Market research is an important component of digital marketing. The state of the market can determine if your business venture can survive. Furthermore, it can decide if it’ll survive at all. Additionally, you can learn how to cater to your audience more efficiently if you understand the market you’re trying to break into. In other words, the best thing you can do for yourself and your business is conduct market research. This is as important as setting marketing objectives when creating a strong marketing plan. Is this the first time you’ve heard of market research and you don’t know where to start? This article will explain the benefits of market research and discuss best practices when conducting it.
What Is Market Research?
Market research is the research of a particular market. You’ll conduct market research while defining your target audience. Despite the fairly simple definition, market research is a broad topic. Moreover, it’s an essential step in the planning process. Whether you’re drafting an e-commerce business plan or having aspirations to launch a digital marketing campaign, you need to do market research. You should see market research as the information-gathering portion of the planning process.
Exploratory market research is preliminary research. It’ll help you form a hypothesis and understand if there’s a problem. In other words, you’ll answer questions such as “What’s happening” and “Why is this happening?” This type of research is quantitative and qualitative. Quantitative research is number-based and qualitative research is word-based. Some quantitative research methods are surveys, polls, and questionaries. Some qualitative research methods are reviewing newspapers, academic journals, library files, and magazines. Essentially, exploratory research is the research that gives you necessary background information. For example, if you want to know why your candle sales are down, you can conduct an investigation or look for already recorded data. You discover people aren’t buying candles because there’s an economic recession. You came to this conclusion because of the results of a survey or the findings in an academic journal.
Causal market research is when you test your hypothesis. To put it differently, you’re testing the cause and the effect of your hypothesis. It can be seen as the next step after exploratory market research. Let’s revisit the previous candle example. If your hypothesis is people aren’t buying candles because they can’t afford them, your casual market research could be the result of a BOGO candle sale promotion. If your sales increased because your candles were cheaper than your competitors’, then you proved your hypothesis correct. Alternatively, if your sales are still low or lower than what you’re accustomed to, then you didn’t prove your hypothesis correct.
Descriptive market research is centered around collecting information on a population. In other words, you’re researching who your audience is. You’ll answer questions such as “Who’s my audience?” and “Why are they interested in my product or service?” Furthermore, descriptive market research explores a population or a phenomenon. For the sake of clarity, let’s say we own a graphic t-shirt business. Descriptive market research would look like collecting information on people who would buy our shirts. Additionally, it would consist of other research about a certain demographic (how much they make, their age bracket, economic status, etc.).
There’s more than one way to perform market research. It’s important that you understand each method so you can receive the most accurate and relevant information. Another key point, choosing the correct research method can make the planning process for a business or campaign easier.
Surveys are the fastest, easiest, and most accessible research method. Additionally, they’re inexpensive. You can perform a survey online and reach a large and diverse audience. Surveys are examples of qualitative data and quantitative data. You can collect a wide array of information with a survey. Furthermore, surveys can differ in length and subject matter. Surveys are great for gathering large amounts of information quickly. Moreover, surveys aren’t limited to multiple-choice or one-word answers. You can gather explicit information. Although, it should be noted that people are less likely to participate in the survey if it’s long.
Interviews are a great way to get a direct response from your audience. You should use it whenever you want specific answers. An interview is a great way to learn more about your target audience and their experiences. Some drawbacks include expense and time. Conducting an interview can become expensive depending on how many you do. Interviews are also time-consuming. With this in mind, interviews are a worthwhile investment because you can receive higher-quality information. However, it’s not always possible or plausible depending on your situation.
A focus group is a targeted group interview. If you already know who your target audience is and want answers to specific questions, a focus group will be the best choice. A moderator will lead the conversation and collect data based on the focus group’s response. Similar to an interview, the formation of a focus group can be expensive. There could be a bias within the group. This can occur when the most dominant personality sways the group’s opinion.
Observation is the best way to collect accurate data. You’re watching a customer interact with your product or a competitor’s product. Observation gives you the opportunity to watch someone’s candid reaction. However, there won’t be anyone directing a conversation. So, depending on the person, you might not get much feedback. Observation is expensive and time-consuming.
Why You Should Use Market Research
Market research is a great way to understand your target audience. Market research is to marketing as visitor tracking is to web analytics. If you know who your audience is, what they want, and how they react to your products, you can better serve them. This insight can make the difference between a successful product launch and a failed one.
Market research can give you a competitive edge. In order to rise above your competitors, you need to take an assertive approach. With market research, you can know your audience better than your competitors know theirs. Moreover, you can become familiar with your competitors’ audience. Henceforth, you can serve your customers and steal your competitor’s customers as well. Effectively, this will expand your audience which will lead to more success.
Improves User Experience
Market research allows you to better understand your audience. If you know what your customers want, you can give them a better experience. Moreover, if your customers are pleased, they’re less likely to be swayed elsewhere. You should see market research as a glimpse into your audience’s minds. For example, let’s say we sell mugs through our e-commerce store. We conduct a survey asking our customers what type of products they’re into. If the vast majority say they like the idea of a personalized mug set, they’re more likely to purchase our mug set. Alternatively, if our audience says our mugs are too expensive, they’re more likely to buy some of our items if we have a sales promotion.
Market research can operate as a safety net. You can ask or find out what your audience wants or what they’re thinking. That being said, it isn’t definitive. You’re still playing a guessing game; however, you’re no longer throwing darts in a dark and hoping something sticks. It’s a guide that can lead you in the right direction. You can get a head start on trends!
Listening to your audience is a great way to inspire creativity. It’s impossible to predict what your customers want or how they’ll use it. Your customers can even inspire the next great invention! Market research examines your audience, but it also tells you what your audience wants to see and what they don’t like. In other words, you can use market research as a critique. As a result, you can invest more time and money into products that your audience will enjoy. If your customers enjoy your products, your business will be more successful.
Market research is cheaper than taking a risk and experiencing failure. It can be expensive if you decide to conduct interviews or create a focus group. However, you’ll end up spending more money creating a product and promoting it if you don’t get a return on the investment. Let’s make a crude comparison. You spend $10,000 preparing for a product launch and it fails. You’re now out of $10,000. Alternatively, you can spend $10,000 on focus groups and interviews, spend another $10,000 to create a product, and make $30,000. Of course, your experience with market research won’t have to be this extreme; however, it is a worthwhile investment nonetheless.
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- What is market research?
- Why should I do market research?
- What is the best way to do market research?
- Why is market research important?
- How can I do market research?