Market research: Definition, importance, and how to get started
Market research is a data-first strategy that produces insight into consumers, sentiments, and wider markets. Learn how to conduct effective market research step-by-step.
Market research is a data-first strategy that produces insight into consumers, sentiments, and wider markets. Learn how to conduct effective market research step-by-step.
What is market research?
Market research is the process of collecting information and insights on a company's market, its competitors and its customers. Organizations typically conduct market research to inform product development and go-to-market strategy and ultimately drive business growth.
It helps answer questions like:
- How large is the market opportunity for my product/service?
- How does my brand stack up against the competition?
- Which demographics are most likely to buy my product or service?
- Which advertising campaign will resonate best with my target market?
This information provides a clear pathway toward satisfying customer demands, enhancing profits, and launching products.
Related reading: What is marketing research and how you can use it to win?
Why is market research important? 5 business benefits
Market research provides the necessary data-backed evidence to help your business make decisions with confidence. Instead of building a company based on gut decisions alone, market research gives you direct insight into what your audience wants to see.
Here’s why market research is so important:
- It helps you understand your competitors. You can investigate your competitor’s success metrics, strategy gaps, and trends with market research. Using this information, your company can craft high-impact campaigns to differentiate from your competitors, improve interactions, and win potential customers.
- Create better products and services. Market research enables a business to collect data on its customer base, including insights into what they value about its products and services. Using data collected from customer satisfaction surveys, you can iterate upon feedback to further enhance your products, services, and customer satisfaction.
- Understand customer preferences and trends. This helps businesses create more effective marketing campaigns and innovate in the right direction.
- Refine your marketing strategies. Designing a marketing strategy and product takes time and money. Market research can help you validate your ideas, confirming you can proceed or ringin the alarm bell.
- It builds credibility. Whether you’re trying to create persuasive marketing collateral, become a thought leader in your industry, or impress your C-Suite, market research arms you with the facts to back up your arguments and claims.
Types of market research
There are several different types of market research. We’ll walk through the most common ones, the pros and cons, and how they’re used.
We’ll discuss the differences between:
- Primary research vs. secondary research
- Quantitative research vs. qualitative research
- DIY market research vs. full-service market research
Related reading: Market research defined: Types and examples
Primary research vs. secondary research
Fundamentally, market research can be broken down into two major categories: primary research and secondary research.
| Primary research | Secondary research | |
| Definition | Primary market research occurs when you collect original data that answers a specific research question. | Secondary market research occurs when you analyze existing data that others have published to answer your question. |
| Use case | Primary research is useful when a business is unlikely to find public data on the research question it has. This is especially the case when a business is investigating its own products and services. | Businesses find secondary research useful when it aims to conduct high-level research on a topic that has already undergone investigation. Wider research questions typically already have published answers. |
| Example | A company wants to know how visually appealing their new product is. They send out a marketing survey to capture this information. | A business wants to know what's the typical audience demographic that engages with content in the personal finance industry. They look for data on the topic already published by personal finance institutions. |
| Advantages | • Directly answers your research question. • You can control the methodology and approach. • You can ask follow-up questions to expand upon your investigation. | • Instantly access data. • Often free to access. • Can provide instant context before you conduct your own research. |
| Disadvantages | • Time-consuming to conduct. • Limited access to samples may lead to bias. • Human error may impact your results. | • Data may be out of date. • Your business doesn’t control the research, meaning there could be bias or error. • You might not have direct access to the data. |
Related reading: Types and examples of primary research
Quantitative research vs. qualitative research
Quantitative research and quantitative research are two sides of the same coin. The first might uncover a figure, like the total percentage of satisfied employees in your organization, while the latter may uncover the ‘why’ behind that figure.
| Quantitative research | Qualitative research | |
| Definition | Quantitative research is market research that uses numerical data, often relying on statistical analysis to provide numerical results. | Qualitative research is market research that focuses on understanding the motivations, feelings, ideas, and options behind information. |
| Use case | Quantitative research is helpful for identifying patterns or numerical evidence. | Qualitative research is useful when you want to understand the reasons behind a statistic, expanding research to comments, ideas, and anecdotes. |
| Example | A business wants to understand its employee loyalty rates. It uses an eNPS survey to calculate the total percentage of loyal employees in the company. | A business wants to understand their low eNPS score. The company uses surveys to ask employees questions about their levels of satisfaction, problems in the workplace, and suggestions to enhance the employee experience. |
| Advantages | • Provides objective data for analysis and comparison. • Businesses can explore data sets on a granular level. • Provides a clear picture of the relationship between statistics. | • Uncovers the rich information behind the numerical data. • Provides context to quantitative data. • Can help understand the cause of some statistics. |
| Disadvantages | • Some things are hard to quantify. • Numbers can be misrepresented. • Misleading questions can lead to misleading results. | • It is subjective, making it hard to analyze. • Differing interpretations of sentiment can make qualitative data hard to work with. • Storing and conducting analysis on qualitative data is challenging. |
Researchers can conduct quantitative and qualitative research individually or in combination to gain broader and deeper insights.
Further reading: 4 types of quantitative research and when to use them
DIY market research vs. full-service market research
Another important factor that sets forms of research apart is who conducts it.
| DIY market research | Full-service market research | |
| Definition | DIY market research is where a business conducts research by itself, making use of its own resources to conduct research. | Full-service market research is where a business contracts an external professional research group to conduct the research and present it to them. |
| Use case | DIY market research is useful for businesses that have a limited budget. | Full-service market research is useful when businesses need a high-quality standard of research, often analyzing complex data. |
| Example | A business leverages its email list to send out a survey over email to gather insight into its customers. | A business conducts a detailed phone survey across the United States, gathering 10,000s of call records and using them to test responses to a new product design. |
| Advantages | • Low-cost. • Complete control over the questions you send out. • Get results faster. | • High quality standard. • Offers a high degree of accuracy, unbiased data collection, and comprehensive detail. • Access to advanced research suites, tools, and wide populations to survey. |
| Disadvantages | • Can be time-consuming. • Limited access to sources. • Lack of internal expertise can impact the results. | • Can be expensive. • You have less insight into the actual research process. • Can take months to complete a project. |
How to conduct market research: Step-by-step guide
Market research requires foresight and some advanced planning. Mapping the research will equip you to successfully launch an initiative, gather insights, and convert data into actionable steps for your organization.
Here are the steps you should follow when conducting market research.
Step 1: Set research objectives
Starting a market research project from scratch can feel intimidating. To focus your research, you should lay out the business question and research goals you’re looking to achieve.
The business question is a short summary of the problem you’re solving and the context of how it fits into your business. Business questions are high-level goals or challenges that tie directly to business objectives that can help you make informed decisions.
A business question might involve:
- Knowledge gaps: Things you don’t know about your industry, competitors, or buyer persona.
- Business phenomena: Trends you’re seeing in the business (e.g.: dips in sales or increases in churn) that need explaining.
- Predictions: You might just be looking to be one step ahead of your competitors.
The research goal is an outline of the specific facts or metrics you hope to learn with your research. In other words, your research goals are what helps you answer your business question, you can map research goals to that question.
Writing strong, relevant research goals is important because they will translate to specific survey questions later on.
Examples of research goals and business questions in market research
To outline how to set effective research objectives, here are some hypothetical business questions and research goals.
| Business question | Research goal |
| Consumer behavior: We’re considering investing in a couple of video streaming services companies, and we need to understand the existing landscape and perceptions so we invest wisely. | • Learn what tech brands and apps are most popular among millennials. • Gather proof points around the quantity/satisfaction of apps used. • Understand millennials’ usage and attitudes towards streaming services. |
| Ad testing: We’re close to going to market with our new dog food, and our designers have come up with several great designs for print ads. How do we choose which design to go with? | • Compare consumer appeal and preference for each ad design. • Identify which design consumers would be willing to pay more for. • Assess any differences by consumer demographics. |
| Brand tracking: We’re an established brand in the sparkling water category, but a lot of new brands have launched in the last year. What does that mean for us? | • Measure brand awareness for all major brands in the category. • Assess each brand’s perception and associations. • Understand brand adoption for our brand and the new entrants. |
Once you’ve established a business question and research goal, you should document them in a research brief.
A well-written research brief will tell anyone who’s interested exactly what you’re studying (and what you will not be) to make sure everyone is on the same page.
Step 2: Identify your target audience
When you’re conducting market research, your ultimate goal is to understand the behaviors and perceptions of the target population you’re interested in.
Identifying your target audience before conducting market research ensures you gather relevant, accurate data, tailor your approach, optimize resources, and develop effective strategies.
Here are some characteristics that you could use to define your target audience:
- Demographics: Location, age, gender, education, household income, race, marital status, parental status.
- Employment and firmographics: Employment status, job function, job level, industry, company size.
- Shopping habits: Stores shopped recently, online shopping frequency, restaurants visited recently, likelihood to make a purchase in the next 12 months.
- Behavioral attributes: Mobile device/app usage, pet ownership, exercise frequency, dietary restrictions, hobbies.
Knowing who you need to target with your market research and how you plan to do it will have implications for how you resource your project.
Try to answer the following questions before getting started:
- Who am I conducting market research on?
- How many people do I need to gather data on?
- Do I already have access to those people?
- Will I be able to get responses from the people I have access to fast enough?
- How will I send my chosen research method to these people?
With market research, there are times when you want to target a broad audience and times when you want to target a narrower group of people.
Related reading: 5 types of market segmentation and how to use them
How to reach your target audience
The method you use to reach the people you need to gather data from depends on who you want to contact. You have two options: reach out to your existing contacts or target a specific group of people.
When you reach out to existing contacts you'll be speaking to your employees, website visitors or social media audience. These are the people you already have access to.
In most cases, you can contact them:
- Via email.
- By posting on social media.
- Embeding a survey on your website.
- Adding a web link or QR code on a receipt or piece of marketing collateral.
You'll want to reach out to a specific group of people when you have a target market in mind that you may not directly have access to.
For example, let's say you have a product that’s specifically for small dogs. Pet owners are a subset of the adult population, dog owners are a subset of pet owners, and small dog owners are a subset of all dog owners.
There are two ways of targeting a narrow population: choosing from pre-profiled audiences or using screening questions.
With SurveyMonkey Audience you can target pre-profiled audiences across 335 million people with advanced targeting options. You can select your audience based on:
- Demographics: Age, gender, household income, etc.
- Firmographics: Industry, job title, job level, etc.
- Behavioral attributes: Devices used, apps downloaded, etc.
- Shopping habits: primary grocery shoppers, stores shopped at, etc.
Check out the targeting options we have available for your next market research project.
You can use your own screening questions when the available targeting options don’t get you the exact target audience you’re looking for.
You can use both methods together. For example, you could use targeting options to specify dog owners and then use a screening question to weed out large dog owners.
Step 3: Choose your research method
There will likely be one or two methods that align with your project goals, or you can focus on several research methods at once.
1. Surveys
The main advantage of using market research surveys is that they are one of the fastest ways of gathering data. Businesses can send out an email with a link to complete the survey to its customers, rapidly reaching a large pool of responses.
However, businesses should be aware of the potential for survey bias when creating a survey. Be sure to follow best practice when writing survey questions to avoid leading your audience to certain answers.
Sending out a set of closed-ended questions helps enable statistical analysis of the responses. Adding open-ended questions allows surveys to cover all the bases you need when launching market research.
Get started with market research surveys on SurveyMonkey for fast, customizable, and expertly crafted surveys.
2. Focus groups
Focus groups bring together a small and carefully selected group of individuals who share similar characteristics.
Focus groups are best to gather in-depth opinions, reviews, comments, and ideas related to your business. You could dig deeper into customer motivations or identify important information to help you solve your research question.
However, focus groups are often not statistically representative and may not capture your target market’s diversity.
Related reading: Focus groups and surveys for customer and market research
4. Interviews
Market research interviews are one-to-one conversations with customers to gather in-depth qualitative information related to your research. They differ from focus groups in your level of control over the specific points that the interview follows. As the interviewer, you can ask follow-up questions to deepen your understanding.
Interviews are best when you need to gather hyper-specific qualitative data. Especially if someone is unlikely to share their feelings in a group, an interview is a great research method to use.
Their main downside is that they can be incredibly time-consuming.
5. Public data
Using public data for market research is another effective way of rapidly gathering data.
Public data is a cost-effective and accessible source of data for your market research. When taken from government sources or notable companies, the data is normally well structured, free from bias, and accurate. However, you don’t have any influence on its structure.
6. Competitor analysis
Another market research method you can use is competitor analysis. You can gather detailed information on a competitor’s services, active marketing campaigns, current pricing models, brand image, and target audience.
It allows you to gather insights into similar companies within your industry and could help you find ways to differentiate your own.
However, data can be very limited. Competitor analysis tools can be inaccurate and gathering the data is time-consuming.
Related reading: How to conduct a competitive analysis with surveys
Step 4: Analyze the data
After you've gathered the data, it's time to analyze it.
Prepare your data
Before you start diving into your results, ensure that you’re working with a complete, clean dataset:
- Wait for all the results to come in before you start analysing. Be mindful of your audience's timezone.
- Remove responses that are low quality or spam.
- Conduct one final check to ensure your sample represents your target population.
Interpret your findings
When you get your market research results, you’ll likely be looking at aggregated answers for the entire sample you collected. Looking at how individual segments of your population respond to your market research is one way to uncover insights that could be critical to your analysis.
Here are a few segments of your sample you could look into:
- Demographic segments: Gender, age groups, etc.
- Geographic segments: Countries, regions, states, etc.
- Behavioral segments: Frequent category purchasers, discount buyers, etc.
Once you know what segments could be interesting to dive into, there are two ways to approach segmenting your results for deeper insights:
- Filter your results: Filtering your data allows you to understand how a specific segment of a broader population responded to your researchsurveys.
- Make comparisons: The benefits of looking at individual segments within your results multiply when you compare them to other segments or to your data as a whole.
Analyzing data trends over time
Collecting data over time can be immensely useful to a business. There are a few things to consider when analyzing data trends over time:
- Understand statistical significance: It’s natural to see differences in results across waves in a tracker and draw immediate conclusions, but it’s critical to understand whether those differences are statistically significant before making strategic decisions.
- Consistency: Keep the targeting criteria, balancing and other sample specifications the same each time.
- Time-Splits: If you’re working with an always-on survey, you’ll want to make sure you split up your time periods consistently, i.e. months, quarters, years.
Step 5: Present your findings
Finding a clear, logical story within your data is the single best way of making an impression and catching the attention of your stakeholders.
Here are seven things to keep in mind as you craft your data story:
1. Set up your story
By now, you’ve become familiar with your research. But, not everyone you’ll present it to will be.
Storytelling frameworks can help you come up with an outline for your presentation. One framework you can follow is SCQA: Situation, Complication, Question & Answer.
- Situation: Where the business is today, what the knowns are, and any other relevant context.
- Complication: The business problem that needs solving - why you set out to do market research.
- Question: What specific questions need answering with your research, and what is your approach to answering them?
- Answer: The main insights coming out of your market research that answer your businessquestions, and how they point to action to solve your complication.
2. Layer in business context
When presenting your research, use business context to explain why the research was needed. If you're following the SCQA example, this is the "complication" part of the story.
Demonstrate why your research matters, why stakeholders should care, and how the findings can help the business.
3. Choose some powerful statistics
Choose your most impactful statistic and use it to capture your audience's attention.
If the data that supports your story isn’t a captivating statistic, try reframing it. Instead of “10% of Americans would feel safe as a passenger in a self-driving car”, try “90% of Americans would not feel safe.”
4. Focus on the “why”
The objective numbers will tell you what happened, but when you collect consumers' voices and opinions using market research, you can uncover the “why.”
Step back and see if your presentation answers both the “what” and “how”, as well as the “why.”
5. Keep it simple
You’ve done a lot of digging into your data, and while a lot of the findings may be interesting, they might not all be relevant to your story. Only include the results that contribute to or add color to your story and recommendations. Everything else can be distributed in an appendix.
6. Choose the right visualization technique
SurveyMonkey research suggests that 42% of people found data visualized with charts, graphs, or infographics more enjoyable than data in a sentence or presented in a table.
Here are the most common chart types and when to use them:
7. Make it human
At the end of the day, the goal of market research is to explain human perceptions and behaviors. The more you can bring real examples into your story, the more tangible the results will be to your audience.
One way to do this is to pepper in quotes from your open-ended responses. You can also mix qualitative information (e.g., interviews, customer support cases, etc.) with your quantitative results. This strategy will bring your data to life and make your points that much more compelling.
Step 6: Inspire action
The following two strategies work well when aiming to inspire stakeholders into action:
- Go on a research roadshow: Conduct a series of meetings with all major stakeholders to present your findings and recommendations.
- Create a follow-up plan: Hold your stakeholders accountable with follow up meetings and detailed project plans.
To win your stakeholders, you have to make your recommendations realistic and aligned to the overall business strategy.
- Focused: Start by referring back to your research brief. Ensure that your recommendations stem from the initial business question and are backed by your insights.
- Specific: Ensure that your recommendations clearly outline specific actions to take.
- Attainable: Communicate that your plan is feasible by outlining what it would take to accomplish your recommendations, including budget or headcount.
- Measurable: Tie your recommendations to quantifiable business outcomes, or forecast the business impact of implementing your recommendations.
Conduct effective market research with SurveyMonkey
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SurveyMonkey offers extensive support and fully managed market research solutions. Whether you’re sending market research surveys or accessing SurveyMonkey Audience, our global survey panel, we have a solution for you.
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