improving brand image and awareness
• Gaining insights into competitors via competitive intelligence

Ultimately, companies can lean on market research techniques to stay ahead of trends and competitors while improving the lives of their customers.

Market research methods take different forms, and you don’t have to limit yourself to just one. Let’s review the most common market research techniques and the insights they deliver.

1. Interviews

3. Focus Groups

4. Observations

5. AI-Driven Market Research

One-on-one interviews are one of the most common market research techniques. Beyond asking direct questions, skilled interviewers can uncover deeper motivations and emotions that drive purchasing decisions. Researchers can elicit more detailed and nuanced responses they might not receive via other methods, such as self-guided surveys.

Interviews also create the opportunity to build rapport with customers and prospects. Establishing a connection with interviewees can encourage them to open up and share their candid thoughts, which can enrich your findings. Researchers also have the opportunity to ask clarifying questions and dig deeper based on individual responses.

Market research surveys provide an easy entry into the consumer psyche. They’re cost-effective to produce and allow researchers to reach lots of people in a short time. They’re also user-friendly for consumers, which allows companies to capture more responses from more people.

Big data and data analytics are making traditional surveys more valuable. Researchers can apply these tools to elicit a deeper understanding from responses and uncover hidden patterns and correlations within survey data that were previously undetectable.

The ways in which surveys are conducted are also changing. With the rise of social media and other online channels, brands and consumers alike have more ways to engage with each other, lending to a continuous approach to market research surveys.

3. Focus groups

Focus groups are “group interviews” designed to gain collective insights. This interactive setting allows participants to express their thoughts and feelings openly, giving researchers richer insights beyond yes-or-no responses.

One of the key benefits of using focus groups is the opportunity for participants to interact with one another. They spark discussions while sharing diverse viewpoints. These sessions can uncover underlying motivations and attitudes that may not be easily expressed through other research methods.

Observing your customers “in the wild” might feel informal, but it can be one of the most revealing market research techniques of all. That’s because you might not always know the right questions to ask. By simply observing, you can surface insights you might not have known to look for otherwise.

This method also delivers raw, authentic, unfiltered data. There’s no room for bias and no potential for participants to accidentally skew the data. Researchers can also pick up on non-verbal cues and gestures that other research methods may fail to capture.

5. AI-driven market research

One of the newer methods of market research is the use of AI-driven market research tools to collect and analyze insights on your behalf. AI customer intelligence tools and consumer insights software like Meltwater Radarly take an always-on approach by going wherever your audience is and continuously predicting behaviors based on current behaviors.

By leveraging advanced algorithms, machine learning, and big data analysis , AI enables companies to uncover deep-seated patterns and correlations within large datasets that would be near impossible for human researchers to identify. This not only leads to more accurate and reliable findings but also allows businesses to make informed decisions with greater confidence.

Tip: Learn how to use Meltwater as a research tool , how Meltwater uses AI , and learn more about consumer insights and about consumer insights in the fashion industry .

No matter the market research methods you use, market research’s effectiveness lies in the questions you ask. These questions should be designed to elicit honest responses that will help you reach your goals.

Examples of common market research questions include:

Demographic market research questions

• What is your age range?
• What is your occupation?
• What is your household income level?
• What is your educational background?
• What is your gender?

Product or service usage market research questions

• How long have you been using [product/service]?
• How frequently do you use [product/service]?
• What do you like most about [product/service]?
• Have you experienced any problems using [product/service]?
• How could we improve [product/service]?
• Why did you choose [product/service] over a competitor’s [product/service]?

Brand perception market research questions

• How familiar are you with our brand?
• What words do you associate with our brand?
• How do you feel about our brand?
• What makes you trust our brand?
• What sets our brand apart from competitors?
• What would make you recommend our brand to others?

Buying behavior market research questions

• What do you look for in a [product/service]?
• What features in a [product/service] are important to you?
• How much time do you need to choose a [product/service]?
• How do you discover new products like [product/service]?
• Do you prefer to purchase [product/service] online or in-store?
• How do you research [product/service] before making a purchase?
• How often do you buy [product/service]?
• How important is pricing when buying [product/service]?
• What would make you switch to another brand of [product/service]?

Customer satisfaction market research questions

• How happy have you been with [product/service]?
• What would make you more satisfied with [product/service]?
• How likely are you to continue using [product/service]?

Bonus Tip: Compiling these questions into a market research template can streamline your efforts.

Market research can offer powerful insights, but it also has some limitations. One key limitation is the potential for bias. Researchers may unconsciously skew results based on their own preconceptions or desires, which can make your findings inaccurate.

• Depending on your market research methods, your findings may be outdated by the time you sit down to analyze and act on them. Some methods struggle to account for rapidly changing consumer preferences and behaviors.
• There’s also the risk of self-reported data (common in online surveys). Consumers might not always accurately convey their true feelings or intentions. They might provide answers they think researchers are looking for or misunderstand the question altogether.
• There’s also the potential to miss emerging or untapped markets . Researchers are digging deeper into what (or who) they already know. This means you might be leaving out a key part of the story without realizing it.

Still, the benefits of market research cannot be understated, especially when you supplement traditional market research methods with modern tools and technology.

Let’s put it all together and explore how to do market research step-by-step to help you leverage all its benefits.

Step 1: Define your objectives

You’ll get more from your market research when you hone in on a specific goal : What do you want to know, and how will this knowledge help your business?

This step will also help you define your target audience. You’ll need to ask the right people the right questions to collect the information you want. Understand the characteristics of the audience and what gives them authority to answer your questions.

Step 2: Select your market research methods

Choose one or more of the market research methods (interviews, surveys, focus groups, observations, and/or AI-driven tools) to fuel your research strategy.

Certain methods might work better than others for specific goals . For example, if you want basic feedback from customers about a product, a simple survey might suffice. If you want to hone in on serious pain points to develop a new product, a focus group or interview might work best.

You can also source secondary research ( complementary research ) via secondary research companies , such as industry reports or analyses from large market research firms. These can help you gather preliminary information and inform your approach.

Step 3: Develop your research tools

Prior to working with participants, you’ll need to craft your survey or interview questions, interview guides, and other tools. These tools will help you capture the right information , weed out non-qualifying participants, and keep your information organized.

You should also have a system for recording responses to ensure data accuracy and privacy. Test your processes before speaking with participants so you can spot and fix inefficiencies or errors.

Step 4: Conduct the market research

With a system in place, you can start looking for candidates to contribute to your market research. This might include distributing surveys to current customers or recruiting participants who fit a specific profile, for example.

Set a time frame for conducting your research. You might collect responses over the course of a few days, weeks, or even months. If you’re using AI tools to gather data, choose a data range for your data to focus on the most relevant information.

Step 5: Analyze and apply your findings

Review your findings while looking for trends and patterns. AI tools can come in handy in this phase by analyzing large amounts of data on your behalf.

Compile your findings into an easy-to-read report and highlight key takeaways and next steps. Reports aren’t useful unless the reader can understand and act on them.

Tip: Learn more about trend forecasting , trend detection , and trendspotting .

Meltwater’s Radarly consumer intelligence suite helps you reap the benefits of market research on an ongoing basis. Using a combination of AI, data science, and market research expertise, Radarly scans multiple global data sources to learn what people are talking about, the actions they’re taking, and how they’re feeling about specific brands.

Our tools are created by market research experts and designed to help researchers uncover what they want to know (and what they don’t know they want to know). Get data-driven insights at scale with information that’s always relevant, always accurate, and always tailored to your organization’s needs.

Learn more when you request a demo by filling out the form below:

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How to Do Market Research: A Definitive Guide

Article Snapshot

Section 1: introduction to market research.

Before we dive into the intricacies of market research, let's first establish a solid understanding of what it entails. Market research is the systematic process of collecting, analyzing, and interpreting data about a target market or industry. It involves gathering information about potential customers, their needs and preferences, as well as assessing the overall market landscape and identifying opportunities for growth.

Market research plays a vital role in shaping business strategies and decision-making processes. It helps businesses identify market trends, evaluate product or service viability, understand customer behavior, and develop effective marketing campaigns. By leveraging market research, companies can minimize risks, optimize resources, and increase their chances of success.

Section 2: Preparing for Market Research

Before embarking on any market research endeavor, it is crucial to establish clear objectives and determine the appropriate research methodology. In this section, we will guide you through the essential steps of preparing for market research.

Defining Research Objectives

The first step in any market research project is to define clear research objectives. These objectives should align with your business goals and provide a framework for your research efforts. Whether you aim to understand customer satisfaction, evaluate market potential for a new product, or analyze competitor strategies, defining specific and measurable objectives is essential to ensure the research is focused and effective.

Choosing the Right Research Methodology

Once you have defined your research objectives, the next step is to select the most appropriate research methodology. There are various methodologies available, each with its strengths and limitations. Qualitative research methods, such as interviews and focus groups, allow for in-depth exploration of customer opinions and perceptions. On the other hand, quantitative research methods, like surveys and data analysis, provide statistical insights and numerical data.

Creating a Research Plan

To ensure the success of your market research endeavor, it is essential to develop a comprehensive research plan. A research plan outlines the steps, timeline, budget, and resources required for your market research project. By creating a well-structured plan, you can effectively manage your research activities, allocate resources efficiently, and stay on track to achieve your research objectives.

Section 3: Conducting Primary Market Research

Primary market research involves collecting firsthand data directly from your target audience. This section will explore various primary research methods and provide insights into how to conduct effective primary market research.

Survey Research

Surveys are a popular and effective method for gathering primary research data. They allow businesses to collect a large volume of data from a diverse audience. Designing effective survey questions, selecting appropriate survey administration methods, and maximizing response rates are crucial elements to consider when conducting survey research.

Interviews and Focus Groups

Interviews and focus groups offer a more in-depth understanding of customer opinions and behaviors. By engaging directly with participants, businesses can explore complex topics and gain valuable insights. This section will cover techniques for conducting successful interviews and focus groups, as well as analyzing and interpreting the qualitative data obtained.

Observational Research

Observational research involves observing and analyzing consumer behavior in real-life situations. This method provides rich insights into consumer interactions, preferences, and decision-making processes. We will discuss different types of observational research and address ethical considerations associated with this methodology.

Section 4: Gathering and Analyzing Secondary Market Research

Secondary market research involves gathering existing data and information from various sources. This section will explore reliable sources for secondary research data, data collection methods, and techniques for analyzing and interpreting secondary research findings.

Sources of Secondary Research Data

Identifying reputable sources for secondary market research data is crucial for obtaining accurate and reliable information. We will explore a wide range of sources, including market research firms, industry reports, government publications, and online databases.

Data Collection and Analysis

Once you have gathered the secondary research data, the next step is to organize and analyze it effectively. This section will provide insights into various data collection methods and techniques for analyzing and interpreting secondary research findings. We will also discuss the utilization of data visualization tools to present data in a visually appealing and informative manner.

Section 5: Utilizing Market Research Findings

Market research findings hold immense value only when they are effectively utilized to drive business growth. In this section, we will explore how to interpret and apply research findings, communicate results, and continually monitor and evaluate market research efforts.

Interpreting and Applying Research Findings

Interpreting research findings accurately is vital to extract actionable insights. We will discuss techniques and strategies for interpreting research findings and applying them to make informed business decisions. Real-world case studies will be presented to illustrate the practical application of market research findings.

Communicating Research Results

Effectively communicating research results is essential for ensuring that the insights gained are understood and utilized by key stakeholders. This section will provide tips for creating visually appealing and informative research reports and delivering impactful presentations to stakeholders and decision-makers.

Monitoring and Evaluating Market Research

Market research is an ongoing process, and continuous monitoring and evaluation are crucial to stay abreast of market trends and changes. We will explore strategies for tracking market dynamics, monitoring the effectiveness of research efforts, and adjusting research strategies based on feedback and evolving market conditions.

Understanding the Importance of Market Research

Market research is an indispensable component of any successful business strategy. It provides crucial insights into customer behavior, market trends, and competitor analysis, enabling businesses to make informed decisions and gain a competitive edge. In this section, we will explore the significance of market research and its role in driving business success.

The Value of Market Research

Market research serves as a guiding light for businesses, helping them navigate the complex landscape of consumer demands and market dynamics. By conducting thorough research, businesses can gain a deep understanding of their target audience, identify unmet needs, and develop products or services that truly resonate with their customers.

One of the primary benefits of market research is its ability to minimize risk. By gathering data and insights before launching a new product or expanding into a new market, businesses can assess market potential, evaluate customer preferences, and anticipate potential challenges. This proactive approach reduces the likelihood of costly mistakes and increases the chances of success.

Moreover, market research plays a vital role in identifying and capitalizing on market opportunities. By staying attuned to market trends, businesses can spot emerging consumer needs, industry shifts, and technological advancements. Armed with this knowledge, they can adapt their strategies, develop innovative solutions, and stay ahead of the competition.

Market research also provides a solid foundation for effective marketing campaigns. By understanding the target audience's preferences, motivations, and pain points, businesses can tailor their messaging, positioning, and communication channels to effectively reach and engage their customers. This targeted approach not only increases customer acquisition but also enhances customer loyalty and brand advocacy.

The Risks of Neglecting Market Research

Failing to conduct market research can have dire consequences for businesses. Without a deep understanding of their target audience, businesses risk developing products or services that do not meet customer needs or preferences. This can lead to low customer satisfaction, decreased sales, and ultimately, business failure.

Additionally, neglecting market research can result in missed opportunities. In a rapidly evolving marketplace, failing to track consumer trends, competitor strategies, and industry shifts can leave businesses lagging behind. By the time they realize the need for change, it may be too late to catch up, leading to lost market share and diminished competitiveness.

Furthermore, without market research, businesses may struggle to effectively allocate their resources. They may invest in marketing campaigns that do not resonate with their target audience or allocate resources to markets with limited potential. This misalignment of resources can drain finances and hinder overall business growth.

The Role of Market Research in Decision-Making

Market research serves as a compass for decision-making, guiding businesses in making strategic choices based on data-driven insights. Whether it is launching a new product, entering a new market, or adjusting pricing strategies, market research provides the necessary information to make informed decisions.

By conducting market research, businesses can gain a comprehensive understanding of their target audience's preferences, needs, and behaviors. This knowledge allows them to develop products or services that align with customer expectations, resulting in higher customer satisfaction and increased sales.

Market research also empowers businesses to assess the competitive landscape. By studying competitors' strengths, weaknesses, and market positioning, businesses can identify gaps and opportunities for differentiation. This knowledge enables them to develop unique value propositions and competitive strategies that set them apart from their rivals.

Additionally, market research helps businesses evaluate the effectiveness of their marketing efforts. By measuring key performance indicators (KPIs) and analyzing consumer responses, businesses can identify areas for improvement and refine their marketing strategies. This iterative approach ensures that marketing budgets are optimized and yields the highest return on investment (ROI).

In conclusion, market research is an invaluable tool for businesses aiming to thrive in a competitive marketplace. By understanding the importance of market research and leveraging its insights, businesses can make informed decisions, minimize risks, seize opportunities, and ultimately drive sustainable growth. Now that we have established the significance of market research, let's delve into the practical steps of preparing for and conducting market research.

Preparing for Market Research

Before diving into market research, it is crucial to lay a solid foundation by preparing for the research process. This section will explore the essential steps involved in preparing for market research, including defining research objectives, selecting the appropriate research methodology, and creating a comprehensive research plan.

Clearly defining research objectives is the cornerstone of any successful market research project. Research objectives serve as guiding principles that outline the specific goals and outcomes you hope to achieve through your research efforts. These objectives should be specific, measurable, achievable, relevant, and time-bound (SMART).

When defining your research objectives, consider what you aim to accomplish. Are you seeking to understand customer preferences for a new product? Do you want to assess market potential for a specific geographic region? Defining clear and focused research objectives will help you stay on track and ensure that your research efforts yield actionable insights.

Once you have defined your research objectives, the next step is to select the most appropriate research methodology. Different research methodologies offer unique advantages and are suited for different research objectives.

Qualitative research methods, such as interviews and focus groups, provide in-depth insights into customer opinions, attitudes, and perceptions. These methods allow for rich, nuanced data collection and are particularly useful for exploring complex topics or understanding the underlying motivations and emotions driving consumer behavior.

Quantitative research methods, on the other hand, involve the collection and analysis of numerical data. Surveys and questionnaires are common quantitative research tools that allow for large-scale data collection. These methods are useful for measuring customer satisfaction, analyzing customer preferences, and identifying statistical relationships between variables.

It's important to choose a research methodology that aligns with your research objectives, budget, and time constraints. Consider the advantages and limitations of each methodology and select the one that will provide the most relevant and accurate data for your specific research needs.

A well-structured research plan is essential for conducting market research efficiently and effectively. A research plan serves as a roadmap that outlines the steps, timeline, budget, and resources required for your research project.

By creating a comprehensive research plan, you can ensure that your market research efforts are well-organized, efficient, and yield valuable insights. The plan will also serve as a reference point to track progress and make adjustments as needed throughout the research process.

Now that you understand the importance of preparing for market research, we will delve into the practicalities of conducting primary market research in the next section.

Conducting Primary Market Research

Survey research is one of the most commonly used methods for collecting primary research data. Surveys allow businesses to gather a large volume of data from a diverse audience efficiently. They can be conducted through various channels, including online surveys, phone interviews, or in-person questionnaires.

When designing a survey, it is important to carefully craft the survey questions to ensure they are clear, unbiased, and relevant to the research objectives. Use a combination of open-ended and closed-ended questions to gather both qualitative and quantitative data. Open-ended questions provide respondents with the opportunity to express their opinions and provide detailed feedback, while closed-ended questions offer predefined response choices that can be easily analyzed.

To maximize response rates, it is essential to carefully consider the survey administration method. Online surveys are cost-effective and convenient, allowing respondents to complete the survey at their convenience. Phone interviews provide a personal touch and allow for follow-up questions, while in-person questionnaires enable businesses to interact directly with respondents. Choosing the appropriate survey administration method depends on factors such as target audience demographics, research objectives, and available resources.

Additionally, it is crucial to consider respondent fatigue and survey length. Long and tedious surveys can lead to decreased response rates and inaccuracies in responses. Keep the survey concise, focused, and engaging to ensure higher participation and reliable data.

Interviews and focus groups provide valuable qualitative insights into consumer opinions, preferences, and behaviors. These methods allow businesses to engage directly with participants and gain a deeper understanding of their thoughts and motivations.

Interviews can be conducted in-person, over the phone, or through video calls. They provide an opportunity to ask probing questions, delve into specific topics, and explore in-depth responses. The interviewer can adapt the questioning based on the participant's responses, allowing for a dynamic and personalized conversation.

Focus groups involve bringing together a small group of individuals to discuss a specific topic or product. This method allows participants to interact with one another, share their opinions, and generate insights through group discussions. Focus groups provide a unique perspective by capturing the collective thoughts and experiences of the participants.

To conduct successful interviews and focus groups, it is essential to carefully plan the session. Develop a discussion guide or interview script that includes a set of key questions or topics to cover. This will ensure consistency and enable comparability across interviews or focus groups. Actively listen to participants, encourage open and honest responses, and create a comfortable environment for sharing opinions.

Qualitative data obtained from interviews and focus groups require careful analysis. Use techniques such as thematic analysis or coding to identify recurring themes, patterns, and insights. These qualitative insights can provide valuable context and depth to complement quantitative data collected through surveys or other methods.

Observational research involves observing and analyzing consumer behavior in real-life settings. This method allows businesses to gain insights into consumer interactions, preferences, and decision-making processes. It can be particularly useful in retail environments, public spaces, or during product usage.

Participant observation involves immersing oneself in the context being studied and actively participating in the observed activities. This method allows researchers to gain firsthand experience and capture the nuances of behavior and interactions. Non-participant observation, on the other hand, involves observing from a distance without directly engaging with the participants. This method allows for more objective observations and avoids potential biases that may arise from researcher-participant interaction.

When conducting observational research, it is essential to consider ethical considerations and obtain necessary permissions, especially in public spaces or when observing sensitive behavior. Maintain confidentiality and anonymity of participants and ensure that the research does not infringe upon their privacy.

Observational research often involves recording observations through notes, photographs, or video recordings. These records serve as valuable data for analysis and interpretation. Analyze the collected data by identifying patterns, behaviors, and trends. Observational research findings can be used to supplement and validate other primary research methods, providing a comprehensive understanding of consumer behavior.

As we have explored the various primary research methods, it is important to note that choosing the appropriate method depends on the research objectives, target audience, available resources, and the depth of insights required. By carefully selecting and conducting primary market research methods, businesses can uncover valuable insights about their target audience, preferences, and behaviors.

Gathering and Analyzing Secondary Market Research

While primary market research provides valuable firsthand data, secondary market research involves gathering existing data and information from various sources. This section will explore the sources of secondary research data and provide insights into data collection methods and techniques for analyzing and interpreting secondary research findings.

Secondary market research relies on existing data and information that has been collected by others. There are various sources from which businesses can gather secondary research data, including:

When gathering secondary research data, it is crucial to consider the reliability and credibility of the sources. Ensure that the data comes from reputable sources and is up-to-date. Cross-referencing information from multiple sources can help validate the accuracy and consistency of the data.

Once you have gathered the relevant secondary research data, the next step is to organize and analyze it effectively. The process of data collection and analysis involves several key steps:

Secondary research findings should be interpreted and used in conjunction with primary research data to gain a comprehensive understanding of the market landscape. Combining primary and secondary research data allows for triangulation, validation, and a more holistic analysis of the research objectives.

By effectively gathering and analyzing secondary research data, businesses can gain valuable insights into market trends, consumer behavior, and industry dynamics. These insights serve as a foundation for informed decision-making, strategy formulation, and staying ahead of the competition.

Utilizing Market Research Findings

Interpreting and analyzing research findings is a critical step in extracting actionable insights that can drive business decisions. Here are some key considerations when interpreting and applying research findings:

Remember that market research is an iterative process, and new insights may emerge as you delve deeper into the data. Continuously revisit and refine your interpretation of the research findings to ensure that you capture the most accurate and valuable insights.

Effectively communicating research results is crucial to ensure that the insights gained are understood and utilized by key stakeholders. Here are some tips for communicating research results:

Market research is an ongoing process that requires continuous monitoring and evaluation. Here are some key aspects to consider when monitoring and evaluating market research efforts:

By monitoring and evaluating market research efforts, you can ensure that the insights gained are effectively utilized and that your research strategies remain aligned with the evolving market landscape.

In conclusion, effectively utilizing market research findings is essential for driving business growth and staying ahead of the competition. By interpreting and applying research findings, communicating results effectively, and continuously monitoring and evaluating research efforts, businesses can make informed decisions, improve customer experiences, and seize market opportunities.

Conclusion: The Power of Market Research

Market research is a powerful tool that empowers businesses to make informed decisions, understand their target audience, and gain a competitive edge. Throughout this comprehensive guide, we have explored the various aspects of market research, from understanding its importance to conducting primary and secondary research, and utilizing research findings effectively. Now, let's recap the key points and emphasize the power of market research in driving business success.

Market research serves as a compass for businesses, guiding them through the complex landscape of consumer demands, market trends, and competitor analysis. By conducting thorough research, businesses can gain valuable insights into their target audience, identify market opportunities, and mitigate risks. Market research enables businesses to make informed decisions, optimize resources, and drive sustainable growth.

One of the primary benefits of market research is its ability to provide a deep understanding of customer preferences and needs. By gaining insights into customer behavior, businesses can develop products and services that truly resonate with their target audience, leading to higher customer satisfaction and loyalty.

Market research also enables businesses to stay ahead of the competition. By monitoring market trends, tracking competitor activities, and assessing industry dynamics, businesses can identify emerging opportunities and adapt their strategies accordingly. This flexibility allows businesses to maintain a competitive edge and seize market opportunities before their competitors.

Furthermore, market research plays a vital role in effective marketing campaigns. By understanding consumer preferences, motivations, and pain points, businesses can tailor their messaging, positioning, and communication channels to reach and engage their target audience more effectively. This targeted approach increases customer acquisition, enhances brand perception, and drives business growth.

However, market research is not a one-time endeavor. It requires continuous monitoring and evaluation to stay attuned to evolving market trends, consumer preferences, and competitive dynamics. By monitoring key metrics, tracking market trends, and gathering ongoing customer feedback, businesses can refine their strategies, identify areas for improvement, and deliver exceptional customer experiences.

In conclusion, market research is an indispensable tool for businesses aiming to thrive in a competitive marketplace. By understanding the importance of market research, preparing thoroughly, conducting primary and secondary research effectively, interpreting and applying research findings, and continuously monitoring and evaluating research efforts, businesses can gain a deeper understanding of their target audience, make informed decisions, and drive business growth. Embrace the power of market research and unlock the endless opportunities it holds for your organization.

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Guide to Market Research: Tools, Trends, and Success Stories

Market research is a critical component for businesses seeking to thrive in a competitive landscape. This comprehensive guide delves into vital tools, emerging trends, and inspiring success stories to enhance your market research efforts.

What is Market Research?

Market research is the systematic process of gathering, analyzing, and interpreting information about a market. This encompasses valuable insights into the target audience, competitors, and broader industry trends, ultimately guiding businesses in decision-making processes.

Purpose: The primary objective of market research is to inform business decisions and mitigate risks by grasping market dynamics. This not only enhances strategic planning but also fosters informed decision-making that aligns with customer expectations.

Benefits: – Identify customer preferences and needs. – Analyze competitors’ strategies. – Measure market potential and growth opportunities. – Enhance product development and innovation . – Reduce market risks and uncertainties. – Improve customer satisfaction and loyalty. – Optimize marketing strategies and campaigns.

Types of Market Research

Market research can be broadly categorized into two fundamental types: primary research and secondary research.

Primary Research

Primary research focuses on the collection of original data that directly pertains to your specific business needs. It is tailored and relevant, ensuring that the findings are actionable.

Key methods include: – Surveys: Collect direct feedback from customers or potential customers through structured questionnaires, often distributed online or in person. – Interviews: Conduct in-depth discussions with individuals to extract detailed qualitative insights, usually in a one-on-one setting. – Focus Groups: Facilitate group discussions that explore the opinions, perceptions, and experiences of participants, allowing for interaction and deeper insights. – Observations: Analyze users’ interactions and behaviors in real-world scenarios to uncover unspoken preferences and habits. – Field Trials: Test products or services in a real-world environment to gauge customer reactions and performance.

Secondary Research

Secondary research involves analyzing pre-existing data gathered by others, which can provide valuable context and benchmarks for your business.

Sources of secondary research include: – Industry reports from market research firms. – Academic journals offering evidence-based research and case studies. – Government publications providing demographic and economic data. – Online databases with aggregated market insights and trends. – White papers and case studies from established organizations. – News articles and press releases for recent developments and shifts in the market.

Tools for Market Research

The right tools can significantly enhance your market research efficiency and effectiveness. Here are some popular tools to consider:

Survey Tools: – SurveyMonkey: A user-friendly interface for creating surveys along with extensive analytics capabilities. – Google Forms: A free, easy-to-use tool for creating a variety of surveys, ideal for quick feedback. – Typeform: Engaging surveys that utilize interactive formats to boost completion rates and enhance user experience .

Data Analysis Tools: – SPSS: A comprehensive statistical software suite for rigorous data analysis, suitable for advanced research. – Tableau: A powerful data visualization tool that helps interpret complex data sets intuitively, making insights accessible to stakeholders. – R: An open-source programming language for statistical computing and graphics, providing flexibility for data analysis.

Market Intelligence Platforms: – SimilarWeb: Provides insights into competitor traffic and online engagement strategies, enabling targeted marketing. – Statista: A vast repository of statistics and market data across various industries, useful for benchmarking. – Think with Google: Offers insightful resources and tools for understanding consumer behavior and trends. – BuzzSumo: Analyzes content performance and social media engagement, useful for content marketing strategies.

Current Trends in Market Research

Staying attuned to emerging trends can significantly bolster your market research effectiveness. Here are some noteworthy trends:

AI and Machine Learning

Artificial Intelligence is reshaping data analysis, automating processes to provide deep insights with minimal human intervention. Applications include:

– Predictive analytics to forecast consumer behavior. – Sentiment analysis to understand public opinion. – Natural language processing to analyze customer feedback.

Remote Research

With many researchers conducting interviews and focus groups online, the geographical barrier is eliminated. This trend offers:

– Increased convenience for participants. – Diverse and inclusive participant pools. – Cost savings on travel and logistics .

Data Privacy and Compliance

As regulations like the General Data Protection Regulation (GDPR) come into effect, understanding legal standards is vital. Adopting ethical practices not only avoids penalties but also builds trust with consumers.

Visual Data Insights

Long-form reports are losing popularity as the use of infographics and data visualizations takes the forefront. This trend enhances communication by presenting findings clearly and engagingly, making it easier for stakeholders to grasp key insights at a glance.

Real-Time Data and Continuous Feedback

In a fast-paced business environment, continuous insight collection enables quicker adjustments to strategies. Using tools that offer real-time data capture can lead to more agile decision-making.

Success Stories of Market Research

Real-life case studies illustrate how effective market research can lead to success and innovation.

Example 1: Coca-Cola Coca-Cola utilized comprehensive market research to identify shifting consumer preferences towards healthier options. This insight led to the successful launch of its flavored water range, aligning its offerings with customer desires and positioning the brand favorably in the wellness trend.

Example 2: Airbnb Airbnb harnessed qualitative research methods to enhance user experience. By thoroughly understanding user pain points through interviews and focus groups, they significantly improved their platform’s usability and expanded into previously untapped markets, such as luxury accommodations.

Example 3: Spotify Spotify employs advanced algorithms and user data analysis to curate personalized playlists and recommendations. By continuously understanding listener preferences through surveys and behavior analysis, Spotify increased user satisfaction and gained a competitive edge in the streaming industry.

Example 4: Procter & Gamble P&G launched an innovative line of household cleaning products after conducting market research that revealed consumer desires for eco-friendly options. The research led to the development of a fully biodegradable product line, significantly expanding their customer base and sales.

Taking Action: Steps to Conduct Effective Market Research

To ensure that your market research efforts yield meaningful insights, follow these systematic steps:

1. Define Your Objectives: Clearly articulate what you aim to uncover through your research, including specific questions you want answered. 2. Select Your Methods: Choose whether to conduct primary or secondary research based on your objectives and available resources. 3. Collect Data: Utilize the identified tools and methods for data collection, ensuring diversity in sources to enhance reliability. 4. Analyze Data: Evaluate the gathered data using appropriate tools and interpret the results critically, seeking patterns and actionable insights. 5. Make Data-Driven Decisions: Use the insights gained to inform your business strategy, marketing approach, product development, and customer engagement efforts.

By being systematic and thorough in each step, you increase the effectiveness and impact of your market research initiatives.

Effective market research is a cornerstone of business success. By strategically applying appropriate tools, staying updated with the latest trends, and learning from successful case studies, you can make informed decisions that propel your business toward measurable growth. What market research strategies have you found effective? Share your thoughts in the comments!

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How to conduct market research with GWI

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There’s a lot of debate about what it takes to create scroll-stopping ads and award-winning campaigns, but here’s one truth we’ll always stand by:

Market research is the backbone of every successful strategy. 

When you know how to do market research, you have the power to understand consumers and make data-led decisions with confidence. Without the right data to light the way, you’re just aiming for your target audience in the dark. But let’s back up. 

The key to conducting market research is not only having the right market research tools to do the heavy lifting for you, but understanding what it is, why you need it, and how you can use it to take your business to the next level.

What is market research?

Market research is the organized gathering of information about target markets and consumers’ needs and preferences. It’s an important component of business strategy and a major factor in maintaining competitiveness.

How could your business benefit from conducting market research?

Not sure if market research is something you need? Think of it like a compass. It’s what guides you through the maze of consumer behavior, so you can drive growth, maximize ROI, and sharpen your competitive edge. It doesn’t matter if you’re a small business just getting on its feet or a successful brand trying to step up its game, really getting to grips with who it is you should be targeting is always a good idea. 

You can use market research to improve your products, services, and messaging to make sure you’re always ahead of the curve. 

It’s not just about understanding the here and now. It’s your crystal ball to help you spot big trends , fresh opportunities, and areas for innovation before it’s too late.

Types of market research

Market research isn’t a one-size-fits-all solution. There are different ways to gather insights, each with their own strengths. Let’s dive into the main types of market research . 

Primary market research

This method uses surveys, interviews, or focus groups to gather first-party data and insights directly from the source – your target audience. It’s also known as field research, as it involves conducting and analyzing the data yourself. This type of traditional market research is usually quite expensive and super time-consuming. 

Secondary market research

Unlike primary research, secondary research uses existing third-party data collected by others like reports, studies, and stats that are available to the public. 

Qualitative research

Qualitative research explores the why behind consumer behaviors through open-ended questions. This is a great option when you’re looking for answers about experiences and feelings, rather than just a simple yes or no answer or numerical data. Qualitative questions help you learn more about people’s experiences and perspectives, so rather than asking “Do you use social media?”, you’d ask “What are your favorite social media platforms?” and “What are your reasons for using them?” instead. 

Quantitative research

Quantitative research uses statistical data to zero in on patterns and trends through closed-ended questions. Questions can be yes or no like “Do you shop at discount stores?” or questions with a numerical answer like “How many times have you used our new product in the last month?”

Consumer research

This type of research delves into the lifestyles and behaviors of your target audience to give you a deeper understanding of who they really are. By using both qualitative and quantitative methods, you get the full picture of what they like, what they do, and what they want from brands, so you can personalize your marketing strategies. 

Brand research

Brand research is your key to gauging brand awareness, loyalty, and overall brand health through the eyes of consumers. It involves collecting and analyzing data on brand performance, perception, and positioning in the market. 

Product research

This type of research gives you insights into product demand, features, and pricing.  It involves gathering and analyzing information about your product’s market potential, performance, and user experience before launching.

Where to start when choosing your market research platform

Choosing the right market research platform is critical if you want to get a deeper understanding of the consumers, competitors, and markets you want to target. These are some things to consider before you take the plunge:

Define your research needs

Having crystal clear goals about what you want to get out of your market research and how your chosen platform can help you reach them is essential. Make sure you’ll have access to the data coverage you need, will be able to get the right level of detail, and get the research back in the right time frame. This is what will guide all of your efforts.

Target audiences

Do you know who you want to connect with? Knowing your target audience is a non-negotiable if you want to ensure your messaging aligns with their preferences and behaviors. The right platform will have lots of info on your target audience, make it super easy to get the insights you need, and help you identify new markets in a flash. Bonus points if you can build customizable audiences like you can with us.

Research methodology

Picking the right research methods – whether that’s surveys, focus groups, or bespoke reports – will help you get the most relevant insights for your business. Pay special attention to how the research is collected, how reliable it is, and how often new waves are released.

Ease of use

There are lots of market research companies to choose from, but it’s important to pick a research tool that not only suits your needs, but offers actionable insights – and fast. The best platforms give users of all levels the power to self-serve insights so you don’t have to be an expert to grab the data and go.

Our global, on-demand platform is accessible to everyone – not just data experts. Even if you don’t know how to do market research, you can still get to those valuable insights that make a difference. But you need a game plan to make sure you get exactly what you need. Here’s a blueprint you can follow if you’re not sure what steps to take. 

1. Identify challenges and define key goals

Start by pinpointing specific challenges you want to improve – whether that’s combatting low sales, improving poor ad performance, or launching a new product. Some of the biggest brands use GWI to grow their audience, enter new markets, create products consumers will love, and outshine the competition. 

Next, hone in on what success looks like for you by setting specific, measurable goals with a definitive time frame. This will help you get a clear picture of how the platform can help you and where you should focus your efforts. Here are some of the key uses we can help with: 

• Media planning
• Content marketing
• Brand strategy
• Product development
• Partner and sponsorship opportunities
• Market sizing

2. Develop your research strategy

Dive into the platform and start building your audience by picking the data set you want to use. With our flagship data set, you can explore 250,000 profiling points across 50+ markets to apply to your audience, covering key areas like demographics, lifestyle habits, and purchase behaviors. Want to dive even deeper? Add more data sets to hone in on your perfect audience. 

After saving your audience, you can apply it to different question charts to help you uncover new things about your audience, and point you in the right direction for the next step. 

3. Collect and analyze data 

Once you have the data you need, you can collate and export it into a shareable dashboard to get a bird’s-eye view of who you’re targeting before digging even deeper. This is where you can spot key insights you need for your strategy. Look for patterns, compare and contrast audiences, and even track trends over time. 

Short on time? Take advantage of our built-in AI features that allow you to create charts on the fly with instant charts , and quickly generate top data points using instant audience insights . 

And for an even deeper view, you can use our API to blend our data with your own, allowing you to get even more granular in your research.   

4. Plug insights into your strategy 

Once you have the data you need to refine your targeting, optimize messaging, and stand out from the competition, you can start building the perfect strategic plan. You’ll know exactly who you’re talking to, what they want to see, and how you can deliver. 

GWI’s audience activation lets you push look-a-like audiences based on GWI data directly into whatever platform you’re activating your digital campaign in, including Meta, Google, TikTok, LiveRamp, The Trade Desk, and many more.

Now’s your time to shine with insights that help you turn a hunch into your next big idea. You’re ready to create world-class campaigns, ads, or products that resonate with your audience, and make decisions with confidence.  

Need some inspo? Here are some examples of what data-driven success looks like with GWI. 

Looking for more specific insights?

With GWI Custom , we offer bespoke recontact surveys, analytics, and solutions to meet your unique needs. Our experts take care of the details from decks and infographics to white papers and custom dashboards. Whether you want an in-depth exploration of industry-specific insights or just want even deeper data on your target audience, we can help. 

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Every business has questions about its audiences, GWI has answers. Powered by consistent, global research, our platform is an on-demand window into their world.

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5 Tips to Market Research Like a Pro

A thriving business requires constant market research to improve your products and continually appeal to customers.

Table of Contents

Market research provides businesses with valuable insights into their competitors, customers and industry trends. Do it well and you can spot new opportunities before others. You’ll also be better able to anticipate future trends and improve profitability. But where to get started? Five simple strategies can form the basis of your market research plan .

How to conduct effective market research

Most effective market research strategies don’t cost anything but time and labor. Others, however, may require spending some ad dollars or ponying up for a survey platform. All are worthwhile, however, for better understanding the market your business is in and the customers you want to reach. We specifically recommend the following research methods.

1. Develop buyer personas.

Buyer personas, also known as customer personas , give you a much more thorough understanding of your customers and who they are. They are essentially fictional creations based in reality — you imagine your ideal customer and build a realistic persona around them.

Market research tools can help you develop buyer personas based on your target customers’ interests, problems and lifestyles. The more personas you have, the better, as understanding why customers buy from you is perhaps the most valuable piece of information any business owner could have. Do they buy to meet a need or desire, address a problem, or exploit an opportunity to its fullest? Your marketers can zero in on this information to create advertising campaigns that generate inquiries by appealing to customers’ needs and wants. Likewise, this insight will help your sales team sell more and your development team iterate better in the future.

As you build buyer personas, harnessing demographic details like age, location, education level, parental status and income levels is very useful. These details can help you develop a communication style and tone of voice that connects with customers. An appreciation of cultural nuances, especially in a diverse country like America, can also benefit you through a better understanding of consumption patterns, attitudes, and product or service preferences.

Buyer personas can also shed light on the people, organizations and institutions that shape customers’ views and opinions. Take influencer marketing as an example. Partnering with an influencer your customers like and respect can generate a lot of sales. Identifying the influences, values and psychology of your audience can help you understand how emotions play a part in their decision-making. [Read related article: The Psychology of Sales ]

2. Conduct a survey.

A problem that many new businesses face is they don’t have a lot of customer information to use for their own market research. To gather more information about the people who buy — or may buy — your product, consider adding a survey form to your website or sending a survey to email addresses you collect.

Surveys allow you to solicit feedback from prospective and existing customers. When you create a questionnaire, try to include a few questions with text boxes so respondents can type in their own answers. You want to solicit as much information as possible — without making your survey so overwhelming that people won’t want to take it — so you can use the answers to build successful, accurate profiles for your market research.

You can also use surveys as a means to get more sales. Some business owners find that adding the option to do a survey in exchange for a discount, such as giving 10 percent off an order, is enough incentive for customers to answer your questions. Everybody benefits. You learn more about your customers and generate revenue at the same time.

3. Upload your lead list to Facebook Ads.

Social media marketing tools, specifically the Facebook Ads program, are an effective way to carry out market research on your audience.

Look for a feature called “Custom Audiences” on your Meta Business Manager dashboard and upload your customer email list to it. The platform then automatically finds the profiles of the people on your list. After analyzing their Facebook pages, it builds charts that showcase trends among the people you added. You can see what habits and interests these people have and use this information to conduct more precise market research. 

For example, Facebook may tell you that many of your customers use YouTube. If that’s the case, you may want to advertise on it as well as create video content and a YouTube channel for your target audience.

4. Study your competitors.

All businesses benefit from a better understanding of their competitors. That’s especially so with larger companies that offer similar products to you. They didn’t get big by accident — they must have done something very well consistently over an extended period to grow so large. You want to learn what that is.

Competitors’ websites are a good place to start when researching why they have a greater market share. You can use tools like Ahrefs and SEMRush to understand the aspects of their content marketing that cause their sites to rank so highly. This is great for technical SEO planning , and it’s also good for getting an idea of why their content resonates so well with the target audiences you have in common. 

There are certain things your rivals do better than you that their customers appreciate. Try to uncover what their clients value the most and make those products or services part of your proposition. On the flip side, there are some things you do better than everyone else in the minds of consumers. Find out from your customers what they are and then build on them further to retain your competitive advantage.

On an operational level, there are important insights you can extract by studying your competition. Where are they advertising? What new products or improvements for existing products are they working on? They may have spotted an opportunity before you did.

5. Set up multiple small email campaigns.

Another way to enhance your market research is through conducting small email campaigns. Once you’ve gathered customer data using the above strategies, you can develop applicable email marketing campaigns and gauge their performance. [See our top picks for high-quality email marketing and survey software .]

Segment your email database into groups that share certain characteristics (like average spend, frequency of purchase, age, annual income, internet habits and so on). Market to each group separately to see who interacts with your emails more by clicking through to your site and making a purchase.

These small tests can provide detailed insight into what kind of marketing works with your audience. While you’re likely to make sales from all segments of customers you contact, you can focus more time on experimenting with the most active groups to incrementally increase engagement with each subsequent campaign.

Why market research is important

Market research is time-consuming, yet it’s important for launching and expanding a successful business. When you know your customers and what they want — and you understand the market you’re competing in — the information you collect can help you grow your company, win sales, and build strong relationships with the people who buy your product.

As you conduct your market research, you’ll discover that people are complex and diverse. They have specific wants and needs that they want someone to solve for them. If you use your data properly, you can build great products that truly help people.

Take the five strategies above and start to implement them in your market research activities. Gather data, keep notes, learn what people like, and you could soon build in future success and stability to your business. 

Syed Balkhi contributed to this article. 

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Market Research: What It Is and How to Conduct It To boost your competitive advantage, you may want to do market research. Entrepreneur is here with a guide on market research and how to conduct it.

By Entrepreneur Staff

Whether you're a new business owner or a seasoned entrepreneur, market research is essential for ensuring your business stays at the top of its game. Stay tuned for more on what market research is and how to conduct it effectively.

What is market research?

Market research is a practice that tracks consumer behavior, market trends, and economic trends. It is the process by which you gather information on your potential customers to evaluate and improve how you meet customer needs.

You can also complete market research to gather data on your competitors to assess where you stand and how you can improve your business plan and operations.

In all your business decisions, not just related to marketing campaigns and profitability calculations but also customer satisfaction in face-to-face interactions, quantitative research about specific markets you target can be a great way to guide you to success.

Key questions

When you begin building a template for your research, there are some key questions you should address. They can help you gather a better feel for what is going on in your target market.

Key questions can include:

• Is there a demand for the product or service you're providing?
• Is there a market or interest in your product or service?
• Does the income range of your target audience match the price point of your product or service?
• Does your product make sense for its location? Can you broaden your locale by providing country-wide or international shipping?
• Is the market saturated with similar products and services? If so, how can you distinguish what your business offers?
• What is the price point of your competitors?

Key demographics

As you complete market research, there are certain demographics you should use to guide your process. Sticking to these critical areas can help streamline your process while still constructing a thorough assessment.

Key demographics often include:

Related: What to Do When Your Ideal Customer Isn't Who You Expected

Types of market research

You can conduct a few different types of market research to find the answers you need. Each has advantages and disadvantages, so it's ideal to complete your research using a combination.

Primary research

This is research you conduct yourself and gather first-hand. If your budget permits, consider hiring a market research firm specializing in primary market research.

Primary types of market research methods include:

• Focus groups : Using a small group from a specific demographic to give reviews and feedback on particular products and services
• Surveys: Asking customers a set list of questions to record their opinions on new products
• Interviews: Asking customers conversational, open-ended questions in a one-on-one virtual or in-person setting to gather opinions and preferences
• Observations: Watching how customers interact with specific products for mannerisms and ease-of-use
• Market segmentation : Dividing your consumers into demographics and analyzing data through that lens to better meet their respective needs

Secondary research

Secondary research is data that already exists. You can find secondary research in credible newspapers, government statistics, and industry reports. While some scholarly research may be behind a paywall, there are numerous credible sources that you can access for free.

Exploratory research

This is a type of research study you can use to conduct your market research. Depending on your stage, you can gather people's opinions on products or topics. This can give you an idea of perception and provide more open-ended data.

Specific research

After you've completed some exploratory research, you can narrow your questions and sample audience to be more specific. Use this to capitalize on opportunities to alleviate pain points in the market and elevate your company over the competition.

Related: The Ultimate Guide to Competitive Research for Small Businesses

How to conduct market research

Market research can be time-consuming, but it's well worth the effort. The more information you can gather about your customer base's needs and buying habits, the greater your chance of securing a competitive advantage in your industry.

Take a look at a step-by-step guide on how to conduct market research.

1. Identify buyer persona

To connect with your target customers, you need to understand who they are.

You might be marketing to more than one demographic, and that's okay, but you still need to create profiles for the buyers you want to reach to keep track of their likes, how they interact with your product, and their buying habits.

Buyer personas are based on demographics like age, gender, locale, income, interests, and needs.

2. Find a sample

After creating buyer personas, you'll need to find the right people to participate in your market research process.

Your interviewees can be people who:

• Have recently purchased your product
• Have purchased from a competitor or abandoned cart at checkout
• Follow or interact with your social media accounts

It can be challenging to find willing participants. If your budget allows for it, feel free to offer incentives for feedback, whether it's a free gift, a nice discount, or even free shipping on their next order.

If you cannot afford to provide incentives, you can also offer participants access to exclusive content. No matter what, make sure you thank your respondents for their time at the end of the process.

Related: The How-To: Market Research On A Tight Budget

3. Create research questions

As you create your market research questions, try to ensure they are open-ended. You do not want to lead your consumer toward the answer that works best for you — you want to get the real answer that can identify strengths and help improve weaknesses.

Research question topics include:

• Customer background information: Try to go beyond age and job title. Keep the conversation going by asking more in-depth questions about their job responsibilities, challenges, and how they tackle them. The more people reveal about themselves, the better.
• Brand awareness : Learn why customers looked for a product like yours and how they came across your business.
• Consideration process: Push the brand awareness conversation further by having the customer take you through their product research. What other brands did they research? How easy or difficult was the research process?
• Decision making: What did they like or dislike about their experience with other businesses? What did they like or dislike about the different products themselves? Were they using any type of criteria for driving their decision-making? What factors ultimately made them choose your product over another?
• Closing the interview: Drive the focus back to your product by asking the consumer what improvements they'd like to see if any. Before the interview closes, open the floor for customer questions. Make sure to thank them for their time and send them a follow-up thank you after the interview.

4. Assess your competition

At this point in the process, you've probably got a decent idea of who your competitors are from when you interviewed customers about other products they considered.

However, that is not thorough enough — you need to dig deeper. You should start with a broad search and narrow it down throughout your process.

You can identify competition by:

• Utilizing industry search tools using sites like G2 and Capterra that can gather user ratings and compare other companies in your field.
• Find and download free market reports, like those provided by the U.S. Census Bureau or private firms, highlighting leading vendors in your industry.
• Use social media as a search engine directory to find other competitors with high-level content.

Related: 3 Reasons Why I Gladly Welcome Competition

5. Create a market research summary

When you finish your market research, you will be left with an excess of information.

While this information is beneficial, it doesn't do any good if it isn't organized enough for you to analyze it. Creating a summary report can help you organize your thoughts and more easily identify critical takeaways.

A streamlined research outline should consist of the following:

• Background information on your motivation for conducting the study
• A breakdown of participant demographics to identify customer personas
• Powerful quotes from participants that can serve as guiding reminders
• Common themes and details reasonings for customers considering your product
• The driving factor that pushed consumers to purchase your product over the competition
• Notes on the most interesting bits you learned and how you can drive those forward
• An action plan for how to capitalize on the research results

Valuable templates for your market research

With a long road ahead, market research might sound daunting. However, the more organized you are with your strategy, the more smoothly the task may go. There are several free templates out there that can serve as a roadmap for your research journey.

No template is better than another — it simply depends on your preference. Take a look at the template options below.

Porter's five forces analysis template

This template is centered around competitive rivalry, with four factors pointing toward it. Those factors are:

• The threat of new entrants
• Buying power
• Threat of substitution
• Supplier power

SWOT analysis template

You may have heard of SWOT before, as it is one of the more common analysis practices. It is a straightforward way of identifying focus areas for you and your competitors. SWOT stands for:

• Opportunities

Related: Start 2022 With a SWOT Analysis

Market survey and focus group template

Both templates are a bit less structured, as you can create your questions based on what you'd like to focus on.

Both strategies focus on qualitative research data to discover information on buyer persona. The most significant difference is that market surveys focus on short-answer questions, and focus groups ask questions that promote in-depth answers.

What market research can mean for you

Market research is an essential practice that can help you track consumer behavior and market and economic trends. Collecting this information to learn about your target demographics and how you can improve your marketing strategy, products, and services to meet their needs is vital.

Now you know how to conduct effective market research, choose a template that resonates with you, and begin your research plan.

Looking for more resources? Click here for Entrepreneur's library of articles for growing your business .

Entrepreneur Staff

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How to conduct market research – A complete guide

Are your market research efforts falling flat? It’s a common problem. All that data – a sea of numbers and statistics – with nothing to bring it to life. No magic. No pizazz. No WOW factor.

But that doesn’t really matter, does it? Market research isn’t meant to be entertaining, right?

Perhaps not, but it does need to capture the attention of your audience – otherwise, what’s the point? You can have the most valuable insights in the world, but if people are skipping over them to get to the good bit (that never comes), your data is going nowhere.

So, what do you do about it?

Conduct market research effectively, of course.

Welcome to the modern world, a place of digital disruption and data-driven insights; of short attention spans and constant distractions. In all, a challenging landscape were standing out and capturing attention requires more effort than ever before.

Luckily, the field of market research has evolved to meet these challenges. Today, market research is about understanding customer behavior and weaving that understanding into a relatable narrative. It’s about valuing quality insights over quantity and becoming increasingly customer centric.

In this blog, we’ll explore what market research is, why it’s important, and how to conduct market research effectively. We’ll delve into different types of market research, including primary research and secondary research, and discuss popular methods for conducting market research, such as surveys, focus groups, and interviews. We’ll also talk about how to avoid bias in your research and how to make sense of your data.

By the end of this guide, you’ll have all the tools you need to conduct market research that captures the insights you’re craving. You can tap this wealth to make sure your product and services development and delivery are on target, as well make sure you’re stacking up against your competition.

What is market research?

Market research is the process of delving deep into the hearts and minds of your customers, like a detective searching for clues. It’s about uncovering the secrets of your market, discovering what drives your customers’ behavior, and using that knowledge to make informed decisions about your business. Think of it as a treasure map, leading you on a journey to uncover valuable insights and opportunities.

Why use market research?

Market research is a secret weapon for your business. With it, you can keep you place at the head of the pack and avoid any looming potholes in your industry landscape.

By understanding your target market, customers, and competition, you can make strategic decisions that will help your business thrive. It’s a powerful tool that can give you a competitive edge and help you power up your business.

Primary vs secondary research

Primary research is like digging for diamonds, it’s the process of collecting original data. Secondary research, on the other hand, is more like panning for gold, it’s the process of gathering data that has already been collected. Primary research is often more time-consuming and expensive, but it allows you to gather information that is specific to your needs. Secondary research is often quicker and cheaper, but it may not be as specific to your needs.

When conducting market research, it is important to consider both primary and secondary research methods. By combining the two, you can gather a comprehensive understanding of your target audience and make informed decisions. Primary research provides a deeper understanding of your target audience, while secondary research provides a broad understanding of the industry and market trends.

In conclusion, primary and secondary research methods are both important tools in the market researcher’s toolbox. Each has its own strengths and weaknesses, and by utilizing both, you can gather a well-rounded understanding of your target audience and make informed decisions. Always remember to keep your research goals and objectives in mind when deciding which research method to use.

Market research methods

There are many methods available to conduct market research, each with unique advantages and disadvantages.

One popular method is surveys, which can be conducted online, by phone, or in person. Surveys are a great way to gather a large amount of data quickly and relatively cheaply. However, they are not always the most effective way to really understand what customers say and do.

Another common method is focus groups, where a small group of people are brought together to discuss a specific topic or product. This method is particularly useful for getting in-depth feedback on a product or service, as participants can discuss their thoughts and experiences with others. However, focus groups can be expensive to organize and may not be representative of the broader population.

Interviewing individual customers is also an effective way to gain insight into customer behavior and attitudes. This method is particularly useful for gaining a deep understanding of a specific target market or customer segment. However, it can be time-consuming and costly to conduct many interviews.

Finally, observational research allows researchers to observe customers in their natural environment, without any interference. This method is useful for gaining insight into customer behavior and can help identify patterns and trends that may not be visible through other research methods.

No matter which method you choose, it is important to remember that market research is not just about gathering data, but also about understanding and interpreting that data.

By using storytelling to bring statistics to life, businesses can create powerful, data-driven customer stories that grab the attention of stakeholders, illustrate key findings, and contribute to customer-centric decisions. Without a compelling narrative, data can become dry and unengaging, leaving readers with fact-fatigue, and missing out on the meaningful takeaways.

How to conduct market research

Conducting market research can seem daunting, but it doesn’t have to be. Start by defining your research question, then choose the methods that will work best for your business. Then, gather and analyze the data, and use it to make informed decisions. Remember that market research is an ongoing process, so be sure to keep track of your findings and adjust as needed.

First up, define the research question. The more specific and focused you are, the easier it’ll be to design your research and analyze the results. For example, if you are a new clothing retailer, your research question might be “What are the most popular clothing styles among teenagers in our target market?”

You’ll need to choose of the many available research methods that work best for your business. There are many different methods of market research, including surveys, focus groups, interviews, and observational studies. Surveys are a popular method because they are relatively cheap and easy to administer. Focus groups are also a good option, as they provide valuable insights into consumer behavior and attitudes. Interviews can be more time-consuming, but they are useful for gaining in-depth information from a small number of participants. Observational studies involve observing consumers in their natural environment, which can provide valuable insights into consumer behavior.

After you have chosen your research methods, it is time to gather and analyze the data. Surveys, focus groups, and interviews should be designed with care, as the questions and format can greatly affect the quality of the data. For observational studies, be sure to have a clear plan for observing and recording consumer behavior. Once you’ve got the data, analyze it to find patterns and trends – using software or (unlikely!) by hand.

Of course, data is only worth what you can do with it – use the data to find what’s possible, what’s under threat, and where you can do better. For example, if your research shows that teens in your target market are really into utility jackets, you make sure you’ve got multiple options in your clothing line.

But you can’t rest on your laurels! Market research is ongoing and constant – keeping up with trends never stop and know that customers behaviors shift too. If you don’t keep up with the changes, you’ll lag your competitors.

You might feel swamped at the idea of doing effective market research, but if you take it step by step, with the right methods for your needs, it can be the key to unlocking growth and results.

Remember, keep your research question focused, choose the right methods, gather, and analyze data, and use the data to make informed decisions. Also, remember to keep track of your findings and adjust as needed. It is an ongoing process, so be prepared to adapt and evolve with the market.

15 common market research questions

When it comes to market research, there’s no such thing as a one-size-fits-all approach. Every business has unique needs and goals, but there are certain questions that are commonly asked in market research. Some of these questions include:

• Who is my target market?
• What are the needs and preferences of my target market?
• What are my competitors doing?
• How can I improve my product or service?
• How can I reach my target market more effectively?
• What are the current trends in my industry?
• How does my product or service compare to others in the market?
• What are the potential barriers to entry in my market?
• What is my product or service’s unique selling point?
• How can I increase brand awareness?
• What is my target market’s buying behavior?
• How can I increase customer loyalty?
• What is the potential market size for my product or service?
• How can I increase customer retention?
• What is the potential return on investment for my product or service?

Answering these questions through market research can help you gain a deeper understanding of your market and make more informed decisions. However, these questions are just the tip of the iceberg when it comes to market research, and you should tailor your questions to your specific needs and goals.

Examples of market research

Are you feeling like Victor Frankenstein on a stormy night, tasked with bringing life to something dull on the surface but brimming with potential? That’s the challenge of market research. But why does it matter so much?

To truly understand your customers and gain valuable insights from your data, you need to dig deep and discover what drives their behavior. And once you have that understanding, you can craft a compelling story. By sharing powerful, data-driven customer stories with your stakeholders, you can grab their attention, illustrate key findings, and contribute to customer-centric decisions.

Because let’s face it, without stories to bring statistics to life, it’s easy for readers to tune out. Our brains relate best to characters, and by constructing characters in your market research, your content will have more impact. In fact, a study from McMaster University found that when stakeholders can see their customers in the story, they connect with the message.

To give you a better idea of how market research can be applied in the real world, let’s look at a couple of examples. In the retail industry, market research can be used to determine which products are in demand and what customers are looking for. A retail company may conduct a survey to gather data on customer preferences and use that information to inform their product development and market focus.

A popular example of market research in the retail industry is Walmart’s use of customer feedback and data analysis to optimize their product selection and improve their in-store experience. In the healthcare industry, market research can be used to understand patient needs and preferences, such as in a study conducted by the Cleveland Clinic to improve their patient satisfaction scores. In the technology industry, market research can be used to understand customer needs and preferences in product development, such as in a study conducted by Apple to improve the user experience of their products.

And let’s not forget successful market research campaigns. One that stands out is Coca-Cola’s “Share a Coke” campaign. By conducting market research and understanding the importance of personalization, Coca-Cola was able to create a campaign that resonated with their target audience and increased sales. Another example is Netflix’s use of data analysis and customer feedback to inform their decision to create their own content, leading to the success of original series like Stranger Things and The Crown.

In summary, market research is essential for understanding your customers and making informed business decisions. From product development to marketing strategies, it can inform a wide range of decisions and lead to success. So, don’t be like Frankenstein on that stormy night, use market research to bring your ideas to life.

How can Forsta help?

At Forsta, we know that market research is a powerful tool for businesses, but it can be difficult to conduct effectively. That’s why we’ve developed a software specifically designed to make market research easier for businesses. Our  market research survey software  is packed with features that make conducting market research a breeze.

Discover the advantages of Forsta’s market research survey software: If you’re looking to take your market research to the next level, then take a look at our website and see how Forsta’s  market research survey software  can help your business conduct market research effectively.

The power of market research at your fingertips: Market research is crucial for any business that wants to stay competitive. It provides valuable information about your target market, customers, and competition, which can inform a wide range of business decisions. From product development to marketing strategies, market research is essential for the success of your business.

Ready to research? Let’s go.

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• Business Strategy

How to Do Marketing Research in Less than 30 Minutes? Nike Case Study

Table of contents.

Marketing research is a complex and time-consuming process, but what if I told you that you can do it in less than 30 minutes?! With AI capabilities and the right tools, market research is no longer a tall order. You need only two things: a media monitoring project for collecting data and an AI Brand Assistant to analyze data for you.

Let’s say that in your market research, you want to learn about Nike’s online performance in the past 30 days.

It couldn’t be easier!

Marketing research  is the process of gathering, analyzing, and interpreting information about a market, including its products, services, customers, focus groups, competitors, and industry trends, to support decision-making and strategy development. Usually, the market research process is resource- and time-consuming, but with the right tool, you can conduct it in less than 30 minutes.

So, if market research is one of your responsibilities and you have been struggling with it so far, you are in the right place!

Read further to compare 3 helpful tools and discover the secret to market research in 3 steps and less than 30 minutes.

Let’s go!

What is marketing research? Definition

Marketing research is your secret weapon for business success! 

Imagine having a crystal ball that shows you what your customers really want, what your competitors are up to, and how you can win your target market. 

That’s marketing research for you! 

It’s all about gathering data, crunching numbers, and getting insights to help you make smart decisions. 

Whether you’re launching a new product, improving your services, or just wanting to know what people think about your brand, marketing research gives you the answers. 

It’s like having a superpower that keeps you one step ahead, ensuring you’re always in the know and ready to grow!

Conduct marketing research in less than 30 minutes with Brand24!

Purposes & benefits of marketing research

• Consumer research:  Understanding customer needs, preferences, and customer satisfaction level
• Market analysis:  Evaluating market potential and market share
• Competitor research:  Analyzing competitor strategies and performance, evaluating market saturation
• Marketing efforts assessment:  Assessing the effectiveness of marketing campaigns based on comparison with historical data
• Exploratory research:  Identifying new market opportunities and trends allowing to reach new potential customers
• Business idea evaluation:  Conducting research for product development and innovation

Marketing research made easy with Brand24.

How to do marketing research?

Marketing research can take a lot of work. 

But what if I told you you could conduct it in less than 30 minutes?

Yes, that’s possible.

Incorporating smart marketing research techniques is the answer.

One last thing you need to know is that there are two types of market research regarding the source of data:

• Primary research – based on primary data collection methods, meaning that you create new, original data, e.g., through surveys and interviews
• Secondary research – relying on existing data produced and collected by somebody else to support your market research

And two types of market research depending on the amount and detail of data:

• Qualitative research – closely analyzing a small sample for very precise insights into consumer preferences.
• Quantitative research – collecting and analyzing massive datasets for a general overview of consumer markets. Especially useful for creating focus groups that will realistically reflect your customers.

Market research in 3 steps

Step 1: ask ai tools.

The fastest and most efficient way to do market research is to use AI marketing tools. 

You can ask this software about anything; it will serve the needed insights in seconds.

Whether you need insights into your brand, influencers, focus groups, product, or service, AI holds the answer to all your questions.

You can choose between many solutions depending on the depth of insight you need for your market research.

I will discuss Chat GPT, Perplexity, and Brand24.

What is the difference between them?

• Chat GPT  is a general-purpose conversational AI that provides general responses based on its training set data and online insights. It can be used for secondary market research.
• Perplexity  focuses on data accuracy and up-to-dateness. It bases its answers on online sources with a good reputation. This allegedly limits unfounded and outdated answers. With Perplexity, you can do secondary research.
• Brand24  combines Chat GPT knowledge with its own data analysis. It works based on a media monitoring project that collects all online mentions of a given keyword. Thanks to this combination, it can answer very specific questions about your brand or support you in competitor research. Brand24 offers primary market research with some secondary research insights. It’s also a handy tool both for qualitative research (individual mentions analysis) and quantitative research ( brand metrics analysis). In short, it’s a versatile tool that can meet all your needs regarding marketing research.

Primary market research made easy with Brand24.

Let’s choose a sample market research question to ask all of them. I’ll go for something general like: Present customer insights for Nike over the past 90 days.

While the answer by Chat GPT is generally correct, it doesn’t tell you much for your marketing research. Unfortunately, it’s too general and quite common knowledge. 

Additionally, you cannot ask Chat GPT about a specific period like “the past 90 days”.

Chat GPT cites Brand24 as a secondary data source in the 3rd and 4th point to support its answer. 

However, it is a one-year-old article—clearly not information about Nike’s performance in the past 90 days. 

Although it’s not entirely wrong, it’s rather useless for thorough market research.

Let’s try Perplexity, then.

That’s another correct yet very general answer.

It is informative for someone outside the company, but I bet everybody at Nike already knows the information shared by Chat GPT and Perplexity.

This means that you need a tool that conducts primary research and provides completely new market insights.

That’s where Brand24 and its AI Brand Assistant come in.

This tool combines Chat GPT’s knowledge and language processing skills with its unique data collected through media monitoring. 

By leveraging both primary and secondary research, Brand24 can provide in-depth insights into your product or service.

Additionally, by combining both qualitative and quantitative data it can conduct a thorough analysis for all target markets.

Thanks to its method, it knows:

• What people are saying about your brand online
• Which of your products is the most loved and which is the most hated
• What is your brand reach online and social media reach
• Everything about your last hashtag campaign
• How you perform compared to your competitors
• What is the AVE of your mentions
• and so much more!

Let’s ask the same question we tested on Chat GPT and Perplexity.

That’s what we needed!

Detailed insights into your online performance deeply informing your market research.

This critical tool combines primary research with external resources to give you ultimate insights into your market research.

Do market research in less than 30 minutes with Brand24!

There’s also a concise conclusion and a visual, so don’t worry if you don’t like digging through numbers.

Additionally, this saves you time and improves your business decisions.

Let’s try one more question: What is the sentiment around Nike?

Chat GPT again tries to use Brand24 data for its secondary research, but again, it’s wrong. 

That “past 30 days” is data for February 2023. Chat GPT took this information from one of our blog posts without checking the date. 

This makes Chat GPT useless as:

• It doesn’t have its own data
• It tries to conduct secondary market research based on others’ data but does it wrong

What about Perplexity?

Again, the answer is not wrong, but it’s also not what you would expect. The information is too general to support market research in any way.

Let’s see what the AI Brand Assistant by Brand24 has to offer.

The AI Brand Assistant supports its answers with its own quantitative research results. Thanks to this, its answers are precise, up-to-date, and reflect the actual state of your brand online.

You can also ask follow-up questions. 

Let’s check the reasons behind the negative sentiment around Nike.

As you can see, the answer is very detailed, referencing particular mentions.

With these in-depth insights, you can adjust your marketing strategy, improve business decisions, and prevent PR crises by addressing customer needs and the most common concerns.

Conduct market research faster than ever with Brand24!

And what else can you ask our AI Brand Assistant regarding marketing research?

1. Which source generates the most mentions?

2. How many mentions did Nike receive in the last 30 days?

3. What is the target market for Nike?

4. What other brands appear in mentions?

5. What is the most trending topic?

6. What is the most mentioned product?

7. What time the target audience is most active on Instagram?

8. How do customers perceive Nike compared to Reebok?

9. How do customers feel about Nike?

10. What is the share of voice compared to Reebok?

11. Conduct a competitor analysis of Reebok.

12. Conduct sentiment analysis of Nike.

13. Present customer insights

And there’s so much more waiting for you to discover!

A hit for market researchers! Streamline your work with Brand24.

What is best is that you don’t even need to ask all those questions. You can completely delegate the market research to our AI Brand Assistant. 

For instance, use this prompt: Conduct market research for Nike. Include sentiment analysis, competitors analysis, reach, and SWOT analysis .

Streamline your market research with AI Brand Assistant!

Step 2: Ask the target audience and focus groups

This is so-called primary research, meaning you collect new, original data directly from your audience or a particular focus group.

So, how to collect customer feedback?

You can ask your target customers about their preferences in survey research. These can be distributed through email, social media, or other channels.

Another option is conducting marketing research through real-time interviews.

But let’s be fair; the former is usually quite ineffective, and the latter is very time-consuming.

There are three ways for you to go.

• Use a dedicated tool to improve your customer experience with your survey. There are many solutions to choose from for your primary research. The most prominent are Google Forms, Survey Monkey, Survey Lab, and Zoho Survey.
• Delegate your whole team to do the interviews for faster results.
• Leverage social listening tools .

If I were to choose, I’d go for social listening . 

Why would you generate more data when there’s already so much existing data to be analyzed online? 

Another thing is that customer behavior changes depending on the method of conducting market research. 

Indeed, for honest consumer insights, social media monitoring works better than any other primary research method.

Thanks to monitoring online mentions, you can also conduct exploratory research. 

Take a moment to browse your customers’ words, and you may identify groundbreaking market research insights. 

There may be aspects of your company that you never thought of as issues, opportunities, etc.

Primary research with Brand24 can inform your strategy and lead you to completely new discoveries and conclusions. 

Based on them, you can create an informed strategy to better appeal to your focus groups and potential customers.

Discover customer preferences with Brand24!

Step 3: Benchmark with competitors

Competitor analysis is the last crucial step of every marketing research. 

By understanding what your competitors are doing, you can identify gaps in the market, spot market trends, and find opportunities to differentiate your brand. 

It helps you benchmark your performance, see where you stand, and understand why certain competitors are more successful. 

Competitive analysis also prepares you to anticipate and respond to threats, ensuring you stay competitive and innovative. 

It helps you to conduct a SWOT analysis for your business as well.

In Brand24, we understand the importance of competitor research .

That’s why we offer a complex comparison feature. With its insights, you can gain a competitive edge over other companies in your niche.

Besides the raw data analysis, you can also ask our Brand Assistant about: 

• Two brands comparison 

What’s great is that the tool prepares a concise conclusion with a visual.

• Strategies to outperform your competitors

• Your competitors’ biggest mentions source
• and anything else that comes to your mind and is based on your project data.

Benchmark competitors with the Brand24 market research tool!

Challenges in the marketing research process

Marketing research is a critical component of business strategy, but several challenges can affect the accuracy and usefulness of the insights gathered. 

Here are some of the main challenges faced when conducting marketing research:

01  Sampling issues

• Challenge:  Selecting a representative market segment is crucial, but it can be difficult to access and ensure that the sample accurately reflects the target consumers.
• Solution:  Use robust sampling techniques and consider multiple methods to improve representativeness. You can also set up focus groups to ensure inclusive sampling.

02  Data collection methods

• Challenge:  Choosing the right data collection method can be difficult. Each method has its pros and cons, and the wrong choice can impact data quality and final results.
• Solution:  Evaluate the research objectives and the characteristics of the target audience to select the best data collection method(s). Remember, media monitoring is a great starting point for any marketing research.

03  Data quality and reliability

• Challenge:  Ensuring the accuracy and reliability of the data collected can be difficult, especially with self-reported data or secondary sources.
• Solution:  Implement data validation techniques and cross-check data from multiple sources when possible. Leverage media monitoring tools for first-hand insights into your customer satisfaction.

04  Data analysis complexity

• Challenge:  Analyzing data, especially large and complex datasets, requires specialized skills and tools. Misinterpretation of data can lead to incorrect conclusions.
• Solution:  Use advanced analytical tools like Brand24 or involve skilled data analysts who can correctly interpret the data.

05  Time constraints

• Challenge:  Conducting comprehensive research takes time, but businesses often need quick insights to make timely decisions.
• Solution:  Plan research timelines carefully and use agile research methodologies. Start your media monitoring project before conducting market research to ensure representative and relevant data.

06  Keeping up with technological changes

• Challenge:  The rapid evolution of technology means new data analysis methods and tools are constantly emerging, making it hard to stay up-to-date.
• Solution:  Choose a tool that keeps up with technological developments and embraces solutions like machine learning and artificial intelligence. Brand24’s AI models have been trained for the past 12 years, ensuring a modern approach with significant reliability.

07  Respondent bias

• Challenge:  Respondents may provide socially desirable answers or may not fully engage with the survey or interview, leading to biased results.
• Solution:  Design surveys and interview questions carefully to minimize bias. Use techniques like anonymous surveys to encourage honest responses. Leverage social listening for brutally honest customer review examples.

08  Interpreting and communicating results

• Challenge:  Even with good data, interpreting and communicating findings effectively to stakeholders can be difficult.
• Solution:  Use clear, visual representations of data and tailor the communication of results to the audience’s level of understanding and interest. At Brand24, we understand this issue, so we offer a wide array of visual data representations, such as charts, graphs, and infographics.

Addressing these challenges requires careful planning, skilled execution, and ongoing adaptation to new trends and technologies in marketing research.

Address marketing research challenges with Brand24!

Marketing research is a challenging, time- and resource-consuming process that is prone to mistakes.

At the same time, marketing research is the key to your success. It informs your marketing strategy, provides key demographics of your clients, and helps you get ahead of your competitors.

Fortunately, with the right tool, effective market research can be done in less than 30 minutes and in 3 simple steps.

How to conduct market research?

Long story short:

• Ask AI Brand Assistant to conduct market research for you.
• Leverage primary research data from social listening to learn about customer satisfaction and focus groups.
• Benchmark with competitors to ensure your leadership in the target market.

Effective market research? Brand24!

Final thoughts:

• Marketing research helps companies better understand their business environment, consumer behavior, market size, and product or service performance. With the right tools, you can get all of those insights in less than 30 minutes.
• While tools like Chat GPT and Perplexity base their answers on secondary research, Brand24 has unique primary data about your brand that nobody else can provide.
• Brand24 combines primary and secondary research by listening to and analyzing your consumer attitudes and transforming them into unique quantitative research data.

Market research conducted in-house in less than 30 minutes.

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Tools & for Industry Research

• Exploding Topics Exploding Topics analyzes millions of searches, conversations, and mentions across the internet to "find trends before they're trends."
• Google Trends Google Trends tells us what people are searching for, in real time. You can use the research it compiles to measure search interest in a particular topic, in a particular place, and at a particular time.
• Social Media Today The latest news, trends, and tips in social media.
• Trend Hunter Showcasing the most up-to-date information on emerging entrepreneurs, business ventures, and retail technology.

WSJ: The Future of Everything

Conducting Market Research & Investigating Trends

To better understand your industry and potential customers, it's important to research the forecasted trends in your industry and/or conduct market research!

Investigating Industry Trends

To understand where your company may be headed, continuously research and stay up-to-date on what's "trending" in your industry! Some tips:

• Scan for general topis that interest you
• Note down the sources that come up in browsing (i.e. publications and/or organizations specific to your industry)
• Explore news sections, follow links to out sources, look up things the news sources mention
• "________ trends"
• "________ industry news"
• "________ startups"
• By company name, industry, a consumer group, or activity/hobby

Ex. What (and why) will we buy in 2024? from The New York Times

Conducting Market Research

According to the U.S. Small Business Administration , "market research blends consumer behavior and economic trends to confirm and improve your business idea." To get a good sense of your market, focus on:

• 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?

U.S. Small Business Administration. (2024, May 31).  Market Research and Competitive Analysis.  https://www.sba.gov/business-guide/plan-your-business/market-research-competitive-analysis.

Researching Trends on Google

To search for industry trends on Google:

• Click the "News" tab
• Adjust your search to sort by date rather than relevance

• << Previous: Researching an Industry or Market
• Next: Researching a Company or Competitor >>
• Last Updated: Aug 7, 2024 3:49 PM
• URL: https://guides.csbsju.edu/entrepreneurship

Extract insights from customer & stakeholder interviews. At Scale.

How to conduct pricing research: 5 effective methodologies.

Home » How to Conduct Pricing Research: 5 Effective Methodologies

Pricing Research Strategies can significantly impact business success, driving informed decision-making and customer satisfaction. Understanding the various approaches to pricing research is essential for companies eager to optimize their market positioning. As competition grows in every industry, businesses must adapt by using effective methodologies that provide deep insights into consumer behavior, pricing elasticity, and market trends.

Choosing the right pricing research strategies enables organizations to uncover valuable data, guiding their pricing decisions. This process involves understanding customers' perceptions, analyzing competitor pricing, and testing various pricing models to identify the most effective rates. By employing structured methodologies, businesses can enhance profitability and create compelling value propositions that resonate with their target audience.

The Importance of Pricing Research in Business

Pricing research strategies play a crucial role in shaping business success. Understanding how price affects customer choices helps companies position their offerings more effectively. This research allows businesses to identify potential sales channels and tailor their marketing efforts to meet consumer demand. With a well-informed pricing strategy, companies can enhance their competitive edge and avoid costly pricing mistakes.

Moreover, pricing research enables businesses to stay responsive to market changes and emerging trends. Utilizing effective methodologies can uncover customer perceptions and preferences, boosting overall profitability. By exploring various pricing models and testing customer reactions, businesses can fine-tune their pricing strategies. Ultimately, adopting a data-driven approach to pricing ensures that companies not only attract customers but also foster long-term loyalty through sustained value.

Understanding Market Demand

Understanding market demand is crucial to developing effective pricing research strategies. It enables businesses to identify the preferences and needs of their target audience. By closely analyzing market trends and consumer behavior, companies can better position their products or services to meet these demands. This understanding not only aids in pricing but also informs marketing and product development strategies.

To effectively gauge market demand, consider these key components:

Consumer Behavior Analysis : Study how customers interact with similar products. This can provide insights into their purchasing habits and preferences.

Competitor Pricing : Analyze how competitors price their offerings. Understanding their strategies can reveal market standards and potential gaps in pricing.

Market Trends and Changes : Keep an eye on economic indicators and consumer trends that may affect demand. Recognizing these shifts can help you adjust pricing strategies proactively.

Feedback Loops : Establish channels for ongoing customer feedback and market research. Continuous input can help you refine your understanding of market demand over time.

By focusing on these areas, businesses can enhance their approach to pricing research, ensuring they remain responsive to market dynamics and customer needs.

Gauging Competitor Pricing

When gauging competitor pricing, it's crucial to understand the market dynamics and the variations in pricing strategies. Start by analyzing pricing data from your direct competitors, focusing on their offerings and target audience. Gather publicly available information, such as their website or marketing materials, to help contextualize your findings. Examining competitor pricing provides insights into their value proposition and assists in identifying potential pricing gaps in your own business strategy.

Next, utilize tools and resources that facilitate competitor analysis. Price monitoring software can track changes in competitor pricing over time, revealing trends and adjustments they make. Engage in customer feedback analysis to understand why consumers choose certain products over others based on pricing. By identifying these key elements, you’ll enhance your pricing research strategies, allowing for informed pricing decisions that align with market expectations and consumer preferences.

Key Pricing Research Strategies

When delving into effective pricing research strategies, it’s crucial to understand the dynamics of market evaluation. Begin by identifying the primary goal of your research: is it to find a competitive price point or to gauge customer willingness to pay? Both objectives drive different research methodologies that can yield significant insights into consumer behavior and market trends.

Next, consider combining qualitative and quantitative research methods. Surveys and interviews can provide rich, detailed insights, while tools like A/B testing or competitor analysis offer hard data. Gathering insights from different angles helps in formulating a comprehensive view. Additionally, regularly updating pricing strategies based on ongoing market feedback ensures responsiveness and adaptability to changing customer needs. By implementing these core strategies, businesses can sharpen their pricing approach and enhance revenue potential, ultimately leading to a better market position.

Customer Surveys and Interviews

Customer surveys and interviews are integral components of effective pricing research strategies. These methodologies help gather firsthand insights from customers, allowing businesses to understand their perceptions on price sensitivity and value. Crafting well-structured surveys and interviews can lead to rich data, highlighting not just what customers are willing to pay but also their underlying motivations and expectations.

To maximize the benefits of customer surveys and interviews, consider the following steps:

Define Clear Objectives : Determine specific questions you want to answer regarding pricing. This focus will guide your survey design.

Select Appropriate Participants : Identify a representative sample of your target market to ensure diverse perspectives.

Use Open-Ended Questions : Allow respondents to express their thoughts freely. This can reveal insights that closed questions may miss.

Analyze Responses Thoroughly : Systematically evaluate the data to draw meaningful conclusions about customer preferences and pricing strategies.

Act on Insights : Use the findings to inform pricing decisions, making adjustments based on validated customer feedback.

These steps will not only enhance your pricing research strategies but also foster a deeper connection with your customer base.

Focus Groups for In-Depth Insights

Focus groups serve as an invaluable tool for gathering in-depth insights during pricing research. When conducted effectively, they provide a platform for open dialogue among participants, allowing businesses to delve into consumer perceptions about pricing strategies. By encouraging brainstorming sessions, organizations can uncover critical pain points and desires that may not surface through surveys or individual interviews.

When organizing focus groups, it's essential to select a diverse mix of participants to represent various market segments. This can include factors such as age, income, and purchasing habits. Additionally, having a skilled moderator to facilitate discussions helps maintain focus and encourages authentic participation, allowing for unique insights into consumer reasoning. As part of effective pricing research strategies, these discussions can illuminate how different pricing models resonate with target audiences, fueling strategic decisions and enhancing overall market relevance.

Advanced Pricing Research Strategies

In advanced pricing research strategies, it’s crucial to explore various methods for obtaining deep customer insights. Deciphering customer preferences and behaviors can guide you in setting price points that align with market expectations. Techniques like price sensitivity analysis help identify the optimal price range that maximizes revenue while ensuring customer satisfaction.

Additionally, employing competitive analysis allows businesses to understand pricing dynamics within their industry. This method involves examining competitors' pricing structures, promotions, and perceived value propositions. By combining these strategies, you can craft effective pricing research strategies that resonate with your target audience and ultimately lead to improved sales performance. The goal is to create a comprehensive understanding of the market, driving informed pricing decisions that foster customer loyalty and business growth.

Conjoint Analysis

Conjoint analysis is a powerful tool in pricing research strategies, allowing businesses to understand customer preferences regarding specific product attributes. By simulating different pricing scenarios and product configurations, organizations can gain insights into how consumers value certain features, including price. This method helps decision-makers define optimal pricing and product offerings in a competitive market.

To properly execute conjoint analysis, follow these steps:

Define the Attributes : Select the key features and price ranges to evaluate. This is crucial for understanding what aspects matter most to customers.

Develop the Survey : Create a survey that presents various combinations of attributes to respondents. This allows analysis of consumer choices in a structured way.

Analyze the Data : Use statistical techniques to interpret responses, revealing the relative importance of each attribute and ideal pricing points.

Make Informed Decisions : Utilize findings to set competitive prices and refine product features, ensuring alignment with consumer preferences and market demand.

By integrating these steps, businesses can enhance their pricing strategies and optimize their market position.

A/B Testing for Price Optimization

A/B testing serves as a powerful method for optimizing pricing strategies by allowing businesses to make data-driven decisions. In this approach, two versions of a product's price—Control (A) and Variation (B)—are tested against each other in real-time. The goal is to measure which pricing strategy leads to higher conversion rates or revenue. This method engages customers directly and provides valuable insights into their willingness to pay for specific features or services.

To conduct effective A/B testing for price optimization, consider these key points: First, define clear objectives, such as increasing sales or market penetration. Next, ensure a diverse sample group to avoid bias in results. Then, analyze the data meticulously, looking for trends and preferences among different customer segments. Lastly, iterate on your findings by continuously refining your pricing research strategies to adapt to evolving market demands. By following this systematic approach, businesses can enhance their pricing decisions and better cater to their target audience.

Real World Application of Pricing Research Strategies in Different Industries

Pricing research strategies play a crucial role across various industries, influencing how businesses position their products and engage customers. In retail, for instance, companies often conduct surveys and focus groups to understand customer perceptions regarding product value and pricing. This feedback helps them set competitive prices that attract buyers while ensuring profitability.

In the software industry, pricing research might involve A/B testing different subscription models to identify which options resonate most with users. Feedback from potential customers can guide adjustments, allowing businesses to enhance product offerings and liquidity. In both cases, applying effective pricing research strategies leads to informed decisions that address market demands and foster growth. The real-world implications of these strategies reveal their significance in driving revenue and creating sustainable business practices while catering to diverse consumer needs.

Case Studies in E-commerce

Case studies in e-commerce often reveal the effectiveness of various pricing research strategies. These case studies provide a practical lens through which businesses can analyze real-world applications of pricing methodologies. For instance, one e-commerce platform successfully utilized competitor pricing analysis to adjust their own prices, resulting in increased sales and customer engagement. This approach not only enhanced their competitive edge but also allowed them to respond swiftly to market fluctuations.

Another compelling case demonstrates the successful implementation of psychological pricing tactics. An e-commerce retailer adopted charm pricing—setting prices just below whole numbers—to enhance perceived value. This minor adjustment led to a significant boost in conversions, showcasing how understanding customer behavior through pricing research can drive profitability. By studying such cases, businesses can glean insights that inform their pricing strategies, ultimately positioning them for sustained success in a competitive market.

Implementation in Traditional Retail

In traditional retail, implementing effective pricing research strategies is crucial for driving sales and remaining competitive. Retailers can begin by gathering data through customer surveys, allowing them to understand consumer preferences and price sensitivities. This helps in tailoring pricing strategies that align closely with customer expectations, ultimately fostering loyalty and repeat business.

Additionally, analyzing competitors' pricing can provide valuable insights into market positioning. Retailers should regularly monitor competitor prices and adjust their own to stay relevant. Utilizing sales data effectively is also essential; understanding which products perform well at certain price points can guide future pricing decisions. By combining these strategies, traditional retailers can create a comprehensive pricing framework that enhances profitability while meeting customer needs. Conducting pricing research systematically ensures that businesses remain agile and responsive in a dynamic market environment.

Conclusion on Effective Pricing Research Strategies

Effective pricing research strategies are essential for businesses aiming to stay competitive in today’s market. By analyzing various methodologies, organizations can discover valuable insights that inform their pricing decisions. Understanding how customers perceive value can directly impact pricing and, consequently, overall profitability.

The journey does not end with gathering data; synthesizing that information into actionable strategies is crucial. Engaging in continuous research allows for adjustments to pricing strategies over time, ensuring they remain relevant amid market changes. Thus, investing effort into developing solid pricing research strategies can significantly enhance a business's success and customer satisfaction in the long run.

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Market research made easy: 3 tips to maximize nonprofit impact 

• Kerry Hecht (she/her)
• August 5, 2024

Many nonprofit organizations believe market research is beyond their reach due to lack of staff, budget, and time. But without the solid data market research can provide, nonprofits may make decisions based on assumptions that lead to misaligned strategies and missed opportunities for retaining donors and volunteers and attracting new ones. A market research program, even at a basic level, helps create a 360-degree view of an organization’s strengths and weaknesses, and it doesn’t have to be time-intensive or costly to be effective. 

How market research can help expand a nonprofit’s reach and impact  

To illustrate, let’s look at a nonprofit that provides engaging, age-appropriate content to help children understand social issues related to gender and sexuality. They also offer resources for parents and teachers to facilitate these important conversations. Despite high website traffic, the organization struggled to convert visitors into paying customers for their content and courses. So, they conducted market research, starting with in-depth interviews with target audiences—LGBTQ+ and ally parents and educators. They discovered their diverse range of offerings was overwhelming visitors, leaving them unsure of where to start. With this feedback, the organization introduced a user-friendly landing page that guides visitors to the content most relevant to their needs, creating a seamless and personalized browsing experience. They also surveyed their email subscribers, gathering detailed information that allowed them to better segment their audience and tailor their offerings. This strategic use of market research led to an increase in conversions, enabling the organization to generate more funds and expand their reach. 

How to conduct market research with limited resources  

How can you make market research both feasible and impactful for your organization? Here are three tips: 

1. Start with desk research. Understanding broader trends that impact behavior provides a foundation for what to expect as you go on to collect your own data. Here are some questions to consider: 

• What causes is your target audience currently most passionate about? How does this resonate with your nonprofit? 
• What kinds of people are volunteering (age, gender, location, etc.)? How does this match your volunteer base? 
• How do nonprofits weather the decline in funding during economic uncertainty? 
• How do organizations stand out in a crowded field of nonprofits? 
• Which organizations are you competing with for both financial and human resources and what are they doing? 

For example, you might use Google Trends to compare keyword searches about specific social issues over time with searches related to your mission. If your nonprofit focuses on mental health, you can track the rising interest in mental health topics, identify seasonal patterns, and adjust your content and campaign timing to maximize engagement. Or if you’re focused on education, you can use the Pew Research Center’s extensive reports and data sets to track trends in public attitudes toward education reform, identify key demographic groups that support these initiatives, and tailor their outreach strategies accordingly. 

2. Leverage existing infrastructure. As a nonprofit, you likely have extensive donor and volunteer lists, along with databases of beneficiaries, which are the most expensive components of market research. Use this existing ecosystem to your advantage, as these people are also your stakeholders, each with a different point of view and relationship with your organization. 

• Analyze data such as donor, volunteer, and beneficiary demographics and giving patterns. 
• Conduct surveys and collect direct feedback from supporters and beneficiaries to gauge their satisfaction, test your messaging, and track your impact. 
• Interview stakeholders to dive deeper into issues and learn what is really important to people and what they expect from you. 

3. Take advantage of free resources. There are many free resources on how to design different kinds of research methods, from surveys to focus groups to brainstorming sessions: 

• Look for online courses, webinars, and tutorials that provide guidance on designing and conducting various types of research. Websites like Coursera, Udemy, and even YouTube offer free and low-cost courses. 
• Leverage free and low-cost tech solutions for conducting market research. Google Forms, SurveyMonkey, and Typeform are excellent tools for creating and distributing surveys. For more complex data analysis, consider using free software like Google Analytics or Microsoft Power BI. 
• Use collaborative platforms to engage your stakeholders in the research process. Platforms like Trello, Asana, and Slack can help manage research projects and facilitate communication among team members. 

Don’t let the misconception that market research is expensive and time consuming hold you back. Schedule a brainstorming session with your team to explore existing opportunities and develop a plan that fits your organization’s unique needs. You can help your nonprofit thrive by uncovering new opportunities to connect with those who matter most to your mission. 

Photo credit: FreshSplash via Getty Images

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• International
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About the author

Kerry Hecht is the founder and CEO of 10k Humans , an award-winning company with a mission to pave the way for a more forward-thinking and people-centric approach to market research. The 10k Humans ecosystem goes beyond traditional data analysis, weaving the rich tapestry of human experiences into compelling narratives that inform and inspire actionable insights. Kerry created 10k Humans to revolutionize the way we understand and utilize data. Her mission is to bridge the gap between humanity and the data-driven world, emphasizing the power of storytelling brought to life through qualitative and quantitative research. At the core of 10k Humans is a dedication to elevating, synthesizing, and counting every voice, demonstrating that harmony between people and data is within reach. Since its inception, 10k Humans has worked with the likes of brands such as Microsoft, Sony, Amazon, Paramount, AT&T, Walmart, Spotify, and Nike.

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What Is Premium Pricing? When and How To Use it Effectively

Learn the ins and outs of premium pricing and why it might be the right strategy for your business.

You enter your favorite brick-and-mortar shoe boutique in search of new boots. Near the back of the store, two pairs of brown leather boots immediately catch your eye. The first pair costs $115, the other costs $1,500.

At first glance, they seem nearly identical, but as you look closer, you spot the differences. The less expensive pair is made of synthetic leather with glued-on soles. The pricier pair is made of hand-stitched Italian leather, features custom-made buckles, and is made locally with impeccable attention to detail—designed to last a lifetime. Does this justify its hefty price tag?

Learn more about premium pricing—what it is, which companies can use it, and how to implement this pricing strategy for your brand.

What is premium pricing?

Premium pricing—also called prestige pricing or luxury pricing—is when companies set a higher price for their products than competitors. This pricing strategy can increase profit margins and position them as premium brands.

Although some brands with premium pricing invest in higher-quality materials, this isn't always the case. Often, brands can command premium prices due to name recognition and perceived prestige.

For example, an outerwear brand could charge $1,700 for a double-breasted wool coat—many times over the average price point—because they’re using merino wool, mother-of-pearl buttons, and immaculate hand-stitching. On the other hand, a brand selling a standard cotton t-shirt could justify a higher price through celebrity endorsements and high-profile collaborations to enhance its brand image.

📚 Learn more: How To Brand Your Business To Gain a Competitive Edge

When to use premium pricing

When you’re first to the market, when you offer unique products, when you sell luxury items, when you produce a limited amount.

• When you introduce proprietary feature

When you provide customization options

Attaching premium pricing to your products might be tempting—it can boost revenue, improve your brand image, and attract high-end shoppers. But a premium price alone doesn’t make a premium product. You have to justify higher prices with real value. Otherwise, you risk alienating customers, inviting competition from better alternatives, and damaging your brand’s credibility.

Here are some situations where premium pricing strategies make sense:

Brands that develop new products can often charge premium prices because of a lack of direct competition. The novelty factor can also attract early adopters.

For example, Pela creates phone cases and accessories from biodegradable materials. As a pioneer in eco-friendly phone accessories, the company combines protecting phones with environmental responsibility. Its cases cost $65, reflecting the unique materials, its commitment to eco-friendly production, and its product differentiation (most alternatives are plastic or rubber).

Customers are frequently willing to pay more for items they perceive as one-of-a-kind. That might mean one-of-one vintage items, objects with a unique selling point, or differentiated products that lack alternatives. In this case, scarcity justifies a higher price point.

Adored Vintage offers a carefully curated collection of women’s clothing and accessories inspired by vintage aesthetics. It can charge premium pricing because each item is unique and hand-selected. Customers aren’t just paying higher prices for the product, they’re also buying the curation and exclusivity of each vintage hair comb and long floral dress.

📚 Resource: Find New Product Ideas in These 16 Places

Luxury brands are obvious candidates for prestige pricing. Products from these companies—from diamond timepieces to ostrich leather handbags—often use expensive materials, resulting in superior quality. The high price tags reflect the product’s value, brand equity, and perception as a status symbol.

STARK , a family-owned carpet company, has been crafting high-end carpets and rugs since 1938. Its large rugs often retail at more than $7,500. It justifies its luxury pricing by using premium materials like hand-knotted wool and skilled artisans to make the rugs. Stark’s reputation for excellence and its presence in prestigious locations—from royal homes to national landmarks—supports its premium pricing strategy.

Companies can increase demand by restricting supply. Limited production creates scarcity, which can allow for premium pricing. This strategy works well for collectibles, special editions, or exclusive product drops but requires careful balance to avoid frustrating customers or diluting brand value.

Gymshark , a fitness apparel brand, has made a name for itself with trendy and performance-focused clothing. It uses a “drop” strategy, releasing limited-edition collections. This exclusivity and limited-run strategy means it can charge premium prices for basic items like t-shirts, hoodies, and shorts. Similarly, the brand frequently collaborates with content creators for limited-edition collections—for instance, its partnership with fitness influencer Whitney Simmons .

When you introduce proprietary features

Products with unique or patented features can come with a higher price tag. These proprietary elements can solve problems in ways other products can’t, providing a competitive advantage . Brands invest heavily in research and development (R&D) to create these features and premium pricing helps recover these costs while the patent protection or trademark lasts.

The $250 Kulala sleep lamp costs more than other night lights on the market. That’s because the lamp uses its trademarked DreamRed light, which the company claims is “scientifically proven not to suppress melatonin.” It’s also handcrafted from natural maple wood and has silent-touch control features.

Customers often value the ability to personalize items according to their preferences. Offering customization lets brands charge more for their products. This might mean a leather tote with a customer’s initials or a ring inscribed with a secret message or inside joke.

Yeti produces high-end coolers, drinkware, and outdoor gear. For buyers who want a more personal touch, the brand offers customizable tumblers, bottles, travel mugs, water bottles, and pet bowls. You can add your name, horoscope symbols, or custom design. This customization—plus Yeti’s reputation for quality and durability—means the brand can charge customers a premium price. For instance, with customization, a 10-ounce tumbler costs $26.

Pros and cons of premium pricing

Premium pricing can boost your brand image and pad your profits, but it also has potential downsides. Before you hike your prices, weigh these pros and cons:

Pros of premium pricing

• Higher profit margins. Premium pricing creates a larger gap between production costs and the selling price, potentially increasing your profits per item.
• Higher perceived value. Just as low cost suggests low quality, a high price often leads shoppers to assume the product is worth it. For instance, Dior produced a bag for $57 that retailed at $2,780 —a price buyers were willing to pay for the brand name.

Cons of premium pricing

• Smaller customer pool. You might miss out on budget-conscious customers who can’t or won’t pay top dollar.
• High expectations. Customers paying premium prices expect premium quality and customer service ; failing to meet those expectations can irreparably damage those customer relationships.
• Lower-cost competition. If competitors offer products of similar quality at lower prices, your customers might bid your premium-priced offering farewell.

Tips for implementing premium pricing

Conduct competitive pricing research, convey how your product is different, build a buying experience that matches your price point, continuously innovate your product and go-to-market.

Premium pricing only works if you can justify the cost to the price-flexible shoppers your brand covets. Here’s how to demonstrate your worth:

Premium pricing doesn’t mean arbitrarily setting high prices. It’s more nuanced than pricing your silk blend duvet covers at $1,000. Instead, analyze your market and competitors. Compare your pricing strategy with other luxury brands in your space to ensure you’re positioning yourself correctly. There are limits to luxury—doing the legwork helps you understand what’s reasonable and what’s outlandish.

Estimate your potential market size and project revenue across various pricing scenarios. Weigh the trade-offs between a lower price point with a larger customer base and a higher price point with fewer affluent customers. Would it be more profitable to sell 10,000 handbags at $500 each, or 3,000 handbags at $2,000 each?

📚 Learn more: Price Optimization Explained: How To Optimize Pricing

To justify premium pricing, your product needs to stand out. Reinforce that your product is worth it by communicating its key product attributes . It’s not enough to offer features your competitors already provide.

Highlight your unique selling proposition on your website and advertise your differentiators across all customer touch points, like Instagram , television ads, or billboards .

Consider partnering with luxury influencers who can authentically showcase your product’s value to their followers. For example, Fairfax & Favor , a British luxury fashion brand that creates stylish footwear and accessories, partnered with luxury lifestyle YouTuber Lydia Elise Millen to showcase its premium suede boots to a wider audience.

Customers willing to pay premium prices expect more than just a high-quality product; they want an exceptional experience from the beginning to the end of their purchasing journey. Every interaction—from the first ad they encounter to the moment they unbox their purchase—should remind them of your brand’s premium nature.

To deliver on this, consider every touchpoint along the customer journey:

• Craft a clean and simple website. Avoid cluttering your site with pop-ups or constant offers. Keep it elegant.
• Use premium packaging. Use heavy cardstock, high-quality boxes, and tissue paper. Protect any hardware on bags or accessories to prevent damage.
• Provide elevated customer service. For expensive purchases, buyers want human interaction. Skip the AI chatbots and offer phone support or concierge services.

In the absence of innovation, competitors can quickly catch up and undercut you. To maintain your premium position, stay relevant with both your product offerings and marketing approach. Find fresh ways to reach and engage your target market , like limited-edition collections with renowned artists, exclusive product previews for top clients, or invite-only events.

What is premium pricing FAQ

What is the meaning of premium pricing.

Premium pricing means setting your prices higher than the competition, banking on the idea that customers will pay more for perceived quality or exclusivity.

When do you use premium pricing?

You might use premium pricing when you’ve got something special to offer—be it top-notch quality, unique features, or a brand name that carries weight.

What is an example of premium pricing?

Think of a Montblanc Meisterstück fountain pen selling for $675 while a regular ballpoint goes for a few dollars—that’s premium pricing in action.

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