Marketing Research: How to conduct, Examples and Benefits
In doing business, one always wants to make informed and balanced decisions. Whether your business creates a widely used product or something original and unusual, you need to convey information about yourself to a potential consumer. To determine how to approach your target audience or to determine the target audience itself, such a procedure as marketing research was invented. Simply put, marketing research is like military reconnaissance. Entering a new market without proper scouting, you are “blind” – you don’t know where the target is, who is your “enemy” – competitors, or which obstacles are waiting for you. You have to probe your “battlefield”, to understand your position and develop an adequate strategy. That’s what marketing research is for.
- How the marketing research is conducted
- What insights you can get with Marketing Research
- Examples of successful implementation of marketing research results
- How the proper marketing research will benefit your business
How the marketing research is conducted
Define research methodology
Usually, the first step of marketing research is to determine the research method. First, the starting point – from the inside (from the product or company traits) or from the outside (from the market you plan to enter). The first way, also called the bottom-up model, determines if to oversimplify, “What I can do on the market” and based on this information you can decide, which obstacles you can overcome, and which properties of your product will be advantageous. The second type of approach, a.k.a top-down model, determines sort of the opposite – “On what market with what conditions I will enter with my product?”.
And while answering this question, you will find out who is your main competitor, is the market favorable to such a product as yours, how to build up or change your marketing strategy due to the market features, etc. We will describe this in more detail below.
During the development of marketing as a study, various marketing models have been invented – SWOT, 7Ps, STP, Porter’s Five Forces, AIDA, McKinsey’s 7-S, and many others.
For example, the SWOT model (which is usually paired with the reverse TOWS model) – is an acronym for “strengths, weaknesses, opportunities, threats”. This model implies analyzing and distinguishing the strengths of the product and/or company, turning them into new opportunities. At the same time, determining and mitigating the main weaknesses and external threats. This model combines the analysis of internal and external factors, though in a limited way.
Another popular marketing model is AIDA. The name is also the acronym for “awareness, interest, desire, action”. But this model concentrates entirely on consumer analysis – consumers’ perception of the product, reaction to the brand, and various advertising campaigns. AIDA is a unique model in the way, that it is one of the few models, that bet big on social media.
There are numerous types of marketing models, or frameworks, that are called to ease the research. All of them are basically variously preset tools for exploring your business and the market. But, using only one model for getting full information isn’t enough, because the result will be always limited by the terms of the model. So, the best option is to combine various models or frameworks with different objects and fields of research.
Conclusions of the marketing research are usually based on the huge amount of processed data, obtained from various sources. Typically, the information could be divided into two types – primary and secondary. Primary data is information, obtained via surveys, interviews, focus groups, observations, etc. Basically, it’s field research, conducted by employees of the company or by hired specialists. Secondary information is data you can find published. Industry reports, surveys, and articles, published by an authoritative source, etc.
For example, you can comb the stores looking for similar products to find out the competitors’ names, or you can find some month/quarter/year industry reports, where you can find a list of industry leaders. Or, you need to know how much people consume now. You may either go out and ask people, but also, you can find official government consumer activity reports, with data, divided by regions and demographic groups.
What insights you can get with Marketing Research
As mentioned, there are different types of approaches to marketing research and usually, there is some specific target – industry, consumer, brand research, marketing campaign evaluation, or competitor analysis. Due to this target, you take the first step – exploratory research. Simply put, it’s a research of what to research. You have to define a strict list of questions, that your research will answer. We will cover this topic in detail in one of our future articles.
In fact, we decided to cover in more detail each of the stages of marketing research with a particular example. Click here and check article about the first stage. There you will also find a list of links to articles about the next steps.
So, let’s say we are conducting general marketing research for a fresh company entering the market with a new product. The company needs to know the general information about the market and its players to present the product most advantageously. What invaluable knowledge we could get if the marketing research is conducted right?
- Find out the state of the market
The first thing you have to determine is whether it is even worth starting the business in the region you choose. You need to define the market capacity and analyze, whether is there enough demand for the product you propose. The favorable options for you here are either there are not enough providers of the product or your product will beat the competitors by 100% chance. You can verify whether any of these two conditions exist by researching competitors and sales volumes in the market.
- Find out your competitors and your position in the market
Every market has a strict hierarchy with powerful leaders, average ones, and underdogs. The research will clarify your rank in the market, your opportunities, and what niche you can occupy. By analyzing your capacities, you can learn, how to present your product in the best way, avoid direct competition, and, subsequently, sell more.
- Determine your target audience and its preferences
Besides knowing your rivals, you need to know who mainly is buying your product. Age, sex, location, occupation, income level, etc. To create a really convincing and efficient marketing campaign, you need to get inside your customers’ heads and figure out what they want.
- Find the best way to communicate with your audience
Today, the Internet is the main way to advertise. It almost entirely ousted every other type of ad. But you can’t just “advertise on the Internet”. There are thousands of websites, social networks, forums, and shopping sites – every one of them can be your ad platform. The proper marketing research could reveal, where your target audience is dwelling, and where you get through to them in the easiest, cheapest way. It is not for nothing that such a profession as a targeting manager appeared – a person, whose only job is to deal with fine-tuning of target advertising services on social media.
- Develop market strategies
Deep research of your market part will reveal, how your competitors sell their products, what advertising strategies they use, and how they position their products. With this knowledge, you can formulate your own strategy, by taking the best of your competitors, and, seeing the example, get rid of all bad ideas you had.
- Test a launch of a new product
In launching a new product, you need to check if your product has the potential to outcome the competitors from the start, or at least, to look like a new alternative. Proper research could reveal problems and flaws in the product positioning, marketing campaign, and sources of advertising. Within the marketing research, having the data about consumers’ behavior, you can simulate the result of the launch. Or you can test your new product in limited conditions, e.g., in a couple of stores/districts/cities to see, how customers will react, so to speak, in vivo.
- Improve the selling processes
The numerous ways of communication create numerous ways of selling. Marketing research helps to create and adjust selling scripts, identify if the sales force performance is inefficient, and adjust sales department budgets.
- Forecast sales and market situation
Your business performance depends not only on the quality of your job but also on the overall situation in the market, thus in the world. During the economic crisis, you should adjust your expenses and the work of your team according to the situation. Marketing research could not only reveal the early signs of recession in the activity of other companies. It could also show the tendencies of the consumption in the market and could help to react in time: adjust budgets, marketing strategies, and pricing.
How the proper marketing research will benefit your business eventually
Except for the obvious purpose of exploring the market, marketing research could prevent you from doing a lot of unnecessary things. As you could see from the example above, the first evident solution isn’t always right. And spending a minor amount of money, even before the enterprise start, on hiring specialists and conducting marketing research, could save you way bigger sums.
Some simple things like “It’s not enough to have a website and a Facebook page to sell worldwide” you can figure out by yourself. But to learn more complicated things, like the detailed target audience portrait, is harder to figure out without proper analysis.
Maybe, professional marketing research could convince one not to start the business in the exact industry or with a certain product at all. It’s easy to imagine – a person has some amount of money and hastily decided to start some business. Without correct preparation and analysis, it could be just another passing story of failure. But, if to stop the rush, exhale, think carefully, and conduct a full-fledged study, it may turn out that the market is overheated – too many businesses offer the same product. Or the market capacity is very low, and there are not enough customers to work with profits. Or even simpler – the production is too complicated, and you simply can’t get enough profit. The costs will be simply too high. All this can be foreseen, and you avoid large losses by having a comprehensive expert opinion with a figured plan of action.
Marketing research is all about optimizing resource spending and saving as much as possible by making the right moves. It’s about having a plan of how, where, and when to direct your effort. We, at Code Harbor, consider the marketing research phase as one of the most important parts of the analysis and planning stages. You can create the most beautiful and useful website or app, but if your marketing strategy isn’t thought out, it won’t save your business.