Nearly 80% of businesses conduct market research to gather targeted insights into their performance, customers, industry, and competition.
While market research offers a variety of benefits, it can be challenging to identify what research to conduct, and when to ensure you get accurate and actionable data for your business decisions.
To cut through information overload and discover how market research can help you, we are breaking down the basics of market research, including what it is, what you can learn, potential benefits, and how to get started.
Market research is the process of collecting, analyzing, and interpreting data about your target market, competitors, and industry. Market research spans a wide range of topics, uncovering insights on various elements that can impact a business.
Some common subjects of market research include:
Market research provides in-depth insights, allowing companies to better understand the market, identify customers’ needs and preferences, discover how their brand is perceived in the market, and measure the impact of investments and strategies.
Market research spots untapped opportunities for companies to focus on, including how to improve their brand status, identify new customer bases and markets to sell to, and provide insights to help senior leadership prioritize investment opportunities.
Market research also reveals potential risks that, if ignored, can cause considerable damage. This includes insight into competitors, the impact of major challenges or economic influences (i.e., COVID-19, heightened regulatory concerns), and negative perceptions of the company and its brands.
All types of businesses use market research, Including B2B (77% of companies), B2C (82%), and B2B2C (83%).
While they conduct research at similar rates, the types of questions they ask are driven by the unique challenges each type of business faces. For example, over half of B2B companies conducted a market share analysis last year, while B2C and B2B2C companies’ top project was evaluating customer satisfaction.
Find out how Hanover can help collect and analyze the data you need for better business decisions.
Anything. One of the biggest values of market research is how you can customize your research to gather the insights you need most. Below are some common examples of insights you can learn through market research.
The most popular market research projects can vary slightly over time, often reflecting market, economic, and societal shifts that impact company performance. Last year, with a focus on expanding to new markets and obtaining new customers, leading projects were analyzing customer satisfaction and needs, evaluating the market and identifying current and upcoming market trends, and measuring the strength of their brand equity.
This year, with inflation affecting customers’ buying power and increased production and resource costs, companies have expressed increased interest in price sensitivity research, making it the fifth-most common market research project. Increased uncertainty has also prompted companies to evaluate sales and renewal performance with win loss analysis projects increasing by 19%.
With endless possibilities for insights, it can be hard to figure out where to start. To identify the type of market research you need, examine your top business priorities and determine if they could benefit from new data and insights.
Ask yourself these two questions.
If the answer to either is no, your strategies will benefit from updated research insights.
Need help convincing your executive team to invest in market research?
You can find more stats on the use and impact of market research in our recent study.
Companies usually conduct market research for one of three reasons: In response to a triggering event, to evaluate past performance, or to measure changes over time and quickly respond to declined performance.
There are a variety of triggering events that prompt businesses to conduct research. Some common situations include:
In addition to conducting research to inform upcoming strategies or overcome pressing challenges, companies also conduct market research to evaluate the success of recent strategies or determine the reason for recent declines in performance. Market research allows companies to measure performance and identify areas of improvement. This can include anything from evaluating the performance of recent product launches, assessing the impact of recent sales and marketing strategies, or measuring the impact of recent pricing or service changes.
The final instance of market research is recurring research. Companies conduct recurring research to ensure data is relevant, to evaluate performance over time, and to quickly identify and respond to changes in performance. For example, some companies periodically measure their brand health including brand awareness, perception, and evaluation against their competitors. By consistently assessing their brand health, these companies have updated insights into their presence in the industry, how customers evaluate them, and potential threats from competitors.
How much research you should conduct depends on your unique business needs and strategies. Often, the amount you conduct is determined by the market research triggers we mention above. If you are launching a new product, breaking into a new market or customer base, or have noticed a decline in performance, you should conduct market research to address these needs as they arise.
Most businesses conduct multiple market research projects a year depending on their needs and resources. Over 80% of companies conduct market research frequently, and 79% conduct at least five market research projects a year.
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In addition to successful key initiatives, companies that conduct market research say it provides an ROI of over four times the cost.
The insights market research provides are directly related to businesses’ biggest challenges. In our State of Market Research report, we asked respondents what their company’s biggest challenges were. In addition, we also asked respondents how their companies have benefited from market research findings.
We found that the benefits they attributed to market research directly addressed their biggest reported challenges. Even those who did not report having a specific challenge reported market research insights helped them accomplish their goals.
There are a variety of benefits of market research depending on the specific research you conduct.
Companies that leverage market research insights into their strategies are also able to accomplish their goals at a higher rate than those without market research insights.
Discover how Rheem leveraged customer insights to build its sustainability strategy.
Some common KPIs based on the focus of the research can include:
Market research is successful if the resulting data is accurate, representative, and informative. Accurate data means the data has been cleaned and is a valid response to the study questions. Representative means that the data reflects the target market and is comprehensive. Finally, informative means the data provides insight and is actionable.
See how market research can help you with these key market research stats.
There are four main types of market research.
Data analytics involves collecting and analyzing large sets of existing data to uncover patterns and predict future outcomes. These data sets can include information like customer behavior data or historical sales data that allows companies to analyze their current performance and model potential scenarios and outcomes.
By leveraging existing data, data analytics provides companies with an objective view of the situation, allowing them to identify gaps and discern trends.
Surveys pose a set of questions to a targeted group of people. The survey measures the opinions, preferences, perceptions, and experiences of a desired audience and can collect self-reported demographic and geographic data.
With surveys, companies get an aggregate but statistically valid picture that they can leverage to make decisions. Surveys also offer the ability to segment and further analyze the answers to determine key drivers of behaviors.
Qualitative research focuses on targeted insights around concepts, opinions, and preferences. Unlike quantitative methods, these market research methodologies leverage a smaller set of data and respondents but allow for more in-depth answers.
There are two common types of qualitative primary research: in-depth Interviews and focus groups.
Secondary research, also known as desk research, is leveraging data that already exists to answer questions. It can be used to understand what others in the market are doing, identify potential markets for growth or expansion, or allow companies to compare their organization to others on key performance indicators.
There are five stages to the market research process.
Leverage your findings to inform your strategy and determine your next steps, whether they indicate you should stay the course, pivot to tackle a more pressing challenge, or even conduct new research to further understand your recent findings.
Leveraging both quantitative and qualitative research can provide a more holistic view of a situation. For example, quantitative data analysis offers relevant findings but can sometimes lack context. If it is followed up by qualitative in-depth interviews, companies can gather feedback to understand the factors that lead to the data analysis findings and identify potential solutions or untapped opportunities.
Interviews can help businesses identify customers’ thoughts and opinions and then that feedback can inform a survey that is sent to a wider audience for measurable insights. Companies can also use secondary desktop research to identify market trends and industry benchmarks and combine it with data analysis or surveys to evaluate the company’s performance in the market.
A sample in research refers to a small but representative group of people whose answers are extrapolated to a larger population.
For example, if a company wants to identify their brand awareness, they will survey a sample of people that have similar characteristics to their target audience. The survey’s findings will then provide a general understanding of how well known the brand is and directions on how to improve their brand’s presence in the market.
Start conducting your own research with this step-by-step guide.
There are three main ways companies can get market research insights.
A market research company is a firm that specializes in conducting research. There are a few different types of market research firms based on the services they provide.
Market research companies provide valuable benefits, making them an effective partner for your research needs. In addition to the research they provide, they have added benefits like:
The cost of market research varies based on how you conduct your research. Conducting research in-house vs hiring a research company might be cheaper (but less effective). The type of methodology you use can affect the cost, for example, in-depth interviews can become quite expensive depending on the incentives you offer to participate. Price can also vary depending on the level of service you need, for example some companies will work with you to identify your focus and mythology, conduct the research, and present findings and recommendations while others will only conduct research and deliver the results.
Don’t make the mistake of focusing on costs by itself. Opting for cheaper or quick research can provide you with skewed data that can do more harm than good.
Good research is worth the investment. Over 85% of companies say market research ROI is over four times the investment. The insights and impact market research provides has also led 69% of businesses to increase their investment in market research this year.
Find out how Baltimore Aircoil successfully entered an international market with targeted insights
Market research is instrumental in building effective data-driven strategies. But only if done right. As you begin to plan out your market research and business strategies, keep the following tips in mind.
By implementing these tips, you can enhance the quality and effectiveness of your market research efforts, enabling data-driven decision-making and strategic planning that aligns with your business objectives.
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