What is Market Research? Definition and Types (2024)

Market research is a systematic process of obtaining, analysing, and interpreting data for actionable decision-making. Conducting good market research is the only way to survive in a competitive market. It provides companies with an overview of emerging market trends, consumer behaviour, and market condition.

In this article, you’ll learn:

• What is market research?
• Why is market research important?
• What are the popular types of market research?
• What is a market research process?
• What are the methods of market research?

Market research is the process of collecting vital information about a company’s target audience, market, and competition.
Through market research, companies can understand their target audience better. They can make better products, improve user experience, and design a marketing strategy that attracts quality leads.

Here are some reasons for conducting market research:

• Determine the feasibility of a new business or product
• Identify potential new markets
• Keep an eye on marketing trends
• Test the demand for new products

Key takeaways:

• Market research determines if there is demand for the product or service you are offering
• A combination of primary and secondary sources is used to conduct market research
• Digital marketers mostly conduct market research. However, sometimes third-party firms also provide support and assistance required to complete market research

Why is market research important?

1. Provides a direction

Data derived from market research helps brands understand what the consumers want, what will work in the market, and how competitors reinvent themselves to stay relevant.
This information helps companies to prioritise customers’ requirements. It (data collected from market research) also directs businesses to focus on customers’ short-term and long-term needs, leading to improved customer satisfaction.

2. Enhances brand image and position in the market

Audiences tend to develop a special bond with companies that provide them with a positive buying experience and consistent excitement by providing products or services that match their preferences.
With market research, companies can determine the likes and dislikes of their target customers and provide a product that matches their requirements. This can help in increasing customer loyalty and satisfaction, leading to a positive brand image and position in the market.

3. Mitigates risk

Market research provides information about emerging market trends, competitors’ strategies, and evolving customer requirements, preparing companies to adjust to market changes. Companies can make long-term market predictions based on the data collected, which helps them mitigate operational risks.

4. Increases decision-making abilities

Data about customers, their requirements, and their expectations can be identified through market research. This data drives leaders to make data-driven decisions. It helps in finding answers to questions like-

• What product will work?
• Which type of digital marketing strategy will suit the product?
• How to sell the product better?
• Which market will be suitable for the product?
• Who will be the target audience for the product?

Primary research

Primary research is referred to as the process of directly collecting information about customers, markets, and competitors.

Secondary research

Secondary research uses previously collected, analysed, and published data to draw conclusions or make observations about a situation.
Most information that is freely available is used to solve the research problem.

Quantitative research

Quantitative research is the collection of primary and secondary data that is numerical in nature. It can be measured easily.
Polls, surveys, desk research, web statistics, and financial records are common ways of collecting quantitative data.

Qualitative research

Qualitative research is the collection of data that is non-numerical and hard to measure. Researchers use qualitative research data to add more value and depth to the data. This market research is used to summarise and infer rather than pinpoint.
These are the common types of market research. Meanwhile, companies occasionally use branding, customer, competitor, and product research.

What is a market research process?

A market research process collects insights from the target audience about a product or service. It is a step-by-step process that determines customer perception of your product. Below, we closely look at the steps of the market research process.

Step 1: Define the problem

Step 2: Develop a market research plan

Step 3: Data collection

Step 4: Analyse the collected data

Step 5: Present the data

Step 6: Take action

There are two methods of market research- primary market research and secondary market research. Below, we have mentioned in detail these types of market research.

Primary market research

Primary market research is conducted in-house by the company’s executives. It is the process where companies get in touch with the customers directly to determine their needs and wants.

Here is some of the primary market research method:

• Focus group
• Interviews
• Observation-based research
• Buyer persona research
• Market segmentation research
• Secondary market research

Secondary market research

This research is conducted by third-party. It can also include data available for free on different platforms, outsourcing research, and more.

Here are secondary market research methods:

• Company websites
• Industry Statistics
• White papers
• Government agency data

Conclusion

Market research is necessary for survival in a competitive marketplace. With technological advancements, marketers must have deep knowledge and understanding of emerging digital tools and their effects on consumers’ buying patterns.

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