Market Research: Understanding Your Industry

Market research is the only way to really know what your customers want. As a business owner, it’s essential to learn about your industry, your customers, and your competition. Sure you can speculate, but you have to do the research to know for sure if you’re providing exactly what your customers want and need. In this comprehensive guide, you will be introduced to the various components of market research and how it can positively impact your business.

What is Market Research?

Market research is a set of techniques utilized in order to obtain information and better understand the market of an industry in which a company specializes. By obtaining and learning this information, your business will be able to determine which products to offer customers, improve the experience that your customers have, and create a well-designed strategy that will attract leads and convert those leads into sales.

Why is Market Research Important?

Market research is the core component to truly understanding your customers. You must understand who they are, what types of things they need, the problems that they face, and how you can provide real solutions. Analyzation is fundamental to providing you with the “what”, but the research that you conduct will provide you with the “why”.

Research allows you to develop a sense of empathy for your customers. It opens up the “caring” aspect behind the services and/or goods that you provide.

Numbers, statistics, and trends only go so far – research fills the necessary void that will allow you to give people what they need and when they need it.

How is Market Research Useful to Your Business?

Market research allows you to assess many different aspects of your products and/or services, your customers, and the industry that you are involved. The following outlines some of the advantages associated with market research:

1. Market research allows you to gauge the general viability associated with your products and/or services and the business that you operate.
2. It allows you to determine if you will be able to serve particular locations, certain types of people, and what markets your business is best suited.
3. Market research allows you to explore your industry in a comprehensive manner and all associated influences from an economic standpoint.
4. If you are starting a new business or considering expanding your current business, the research that you conduct can help you determine if you will achieve the success that you desire with the endeavor/s.
5. Market research is the core component of creating a solid and productive marketing plan for your business.
6. Finally, the marketing research that you conduct will allow you to measure the overall success of the initial marketing plan that you created for your business.

What are the 4 Main Types of Market Research?

As you research the act of marketing research, you will discover that there are many different methods for conducting your research. The good news is that you do not have to choose just one method. You may actually pull from many strategies that have proven successful for business owners just like you. The method that you select should take into consideration the type of business that you own and operate, your goals as a business owner, and the types of products and/or services that you offer. The following outlines the 4 main types of marketing research with a brief explanation of each:

1. Surveys – Out of all of the types of marketing research that are currently available, surveys are considered to be the most popular among business owners. This method simply provides a series of short questions that respondents answer. The questions may be opened or closed. You may set up surveys as a screened questionnaire or you may send the survey through a text message or an email. These are easy for customers to complete and they are inexpensive. Today, the market offers many survey products and associated software programs that quickly analyze the qualitive data provided.
2. Focus Groups – In doing market research, you will eventually come to a point where you have groups of people who actually fit your target market. You may then take these groups and get them together to have a discussion about the products and/or services that you offer, their personal experiences with said items, and/or to provide some type of marketing message in order to delve deeper with insights.
3. Interviews – The next type of market research is the one-on-one conversation that you have with a member or members of a particular targeted group that includes individuals that match your target audience profile. You may do this in person, on the phone, or even through video conferencing. It is often best to offer all options to customers and allow them to select that which they are most comfortable. The higher the comfort level, the more likely that the customer is likely to participate. By taking the time to speak directly to a customer, you will get a deeper level of insight and possibly be provided with information that you have not previously considered.
4. Observation – In this type of market research, you will provide a customer with your product and/or service. They must be encouraged to interact with the item of interest. While doing so, you will need to take notes and be highly observant to their reactions, issues, satisfaction, and dissatisfaction. This allows a customer to use your product and/or service without being influenced by others and in a natural setting. Remember, though, you will still need to understand what they are thinking. It may be best to collaborate this form of marketing research with other types of marketing research – such as an interview, questionnaire or a survey.

How to Do Market Research

When conducting market research, it is imperative that you successfully understand who the users are that will use your products and/or services and that you know what they want from your business. The following offers 4 simple steps that will allow your business to achieve success in each of these endeavors:

1. Create a Persona – The first step to conducting market research in a successful manner is to create a very simple persona of your targeted customer. This is made possible by obtaining psychographic and general demographic-based information of those that utilize similar goods and services to that which your business provides. You may use a combination of both interviews and surveys to obtain the information that you need to create a personalized “character”.
2. Observe – The next component to successfully conducting marketing research is to watch a person use your product and/or service. You may watch them in an overt (they know) manner or in a covert (they don’t know) manner. Or, you may choose to do both. The choice is yours! You should take comprehensive notes. You need to know the “what”, “when”, “why”, and the “whom” for all of the interactions that you conduct. Remember, fully explain the process and avoid recording the session. Once the observational study is complete, you should follow it up with an interview so that you may learn more.
3. Interviews – You may meet with a person from your target market and then conduct an in-depth interview with them. Inquire like a journalist and avoid the urge to encourage a sale. Inquire about the person’s life, their needs, and how products and services like those that you offer will assist them. Be sure to avoid asking questions that lead them into a purchase and require them to determine how they would act in the future.
4. Data Analyzation – Marketing research is to obtain action-based insights in a quick manner. There are many ways to obtain the information that you are seeking. Examples include flow charts, affinity diagrams, journey maps associated with your customer or customers, and specially-designed software programs such as those that analyze and cluster information received from survey respondents.

What are the Best Questions to Ask Customers?

When conducting market research, you should have an outline of questions that will allow you to obtain the most information possible for your target audience. The following questions will help you successfully pull information that will give you the most insight into the minds of those in your target audience that you are researching for your business:

1. Who are you?
2. What do you do?
3. What do you enjoy?
4. What is your average day like?
5. Have you ever purchased (product and/or service)?
6. If so, what were you trying to solve or what goal did you hope to achieve?
7. Did the (product/service) help you?
8. What types of problems do you encounter that you are in search of a solution for?
9. Do you consult anyone before making purchases?
10. Is there any other information that you would like to share with me?

Do I Need a Research Objective?

Yes, when you conduct marketing research, you do need a research objective. You should define this prior to initiating your research.

First, determine what it is that you want the research to discover. Next, outline all that you know about the customers and the industry that you are part of with your business. This objective will help you stay focused when pulling information.

What Should Be Considered When Creating Questions for Research?

When conducting research marketing for your business, you must develop research questions. These must include your market, the customers that you serve, and those businesses with which you are in competition. You will not get all of the answers from these individuals. Some, you will have to answer yourself after gathering information. The following outlines an example of a question for each group:

1. Marketing Question – “What are the main demographics for the products and/or services that you offer?”
2. Customer Question – “What is a target profile of a customer that would use the products and/or services that your business offers?”
3. Competitor Question – “What are the strengths and weaknesses of your main competitor?”

How to Interpret Findings

The goal behind interpreting findings is to organize results and then decipher the information that your business needs from those findings. In short, this is the information that you have discovered.

You should focus on identifying any common trends among your information. You may use lists, mind maps, and similar tools to successfully organize your information.

Next, take that information and determine how the products and/or services that you offer fill a need. Organization is the key to successfully analyzing the data that you uncover during your marketing research endeavors.

What’s the Difference Between Quantitative and Qualitative Research?

Quantitative research involves questions that have a numeric value for an answer. An example of such is determining a customer’s satisfaction, based on a 1 to 5 scale. Qualitative research involves questions that do not require a number for an answer. An example is asking what a customer liked most about the service that they experienced. To conduct comprehensive marketing research, you should make sure that you include both quantitative and qualitative questions in the research.

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