What is Market Research?

Market research regards learning about your customers. Specifically, market research is identifying the needs and wants of your target customer, scope business operations to meet those needs, the manner in which to reach the customer with your offering, and broadening your product or service to include other prospective customers.  

Business owners and entrepreneurs acquire information through marketing research that helps identify and define marketing opportunities and problems; generate, refine and evaluate marketing actions; monitor marketing performance; and improve the understanding of marketing as a process.  

Quantitative and Qualitative Primary Market Research

Primary research is split into two categories: quantitative and qualitative. Quantitative research provides hard numbers to some of the questions above. For example, it should give you a baseline of the number of potential customers in a given product market, the number of potential markets, etc.   Qualitative Research deals less with hard numbers and addresses more of the preferences among identified customer segments. This research method relies greatly on soft data, such as conversations and customer opinions.

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What is the Marketing Research Process

The marketing research process generally proceeds as follows:

• Define the Problem
• Assess Informational Needs
• Collect Data
• Analyze the Data
• Make Recommendations

Why Is Market Research Valuable?

Marketing research can help small businesses determine the following:

• What are the demographics of your potential customer base? (Age, race, ethnicity, community or belief association, socio-economic status, etc.)
• Where is your potential customer base located?
• How may people within a given area meet those demographics?
• What is the level of urgency (level of need or want) for the product among the potential customers?
• To what extent will your product or service meet that specific customer demand?
• Are there other businesses already serving these customers?
• How well do these competitors meet the customers level of demand?
• Does any competitor have a competitive advantage over other businesses in meeting the customer demand?
• Do you have a competitive advantage in meeting the customer demand? That cannot be replicated? That cannot be outdone?

The above questions are just examples of the type of information you will want to understand in evaluating the value proposition or potential of a product, service, or idea to be a profitable entrepreneurial venture.  

Two Basic Types of Market Research

The two basic types of marketing research are Primary and Secondary Research. Secondary Research involves using data or information from third parties to make an assessment about the characteristics of the market. Primary research involves assembling information and resources oneself to determine the market characteristics.  

How Market Research Is Conducted There are different ways in which a business can carry out market research. This includes:

• Customer surveys: This includes conducting research by meeting with customers face-to-face and do the interview online or through phone calls. Business usually provides a short simple questionnaire about a product or service which customers are supposed to respond to.
• Web-savvy businesses: They use their online channels to conduct market research. The most common online channel is websites and social media where customers are encouraged to give feedback about their products and services. A simple and short questionnaire is provided on the website for customers to respond. To ensure the effectiveness of using online research, it needs to be mobile-friendly (usable on mobile devices). Social media may include Facebook, Twitter, LinkedIn, and so on.
• Products Trials: This is where a company decides to provide a few samples of their new products to customers in real settings. Then from customers feedback, you are able to gauge the effectiveness of the products. Based on the results, you can either change or improve on the product or service to increase value to customers.
•  Focus groups: This is where group sessions are organized and people are mobilized so that they can participate in question and answer or a topic on specific service or product. However, the focus group method may be expensive, especially for businesses that are just starting over (small businesses). 
• Direct Observation: This method involves recording video on customer behavior or purchase patterns or directly watching customers. It is important to note that privacy requires that you conduct in a public setting if not, the person being recorded need to be informed about the recording. Although it gives you the exact customers behavior, it is, on the other hand, consumes a lot of time.