Market research process
If you are new to market research, you should be clear on why market research is important to grow your business. This guide covers key steps in the market research process and three market research techniques you can use today to raise your game.
How this guide raises your game
- Why market research makes you more competitive
- The three steps of the market research process
- Three research techniques you can start today
Market research / marketing research is the process of gathering objective information about your market and your target audience. The market research process means you make more informed and better quality decisions about your marketing activity.
The better you understand your target audience, the more likely your marketing activity will be relevant to the needs of consumers.
And when consumers find something relevant, they are more likely to listen, more likely to research and more likely to buy your products than those of your competitors.
Finding what is relevant to consumers through the market research process ultimately increases your sales and profits.
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Market research makes you more competitive by making better choices
Good market research helps the choices you need to make through brand activation. It is used to improve the chances of standing out from your competitors.
Of course, there are no absolute guarantees when it comes to success in the market. Sometimes the market research process can be there to prevent you making a major error as much as finding a new opportunity.
There are many published books and technical guides to conducting market research. Most companies will have their own specific ways of carrying out market research.
The aim of this guide is not to make you a market researcher but to understand how it works and how it can be used to make you more competitive.
So, at the most basic level, the market research process can be broken down into 3 steps.
The basic market research process
Step 1 – Define the business problem
The market research process starts with identifying a need for a specific piece of information or answer to a specific question. This ‘question’ becomes the research question that leads the market research brief.
If you imagine filling in the gaps, if only I knew (your research question) then I could decide on (marketing activity), this is how you start to generate your research needs.
For example, if only I knew …
… why consumers are buying Product X rather than my product, then I could decide what to change in the product or marketing to increase the sales.
… if consumers prefer red or blue widgets, then I could decide which colour to feature in my widgets advertising.
… if consumers would like my product with added sprinkles, then I could decide whether to add these to my product.
Step 2 – Research the business problem
The next step is usually to write a research brief based on the research question. This article won’t go through a full research brief, but you can download an example template of a brief here which also includes commentary on how to complete the brief.
This brief is normally given to a market research company and we cover more on how to find and choose a market research company in another of our guides.
Most research questions will usually start with an “why” or an “if” which can be helpful when deciding which research methodology works best.
“Why” questions usually require a deeper understanding of underlying motivations and psychological behaviour and are usually best researched though qualitative methods.
“If” questions which come down to a more direct preference / choice for the consumer are usually best met with quantitative research methods.
Step 3 – Analyse the results and put into action
Market research will normally result in a set of recommendations and answers to the research question which started the process.
However, it does not stop there. The answers feed in to the start of many other marketing processes. Brand strategy, communications and digital marketing for example all become more efficient and effective when the results of market research are fed in at the start of those processes.
Within each of these major steps, there can be many smaller steps. Particularly in carrying out the research itself. But we cover most of those steps in other market research guides in this section.
It can take time to build deep understanding of your consumers, and time to build strong expertise in this area. But for those short of time and budget, we recommend below three market research techniques you can start today.
Define the problem – The market research brief
To define the business problem, you should aim to write a brief that can be used with a market research company to carry out the actual research. The contents of that brief are usually as follows :-
Give any context that helps the researchers understand the challenge better. Try to be concise and relevant. For example, what caused the need for research to take place? Which markets are included? What do you already know about the market?
What is the #1 priority question that you need the market research to answer? You will likely have MANY questions, but identifying the key single question helps the research team prioritise. Consider whether this question is closed (should we launch Product x – Yes or No?) or more open (what’s the best advertising message to drive sales of Product X?)
Business objective : What is your end goal and how will it be achieved? e.g. how to grow sales by attracting new consumers.
Market research objective : Summarise the research aims, information needs and list questions you need the research to answer. What decisions will you make with the research? This can go into more specific detail than the overall research purpose.
Is your market research objective to understand an opportunity or challenge (which leans to qualitative) research methods or to measure and validate a hypothesis (which leans to quantitative research methods)? Or both? If you have any expectations on the sample size, survey length and have any stimulus material already prepared, you should refer to these in this section. If you don’t have these things, make clear your expectations of the researchers to respond.
Are there any mandatory considerations or things to avoid? e.g. If there are any legal or regulatory requirements in the industry, if a particular group should or should not be included. Are there any geographic considerations the researchers should include?
What specifically must the project deliver and how will you define it as a success? Is there a specific reporting format you want?
For any decisions that will be made on the basis of the research, list out the measures that will be used to evaluate the decision e.g. we will only launch Product X if (80%) of respondents say they will purchase.
Budgets and timelines
Budgets will need to cover the market researchers time, any costs incurred with conducting interviews (e.g. hiring a venue) and production of any stimulus materials. It is not unreasonable to ask for details of costs. Also, be reasonable on timelines, it takes time to organise questionnaires, set up interviews and compile reports so build this in to your timeline.
Who will see the report and who will make decisions on it?
The market research company would normally respond to this sort of proposal with a research plan. This plan should cover the research methodology – qualitative, quantitative or secondary research – which we cover in other guides in this section.
Three market research techniques you can start today.
Google Trends can be a great place to start secondary research. Your aim in marketing is to answer people’s needs, and Google is often the place people go to research their needs.
Observation and listening skills. Try to build the habit of paying more attention to the the world around you, that can also be a great source of insights
Competitor activity analysis. Your competitor website and their marketing activities can give you great insight into how they see the world, and start your thinking about how you can make your products more relevant than theirs to your target audience.
A great place to start any sort of market research is to use Google Trends.
Google Trends is a free service that lets you compare search topics and terms from all over the world going back to 2004. You can compare up to five terms at a time. These can be filtered by date and by geography.
It gives you an index of how different searches compare to each other over a period of time, which helps you understand how many people are comparatively searching on a topic or subject.
While you can’t get the absolute number of searches from Google Trends, it is still a helpful tool for helping you understand the terms that consumers use and which terms are more popular than others.
Find popular terms
When your business operates in multiple areas, it can help you identify which terms are is more commonly searched for. So, you would typically use the more popular term in your communications.
Is ‘coffee shop’ or ‘cafe’ a more commonly searched term for example? What about ‘agency’ or ‘consultancy’?
Asking these basic questions through Google Trends helps you start to build a view of the language consumers use and the scale of their need.
You can read a mini case study for business opportunity identification on using Google Trends in our article on secondary research.
You should also consider though that the most popular terms are also the most competitive. This should be part of your digital marketing planning.
Use Google Trends for your industry
We love Google Trends. It’s free. It’s easy to use. We encourage you to go have a play and check out some comparisons for your industry.
See what is trending in what people search for. See if you can capture learning on what keywords to use on your website, in your advertising and in how you articulate the benefit you can offer consumers.
In the example above, you can see how we compared Market Research and Consumer Insight. Though these terms are quite similar in meaning, market research is a much more commonly used search term. Why is why we have used it more often in writing this article.
Build your observation and listening skills
Your target audience is all around you if you start to build the habit of looking and listening more.
As you go about your day, how many potential consumers are around you?
In the street. In the supermarket. On the train. In a cafe. Even if you are keeping socially distant.
Look at what people do and listen to what they say to get a feel for what they think of your brand.
We don’t mean in a creepy way. Obviously. Just keep your eyes and ears open.
Market research is about having real understanding of what people want. How they think and how they feel. Watching and listening to consumers is a great way to build up this understanding.
If your product or idea is something that you can see people using (food and drink is a great example) then hang out in places where people use those products. Watch and listen to how they interact with the product.
If your product is a service, go to places where people use that service. Watch how the service is used. If people are using your service already, ask them how it is going. Ask them how you could do it better.
Online is also another great place to observe consumers in your industry. Check out online forums and social media comments to get a feel for what matters most to consumers in your industry.
Every time one of your competitors carries out an activity for their audience, that’s an opportunity for you to understand the market more.
You should develop a habit of checking out your competitors on a regular basis.
If they have premises open to the public (a retail store or cafe for example), go for a visit and put yourself in the shoes of a potential customer. What do they do well? What inspiration can you take? Is there anything that doesn’t work so well for them?
Go online. Google competitors and see what comes up. Do they have high search rankings or are they difficult to find?
Check out their website and social media platforms. What are their key messages? Who is their audience? Do they have reviews online and what are people saying about them.
Look at forums or review sites like Trust Pilot or Product Review. See what consumers are saying about other brands in your category. Is there something they complain about that might be an opportunity for you?
Three-brains and market research
We coach and consult on market research and often include market research skill development and market research project delivery as part of our services. We help businesses commission, manage and apply market research.
If you’d like to talk about raising your game in market research as part of our coaching and consulting services, click on the button to fill out the contact form.
3 pages including a blank template, a guide to completing each section and an example brief from the vegan ice cream case study in our secondary research skill guide.
Powerpoint and Keynote versions of this document available on request.