What is Market Research?
Market research is using an organized way to gather information about a product’s target customers in the market. It enables product managers to create new products and features based on their customer needs. It also allows product managers to identify competing prices to inform the market’s willingness to pay.
Why you Should do Market Research
Market research can help you:
- Identify potential new customers
- Understand your existing customers
- Set realistic targets for your business
- Develop new, effective strategies
- Solve your biggest business challenges
- Prepare for possible business expansion
- Identify new business opportunities
Market research should not be outsourced since the insight is incredibly important to keep in-house and will develop to grow your company.
Who Should do the Market Research?
Ideally, you should have both researchers and designers on board to conduct a market survey. This is because they can bring in different benefits from two perspectives. Researchers are experienced in designing the research, objective, and able to run in-depth post-research analysis right after. Being familiar with products you have, designers can make research more focused and redesign process faster after the test, resulting in more impactful research findings.
How to do Market Research
PHASE 1: Planning
To make the research process organized, you need a plan. The first step is to decide the data you are looking for to answer the questions about the market need and/or pricing of your product. Then you can form the research hypotheses to set your expectations. The outcomes can be surprising but you will be in a better position to analyze the data and make effective changes.
PHASE 2: Collecting Market Research Data
Before getting into the research approaches, keep in mind it is critical to ask questions in the right way because the rest of the work will rely on it. (To learn more about unbiased data, check How to Conduct Unbiased Market Research for Your Product.) One common mistake is having many hypothetical questions. For example, you may ask if people will hypothetically purchase your product. But believe it or not, their answers might be the complete opposite of what they would actually do. So how do you collect data scientifically? Testing the real-world behaviors of what people actually do, compared to polling a survey of what they ‘would’ do.
Now, let’s see the approaches to conduct the market research.
Two types of data
There are two types of data you can collect in market research for different purposes.
- Quantitative research is all about numbers. You can use it to statistically validate/invalidate your hypothesis, making business predictions. For example, quantitative research is useful for answering questions such as:
- Is there a market for your products and services?
- How much market awareness is there of your product or service?
- How long are visitors staying on your website, and from which page are they exiting?
- Qualitative research is about people and their personal opinions about your business. You can use individual cases to define problems and learn about the customers’ opinions, values and beliefs. Some typical questions a research may ask include:
- Why do you think this product is/isn’t better than competing products?
- How would you characterize this website design? How friendly and easily navigable is it?
- What message do you get from this advertisement associated with the brand?
Two types of market research
There are two types of market research i.e. primary research and secondary research:
- Primary Research: Primary research is the information you need that doesn’t exist. You can use it to analyze current sales, the effectiveness of current practices, and get the information about your competition.
- Ways to collect primary research:
- Interviews (qualitative, by telephone or face-to-face)
- Focus groups (qualitative, direct feedback from a sampling of potential clients or customers)
- Surveys (quantitative, online or by telephone or mail)
- Ways to collect primary research:
Note: Make your questionnaires are either closed-ended or short and easy open-ended questions.
- Questions you can ask:
- What are your interests and hobbies? / How do you usually spend your leisure time?
- What is your typical budget for this type of product or service?
- What features do you look for when you make the purchase?
- Questions you can ask:
- Secondary Research: Secondary research is collecting and reviewing information and data that has already been collected and analyzed by other sources. You can use it to identify competitors, establish benchmarks and identify target segments.
- Sources to collect secondary research:
- Information this can provide:
- Market Analysis: A snapshot of your market size and its growth potential
- Industry Perspectives: Threats & Opportunities
- Customer Profiles: Figuring out your customer segments
- Competitors: How many? Why successful?
- Product Pricing: Help you determine where your prices should fit within the marketplace
PHASE 3: Analyzing & Acting on Your Market Research Data
You can use Excel or Google Sheets (for small amounts of data) or BI tools (for large datasets) to analyze and visualize your data. While some of the BI tools require technical skills, some of them are easy to use. For example, Chartio is designed for everyone in your company to analyze data and share their insights with no SQL knowledge needed. After getting your result, acting on it makes the market research meaningful and complete.
Market research is an important component of business strategy. Designers and researchers shouldn’t be the only ones who care about it. Everyone in your company can observe and benefit from it, and the insights of the market will affect your decisions of the product. Remember to continue to do market research as market trends changes, as tracking the market is critical in setting your product for success.