Knowing your customer is a fundamental precept in marketing. Market research helps you to analyse your target market and customer behaviour. This enables you to gain insights into the factors that motivate customers and influence their buying behaviour.
When market research is appropriately executed, it helps control marketing costs as marketing campaigns are targeted to focus on the areas that directly affect the customer. Market research focuses on what factors about your product attract the customer. What factors about the competitor’s products outperform your products? Marketing itself has undergone tremendous change after the COVID-19 epidemic with the introduction of digital marketing. Whatever the form of marketing, market research leverages statistics and data analysis.
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Types of Market Research
Market research relies on small representative population samples to extrapolate the analysed results and conclusions to the larger population.
Primary research is DIY research when you try to do it in-house. Secondary research is outsourced to market research agencies to conduct sample surveys in different areas to arrive at conclusions which help marketing decisions. Primary research is further divided into Exploratory Primary Research and Specific Primary Research. Secondary research focuses on all the data at your disposal, including public sources, market data, competitor analysis, industry content and sales data.
Market Research Process
- Establishing Research Objectives: Research objectives originate from the stakeholders of the organisation who are desirous of obtaining specific results for the marketing revenues. Objectives may be framed as specific results/business concerns, which the researcher may further modify.
- Research Type: Qualitative information helps you gain insight into the consumer’s psyche, thoughts and decision-making process. Quantitative questions analyse the market size, measurement of attitudes and behaviours and consumer feedback on the product or the service.
- Long-Term and Short-Term Research: In long-term research, participants are members of an online community contacted for specific research projects but available on a long-term basis. Short-term research could be conducted over three months. You become a member of an online community with other moderators and members, whose interactions you can observe.
Key Questions
When you are conducting research, some of the key questions that you should raise to evaluate the market’s overall attractiveness include the following:
- Level of demand and market size: How many people actively buy the products or services you are offering?
- Value addition or points of difference with competitors’ products: What are your unique selling propositions? How unique is your product, and how can you differentiate yourself?
- Costs of customer acquisition: How much does it cost to acquire and retain a customer?
- Urgency: How badly or urgently do the people need this product?
- Active demand: How actively are people purchasing the product or the service?
- Cost of product or service delivery: How much will it cost to deliver the product or the service?
- Re-engineering potential: Can you re-engineer the product/service to make it more appealing to other customers in other markets?
- Barriers to entry: What is the product’s barrier to entry for competitors?
- Speed of delivery: How quickly can you make your product or service and reach the market?
- Investment: How much up-front investment is the company prepared to make to bring the product/service to the market?
- Upselling potential: What is the upselling potential for selling other similar products or substitutes produced by your company to the same group of consumers?
- Continuance of marketing efforts: Once you have already established the product/service in the market after the initial launch, how much more marketing and selling effort is required to sustain the demand for the product?
Analyse your findings using statistical tools like SPSS packages to arrive at conclusions. As a final step, you present your findings. Think beyond Google and actively use secondary research to corroborate your findings.
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Market Research Tools to Analyse Your Business Perspective
Some of the tools you can use for market research include Porter’s 5 Forces Competitor Analysis Model and SWOT analysis to determine the strengths and weaknesses of the industry.
Porter’s 5 Forces Model
Porter’s 5 Forces Model identifies five competitive market forces that help determine every industry’s strengths and weaknesses.
The five forces may be analysed as follows:
- Power of Buyers/Customers Over the Industry
Factors to consider would include:
- Concentration of buyers
- Sales concentration by the buyers
- Product differentiation
- Switching costs for buyers
- Backward integration
- Price sensitivity
- Substitutes
- Bargaining Power of Sellers
If a monopolistic or an oligopolistic form of market exists, it is important to determine how much power an individual seller has over the market.
- Threat of New Entrants
If entry barriers are low and permit other entrants to enter the market, it will increase competition and decrease the prices. The opposite is also true.
- Threat of Substitutes
If a large number of similar substitutes exist for the product, the pricing power of the company reduces and vice-versa.
- Competitive Rivalry
If the rivalry among competitors is stiff, profitability will be low.
Porter’s Five Forces Model Template
SWOT Analysis
SWOT (strengths, weaknesses, opportunities and threats) analysis is a market research framework designed to analyse a company’s position and formulate developmental strategies accordingly. It helps in arriving at conclusions and decision-making. Strengths and weaknesses are internal to all companies, and opportunities and threats emanate from the external environment.
Market Survey Template
A survey should ask multiple-choice, open-ended questions covering the following areas:
- Demography
- Industry
- Product/brand
- Business
- Competitor questions
[The template could be an amalgam of any or all of these areas.]
Sample Template
Source: https://www.examples.com/education/marketing-research-questionnaire.html
Market research in India – P&G India example
India is one of the most diverse countries in the world, owing to the multiplicity of languages, cultures, and behaviour it hosts. While designing market research studies and selecting local markets for research, a good understanding of cultural standards is required.
Procter & Gamble India used qualitative market research tools, including focus groups, in-house, in-context, and in-store visits. Qualitative tools such as blind groups and concept tests were also used. Apart from using external market research agencies, the internet was also prolifically used in order to do market research. P&G India employed market researchers for every product division. Two independent in-house market research groups were responsible for advertising research and marketing testing of products. Qualitative testing resulted in a lot of interaction between the market researcher and the customer. Their quantitative research normally required larger sample sizes, which helped generate new product ideas. Online concept tests conducted by P&G India helped tremendously improve existing products and launch improved versions of existing products. P&G’s online market surveys are cost-effective and save considerable money for the company.
Key Takeaways
Conducting market research can provide valuable insights into product feasibility and brand awareness among consumers. It also helps you learn about the competitors, substitutes present in the market, the consumer’s acceptance of them, and the industry’s state. Market research acts as an eye-opener and a tool that can help your product/service gain better acceptance. Seekho.ai offers several opportunities for you to seekho/learn/upskill through various courses available. Visit our blog.
