What Is Market Research?

Market research definition

Market research can be defined as an indispensable method that allows professionals to identify, analyze, and interpret useful data about a product/service’s life cycle and information about past, present, or potential customers. In simple terms, it entails running thorough research to come across essential information about your target audience’s characteristics, such as:

• consumers’ spending habits,
• location,
• wants and needs,
• industry trends,
• competitors, and so on.

The importance of doing market research

It also helps business owners to determine if their strategy is viable and to ensure long-run success. Moreover, market research will generate valuable data based on valid information that can help businesses identify potential threats and overcome challenges.

Needless to say, putting together powerful strategies such as market segmentation and product differentiation would be impossible to achieve without performing market research.

Types of market research

There are two main categories called primary research and secondary research. Under these two categories, we can find different types of market research that businesses conduct to collect data.

Primary research focuses on gathering first-hand insights about your target market. Businesses use this method to successfully identify the right market segments.

Primary market research breaks down into another two sectors:

Exploratory research – this kind of research provides relevant information about any challenges or threats that a company encounters or may arise in the future with less focus on measurable customer trends. Usually, this is the first step when you need to take into account when running thorough market research. It involves open-ended interviews and surveys with small groups of people.

Primary specific research – entails digging deeper into details that the company has already identified during the previous round of research as important issues.

Secondary research – implies scanning through all the data and public records you have at hand in order to come to a reliable conclusion. 

This type of research falls into another three brackets: Public, commercial, and internal sources. There are several specific steps you need to follow in order to successfully achieve your research objectives:

Before proceeding any further with your market research, you must first identify your ideal buyer persona. Having such a short summary of your ideal customer in place, you’ll get an overall overview of your target audience and therefore, you’ll be able to properly streamline your activities and objectives, and get effective results.

You must identify a persona group to help you better understand their needs, wants, characteristics, and buying habits. It is recommended to put together a set of well-prepared questions to gather useful information about your customers (also the questions should be open-ended so you can avoid one-word answers).

Create a list of your immediate competitors that will come in handy when trying to improve your overall strategy. It is an opportunity to compare yourself with other professionals you identify with and determine the weaknesses and strengths of your business.