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How to Do Market Research: The Complete Guide

Learn how to do market research with this step-by-step guide, complete with templates, tools and real-world examples.

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Market research is the systematic process of gathering, analyzing and interpreting information about a specific market or industry.

What are your customers’ needs? How does your product compare to the competition? What are the emerging trends and opportunities in your industry? If these questions keep you up at night, it’s time to conduct market research.

Market research plays a pivotal role in your ability to stay competitive and relevant, helping you anticipate shifts in consumer behavior and industry dynamics. It involves gathering these insights using a wide range of techniques, from surveys and interviews to data analysis and observational studies.

In this guide, we’ll explore why market research is crucial, the various types of market research, the methods used in data collection, and how to effectively conduct market research to drive informed decision-making and success.

What is market research?

The purpose of market research is to offer valuable insight into the preferences and behaviors of your target audience, and anticipate shifts in market trends and the competitive landscape. This information helps you make data-driven decisions, develop effective strategies for your business, and maximize your chances of long-term growth.

Why is market research important? 

By understanding the significance of market research, you can make sure you’re asking the right questions and using the process to your advantage. Some of the benefits of market research include:

• Informed decision-making: Market research provides you with the data and insights you need to make smart decisions for your business. It helps you identify opportunities, assess risks and tailor your strategies to meet the demands of the market. Without market research, decisions are often based on assumptions or guesswork, leading to costly mistakes.
• Customer-centric approach: A cornerstone of market research involves developing a deep understanding of customer needs and preferences. This gives you valuable insights into your target audience, helping you develop products, services and marketing campaigns that resonate with your customers.
• Competitive advantage: By conducting market research, you’ll gain a competitive edge. You’ll be able to identify gaps in the market, analyze competitor strengths and weaknesses, and position your business strategically. This enables you to create unique value propositions, differentiate yourself from competitors, and seize opportunities that others may overlook.
• Risk mitigation: Market research helps you anticipate market shifts and potential challenges. By identifying threats early, you can proactively adjust their strategies to mitigate risks and respond effectively to changing circumstances. This proactive approach is particularly valuable in volatile industries.
• Resource optimization: Conducting market research allows organizations to allocate their time, money and resources more efficiently. It ensures that investments are made in areas with the highest potential return on investment, reducing wasted resources and improving overall business performance.
• Adaptation to market trends: Markets evolve rapidly, driven by technological advancements, cultural shifts and changing consumer attitudes. Market research ensures that you stay ahead of these trends and adapt your offerings accordingly so you can avoid becoming obsolete. 

As you can see, market research empowers businesses to make data-driven decisions, cater to customer needs, outperform competitors, mitigate risks, optimize resources and stay agile in a dynamic marketplace. These benefits make it a huge industry; the global market research services market is expected to grow from $76.37 billion in 2021 to $108.57 billion in 2026 . Now, let’s dig into the different types of market research that can help you achieve these benefits.

Types of market research 

• Qualitative research
• Quantitative research
• Exploratory research
• Descriptive research
• Causal research
• Cross-sectional research
• Longitudinal research

Despite its advantages, 23% of organizations don’t have a clear market research strategy. Part of developing a strategy involves choosing the right type of market research for your business goals. The most commonly used approaches include:

1. Qualitative research

Qualitative research focuses on understanding the underlying motivations, attitudes and perceptions of individuals or groups. It is typically conducted through techniques like in-depth interviews, focus groups and content analysis — methods we’ll discuss further in the sections below. Qualitative research provides rich, nuanced insights that can inform product development, marketing strategies and brand positioning.

2. Quantitative research

Quantitative research, in contrast to qualitative research, involves the collection and analysis of numerical data, often through surveys, experiments and structured questionnaires. This approach allows for statistical analysis and the measurement of trends, making it suitable for large-scale market studies and hypothesis testing. While it’s worthwhile using a mix of qualitative and quantitative research, most businesses prioritize the latter because it is scientific, measurable and easily replicated across different experiments.

3. Exploratory research

Whether you’re conducting qualitative or quantitative research or a mix of both, exploratory research is often the first step. Its primary goal is to help you understand a market or problem so you can gain insights and identify potential issues or opportunities. This type of market research is less structured and is typically conducted through open-ended interviews, focus groups or secondary data analysis. Exploratory research is valuable when entering new markets or exploring new product ideas.

4. Descriptive research

As its name implies, descriptive research seeks to describe a market, population or phenomenon in detail. It involves collecting and summarizing data to answer questions about audience demographics and behaviors, market size, and current trends. Surveys, observational studies and content analysis are common methods used in descriptive research. 

5. Causal research

Causal research aims to establish cause-and-effect relationships between variables. It investigates whether changes in one variable result in changes in another. Experimental designs, A/B testing and regression analysis are common causal research methods. This sheds light on how specific marketing strategies or product changes impact consumer behavior.

6. Cross-sectional research

Cross-sectional market research involves collecting data from a sample of the population at a single point in time. It is used to analyze differences, relationships or trends among various groups within a population. Cross-sectional studies are helpful for market segmentation, identifying target audiences and assessing market trends at a specific moment.

7. Longitudinal research

Longitudinal research, in contrast to cross-sectional research, collects data from the same subjects over an extended period. This allows for the analysis of trends, changes and developments over time. Longitudinal studies are useful for tracking long-term developments in consumer preferences, brand loyalty and market dynamics.

Each type of market research has its strengths and weaknesses, and the method you choose depends on your specific research goals and the depth of understanding you’re aiming to achieve. In the following sections, we’ll delve into primary and secondary research approaches and specific research methods.

Primary vs. secondary market research

Market research of all types can be broadly categorized into two main approaches: primary research and secondary research. By understanding the differences between these approaches, you can better determine the most appropriate research method for your specific goals.

Primary market research 

Primary research involves the collection of original data straight from the source. Typically, this involves communicating directly with your target audience — through surveys, interviews, focus groups and more — to gather information. Here are some key attributes of primary market research:

• Customized data: Primary research provides data that is tailored to your research needs. You design a custom research study and gather information specific to your goals.
• Up-to-date insights: Because primary research involves communicating with customers, the data you collect reflects the most current market conditions and consumer behaviors.
• Time-consuming and resource-intensive: Despite its advantages, primary research can be labor-intensive and costly, especially when dealing with large sample sizes or complex study designs. Whether you hire a market research consultant, agency or use an in-house team, primary research studies consume a large amount of resources and time.

Secondary market research 

Secondary research, on the other hand, involves analyzing data that has already been compiled by third-party sources, such as online research tools, databases, news sites, industry reports and academic studies.

Here are the main characteristics of secondary market research:

• Cost-effective: Secondary research is generally more cost-effective than primary research since it doesn’t require building a research plan from scratch. You and your team can look at databases, websites and publications on an ongoing basis, without needing to design a custom experiment or hire a consultant. 
• Leverages multiple sources: Data tools and software extract data from multiple places across the web, and then consolidate that information within a single platform. This means you’ll get a greater amount of data and a wider scope from secondary research.
• Quick to access: You can access a wide range of information rapidly — often in seconds — if you’re using online research tools and databases. Because of this, you can act on insights sooner, rather than taking the time to develop an experiment. 

So, when should you use primary vs. secondary research? In practice, many market research projects incorporate both primary and secondary research to take advantage of the strengths of each approach.

One rule of thumb is to focus on secondary research to obtain background information, market trends or industry benchmarks. It is especially valuable for conducting preliminary research, competitor analysis, or when time and budget constraints are tight. Then, if you still have knowledge gaps or need to answer specific questions unique to your business model, use primary research to create a custom experiment. 

Market research methods

• Surveys and questionnaires
• Focus groups
• Observational research
• Online research tools
• Experiments
• Content analysis
• Ethnographic research

How do primary and secondary research approaches translate into specific research methods? Let’s take a look at the different ways you can gather data: 

1. Surveys and questionnaires

Surveys and questionnaires are popular methods for collecting structured data from a large number of respondents. They involve a set of predetermined questions that participants answer. Surveys can be conducted through various channels, including online tools, telephone interviews and in-person or online questionnaires. They are useful for gathering quantitative data and assessing customer demographics, opinions, preferences and needs. On average, customer surveys have a 33% response rate , so keep that in mind as you consider your sample size.

2. Interviews

Interviews are in-depth conversations with individuals or groups to gather qualitative insights. They can be structured (with predefined questions) or unstructured (with open-ended discussions). Interviews are valuable for exploring complex topics, uncovering motivations and obtaining detailed feedback. 

3. Focus groups

The most common primary research methods are in-depth webcam interviews and focus groups. Focus groups are a small gathering of participants who discuss a specific topic or product under the guidance of a moderator. These discussions are valuable for primary market research because they reveal insights into consumer attitudes, perceptions and emotions. Focus groups are especially useful for idea generation, concept testing and understanding group dynamics within your target audience.

4. Observational research

Observational research involves observing and recording participant behavior in a natural setting. This method is particularly valuable when studying consumer behavior in physical spaces, such as retail stores or public places. In some types of observational research, participants are aware you’re watching them; in other cases, you discreetly watch consumers without their knowledge, as they use your product. Either way, observational research provides firsthand insights into how people interact with products or environments.

5. Online research tools

You and your team can do your own secondary market research using online tools. These tools include data prospecting platforms and databases, as well as online surveys, social media listening, web analytics and sentiment analysis platforms. They help you gather data from online sources, monitor industry trends, track competitors, understand consumer preferences and keep tabs on online behavior. We’ll talk more about choosing the right market research tools in the sections that follow.

6. Experiments

Market research experiments are controlled tests of variables to determine causal relationships. While experiments are often associated with scientific research, they are also used in market research to assess the impact of specific marketing strategies, product features, or pricing and packaging changes.

7. Content analysis

Content analysis involves the systematic examination of textual, visual or audio content to identify patterns, themes and trends. It’s commonly applied to customer reviews, social media posts and other forms of online content to analyze consumer opinions and sentiments.

8. Ethnographic research

Ethnographic research immerses researchers into the daily lives of consumers to understand their behavior and culture. This method is particularly valuable when studying niche markets or exploring the cultural context of consumer choices.

How to do market research

• Set clear objectives
• Identify your target audience
• Choose your research methods
• Use the right market research tools
• Collect data
• Analyze data 
• Interpret your findings
• Identify opportunities and challenges
• Make informed business decisions
• Monitor and adapt

Now that you have gained insights into the various market research methods at your disposal, let’s delve into the practical aspects of how to conduct market research effectively. Here’s a quick step-by-step overview, from defining objectives to monitoring market shifts.

1. Set clear objectives

When you set clear and specific goals, you’re essentially creating a compass to guide your research questions and methodology. Start by precisely defining what you want to achieve. Are you launching a new product and want to understand its viability in the market? Are you evaluating customer satisfaction with a product redesign? 

Start by creating SMART goals — objectives that are specific, measurable, achievable, relevant and time-bound. Not only will this clarify your research focus from the outset, but it will also help you track progress and benchmark your success throughout the process. 

You should also consult with key stakeholders and team members to ensure alignment on your research objectives before diving into data collecting. This will help you gain diverse perspectives and insights that will shape your research approach.

2. Identify your target audience

Next, you’ll need to pinpoint your target audience to determine who should be included in your research. Begin by creating detailed buyer personas or stakeholder profiles. Consider demographic factors like age, gender, income and location, but also delve into psychographics, such as interests, values and pain points.

The more specific your target audience, the more accurate and actionable your research will be. Additionally, segment your audience if your research objectives involve studying different groups, such as current customers and potential leads.

If you already have existing customers, you can also hold conversations with them to better understand your target market. From there, you can refine your buyer personas and tailor your research methods accordingly.

3. Choose your research methods

Selecting the right research methods is crucial for gathering high-quality data. Start by considering the nature of your research objectives. If you’re exploring consumer preferences, surveys and interviews can provide valuable insights. For in-depth understanding, focus groups or observational research might be suitable. Consider using a mix of quantitative and qualitative methods to gain a well-rounded perspective. 

You’ll also need to consider your budget. Think about what you can realistically achieve using the time and resources available to you. If you have a fairly generous budget, you may want to try a mix of primary and secondary research approaches. If you’re doing market research for a startup , on the other hand, chances are your budget is somewhat limited. If that’s the case, try addressing your goals with secondary research tools before investing time and effort in a primary research study. 

4. Use the right market research tools

Whether you’re conducting primary or secondary research, you’ll need to choose the right tools. These can help you do anything from sending surveys to customers to monitoring trends and analyzing data. Here are some examples of popular market research tools:

• Market research software: Crunchbase is a platform that provides best-in-class company data, making it valuable for market research on growing companies and industries. You can use Crunchbase to access trusted, first-party funding data, revenue data, news and firmographics, enabling you to monitor industry trends and understand customer needs.

• Survey and questionnaire tools: SurveyMonkey is a widely used online survey platform that allows you to create, distribute and analyze surveys. Google Forms is a free tool that lets you create surveys and collect responses through Google Drive.
• Data analysis software: Microsoft Excel and Google Sheets are useful for conducting statistical analyses. SPSS is a powerful statistical analysis software used for data processing, analysis and reporting.
• Social listening tools: Brandwatch is a social listening and analytics platform that helps you monitor social media conversations, track sentiment and analyze trends. Mention is a media monitoring tool that allows you to track mentions of your brand, competitors and keywords across various online sources.
• Data visualization platforms: Tableau is a data visualization tool that helps you create interactive and shareable dashboards and reports. Power BI by Microsoft is a business analytics tool for creating interactive visualizations and reports.

5. Collect data

There’s an infinite amount of data you could be collecting using these tools, so you’ll need to be intentional about going after the data that aligns with your research goals. Implement your chosen research methods, whether it’s distributing surveys, conducting interviews or pulling from secondary research platforms. Pay close attention to data quality and accuracy, and stick to a standardized process to streamline data capture and reduce errors. 

6. Analyze data

Once data is collected, you’ll need to analyze it systematically. Use statistical software or analysis tools to identify patterns, trends and correlations. For qualitative data, employ thematic analysis to extract common themes and insights. Visualize your findings with charts, graphs and tables to make complex data more understandable.

If you’re not proficient in data analysis, consider outsourcing or collaborating with a data analyst who can assist in processing and interpreting your data accurately.

7. Interpret your findings

Interpreting your market research findings involves understanding what the data means in the context of your objectives. Are there significant trends that uncover the answers to your initial research questions? Consider the implications of your findings on your business strategy. It’s essential to move beyond raw data and extract actionable insights that inform decision-making.

Hold a cross-functional meeting or workshop with relevant team members to collectively interpret the findings. Different perspectives can lead to more comprehensive insights and innovative solutions.

8. Identify opportunities and challenges

Use your research findings to identify potential growth opportunities and challenges within your market. What segments of your audience are underserved or overlooked? Are there emerging trends you can capitalize on? Conversely, what obstacles or competitors could hinder your progress?

Lay out this information in a clear and organized way by conducting a SWOT analysis, which stands for strengths, weaknesses, opportunities and threats. Jot down notes for each of these areas to provide a structured overview of gaps and hurdles in the market.

9. Make informed business decisions

Market research is only valuable if it leads to informed decisions for your company. Based on your insights, devise actionable strategies and initiatives that align with your research objectives. Whether it’s refining your product, targeting new customer segments or adjusting pricing, ensure your decisions are rooted in the data.

At this point, it’s also crucial to keep your team aligned and accountable. Create an action plan that outlines specific steps, responsibilities and timelines for implementing the recommendations derived from your research. 

10. Monitor and adapt

Market research isn’t a one-time activity; it’s an ongoing process. Continuously monitor market conditions, customer behaviors and industry trends. Set up mechanisms to collect real-time data and feedback. As you gather new information, be prepared to adapt your strategies and tactics accordingly. Regularly revisiting your research ensures your business remains agile and reflects changing market dynamics and consumer preferences.

Online market research sources

As you go through the steps above, you’ll want to turn to trusted, reputable sources to gather your data. Here’s a list to get you started:

• Crunchbase: As mentioned above, Crunchbase is an online platform with an extensive dataset, allowing you to access in-depth insights on market trends, consumer behavior and competitive analysis. You can also customize your search options to tailor your research to specific industries, geographic regions or customer personas.

• Academic databases: Academic databases, such as ProQuest and JSTOR , are treasure troves of scholarly research papers, studies and academic journals. They offer in-depth analyses of various subjects, including market trends, consumer preferences and industry-specific insights. Researchers can access a wealth of peer-reviewed publications to gain a deeper understanding of their research topics.
• Government and NGO databases: Government agencies, nongovernmental organizations and other institutions frequently maintain databases containing valuable economic, demographic and industry-related data. These sources offer credible statistics and reports on a wide range of topics, making them essential for market researchers. Examples include the U.S. Census Bureau , the Bureau of Labor Statistics and the Pew Research Center .
• Industry reports: Industry reports and market studies are comprehensive documents prepared by research firms, industry associations and consulting companies. They provide in-depth insights into specific markets, including market size, trends, competitive analysis and consumer behavior. You can find this information by looking at relevant industry association databases; examples include the American Marketing Association and the National Retail Federation .
• Social media and online communities: Social media platforms like LinkedIn or Twitter (X) , forums such as Reddit and Quora , and review platforms such as G2 can provide real-time insights into consumer sentiment, opinions and trends. 

Market research examples

At this point, you have market research tools and data sources — but how do you act on the data you gather? Let’s go over some real-world examples that illustrate the practical application of market research across various industries. These examples showcase how market research can lead to smart decision-making and successful business decisions.

Example 1: Apple’s iPhone launch

Apple ’s iconic iPhone launch in 2007 serves as a prime example of market research driving product innovation in tech. Before the iPhone’s release, Apple conducted extensive market research to understand consumer preferences, pain points and unmet needs in the mobile phone industry. This research led to the development of a touchscreen smartphone with a user-friendly interface, addressing consumer demands for a more intuitive and versatile device. The result was a revolutionary product that disrupted the market and redefined the smartphone industry.

Example 2: McDonald’s global expansion

McDonald’s successful global expansion strategy demonstrates the importance of market research when expanding into new territories. Before entering a new market, McDonald’s conducts thorough research to understand local tastes, preferences and cultural nuances. This research informs menu customization, marketing strategies and store design. For instance, in India, McDonald’s offers a menu tailored to local preferences, including vegetarian options. This market-specific approach has enabled McDonald’s to adapt and thrive in diverse global markets.

Example 3: Organic and sustainable farming

The shift toward organic and sustainable farming practices in the food industry is driven by market research that indicates increased consumer demand for healthier and environmentally friendly food options. As a result, food producers and retailers invest in sustainable sourcing and organic product lines — such as with these sustainable seafood startups — to align with this shift in consumer values. 

The bottom line? Market research has multiple use cases and is a critical practice for any industry. Whether it’s launching groundbreaking products, entering new markets or responding to changing consumer preferences, you can use market research to shape successful strategies and outcomes.

Market research templates

You finally have a strong understanding of how to do market research and apply it in the real world. Before we wrap up, here are some market research templates that you can use as a starting point for your projects:

• Smartsheet competitive analysis templates : These spreadsheets can serve as a framework for gathering information about the competitive landscape and obtaining valuable lessons to apply to your business strategy.
• SurveyMonkey product survey template : Customize the questions on this survey based on what you want to learn from your target customers.
• HubSpot templates : HubSpot offers a wide range of free templates you can use for market research, business planning and more.
• SCORE templates : SCORE is a nonprofit organization that provides templates for business plans, market analysis and financial projections.
• SBA.gov : The U.S. Small Business Administration offers templates for every aspect of your business, including market research, and is particularly valuable for new startups. 

Strengthen your business with market research

When conducted effectively, market research is like a guiding star. Equipped with the right tools and techniques, you can uncover valuable insights, stay competitive, foster innovation and navigate the complexities of your industry.

Throughout this guide, we’ve discussed the definition of market research, different research methods, and how to conduct it effectively. We’ve also explored various types of market research and shared practical insights and templates for getting started. 

Now, it’s time to start the research process. Trust in data, listen to the market and make informed decisions that guide your company toward lasting success.

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What Is Market Research?

• How It Works
• Primary vs. Secondary
• How to Conduct Research

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Market research examines consumer behavior and trends in the economy to help a business develop and fine-tune its business idea and strategy. It helps a business understand its target market by gathering and analyzing data.

Market research is the process of evaluating the viability of a new service or product through research conducted directly with potential customers. It allows a company to define its target market and get opinions and other feedback from consumers about their interest in a product or service.

Research may be conducted in-house or by a third party that specializes in market research. It can be done through surveys and focus groups, among other ways. Test subjects are usually compensated with product samples or a small stipend for their time.

Key Takeaways

• Companies conduct market research before introducing new products to determine their appeal to potential customers.
• Tools include focus groups, telephone interviews, and questionnaires.
• The results of market research inform the final design of the product and determine how it will be positioned in the marketplace.
• Market research usually combines primary information, gathered directly from consumers, and secondary information, which is data available from external sources.

Market Research

How market research works.

Market research is used to determine the viability of a new product or service. The results may be used to revise the product design and fine-tune the strategy for introducing it to the public. This can include information gathered for the purpose of determining market segmentation . It also informs product differentiation , which is used to tailor advertising.

A business engages in various tasks to complete the market research process. It gathers information based on the market sector being targeted by the product. This information is then analyzed and relevant data points are interpreted to draw conclusions about how the product may be optimally designed and marketed to the market segment for which it is intended.

It is a critical component in the research and development (R&D) phase of a new product or service introduction. Market research can be conducted in many different ways, including surveys, product testing, interviews, and focus groups.

Market research is a critical tool that companies use to understand what consumers want, develop products that those consumers will use, and maintain a competitive advantage over other companies in their industry.

Primary Market Research vs. Secondary Market Research

Market research usually consists of a combination of:

• Primary research, gathered by the company or by an outside company that it hires
• Secondary research, which draws on external sources of data

Primary Market Research

Primary research generally falls into two categories: exploratory and specific research.

• Exploratory research is less structured and functions via open-ended questions. The questions may be posed in a focus group setting, telephone interviews, or questionnaires. It results in questions or issues that the company needs to address about a product that it has under development.
• Specific research delves more deeply into the problems or issues identified in exploratory research.

Secondary Market Research

All market research is informed by the findings of other researchers about the needs and wants of consumers. Today, much of this research can be found online.

Secondary research can include population information from government census data , trade association research reports , polling results, and research from other businesses operating in the same market sector.

History of Market Research

Formal market research began in Germany during the 1920s. In the United States, it soon took off with the advent of the Golden Age of Radio.

Companies that created advertisements for this new entertainment medium began to look at the demographics of the audiences who listened to each of the radio plays, music programs, and comedy skits that were presented.

They had once tried to reach the widest possible audience by placing their messages on billboards or in the most popular magazines. With radio programming, they had the chance to target rural or urban consumers, teenagers or families, and judge the results by the sales numbers that followed.

Types of Market Research

Face-to-face interviews.

From their earliest days, market research companies would interview people on the street about the newspapers and magazines that they read regularly and ask whether they recalled any of the ads or brands that were published in them. Data collected from these interviews were compared to the circulation of the publication to determine the effectiveness of those ads.

Market research and surveys were adapted from these early techniques.

To get a strong understanding of your market, it’s essential to understand demand, market size, economic indicators, location, market saturation, and pricing.

Focus Groups

A focus group is a small number of representative consumers chosen to try a product or watch an advertisement.

Afterward, the group is asked for feedback on their perceptions of the product, the company’s brand, or competing products. The company then takes that information and makes decisions about what to do with the product or service, whether that's releasing it, making changes, or abandoning it altogether.

Phone Research

The man-on-the-street interview technique soon gave way to the telephone interview. A telephone interviewer could collect information in a more efficient and cost-effective fashion.

Telephone research was a preferred tactic of market researchers for many years. It has become much more difficult in recent years as landline phone service dwindles and is replaced by less accessible mobile phones.

Survey Research

As an alternative to focus groups, surveys represent a cost-effective way to determine consumer attitudes without having to interview anyone in person. Consumers are sent surveys in the mail, usually with a coupon or voucher to incentivize participation. These surveys help determine how consumers feel about the product, brand, and price point.

Online Market Research

With people spending more time online, market research activities have shifted online as well. Data collection still uses a survey-style form. But instead of companies actively seeking participants by finding them on the street or cold calling them on the phone, people can choose to sign up, take surveys, and offer opinions when they have time.

This makes the process far less intrusive and less rushed, since people can participate on their own time and of their own volition.

How to Conduct Market Research

The first step to effective market research is to determine the goals of the study. Each study should seek to answer a clear, well-defined problem. For example, a company might seek to identify consumer preferences, brand recognition, or the comparative effectiveness of different types of ad campaigns.

After that, the next step is to determine who will be included in the research. Market research is an expensive process, and a company cannot waste resources collecting unnecessary data. The firm should decide in advance which types of consumers will be included in the research, and how the data will be collected. They should also account for the probability of statistical errors or sampling bias .

The next step is to collect the data and analyze the results. If the two previous steps have been completed accurately, this should be straightforward. The researchers will collect the results of their study, keeping track of the ages, gender, and other relevant data of each respondent. This is then analyzed in a marketing report that explains the results of their research.

The last step is for company executives to use their market research to make business decisions. Depending on the results of their research, they may choose to target a different group of consumers, or they may change their price point or some product features.

The results of these changes may eventually be measured in further market research, and the process will begin all over again.

Benefits of Market Research

Market research is essential for developing brand loyalty and customer satisfaction. Since it is unlikely for a product to appeal equally to every consumer, a strong market research program can help identify the key demographics and market segments that are most likely to use a given product.

Market research is also important for developing a company’s advertising efforts. For example, if a company’s market research determines that its consumers are more likely to use Facebook than X (formerly Twitter), it can then target its advertisements to one platform instead of another. Or, if they determine that their target market is value-sensitive rather than price-sensitive, they can work on improving the product rather than reducing their prices.

Market research only works when subjects are honest and open to participating.

Example of Market Research

Many companies use market research to test new products or get information from consumers about what kinds of products or services they need and don’t currently have.

For example, a company that’s considering starting a business might conduct market research to test the viability of its product or service. If the market research confirms consumer interest, the business can proceed confidently with its business plan . If not, the company can use the results of the market research to make adjustments to the product to bring it in line with customer desires.

What Are the Main Types of Market Research?

The main types of market research are primary research and secondary research. Primary research includes focus groups, polls, and surveys. Secondary research includes academic articles, infographics, and white papers.

Qualitative research gives insights into how customers feel and think. Quantitative research uses data and statistics such as website views, social media engagement, and subscriber numbers.

What Is Online Market Research?

Online market research uses the same strategies and techniques as traditional primary and secondary market research, but it is conducted on the Internet. Potential customers may be asked to participate in a survey or give feedback on a product. The responses may help the researchers create a profile of the likely customer for a new product.

What Are Paid Market Research Surveys?

Paid market research involves rewarding individuals who agree to participate in a study. They may be offered a small payment for their time or a discount coupon in return for filling out a questionnaire or participating in a focus group.

What Is a Market Study?

A market study is an analysis of consumer demand for a product or service. It looks at all of the factors that influence demand for a product or service. These include the product’s price, location, competition, and substitutes as well as general economic factors that could influence the new product’s adoption, for better or worse.

Market research is a key component of a company’s research and development (R&D) stage. It helps companies understand in advance the viability of a new product that they have in development and to see how it might perform in the real world.

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How to Do Market Research: A Comprehensive Guide for 2024

• by Alice Ananian
• September 4, 2024

Imagine launching a product that flies off the shelves or watching a marketing campaign go viral. Now, picture the opposite: a product launch met with crickets or an ad campaign that falls flat. The difference between these scenarios often boils down to one critical factor: market research. In the high-stakes business world, it’s not just a tool—it’s your secret weapon. Whether you’re a startup founder, product developer, or marketing professional, mastering market research can be your ticket to business success.

This comprehensive guide is your roadmap to conducting market research that doesn’t just inform—it transforms. We’ll dive deep into the art and science of understanding your market, from defining research objectives to analyzing data and implementing game-changing insights. By the time you finish reading, you’ll be armed with the knowledge to make decisions that aren’t just informed but inspired. Ready to turn market research into your competitive edge? Let’s dive in.

What is Market Research?

Market research is the systematic process of gathering, analyzing, and interpreting information about a target market, competitors, and the overall business environment. It’s the foundation upon which successful business strategies are built, providing crucial insights that inform decision-making across all aspects of an organization.

The importance of market research for businesses cannot be overstated. It reduces risk, identifies opportunities, and ensures that products and services align with customer needs.

Key benefits of conducting market research include:

• Identifying market opportunities and threats
• Understanding customer needs and preferences
• Evaluating competitive landscape
• Optimizing marketing strategies
• Forecasting market trends
• Improving product development
• Enhancing customer satisfaction
• Making data-driven business decisions

Ask the Right Users at the Right Time

Types of Market Research

The main divisions of market research types are primary vs. secondary and quantitative vs. qualitative. Let’s take a look at how they differ. 

Primary vs. Secondary Research

Market research can be categorized into two main types: primary and secondary research.

Primary research involves collecting original data directly from sources such as customers, competitors, or industry experts. This type of research is tailored to your specific business needs and provides up-to-date, relevant information.

Secondary research , on the other hand, involves analyzing existing data from published sources such as industry reports, government statistics, or academic studies. This type of research is often quicker and less expensive than primary research.

For example, a company launching a new fitness app might conduct primary research by surveying potential users about their exercise habits and app preferences. They might also perform secondary research by analyzing reports on the fitness app market and user demographics from industry publications.

Qualitative vs. Quantitative Research

Another important distinction in market research is between qualitative and quantitative methods.

Qualitative research focuses on gathering non-numerical data to understand motivations, opinions, and attitudes. It often involves open-ended questions and in-depth exploration of topics. Examples include:

• In-depth interviews

Focus groups

• Observational studies

Quantitative research , in contrast, deals with numerical data and statistical analysis. It aims to quantify opinions, behaviors, or other defined variables. Examples include:

• Surveys with closed-ended questions
• Sales data analysis
• Website analytics

To illustrate the difference, consider a company researching customer satisfaction. A qualitative approach might involve conducting in-depth interviews to understand the reasons behind customer satisfaction or dissatisfaction. A quantitative approach could involve sending out a survey asking customers to rate their satisfaction on a scale of 1 to 10 and analyzing the resulting numerical data.

Step-by-Step Guide: How to Do Market Research

Market research is a crucial process that helps businesses understand their target audience, assess market conditions, and make informed decisions to drive success.

1. Define your research objectives with precision

Gain clarity on the purpose of your market research. Are you exploring customer tastes and trends, testing the appeal of a new product or service, or gauging the size and potential of your market? Your research goals should be clearly defined, as they form the foundation of your entire research project.

2. Identify your target audience accurately

Figure out who holds the keys to the information you need. Is it your existing clients, potential customers, or particular demographic segments? Correct audience identification is key to gathering reliable and relevant data.

Pro Tip: If you’re struggling to pinpoint your target audience, use Prelaunch’s Customer Clusters to quickly identify and segment your potential customers based on real data. This powerful tool helps you uncover key demographic and psychographic insights.

3. Choose the most suitable research methods

The methodology should match your objectives and chosen audience. Whether it’s primary or secondary, qualitative or quantitative, or a mixture of all, your research methods should adequately serve your research needs.

4. Develop a well-defined research plan

A comprehensive plan streamlines your research process. It includes the timeline for your research, budget allocation, individual method approaches, how you’ll obtain participants, the type of questions you’ll pose, and your data collection and analysis methods. A robust research plan ensures the effectiveness of your research.

5. Collect extensive and valuable data

Implement your research plan and gather data via surveys, interviews, focus groups, or any other methods you’ve chosen. It’s essential to collect a rich and varied data set to unearth meaningful insights.

6. Analyze and interpret the data proficiently

Leverage suitable analytical tools and techniques to dissect your data. Search for patterns, trends, and valuable insights that speak to your research objectives. This is where the true value of your research begins to emerge. It’s also where market segmentation comes into play.

7. Present your findings professionally

Transform your raw data into a comprehensive, easy-to-understand report. Use visual aids such as charts and graphs to represent your data effectively, making it easily digestible for the reader.

8. Make smart, data-driven decisions

The crux of your market research is the action you take based on your findings. Use the insights from your research to form your business strategies and decisions. Keep in mind, the true power of market research is not just in the gathering of data but in its strategic application.

Market Research Methods

Surveys and questionnaires.

Surveys and questionnaires stand as versatile tools in market research. They have the potential to collect both qualitative and quantitative data from a large number of respondents, helping to grasp a broad understanding of consumer behavior and trends.

In-depth interviews provide detailed insights into individual opinions and experiences and capture the nuances of personal perspectives. Whether structured, semi-structured, or unstructured, each approach unfolds layers of consumer thought processes, enhancing your strategic decisions.

Pro tip: Want the inside scoop on what your future customers really think? Try Prelaunch’s AI-powered in-depth interviews feature! Chat with folks who’ve already shown interest in your product, and let the AI do the heavy lifting of analyzing all that juicy feedback. You’ll get neat customer segments and spot-on suggestions to make your product even better. It’s like having a crystal ball for your launch, but way more fun (and actually useful)!

Focus groups involve guided discussions with small groups of participants, a unique approach that allows for the exploration of group dynamics and collective opinions. This method provides a window into communal responses to products or services and their varying influences within a shared context.

Observational research

Observational research, the subtle art of watching and recording how consumers interact with products or services in real-world settings, can reveal intricacies of consumer behavior that other methods might overlook.

Experimental research

The experimental research method, a systematic approach of manipulating variables to test cause-and-effect relationships, has a vital role in progressing aspects such as product development or pricing strategies.

Content analysis

Content analysis involves systematically analyzing communications like social media posts, customer reviews, or competitor marketing materials. This method offers a deep dive into the public perception and discourse surrounding your brand.

Social media listening

Social media listening carries an importance more than ever in this digital age. Monitoring social media platforms for mentions of your brand, competitors, or industry-related topics can help you keep your finger on the pulse of market sentiment.

Competitive analysis

Competitive analysis, a comprehensive research into your competitors’ strategies, strengths, and weaknesses, enables you to identify opportunities and threats in the market, and to build benchmarking standards for your brand.

Pro tip: Try using the Prelaunch AI Market Research tool that quickly gives you a summary of what people think of your competitors’ products based on their comment and feedback on Amazon.com. Simply find the Amazon product links, copy-paste and presto! 

Tools and Resources for Market Research

This is a comprehensive listing of all the tools and resources you’ll need to conduct effective market research.

Survey Tools

• SurveyMonkey : An online survey platform that allows users to create, distribute, and analyze surveys to gather feedback and insights
• Google Forms : A free tool for creating customizable surveys and forms to collect data and responses easily.
• Typeform : A versatile survey and form-building tool designed to create engaging and interactive questionnaires.

Social Media Analytics

• Hootsuite : A social media management platform that schedules posts, monitors social media activity, and provides analytics.
• Sprout Social : A social media management and analytics tool that helps businesses manage their social media presence and engage with audiences.
• Brandwatch : A social listening and analytics tool that provides insights into brand perception and market trends through social media data.

Website Analytics

• Google Analytics : A free web analytics service that tracks and reports website traffic, user behavior, and conversion metrics.

Market Research Databases

• Statista : A statistics portal that provides access to a wide range of industry, market, and consumer data.
• IBISWorld : A market research database offering detailed industry reports and insights into market trends and forecasts.
• MarketResearch.com : A platform that provides access to a vast array of market research reports and industry insights.

Customer Relationship Management (CRM) Software

• Salesforce : A comprehensive CRM software that manages customer relationships, sales, and marketing activities.
• HubSpot : A CRM and inbound marketing platform that integrates tools for managing contacts, marketing automation, and sales.

Concept Testing Platforms

• Prelaunch : Allows you to validate product concepts quickly and efficiently, gathering valuable market feedback before full-scale launch.

Professional Market Research Services

• Nielsen : A global measurement and data analytics company providing insights into consumer behavior and media consumption.
• Ipsos : A market research firm that offers data and insights on consumer behavior, market trends, and public opinion.
• Kantar : A global data, research, and consultancy company providing insights into consumer behavior and market dynamics.

Real-World Examples of Successful Market Research

To help provide you with some context of just how integral market research is, we’ve compiled some real-world examples. 

Starbucks – Building a Brand on Customer Insights

Starbucks, the global coffeehouse chain, is a prime example of a company that has leveraged market research to build a strong brand. Their success story revolves around understanding their customers deeply and tailoring their offerings accordingly.

• Understanding the Customer: Starbucks began by conducting extensive market research to identify the needs and preferences of their target audience. They discovered that customers were seeking more than just coffee; they wanted an experience.
• Creating a Unique Experience: Based on their research, Starbucks focused on creating a welcoming atmosphere, offering high-quality coffee, and providing excellent customer service. This emphasis on experience differentiation set them apart from competitors.
• Iterative Research and Development: Starbucks continuously conducts market research to refine their offerings. They gather customer feedback through surveys, social media listening, and in-store observations. This data helps them introduce new products, adjust pricing, and optimize store layouts.
• Loyalty Program and Personalization: Starbucks’ loyalty program, My Starbucks Rewards, is a testament to their commitment to customer-centricity. By collecting detailed information about customer preferences, they can offer personalized recommendations, rewards, and promotions.

Netflix – Data-Driven Content Strategy

Netflix, a global streaming service, has mastered the art of using data to inform its content strategy.

• Analyzing Viewing Habits: Netflix collects vast amounts of data on viewer behavior, including what they watch, when they watch, and how they interact with content. This data provides insights into viewer preferences and trends.
• Content Recommendation Engine: Netflix’s recommendation algorithm is powered by data analysis. By understanding individual preferences, the platform can suggest shows and movies that are likely to be enjoyed by each user.
• Original Content Development: Netflix uses data to identify potential hits for original content. By analyzing viewer data, they can identify popular genres, themes, and actors, which helps them develop shows that are more likely to be successful.

These examples demonstrate the power of market research in driving business success. By understanding customers, identifying market trends, and making data-driven decisions, companies can create products and services that resonate with their target audience, build strong brands, and achieve sustainable growth.

Common Market Research Mistakes and How to Avoid Them

When conducting market research, it’s crucial to be aware of potential pitfalls that can undermine the effectiveness of your findings. Here are some common mistakes to avoid:

Insufficient sample size is a common error that can undermine your market research efforts. Ensuring your sample size is large enough to be statistically significant and truly representative of your target population is paramount. It’s crucial to use an appropriate sample size to generate reliable findings that can guide your decision-making processes.

Leading questions in surveys is another frequent mistake. It’s vital to frame your questions neutrally to prevent biasing responses. This involves careful crafting and review of your questions to identify and eliminate potential bias. Consider having your questions reviewed by neutral parties to ensure their impartiality.

Ignoring secondary research can be damaging to your research efforts. Existing data sources can provide invaluable insights and should not be overlooked. It’s advisable to start your research process with secondary research to inform the design of your primary research. This could provide valuable context and save time and resources.

Misinterpreting data can lead to faulty conclusions and misguided strategies. It’s crucial to be cautious when interpreting your research findings. Consider all possible explanations, and don’t hesitate to seek expert help if needed. Always remember, data is only as good as the interpretations made from it.

Neglecting ongoing research is a mistake that can make your business strategy outdated. Market conditions are constantly changing, and your research should reflect this. Implementing regular research practices can help you stay updated on market trends and customer needs, keeping your business strategy relevant and effective.

The Future of Market Research

The landscape of market research is experiencing a rapid metamorphosis fostered by technological innovations and the shifting patterns of consumer behaviors. Here we delve deeper into these transformative trends:

Artificial Intelligence and Machine Learning : These technologies are revolutionizing the data analysis process. AI and Machine Learning algorithms can comb through enormous data volumes at lightning speed, unearthing intricate insights that would be arduous to glean manually, thus transforming the efficiency and depth of market research.

Comprehensive Concept Validating Software: As you can see in the Tools and Resources section above, there are several platforms available for any and all steps that go into conducting market research. One trend worth noting is that more and more, companies will seek to use tools that have an all-in-one approach so they don’t have to worry about syncing their data across multiple spaces. Trailblazing platforms like this include Prelaunch that give any creator the power to digitally test an idea before spending millions on prototyping and manufacturing.

Big Data : The escalating accessibility of vast data sets is shedding new light into consumer behavior and market trends. By analyzing this big data, researchers can gauge detailed market patterns, predict future trends, and make more informed decisions, thereby fostering a deeper understanding of the marketplace.

Mobile Research : The omnipresence of smartphones has triggered a shift towards mobile-first research methodologies. These enable researchers to connect with consumers on devices they use daily, thereby collecting real-time data and gaining more authentic and complete insights into consumer behavior.

Virtual and Augmented Reality : The advent of these cutting-edge technologies has ushered in an era of new possibilities for product testing and consumer behavior studies. VR and AR can create immersive, realistic environments where consumers can interact with products or services, offering rich, multidimensional data for market researchers.

Ethical Data Collection : Amid growing concerns around data privacy, the future of market research hinges on transparent and ethical data collection. Ensuring that data is obtained through fair practices and used responsibly is becoming paramount, as trust becomes a crucial factor in consumer relations.

Speculations indicate that the market researchers of the future will have to proficiently meld traditional research methods with emerging technologies. The emphasis will be on agility and a commitment to continued learning to keep abreast with the swiftly evolving markets.

Market Research Takeaways

Market research is a powerful tool that can drive business success by providing crucial insights into your market, customers, and competitors. By following the steps outlined in this guide and leveraging the appropriate tools and methods, you can conduct effective market research that informs your business strategies and decision-making processes.

Remember, good market research is an ongoing process. Markets are constantly evolving, and staying ahead requires continuous learning and adaptation. Whether you’re validating a new product concept, optimizing your marketing strategies, or exploring new market opportunities, make market research an integral part of your business practices.

Ready to put your market research skills into practice? Start by defining your research objectives and planning your first study. And if you’re looking to validate a new product or service concept quickly and efficiently, consider using Prelaunch.com. With its powerful concept testing capabilities, Prelaunch can help you gather valuable market feedback and set your business on the path to success.

Happy researching!

Alice Ananian

Alice has over 8 years experience as a strong communicator and creative thinker. She enjoys helping companies refine their branding, deepen their values, and reach their intended audiences through language.

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How to do Market Analysis in 6 Easy Steps

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Knowing how to do market analysis is pivotal for many roles, benefiting any organization, regardless of its size, scope, or sector.

Regular market analysis levels up your individual ability to spot potential opportunities, stay on top of current trends, and gives you insights into the competitive landscape .

This article will cover why you need to analyze a market frequently and shows you how to do a basic market analysis in 6 straightforward steps.

What is a market analysis?

Market analysis is the process of gathering data about a target market . It examines the competitive landscape, consumers, and conditions that impact the marketplace.

The benefits of market analysis

Here are eight reasons why a regular market analysis is beneficial:

• Understand the competitive landscape
• Spot trends in your market
• Uncover opportunities for growth or diversification
• Reduce either risk or cost for launching new products or services
• Develop a deeper understanding of a target audience
• Enhance marketing efforts or discover ways to change
• Analyze business performance within a market
• Identify new segments of a market to target

Why you should conduct a market analysis

Aside from the benefits we’ve already listed, reviewing and redoing your market analysis regularly is important . Here’s why.

• Markets shift
• Consumer behaviors change
• New players enter existing markets
• Disruptive technologies and enhancements to rival offerings can shift the landscape
• External events impact market conditions that drive changes

If you already know how to do market analysis, ask yourself how frequently you undertake the task: is it annually or quarterly? And consider the time it takes and the tools you used to obtain your information.

With this in mind, we’ll walk you through the most effective market analysis methods. Showing you the steps to take, with market analysis examples, to bring these steps to life.

How to conduct a market analysis

These six steps break down how to analyze a market into easy-to-follow, digestible stages.

Before you start: Use a framework to record your findings. There are plenty of visualization tools, but a basic excel sheet will be fine if you want to keep it simple. Why? Because when you return to review this analysis and repeat this exercise, you’ll want to have everything recorded in a single place. It will save you time and make any future comparisons easier.

Step 1 – Market segmentation

What: Whether you want to enter a new market , launch a new product, or simply assess opportunities for an existing business, this first step in the market analysis process is crucial yet often overlooked.

Why: Market segmentation helps you identify the core segments of a market to target. By identifying the portion of a market your products will be suitable for, you can accurately define the market size and better understand your potential customers’ specific needs and preferences.

How: There are multiple ways you can segment a market, and the right approach will depend on your product, its customers, and its target profiles.

Here, we can see how a segment is built using Similarweb’s website segment feature. I specifically want to view the credit card sector in the US, a market made up of pure players (think Amex or Visa ) and individual players with credit card lines as one of their segments (think Wells Fargo or USAA ). By splitting up a market like this, I can analyze the areas of business I care about more for my market analysis.

So, instead of viewing data that encompasses the other lines of business the likes of Wells Fargo and the USAA handle, such as loans, I get to hone in on their credit card segments only.

This is just one example of market segmentation. You can also segment a market based on consumer needs, ideal consumer profiles, regions, and other demographic data.

Step 2 – Market sizing

What: Market sizing determines your target market’s potential volume or sales revenue. It’s an essential component of market analysis that uses either secondary or primary research to explore the actual size of the market you are in or wish to enter. 

Total Addressable Market (TAM) – This gives you the complete value of the overall market and the first step in the market sizing process . Let’s say we want to analyze the US credit card market, the TAM would account for the whole of this market. Service Addressable Market (SAM) looks at potential audience volumes for a product or service in a target region. Sticking with the credit card sector example, this could be the total value of the credit card business that specifically targets the ‘poor credit rating’ segment of this market. Share of Market (SOM) – Also known as ‘service addressable market,’ it represents the proportion of your SAM that you are likely to achieve. SOM is always lower than SAM, taking a range of estimates based on the previous year’s performance or current market share + project growth to arrive at this figure.

Why: Market sizing helps businesses understand the size of their opportunity. By understanding the size and scope of a market, companies can better assess the potential profitability of the market. Tracking market share over time can also show who wins or loses at any given time.

Power-up Your Market Analysis with Similarweb Today

Market analysis example: market sizing

Using a metric known as traffic share , we can estimate the potential market size by showing the total reachable audience you have or could have with a product or service.

Using Similarweb Industry Analysis , I can see a real-time snapshot of my market’s performance. With it, I can see the total number of people in a market (unique visitors) and establish how much of that share I have or will target this year.

When sizing a market, it’s easy to fall into the habit of analyzing the market quarterly or annually. But often, the best insights are dynamic in nature. They appear to show shifts, sometimes unexpectedly or can indicate growth and changing behaviors as the year progresses. This is why we place a high emphasis on continuing a market analysis throughout the year.

Here, we’re looking at traffic share changes over time using Similarweb’s market trends. You can see the impact of Snychrony’s growth (in green) as they gain traction, along with USAA (purple). At the start of the year, these two players had no impact on the market. By the end of 2022, they’re showing gains and would be two key competitors to track when you reach step 4 of the market analysis process.

Those analyzing a market annually would miss out on key insights that show the rise of these two emerging players. At the end of the year, they’ve already grabbed a chunk of the market and, if they continue on the same trajectory, will continue to do so in 2023.

With the right tools, you get a dynamic view of the market data you need, allowing you to change tactics when markets shift.

Step 3 – Market trends

What: Reviewing current trends is key to any good market analysis. As we all know, trends can rise and fall at a moment’s notice. This is why this activity, in particular, is one you should routinely perform.

Why: Keeping a finger on the pulse can help you adapt and flex, at the right time, in the right way. Market trends give you insights into the current market situation and potential opportunities and challenges. Doing so can help you identify areas for growth, spot potential risks, and plan effective strategies. Market trends can also provide valuable information about customer preferences, competition, and economic and technological developments. By monitoring these trends, businesses can stay ahead of the curve and make informed decisions that will benefit their bottom line.

You may have heard about ChatGPT in the press ; this is an example of a highly-disruptive technology that has the potential to completely shift an entire market; many, in fact. It managed to gain over 1 million users within its first week on the market. And it’s a great example of why regular market trends analysis should occur.

How: There are lots of ways new market trends can surface. Consumer behavior , economic trends, technological advancements, and the competitive landscape can impact how markets behave. Legal and regulatory changes can also influence trends and changes too.

Staying up to date with industry news and legislation changes is useful. But it takes time, and it’s not always the most effective way to know when consumer sentiment changes.

Market research surveys are one way to understand customer attitudes and needs and how they shift over time. However, it’s not the most effective way to inform your market analysis. Particularly when you want real-time market intel.

Market analysis example: trend detection 

Similarweb analyzes billions of data signals daily to deliver game-changing insights about any market, region, or individual company. So, as we look at how to do market analysis, I wanted to share a practical example of how clients use Similarweb to spot trends in a market.

Wonderbly , a global business, provides personalized books, serving over 6 million customers. To grow its business, it conducts regular market analysis. As part of this process, they analyzed seasonal trending keywords within Similarweb. Let’s look at what it found out and how it impacted the business.

Wonderbly was able to spot an emerging category (anniversaries and weddings) that was not currently catered for within its own product set. In addition to being able to capitalize on seasonal trends in its market, it achieved a 69% revenue in books purchased by a more mature demographic and a completely new audience for its business.

Read more: Wonderbly’s market analysis success story .

Step 4 – Competitive analysis

What: A competitive analysis involves collecting and reviewing data about key industry players, rivals, or emerging stars in your market. It unpacks and tracks their activities and successes, letting you see what’s working, how they go to market and the various marketing strategies they use to attract and retain customers.

Why: Regardless of your size or scope, understanding the competitive landscape is key. Your target audience knows your competitors and will likely size up the pros and cons of buying from thesm before considering whether to do business with you. A robust competitive analysis can help you refine your own offerings, make informed pricing decisions, show where you can beat out your rivals, and identify areas for improvement or diversification.

How: A tried and trusted tool for this process is the well-known SWOT analysis . It lets you map and view what and how each competitor takes its products to market. Considering things like pricing, positioning, marketing, services, and more. A competitive matrix is another tool used to visualize data about rivals in a market.

To do it, download our free competitive analysis framework . Then, pick five competitors in your market to track. Complete each section, and analyze the results to discover your biggest opportunities.

Step 5 – Develop strategies

What: Use the results of your market analysis to make data-driven decisions .

Why: When you read a post about how to do market analysis, the chances are you’ve got a goal in mind. Perhaps you want to explore a new market before deciding if it’s ripe for entry. You may want to introduce a new product or service or acquire an existing company. Whatever your goal is, ensure you put the insights and data you’ve obtained to good use.

How: Create a list of potential opportunities, then build strategies around each. Here, you might evaluate potential ideas based on project costs or timeframes. Once you’ve clearly mapped out each opportunity, and understand the potential impact it will have, along with associated costs and timeframes, you can think strategically about which ideas to move forward with from both a short and long-term perspective.

Pro Tip: Use a framework to record, capture, and review the data you’ve collected about market segmentation, size, trends, and key competitors. You can draw inspiration from our downloadable competitive analysis frameworks. However, what’s key is that you systematically record your findings and review them regularly.

Step 6 – Monitor the market

What: Keep track of your market and its key players; monitor changes over time.

Why: We know markets shift, whether they’re impacted by consumer behaviors, external factors, or something else. So, it’s important to monitor changes over time.

How: We may be a little biased, but Similarweb gives you a real-time bird-eye view of your market. Letting you dive into the details and unpick changes and tactics whenever you need. With it, you can track key growth metrics, marketing channels, emerging players, trending topics , and much more.

Using the Industry Analysis tab in Similarweb Research Intelligence , I can identify the market leaders and rising stars quickly. Here, I immediately see a company to track, Synchrony . As an emerging player showing exponential growth (2700%), I’ll take my market analysis a step further by investigating their successes later.

Similarweb shows me key insights, such as website traffic , the marketing channels it’s getting traffic from, audience demographics , geography , organic search insights, and more. As part of any good market analysis, the ability to spot rising players and unpack their successes can be crucial, particularly when they’re showing such growth.

Analyzing a market: Conclusions

Learning how to do market analysis is the first step. Aside from analyzing the results and making key strategic decisions, the ability to track changes over time is key. Similarweb makes it easy to segment, size, and analyze a market fast. With it, you can spot opportunities, benchmark your performance, and monitor shifts and changes as they happen, not a month or quarter later.

What are the 4 types of market analysis?

The four types of market analysis are market segmentation, market sizing, market trends, and competitive analysis.

What are the five components of market analysis?

The five components of market analysis are: customer segmentation , customer needs and trends, competitors, market size and trend, and pricing.

What makes a good market analysis?

A good market analysis should include accurate, up-to-date data, clear objectives, and a thorough market and customer needs analysis.

Is market analysis the same as a SWOT analysis?

No, market analysis and SWOT analysis are not the same. While a SWOT analysis evaluates an organization’s strengths, weaknesses, opportunities, and threats, a market analysis focuses on the external environment, such as customer needs, market trends, and competitors.

by Liz March

Digital Research Specialist

Liz March has 15 years of experience in content creation. She enjoys the outdoors, F1, and reading, and is pursuing a BSc in Environmental Science.

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Give it a try or talk to our insights team — don’t worry, it’s free!

Market Research Components

• Market Size and Market Growth
• Market Segmentation
• Market Trends
• Competitive Analysis
• SWOT Analysis
• PESTEL Analysis
• Porter’s Five Forces Analysis
• Demand and Supply Dynamics
• Market Dynamics
• Consumer Demand Analysis
• Market Risk Analysis
• Market Gap Analysis
• Ansoff Matrix
• VRIO Analysis

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How To Do Market Research: Definition, Types, Methods

Jul 25, 2024

11 min. read

Market research isn’t just collecting data. It’s a strategic tool that allows businesses to gain a competitive advantage while making the best use of their resources. Research reveals valuable insights into your target audience about their preferences, buying habits, and emerging demands — all of which help you unlock new opportunities to grow your business.

When done correctly, market research can minimize risks and losses, spur growth, and position you as a leader in your industry. 

Let’s explore the basic building blocks of market research and how to collect and use data to move your company forward:

Table of Contents

What Is Market Research?

Why is market research important, market analysis example, 5 types of market research, what are common market research questions, what are the limitations of market research, how to do market research, improving your market research with radarly.

Market Research Definition: The process of gathering, analyzing, and interpreting information about a market or audience.

Market research studies consumer behavior to better understand how they perceive products or services. These insights help businesses identify ways to grow their current offering, create new products or services, and improve brand trust and brand recognition .

You might also hear market research referred to as market analysis or consumer research .

Traditionally, market research has taken the form of focus groups, surveys, interviews, and even competitor analysis . But with modern analytics and research tools, businesses can now capture deeper insights from a wider variety of sources, including social media, online reviews, and customer interactions. These extra layers of intel can help companies gain a more comprehensive understanding of their audience.

With consumer preferences and markets evolving at breakneck speeds, businesses need a way to stay in touch with what people need and want. That’s why the importance of market research cannot be overstated.

Market research offers a proactive way to identify these trends and make adjustments to product development, marketing strategies , and overall operations. This proactive approach can help businesses stay ahead of the curve and remain agile as markets shift.

Market research examples abound — given the number of ways companies can get inside the minds of their customers, simply skimming through your business’s social media comments can be a form of market research.

A restaurant chain might use market research methods to learn more about consumers’ evolving dining habits. These insights might be used to offer new menu items, re-examine their pricing strategies, or even open new locations in different markets, for example.

A consumer electronics company might use market research for similar purposes. For instance, market research may reveal how consumers are using their smart devices so they can develop innovative features.

Market research can be applied to a wide range of use cases, including:

• Testing new product ideas
• Improve existing products
• Entering new markets
• Right-sizing their physical footprints
• Improving brand image and awareness
• Gaining insights into competitors via competitive intelligence

Ultimately, companies can lean on market research techniques to stay ahead of trends and competitors while improving the lives of their customers.

Market research methods take different forms, and you don’t have to limit yourself to just one. Let’s review the most common market research techniques and the insights they deliver.

1. Interviews

3. Focus Groups

4. Observations

5. AI-Driven Market Research

One-on-one interviews are one of the most common market research techniques. Beyond asking direct questions, skilled interviewers can uncover deeper motivations and emotions that drive purchasing decisions. Researchers can elicit more detailed and nuanced responses they might not receive via other methods, such as self-guided surveys.

Interviews also create the opportunity to build rapport with customers and prospects. Establishing a connection with interviewees can encourage them to open up and share their candid thoughts, which can enrich your findings. Researchers also have the opportunity to ask clarifying questions and dig deeper based on individual responses.

Market research surveys provide an easy entry into the consumer psyche. They’re cost-effective to produce and allow researchers to reach lots of people in a short time. They’re also user-friendly for consumers, which allows companies to capture more responses from more people.

Big data and data analytics are making traditional surveys more valuable. Researchers can apply these tools to elicit a deeper understanding from responses and uncover hidden patterns and correlations within survey data that were previously undetectable.

The ways in which surveys are conducted are also changing. With the rise of social media and other online channels, brands and consumers alike have more ways to engage with each other, lending to a continuous approach to market research surveys.

3. Focus groups

Focus groups are “group interviews” designed to gain collective insights. This interactive setting allows participants to express their thoughts and feelings openly, giving researchers richer insights beyond yes-or-no responses.

One of the key benefits of using focus groups is the opportunity for participants to interact with one another. They spark discussions while sharing diverse viewpoints. These sessions can uncover underlying motivations and attitudes that may not be easily expressed through other research methods.

Observing your customers “in the wild” might feel informal, but it can be one of the most revealing market research techniques of all. That’s because you might not always know the right questions to ask. By simply observing, you can surface insights you might not have known to look for otherwise.

This method also delivers raw, authentic, unfiltered data. There’s no room for bias and no potential for participants to accidentally skew the data. Researchers can also pick up on non-verbal cues and gestures that other research methods may fail to capture.

5. AI-driven market research

One of the newer methods of market research is the use of AI-driven market research tools to collect and analyze insights on your behalf. AI customer intelligence tools and consumer insights software like Meltwater Radarly take an always-on approach by going wherever your audience is and continuously predicting behaviors based on current behaviors.

By leveraging advanced algorithms, machine learning, and big data analysis , AI enables companies to uncover deep-seated patterns and correlations within large datasets that would be near impossible for human researchers to identify. This not only leads to more accurate and reliable findings but also allows businesses to make informed decisions with greater confidence.

Tip: Learn how to use Meltwater as a research tool , how Meltwater uses AI , and learn more about consumer insights and about consumer insights in the fashion industry .

No matter the market research methods you use, market research’s effectiveness lies in the questions you ask. These questions should be designed to elicit honest responses that will help you reach your goals.

Examples of common market research questions include:

Demographic market research questions

• What is your age range?
• What is your occupation?
• What is your household income level?
• What is your educational background?
• What is your gender?

Product or service usage market research questions

• How long have you been using [product/service]?
• How frequently do you use [product/service]?
• What do you like most about [product/service]?
• Have you experienced any problems using [product/service]?
• How could we improve [product/service]?
• Why did you choose [product/service] over a competitor’s [product/service]?

Brand perception market research questions

• How familiar are you with our brand?
• What words do you associate with our brand?
• How do you feel about our brand?
• What makes you trust our brand?
• What sets our brand apart from competitors?
• What would make you recommend our brand to others?

Buying behavior market research questions

• What do you look for in a [product/service]?
• What features in a [product/service] are important to you?
• How much time do you need to choose a [product/service]?
• How do you discover new products like [product/service]?
• Do you prefer to purchase [product/service] online or in-store?
• How do you research [product/service] before making a purchase?
• How often do you buy [product/service]?
• How important is pricing when buying [product/service]?
• What would make you switch to another brand of [product/service]?

Customer satisfaction market research questions

• How happy have you been with [product/service]?
• What would make you more satisfied with [product/service]?
• How likely are you to continue using [product/service]?

Bonus Tip: Compiling these questions into a market research template can streamline your efforts.

Market research can offer powerful insights, but it also has some limitations. One key limitation is the potential for bias. Researchers may unconsciously skew results based on their own preconceptions or desires, which can make your findings inaccurate.

• Depending on your market research methods, your findings may be outdated by the time you sit down to analyze and act on them. Some methods struggle to account for rapidly changing consumer preferences and behaviors.
• There’s also the risk of self-reported data (common in online surveys). Consumers might not always accurately convey their true feelings or intentions. They might provide answers they think researchers are looking for or misunderstand the question altogether.
• There’s also the potential to miss emerging or untapped markets . Researchers are digging deeper into what (or who) they already know. This means you might be leaving out a key part of the story without realizing it.

Still, the benefits of market research cannot be understated, especially when you supplement traditional market research methods with modern tools and technology.

Let’s put it all together and explore how to do market research step-by-step to help you leverage all its benefits.

Step 1: Define your objectives

You’ll get more from your market research when you hone in on a specific goal : What do you want to know, and how will this knowledge help your business?

This step will also help you define your target audience. You’ll need to ask the right people the right questions to collect the information you want. Understand the characteristics of the audience and what gives them authority to answer your questions.

Step 2: Select your market research methods

Choose one or more of the market research methods (interviews, surveys, focus groups, observations, and/or AI-driven tools) to fuel your research strategy.

Certain methods might work better than others for specific goals . For example, if you want basic feedback from customers about a product, a simple survey might suffice. If you want to hone in on serious pain points to develop a new product, a focus group or interview might work best.

You can also source secondary research ( complementary research ) via secondary research companies , such as industry reports or analyses from large market research firms. These can help you gather preliminary information and inform your approach.

Step 3: Develop your research tools

Prior to working with participants, you’ll need to craft your survey or interview questions, interview guides, and other tools. These tools will help you capture the right information , weed out non-qualifying participants, and keep your information organized.

You should also have a system for recording responses to ensure data accuracy and privacy. Test your processes before speaking with participants so you can spot and fix inefficiencies or errors.

Step 4: Conduct the market research

With a system in place, you can start looking for candidates to contribute to your market research. This might include distributing surveys to current customers or recruiting participants who fit a specific profile, for example.

Set a time frame for conducting your research. You might collect responses over the course of a few days, weeks, or even months. If you’re using AI tools to gather data, choose a data range for your data to focus on the most relevant information.

Step 5: Analyze and apply your findings

Review your findings while looking for trends and patterns. AI tools can come in handy in this phase by analyzing large amounts of data on your behalf.

Compile your findings into an easy-to-read report and highlight key takeaways and next steps. Reports aren’t useful unless the reader can understand and act on them.

Tip: Learn more about trend forecasting , trend detection , and trendspotting .

Meltwater’s Radarly consumer intelligence suite helps you reap the benefits of market research on an ongoing basis. Using a combination of AI, data science, and market research expertise, Radarly scans multiple global data sources to learn what people are talking about, the actions they’re taking, and how they’re feeling about specific brands.

Our tools are created by market research experts and designed to help researchers uncover what they want to know (and what they don’t know they want to know). Get data-driven insights at scale with information that’s always relevant, always accurate, and always tailored to your organization’s needs.

Learn more when you request a demo by filling out the form below:

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What Are Consumer Insights? Meaning, Examples, Strategy

How Coca-Cola Collects Consumer Insights

Market Intelligence 101: What It Is & How To Use It

9 Top Consumer Insights Tools & Companies

How to Conduct a Market Analysis? (+ Examples)

Appinio Research · 04.10.2023 · 29min read

Are you ready to transform your business with the unparalleled advantages of market analysis? Discover how harnessing the power of data-driven insights can propel your decision-making and unlock exceptional growth opportunities.

In this guide, we delve deep into the art of market analysis, showing you how to gain a competitive edge, tailor your strategies with precision, and, ultimately, boost your success. Let's embark on this journey of discovery together.

What is Market Analysis?

Market analysis is the process of evaluating market conditions and dynamics to understand its potential and make informed decisions. It helps you answer crucial questions:

• Who are your customers?
• What are their needs and preferences?
• Who are your competitors?
• What market trends should you be aware of?

Market analysis is crucial because it empowers you to make data-driven choices, minimize risks, and maximize opportunities.

Why is Market Analysis Important?

Before diving into the analysis, you need to define your objectives. Common goals of market analysis include:

• Market Entry: Evaluating the feasibility of entering a new market.
• Product Development : Identifying market gaps for new product development.
• Competitor Analysis: Understanding your competition's strengths and weaknesses.
• Strategic Planning: Shaping your business strategies based on market insights.

Benefits of Effective Market Analysis

Conducting a thorough market analysis brings several benefits:

• Risk Mitigation: Minimize the risk of entering an unprofitable market.
• Resource Allocation: Optimize resource allocation for marketing and product development.
• Competitive Advantage: Gain a competitive edge by understanding your market better.
• Innovation: Identify opportunities for innovation and growth.

Now that you understand the importance of market analysis, let's move on to the practical steps involved.

How to Prepare for Market Analysis?

Before diving into market analysis, setting the stage for success is essential. Here are the key steps to prepare for market analysis:

• Set Clear Objectives: Define your specific goals and objectives for the analysis. Be clear about what you want to achieve. For example, if you're planning to enter a new market, your purpose might be to determine market demand and competition.
• Identify Target Audience: Knowing your audience is crucial. Identify the demographics, preferences, and behaviors of your target market. This information will guide your data collection methods .
• Gather Necessary Resources: Market analysis requires data, tools, and expertise. Ensure you have access to the resources you need. This might include budget allocation for research tools, hiring analysts, or outsourcing data collection.
• Consider Ethical Considerations: Ethical guidelines are paramount in market analysis. Ensure that your data collection methods and analysis processes adhere to ethical standards, respecting privacy and confidentiality.

With your preparations in place, you're ready to collect the data necessary for your market analysis.

Data Collection for Market Analysis

Accurate and relevant data is the lifeblood of market analysis. Here's how you can gather the information you need:

Primary Data Sources

Primary data refers to information collected directly from the source. You can obtain primary data through:

• Surveys: Conducting surveys to gather insights from your target audience.
• Interviews: Engaging in one-on-one interviews with industry experts or potential customers .
• Observations: Collecting data by observing customer behavior or market trends.

Secondary Data Sources

Secondary data is information that already exists and is collected by someone else. Sources of secondary data include:

• Market Reports: Industry-specific reports and publications.
• Government Data: Data provided by government agencies.
• Competitor Reports : Analyzing reports and information about your competitors.

Qualitative Data Collection Methods

Qualitative data provides in-depth insights into customer attitudes and behaviors. Qualitative methods include:

• Focus Groups: Gathering a small group of participants to discuss specific topics.
• In-Depth Interviews: Conducting in-depth interviews with individuals to explore their perspectives.

Quantitative Data Collection Methods

Quantitative data is numerical and can be analyzed statistically. Common quantitative methods include:

• Surveys: Creating structured questionnaires for large-scale data collection.
• Online Analytics: Analyzing website and social media metrics for user behavior.

With your data collected, it's time to move on to the next crucial step: analyzing and interpreting the data.

Market Research Techniques

Analyzing the data you've collected is where the real insights come to light. Let's explore various market research techniques that help you make sense of your data.

Surveys and Questionnaires

Surveys and questionnaires are powerful tools for collecting quantitative data. They allow you to gather structured responses from a large sample of participants. When designing surveys, consider:

• Question Types: Crafting survey questions that are clear and unbiased.
• Sampling Techniques: Ensuring your sample is representative of your target audience.
• Data Analysis: Applying statistical methods to analyze survey data.

Interviews provide qualitative data through in-depth conversations with individuals. Key considerations include:

• Interview Structure: Developing a structured interview guide.
• Listening Skills: Active listening to uncover valuable insights.
• Transcribing and Coding: Transcribing interviews and coding responses for analysis.

Focus Groups

Focus groups involve small group discussions, providing rich qualitative data. To conduct effective focus groups:

• Moderation Skills: Skillfully moderating group discussions.
• Participant Selection: Recruiting diverse participants for varied perspectives.
• Thematic Analysis : Identifying themes and patterns in focus group discussions.

Observational Research

Observational research involves watching and recording customer behavior.

• Research Setting: Choosing the right environment for observations.
• Data Recording: Accurate and detailed recording of observations.
• Interpretation: Interpreting observed behaviors in the context of your objectives.

Competitor Analysis

Competitor analysis involves evaluating your rivals to understand their strengths and weaknesses.

• Identifying Competitors: Determine who your main competitors are.
• Competitive Metrics: Choose relevant metrics to assess competition.
• Benchmarking: Comparing your performance against competitors.

By mastering these market research techniques, you'll be well-prepared to extract valuable insights from your data. The next step is to interpret these insights effectively.

Data Analysis and Interpretation

Analyzing and interpreting data is the heart of market analysis. This process involves converting raw data into actionable insights.

Data Cleaning and Preparation

Data can be messy, and cleaning and preparing it for analysis is essential. This involves:

• Data Cleaning: Removing outliers, errors, and inconsistencies.
• Data Transformation: Converting data into a consistent format.
• Data Validation: Ensuring data accuracy and completeness.

Descriptive Analysis

Descriptive analysis involves summarizing and visualizing data to understand its basic characteristics. Techniques include:

• Summary Statistics: Calculating measures like mean, median, and standard deviation.
• Data Visualization: Creating charts and graphs to represent data visually.
• Data Distribution Analysis: Understanding how data is distributed.

Statistical Analysis

Statistical analysis allows you to draw meaningful conclusions from your data. Techniques include:

• Hypothesis Testing: Testing hypotheses to make data-driven decisions.
• Regression Analysis : Examining relationships between variables.
• Segmentation Analysis: Grouping data for more targeted insights.

Identify Trends and Patterns

Identifying trends and patterns in your data helps you make predictions and formulate strategies.

• Time Series Analysis : Analyzing data over time to identify trends.
• Pattern Recognition: Spotting recurring patterns in customer behavior.
• Predictive Modeling : Using data to make future predictions.

Armed with these analytical skills, you can effectively uncover valuable insights that inform your business decisions.

Market Segmentation

Market segmentation is crucial in understanding your audience better and tailoring your strategies accordingly.

What is Market Segmentation?

Market segmentation involves dividing your market into distinct groups based on shared characteristics. This is significant because it allows you to:

• Target Specific Audiences: Tailor your marketing efforts to specific segments.
• Personalize Products: Customize products and services to meet segment needs.
• Optimize Resource Allocation: Allocate resources more efficiently by focusing on high-potential segments.

Types of Market Segmentation

There are various ways to segment a market, including:

• Demographic Segmentation : Dividing based on age, gender, income, etc.
• Psychographic Segmentation : Grouping by lifestyles, values, and attitudes.
• Geographic Segmentation: Segmenting by location or region.
• Behavioral Segmentation : Dividing based on buying behavior and preferences.

Targeting Specific Market Segments

After segmentation, you must target your chosen segments effectively. This involves:

• Positioning: Crafting a unique value proposition for each segment.
• Messaging: Tailoring your marketing messages to resonate with each segment.
• Product Development: Adapting products to meet segment-specific needs.

By understanding your market segments, you can connect with your audience on a deeper level and increase your chances of success.

SWOT Analysis

A SWOT analysis is a valuable tool for assessing your business's internal strengths and weaknesses, as well as external opportunities and threats.

Identify and leverage your strengths, such as:

• Unique Products: What sets your products apart from the competition?
• Skilled Workforce: Highlight the expertise of your team.
• Strong Brand: Emphasize your brand reputation and recognition.

Acknowledge and address your weaknesses, including:

• Limited Resources: Recognize budget constraints or resource shortages.
• Market Share : Assess areas where competitors outperform you.
• Operational Challenges: Identify internal issues that need improvement.

Opportunities

Exploit opportunities in your market, such as:

• Market Growth: Explore emerging markets and trends.
• Partnerships: Seek collaboration with complementary businesses.
• New Technologies: Embrace innovations that can improve your operations.

Mitigate potential threats, such as:

• Competition: Analyze the competitive landscape and potential disruptors.
• Economic Trends: Consider how economic fluctuations may affect your business.
• Regulatory Changes: Stay updated on industry regulations and compliance.

Conducting a SWOT analysis helps you develop strategies that capitalize on strengths, mitigate weaknesses, seize opportunities, and guard against threats.

How to Conduct Competitive Market Analysis?

Competitive market analysis is a critical component of your overall market analysis strategy. Understanding who your competitors are, analyzing their strengths and weaknesses, and conducting competitive benchmarking are essential steps to gain a strategic advantage in your market.

1. Identify Key Competitors

Identifying your key competitors is the first step in a competitive market analysis. Key competitors are those businesses that directly compete with you for the same target audience or market share. Here's how to identify them:

• Market Research : Conduct thorough market research to identify businesses offering similar products or services in your industry or niche.
• Customer Feedback: Listen to your customers. Often, they will mention your competitors when discussing alternatives or choices.
• Industry Associations: Explore industry associations, directories, or trade publications to find a list of competitors.
• Online Search: Use search engines and social media platforms to discover businesses that appear in similar search results or target similar keywords.

Once you have identified your key competitors, you can move on to a more in-depth analysis of their strengths and weaknesses.

2. Analyze Competitor Strengths and Weaknesses

Analyzing competitor strengths and weaknesses provides valuable insights into their strategies and helps you identify opportunities and threats. Here's how to conduct this analysis effectively:

Product or Service Offering

• Strengths: Determine what your competitors excel at regarding product quality, features, and innovation.
• Weaknesses: Identify areas where their products or services fall short compared to yours.

Pricing Strategies

• Strengths: Analyze whether competitors offer competitive pricing or unique pricing models.
• Weaknesses: Look for instances where their pricing may be less competitive or prohibitive.

Market Share and Customer Base

• Strengths: Assess the size of their customer base and market share in your industry.
• Weaknesses: Investigate whether they have any vulnerabilities or dependencies on a specific customer segment.

Marketing and Branding

• Strengths: Analyze their marketing strategies, branding efforts, and customer engagement tactics.
• Weaknesses: Identify any gaps or areas where their marketing efforts may be less effective.

Customer Reviews and Feedback

• Strengths: Look for positive customer reviews and feedback to understand what your competitors are doing well.
• Weaknesses: Pay attention to negative reviews and areas where customers express dissatisfaction.

This analysis will help you identify areas where you can differentiate yourself and gain a competitive edge. It also enables you to anticipate how competitors might respond to your strategies.

3. Competitive Benchmarking

Competitive benchmarking involves comparing your performance and strategies against those of your key competitors. It allows you to set performance goals, identify best practices, and continuously improve.

• Select Key Metrics: Choose the key performance metrics that matter most to your business. These could include revenue growth, customer acquisition costs, customer satisfaction scores, or market share.
• Gather Data: Collect data on these selected metrics for both your business and your competitors. This data can come from public sources, industry reports, or your own internal records.
• Analyze and Compare: Compare your performance against that of your competitors using the selected metrics. Pay close attention to areas where you outperform them and areas where you lag behind.
• Identify Best Practices: Identify the strategies and practices that contribute to your competitors' success. Learn from their best practices and consider implementing similar strategies in your business.
• Set Improvement Goals: Based on your analysis, set specific improvement goals for your business. These goals should be realistic and aligned with your overall business objectives.
• Monitor Progress: Regularly monitor your progress toward achieving your improvement goals. Adjust your strategies and tactics as needed to stay competitive.

Competitive benchmarking is an ongoing process. By continuously assessing your performance compared to your competitors, you can adapt and refine your strategies to maintain a competitive advantage in the market.

How to Conduct Comparative Market Analysis?

Comparative market analysis involves assessing your market position, understanding competitor strategies and performance, and identifying opportunities for growth. Let's explore each aspect in more detail.

What is Comparative Analysis in Market Research?

Comparative analysis involves examining your business in relation to your competitors and the overall market. It helps you:

• Gain Perspective: Understand where your business stands in the market landscape.
• Identify Trends: Recognize industry trends and shifts.
• Spot Opportunities: Discover areas where your business can excel or innovate.

To conduct an effective comparative analysis:

• Collect Data: Gather data on your business, competitors, and the market as a whole.
• Use Key Metrics: Focus on key performance metrics relevant to your industry.
• Benchmark Against Competitors: Compare your performance against that of your direct competitors.

Analyzing Competitor Strategies and Performance

Analyzing competitor strategies and performance is a critical aspect of comparative analysis. Here's how to go about it:

1. Competitor Strategies

Product and Service Strategies: Examine their product/service offerings and pricing strategies.

• Marketing and Promotion: Analyze their marketing campaigns, messaging, and customer engagement tactics.
• Distribution Channels: Understand how they reach and distribute products or services to customers.
• Innovation: Identify areas where they innovate or introduce new features.

2. Financial Performance

• Revenue and Growth: Assess their revenue figures and growth rates over time.
• Profit Margins: Analyze their profit margins and how they compare to industry standards.
• Investment and Funding: Explore whether they have secured significant investments or funding.

3. Customer Engagement

• Customer Base: Understand the size and composition of their customer base.
• Customer Satisfaction: Look for indicators of customer satisfaction, such as reviews or feedback.

4. Market Presence

Market Share: Determine their market share in your industry or niche.

Geographic Reach: Explore the regions or markets they serve.

Identifying Market Position and Opportunities

Identifying your market position and opportunities is the ultimate goal of comparative market analysis. Here's how to accomplish this:

1. Market Position

• Relative Strengths: Determine where your business excels compared to competitors.
• Areas of Improvement: Identify areas where you lag and need improvement.
• Market Niche: Define your unique value proposition and niche within the market.

2. Opportunities

• Competitive Gaps: Recognize gaps in the market that your business can fill.
• Unmet Customer Needs: Explore customer needs that competitors are not effectively addressing.
• Emerging Trends: Stay alert to emerging industry trends and adapt your strategies accordingly.

3. Strategic Planning

• Strategy Development: Formulate strategies that capitalize on your strengths and address weaknesses.
• Innovation: Consider innovative approaches to differentiate your business.
• Risk Mitigation: Develop plans to mitigate risks associated with market dynamics.

By conducting a comprehensive comparative market analysis, you gain a deeper understanding of your competitive landscape, enabling you to make informed decisions, refine your strategies, and seize growth opportunities effectively. This process should be ongoing, as the market is dynamic and ever-changing.

Competitive Market Analysis vs. Comparative Market Analysis

While these approaches share some similarities, they serve distinct purposes and offer unique insights. Let's explore the key differences and applications of each.

Competitive Market Analysis

Objective: Competitive Market Analysis primarily focuses on assessing your direct competitors and understanding their strategies, strengths, weaknesses, and overall market position. Its main goal is to help you gain a competitive edge by learning from and responding to your rivals effectively.

Key Aspects:

• Competitor-Centric: It revolves around thoroughly examining specific competitors that directly impact your business.
• Strategy-Oriented: The emphasis is on understanding your competitors' strategies, pricing models, product offerings, and marketing tactics.
• Market Positioning: It helps you define your position in relation to your immediate competitors and identify areas for differentiation.
• Direct Impact: Competitive Market Analysis is often employed for short-term decision-making, such as refining marketing strategies or adjusting pricing to respond to competitor moves.

Comparative Market Analysis

Objective: Comparative Market Analysis takes a broader perspective by evaluating your business within the context of the entire market. It aims to provide a comprehensive view of your market's dynamics, trends, and opportunities, helping you make informed, long-term strategic decisions.

• Market-Centric: It considers a broader view of the market, including competitors, potential entrants, and industry dynamics.
• Trend Analysis : Comparative Market Analysis looks at industry trends, market growth, consumer behavior, and emerging technologies that may impact your business.
• Strategic Insights: It provides strategic insights that extend beyond immediate competition, helping you identify opportunities for market expansion , diversification, or innovation.
• Long-Term Planning: This approach is suitable for long-term strategic planning, such as entering new markets, launching new products, or adapting to evolving market conditions.

How to Choose the Right Approach?

The choice between Competitive Market Analysis and Comparative Market Analysis depends on your specific business goals and the depth of insights you seek:

• Use Competitive Market Analysis when you need to closely monitor and respond to specific competitors' actions, refine short-term strategies, or differentiate your offerings within a crowded market segment.
• Opt for Comparative Market Analysis when you are making long-term strategic decisions, considering market expansion, or seeking to innovate based on broader industry trends. This approach provides a holistic view that extends beyond immediate competitors.

In practice, many businesses find value in combining elements of both approaches to gain a comprehensive understanding of their market environment. The key is to align your analysis with your strategic objectives and adapt your approach as your business evolves.

Market Analysis Template

A well-structured market analysis template is invaluable for streamlining the market research process, ensuring you cover all essential aspects and gather data systematically. Let's explore the components of an effective market analysis template and how to customize it to your specific needs.

How to Create a Structured Market Analysis Framework?

A comprehensive market analysis template typically includes the following sections:

1. Market Overview

• Market Size: Describe the current size and potential growth of the market.
• Market Segmentation: Identify key segments within the market.
• Market Trends: Highlight recent trends and developments.

2. Competitive Landscape

• Competitor Identification: List your main competitors and potential disruptors.
• Competitor Analysis: Evaluate their strengths, weaknesses, opportunities, and threats (SWOT).
• Competitive Advantage: Explore ways in which your business can gain a competitive edge.

3. Target Market Analysis

• Customer Personas: Develop detailed customer personas based on demographics, behavior, and preferences.
• Customer Needs: Understand your target audience's specific needs and pain points.
• Market Demand: Assess the demand for your products or services within your target market.

4. SWOT Analysis

• Strengths: Identify your business's internal strengths and advantages.
• Weaknesses: Acknowledge areas where your business may be vulnerable.
• Opportunities: Explore external factors that can be leveraged for growth.
• Threats: Recognize potential challenges and external risks.

5. Trends and Forecast

• Market Trends: Analyze current trends and their potential impact on your business.
• Market Forecast: Make data-driven predictions about the future of the market.
• Emerging Technologies: Assess how emerging technologies may influence your industry.

How to Utilize Template for Efficient Market Analysis?

Templates not only save time but also ensure that you cover all critical aspects of market analysis. To effectively utilize a template:

1. Identify Relevant Sections

Review the template to identify sections that are relevant to your specific market analysis objectives. Not all sections may be necessary for every analysis.

2. Customize Sections

Tailor each section to your business and market. For example:

• In the "Market Overview" section , provide market data specific to your industry or region.
• In the "Competitive Landscape" section , focus on competitors directly impacting your business.

3. Collect Data Methodically

Use the template as a guide to collect data methodically. It ensures that you gather the right information in a structured manner.

4. Analyze and Interpret Data

After collecting data, analyze and interpret it within the context of each section of the template.

This step provides actionable insights.

5. Draw Conclusions and Recommendations

Utilize the insights gained from your analysis to draw conclusions and formulate recommendations that address your initial market analysis objectives.

6. Report Compilation

Compile the information from your template into a well-organized market analysis report that can be easily shared with stakeholders, investors, or team members.

How to Customize the Market Analysis Template?

Market analysis templates should not be rigid but rather adaptable to meet your unique requirements.

• Additional Sections: If your analysis requires sections not covered in the template, feel free to add them. For example, you might include a section on environmental or sustainability factors.
• Data Sources and Tools: Specify the data sources and analysis tools you'll use for each section. This ensures transparency and accountability in your analysis process.
• Visual Elements: Incorporate charts, graphs, and visual representations where relevant. Graphic elements can make complex data more digestible.
• Timelines and Milestones: If your market analysis is part of a larger project or business plan, include timelines and milestones to track progress.
• Appendices: Consider including appendices with supplementary materials such as raw data, survey questionnaires, or detailed calculations to support your analysis.

Market Analysis Examples

To gain a deeper understanding of how market analysis is applied in real-world scenarios, let's explore a variety of detailed examples that showcase different aspects of this crucial business practice.

Example 1: Entering a New Market

Scenario: Imagine you are the marketing manager of a well-established electronics company considering expansion into a new geographic market. Let's call it Market X.

Market Analysis Objective: Your goal is to assess the feasibility and potential success of entering Market X.

Data Collection and Analysis

• Market Research: Begin by collecting data on Market X, such as population demographics, economic indicators, and consumer behavior.
• Competitor Analysis: Identify and analyze competitors already operating in Market X. Assess their market share, product offerings, pricing strategies, and customer reviews.
• Consumer Surveys: Conduct surveys in Market X to understand consumer preferences, needs, and willingness to adopt your products.
• Regulatory Environment: Investigate the regulatory framework in Market X, including import/export regulations, industry standards, and compliance requirements.

Findings and Insights

• Market Potential: Through extensive data analysis, you discover that Market X has a growing population with a high demand for electronics, indicating market potential.
• Competitive Landscape: You identify several established competitors, but their product offerings are limited in comparison to your company's range.
• Consumer Preferences: Survey results reveal a preference for high-quality, durable electronics aligning with your product portfolio.
• Regulatory Insights: Understanding the regulatory environment helps you plan for compliance, ensuring a smooth market entry.

Recommendations

Based on your analysis, you can make informed recommendations:

• Market Entry Strategy: Develop a comprehensive market entry strategy tailored to Market X, including distribution channels and pricing strategies.
• Product Localization: Customize certain product features to align with local preferences and regulatory requirements.
• Competitive Edge: Leverage your wider product range as a competitive advantage.

Example 2: Product Launch Strategy

Scenario: You work for a startup that has developed an innovative health and fitness wearable device. Your goal is to create an effective product launch strategy.

Market Analysis Objective: Understand your target market, competition, and market trends to launch the wearable successfully.

• Target Audience Profiling: Create detailed customer personas based on demographics, interests, and health and fitness habits.
• Competitor Analysis: Examine the market for similar wearable devices, assessing their features, pricing, and customer reviews.
• Market Trends and Consumer Behavior: Analyze market trends related to health and fitness, wearable technology adoption, and consumer preferences.
• Market Size and Growth: Determine the size of the wearable technology market and its growth rate.
• Target Audience: Detailed personas reveal that your primary customer segments include health-conscious individuals, athletes, and tech enthusiasts.
• Competition: While there are competitors in the market, a gap exists for a wearable that combines health monitoring with advanced fitness tracking.
• Market Trends: Trends show an increasing demand for health-related wearables due to a growing focus on fitness and well-being.
• Market Size: The market is substantial and expected to grow steadily over the next few years.
• Product Features: Focus your product's features on health monitoring and advanced fitness tracking to cater to the identified target segments.
• Pricing Strategy: Set a competitive yet profitable price point for your wearable.
• Marketing Campaign: Develop a marketing campaign highlighting the unique features of your wearable and its benefits for health-conscious consumers, athletes, and tech enthusiasts.

Example 3: Competitive Analysis for an E-commerce Startup

Scenario: You're part of a startup team launching an e-commerce platform that sells handmade artisanal products. You need to understand the competitive landscape to formulate a successful business strategy.

Market Analysis Objective: Gain insights into the e-commerce market for handmade products and identify opportunities for differentiation.

• Competitor Identification: Identify existing e-commerce platforms specializing in handmade products.
• Product Range and Quality: Assess the variety and quality of products offered by competitors.
• Pricing Strategies: Analyze pricing strategies and discount offers of competitors.
• Customer Reviews: Study customer reviews and ratings for competing platforms.
• Competitor Landscape: You discover several established e-commerce platforms in the handmade product niche, but none seem to offer a comprehensive range of unique artisanal items.
• Product Quality: Competitors mainly offer mass-produced items with limited emphasis on craftsmanship and uniqueness.
• Pricing: Pricing strategies appear to be competitive, but customer reviews indicate a desire for more affordable options.
• Product Curation: Focus on curating a selection of high-quality, truly artisanal products to differentiate your platform.
• Competitive Pricing: Offer competitive pricing while maintaining the unique value proposition of handmade items.
• Customer Engagement: Implement strategies to engage customers and gather feedback for continuous improvement.

These examples illustrate how market analysis informs critical business decisions. Whether entering a new market, launching a product, or competing in e-commerce, a data-driven approach empowers you to make informed choices and increase your chances of success.

Remember that market analysis is an ongoing process, and staying updated with evolving market dynamics is essential for long-term success.

Market analysis is your secret weapon for success in the ever-evolving business landscape. By understanding your market, customers, and competition, you gain the knowledge to make informed decisions, identify growth opportunities, and stay ahead of the curve.

Remember, market analysis is not a one-time task; it's an ongoing journey. Continuously gather data, adapt your strategies, and embrace the power of real-time insights. With the right tools and knowledge, you have the potential to turn market analysis into a dynamic force that propels your business to new heights.

How to Conduct Market Analysis in Minutes?

Looking to supercharge your market analysis? Look no further than Appinio , the real-time market research platform changing the game. With Appinio, you can harness the power of real-time consumer insights to make data-driven decisions that drive your business forward.

• Lightning-Fast Insights: Say goodbye to waiting weeks for market research results. Appinio delivers answers to your burning questions in minutes.
• Instant Decision-Making: With real-time consumer insights at your fingertips, you can make informed decisions on the fly, giving your business a competitive edge.
• User-Friendly and Intuitive: Market research doesn't have to be a daunting task. Appinio's user-friendly platform makes it easy for anyone to access and interpret valuable data.

Say goodbye to the old stigma of market research being boring, intimidating, and overpriced. It's time to unlock the power of real-time insights and drive your success.

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What is Convenience Sampling? Definition, Method, Examples

The Ultimate Guide to Market Research: Types, Benefits, and Real-World Examples

Team Fratzke

Today's consumers hold a lot of power when making purchase decisions. With a quick inquiry in a search engine or search bar within a social media platform, they can access genuine reviews from their peers without relying on sales reps.

Considering this shift in consumer behavior, adjusting your marketing strategy so it caters to the modern-day buying process is essential . To achieve this, you must thoroughly understand your target audience, the market you operate in, and the factors influencing their decision-making.

This is where market research can be leveraged so you stay current with your audience and industry. 

Article Overview

In this article, we’ll walk you through everything you need to know about how to conduct market research, including:

• Why market research is essential for understanding your target audience, the market you operate in, and factors influencing decision-making
• What are the different types of market research, such as primary and secondary market research
• How to collect information about your customers and target market to determine the success of a new or existing product, improve your brand, and communicate your company's value
• Real-world examples of companies leveraging market research

What is market research?

Market research is a necessary process that involves collecting and documenting information about your target market and customers. This helps you determine the success of a new product, improve an existing one, or understand how your brand is perceived. You can then turn this research into profits by  developing marketing strategies and campaigns to effectively communicate your company's value .

While market research can provide insights into various aspects of an industry, it is not a crystal ball that can predict everything about your customers. Market researchers typically explore multiple areas of the market, which can take several weeks or even months to get a complete picture of the business landscape.

Even by researching just one of those areas, you can gain better insights into who your buyers are and what unique value proposition you can offer them that no other business currently provides.

Of course, you can simply use your industry experience and existing customer insights to make sound judgment calls. However, it's important to note that market research provides additional benefits beyond these strategies. There are two things to consider:

• Your competitors also have experienced individuals in the industry and a customer base. Your immediate resources may equal those of your competition's immediate resources. Seeking a larger sample size for answers can provide a better edge.
• Your brand's customers do not represent the entire market's attitudes, only those who are attracted to your brand.

The market research services industry is experiencing rapid growth , indicating a strong interest in market research as we enter 2024. The market is expected to grow from approximately $75 billion in 2021 to $90.79 billion in 2025, with a compound annual growth rate of 5%. 

Your competitors have highly skilled individuals within the industry, meaning your available personnel resources are likely similar to those of your competitors. So what are you going to do to get ahead?

You’re going to do thorough market research, which is why seeking answers from a larger sample size is essential. Remember that your customers represent only a portion of the market already attracted to your brand, and their attitudes may not necessarily reflect those of the entire market. You could be leaving money on the table by leaving out untapped customers .

Why do market research?

Market research helps you meet your buyers where they are. Understanding your buyer's problems, pain points, and desired outcomes is invaluable as our world becomes increasingly noisy and demanding. This knowledge will help you tailor your product or service to appeal to them naturally. 

What’s even better is when you're ready to grow your business, market research can also guide you in developing an effective market expansion strategy.

Market research provides valuable insights into factors that impact your profits and can help you to :

• Identify where your target audience and current customers are conducting their product or service research
• Determine which competitors your target audience looks to for information, options, or purchases
• Keep up with the latest trends in your industry and understand what your buyers are interested in
• Understand who makes up your market and what challenges they are facing
• Determine what influences purchases and conversions among your target audience
• Analyze consumer attitudes about a particular topic, pain, product, or brand
• Assess the demand for the business initiatives you're investing in
• Identify unaddressed or underserved customer needs that can be turned into selling opportunities
• Understand consumer attitudes about pricing for your product or service.

Market research provides valuable information from a larger sample size of your target audience, enabling you to obtain accurate consumer attitudes. By eliminating any bias or assumptions you have about your target audience, you can make better business decisions based on the bigger picture. 

As you delve deeper into your market research, you will come across two types of research: primary and secondary market research . Simply put, think of two umbrellas beneath market research - one for primary and one for secondary research. In the next section, we will discuss the difference between these two types of research. That way, if you work with a market who wants to use them, you’ll be ready with an understanding of how they can each benefit your business.

Primary vs. Secondary Research

Both primary and secondary research are conducted to collect actionable information on your product. That information can then be divided into two types: qualitative and quantitative research. Qualitative research focuses on public opinion and aims to determine how the market feels about the products currently available. On the other hand, quantitative research seeks to identify relevant trends in the data gathered from public records. 

Let's take a closer look at these two types.

Primary Research

Primary research involves gathering first-hand information about your market and its customers. It can be leveraged to segment your market and create focused buyer personas . Generally, primary market research can be categorized into exploratory and specific studies.

Exploratory Primary Research

This type of primary market research is not focused on measuring customer trends; instead, it is focused on identifying potential problems worth addressing as a team. It is usually conducted as an initial step before any specific research is done and may involve conducting open-ended interviews or surveys with a small group of people.

Specific Primary Research

After conducting exploratory research, businesses may conduct specific primary research to explore issues or opportunities they have identified as necessary. Specific research involves targeting a smaller or more precise audience segment and asking questions aimed at solving a suspected problem. Specific primary research reveals problems that are unique to your audience so you can then offer a unique (and valuable) solution.

Secondary Research

Secondary research refers to collecting and analyzing data that has already been published or made available in public records. This may include market statistics, trend reports, sales data, and industry content you already can access. Secondary research really shines when you go to your competitors . The most commonly used sources of secondary market research include:

• Public sources
• Commercial sources
• Internal sources

Public Sources

When conducting secondary market research, the first and most accessible sources of information are usually free . That’s right–these public sources are free and at your fingertips so there’s no reason for you to not be checking them out and leveraging them for your own gain.

One of the most common types of public sources is government statistics. According to Entrepreneur, two examples of public market data in the United States are the U.S. Census Bureau and the Bureau of Labor & Statistics. These sources offer helpful information about the state of various industries nationwide including:

Commercial Sources

Research agencies such as Pew, Fratzke, Gartner, or Forrester often provide market reports containing industry insights from their own in-depth studies . These reports usually come at a cost if you want to download and obtain the information, but these agencies are experts at what they do, so the research is most likely valuable.

Internal Sources

Internal sources of market data can include average revenue per sale, customer retention rates, and other data on the health of old and new accounts. They are often overlooked when it comes to conducting market research because of how specific the data is; however, these sources can be valuable as they provide information on the organization's historical data.

By analyzing this information, you can gain insights into what your customers want now . In addition to these broad categories, there are various ways to conduct market research. Let’s talk about them.  

Types of Market Research

• Interviews (in-person or remote)

Focus Groups

• Product/ Service Use Research

Observation-Based Research

Buyer persona research, market segmentation research, pricing research.

• Competitive Analysis Research

Customer Satisfaction and Loyalty Research

Brand awareness research, campaign research.

Interviews can be conducted face-to-face or virtually, allowing for a natural conversation flow while observing the interviewee's body language. By asking questions about themselves, the interviewee can help you create buyer personas , which are made by using information about the ideal customer, such as:

• Family size 
• Challenges faced at work or in life 

And other aspects of their lifestyle. This buyer profile can shape your entire marketing strategy , from the features you add to your product to the content you publish on your website. Your target audience will feel that the marketing was made just for them and will be drawn to your product or service.

Focus groups are market research involving a few carefully selected individuals who can test your product, watch a demonstration, offer feedback, and answer specific questions. This research can inspire ideas for product differentiation or highlight the unique features of your product or brand that set it apart from others in the market.  This is a great market research option to gain specific feedback, which you can use to improve your services .

Product/Service Use Research

Product or service usage research provides valuable insights into how and why your target audience uses your product or service.  This research can help in various ways including:

•  Identifying specific features of your offering that appeal to your audience. 
• Allowing you to assess the usability of your product or service for your target audience. 

According to a report published in 2020, usability testing was rated the most effective method for discovering user insights, with a score of 8.7 out of 10. In comparison, digital analytics scored 7.7, and user surveys scored 6.4.

Observation-based research is a process that involves observing how your target audience members use your product or service. The way that you intended your product or service to be used may not be the actual way that it is used. Observation-based research helps you understand what works well in terms of customer experience (CX) and user experience (UX), what problems they face, and which aspects of your product or service can be improved to make it easier for them to use.

To better understand how your potential customers make purchasing decisions in your industry, it is essential to know who they are. This is where buyer persona research comes in handy. Buyer or marketing personas are fictional yet generalized representations of your ideal customers. They give you someone to whom you want your marketing efforts to empathize and move, even though they don’t really exist. 

Gathering survey data and additional research to correctly identify your buyer personas will help you to visualize your audience so you can streamline your communications and inform marketing strategy . Key characteristics to include in a buyer persona are:

• Job title(s)
• Family size
• Major challenges

Market segmentation research enables you to classify your target audience into various groups or segments based on specific and defining characteristics. This method allows you to understand their needs, pain points, expectations, and goals more effectively.

Pricing research can provide valuable insights about the prices of similar products or services in your market. It can help you understand what your target audience expects to pay for your offerings and what would be a reasonable price for you to set. Correct pricing is important because if you set it too high, consumers will go to your cheaper competitor; but if you set it too low, your consumers may become suspicious of your product or service and still end up with your competitor. This information allows you to develop a solid pricing strategy aligning with your business goals and objectives. 

Competitive Analysis

Competitive analyses are incredibly valuable as they provide a deep understanding of your market and industry competition. Through these analyses, you can gain insights like: 

• What works well in your industry 
• What your target audience is already interested in regarding products like yours
• Which competitors you should work to keep up with and surpass 
• How you can differentiate yourself from the competition

Understanding customer satisfaction and loyalty is crucial to encouraging repeat business and identifying what drives customers to return (such as loyalty programs, rewards, and exceptional customer service). Researching this area will help you determine the most effective methods to keep your customers coming back again and again. If you have a CRM system, consider further utilizing automated customer feedback surveys to improve your understanding of their needs and preferences.

Brand awareness research helps you understand the level of familiarity your target audience has with your brand. It provides insights into your audience members' perceptions and associations when they think about your business.This type of research reveals what they believe your brand represents. This information is valuable for developing effective marketing strategies, improving your brand's reputation, and increasing customer loyalty .

To improve your marketing campaigns, you need to research by analyzing the success of your past campaigns among your target audience and current customers. This requires experimentation and thoroughly examining the elements that resonate with your audience. By doing so, you can identify the aspects of your campaigns that matter most to your audience and use them as a guide for future campaigns. 

Now that you understand the different market research categories and types let's look at how to conduct your market research.  Using our expertise and experience, we’ve created a step-by-step guide to conducting market research.

How to Do Market Research (Detailed Roadmap)

• Define the problem or objective of the research. 
• Determine the type of data needed. 
• Identify the sources of data. 
• Collect the data. 
• Analyze the data. 
• Interpret the results. 
• Report the findings. 
• Take action based on the findings.

1. Define the problem or objective of the research

Defining the problem or objective of the research is the first step in conducting market research. This involves identifying the specific issue that the research is trying to address. It is essential to be clear and specific about the research problem or objective, as it will guide the entire research process.

2. Determine the type of data needed

After defining the research problem or objective, the next step is determining the data type needed to address the issue. This involves deciding whether to collect primary or secondary data. Primary data is collected directly from the source, while secondary data is collected from existing sources such as government reports or market research studies.

3. Identify the sources of data

Once the data type has been determined, the next step is identifying the data sources. This involves identifying potential sources of primary and secondary data that can be used to address the research problem or objective. Primary data sources can include surveys, focus groups, and interviews, while secondary data sources can include government reports, industry publications, and academic journals.

4. Collect the data

After identifying the data sources, the next step is to collect the data. This involves designing and implementing a data collection plan consistent with the research problem or objective. The data collection plan should specify the methods and procedures for collecting data, sample size, and sampling method.

5. Analyze the data

Once the data has been collected, the next step is to analyze the data. This involves organizing, summarizing, and interpreting the data to identify patterns, relationships, and trends. The research problem or objective should guide the data analysis process and be conducted using appropriate statistical methods and software.

6. Interpret the results

After analyzing the data, the next step is to interpret the results. This involves drawing conclusions from the data analysis and using the results to address the research problem or objective. It is essential to analyze the results objectively and to avoid making assumptions or drawing conclusions that are not supported by the data.

7. Report the findings

Try identifying common themes to create a story and action items.To make the process easier, use your favorite presentation software to create a report, as it will make it easy to add quotes, diagrams, or call clips.

Feel free to add your flair, but the following outline should help you craft a clear summary:

• Background: What are your goals, and why did you conduct this study?
• Participants: Who you talked to? A table works well to break groups down by persona and customer/prospect.
• Executive Summary: What were the most exciting things you learned? What do you plan to do about it?
• Key Findings: Identify the key findings using data visualizations and emphasize key points.
• Recommendations + Action Plan: Your analysis will uncover actionable insights to fuel strategies and campaigns you can run to get your brand in front of buyers earlier and more effectively. Provide your list of priorities, action items , a timeline, and its impact on your business.

8. Take action based on the findings

The final step in conducting market research is to take action based on the findings. This involves using the results to make informed decisions about the marketing strategy, product development, or other business decisions. It is important to use the findings to drive action and to monitor and evaluate the effectiveness of the action taken continuously.

How to Prepare for Market Research Projects

Identify a persona group to engage, prepare research questions for your market research participants, list your primary competitors.

The idea is to use your persona as a reference point for understanding and reaching out to your industry's audience members. Your business might cater to more than one persona, and that's completely acceptable! However, you must be mindful of each persona while strategizing and planning your content and campaigns. 

How to Identify the Right People to Engage for Market Research

When selecting a group on which to conduct market research , it is essential to consider individuals with the same characteristics as your target audience. 

If you need to research multiple target audiences, recruit separate groups for each one. Select people who have recently interacted with you by looking through social media for post interactions or seeing if they’ve made recent purchases from you.

If you are planning to conduct an evaluation, it is recommended that you focus on people who have completed it within the last six months. However, if you have a longer sales cycle or a specific market, you can extend the period up to a year. It is crucial to ask detailed questions during the evaluation, so the participants' experience must be fresh.

Gather a mix of participants

If you want to expand your customer base, you’re going to want to get viewpoints of your product or service from every angle. Consider getting this mix by recruiting individuals who have already purchased your product, those who have bought a competitor's product, and those who haven't purchased anything. While targeting your existing customers may be the easiest option, gathering information from non-customers can help you gain a more balanced market perspective .

We recommend taking the following steps to select a mix of participants:

• Create a list of customers who made a recent purchase . This is usually the most accessible group to recruit. If you have a CRM system with list segmentation capabilities, run a report of deals that closed within the past six months and filter it for the characteristics you're looking for. Otherwise, work with your sales team to get them a list of appropriate accounts.
• Create a list of customers who were in an active evaluation but didn't make a purchase. You should get a mix of buyers who either purchased from a competitor or decided not to purchase. Again, you can obtain this list from your CRM or your Sales team's system to track deals.
• Use social media to call for participants. Try reaching out to people who follow you on social media but decided not to buy from you. Some may be willing to talk to you and explain why they did not purchase your product.
• Leverage your network . Spread the word that you're conducting a study to your coworkers, former colleagues, and LinkedIn connections. Even if your direct connections don't qualify, some will likely have a coworker, friend, or family member who does.
• Choose an incentive to motivate participants to spend time on your study. If you're on a tight budget , you can reward participants for free by giving them exclusive access to content. 

Related Resources:

• Digital Marketing Strategy: Keep It Simple
• 5 Marketing Predictions for the Looming Recession
• Recession Proof Marketing Strategies for Your Business
• Marketing Operations Framework - The Five Ps
• Biggest Marketing Challenges Leaders Face
• Digital Marketing Benchmarks & KPIs - How To Compare Your Performance

Preparation is key when conducting research in hopes of gaining productive and informative conversations. This involves creating a discussion guide, whether it is for a focus group, an online survey, or a phone interview. The guide should help you cover all the relevant topics and manage your time efficiently.

The discussion guide should be in an outline format, with an allocated time and open-ended questions for each section. All the questions must be open-ended, as asking closed questions may lead the interviewee to respond with a simple "yes" or "no" answer. You may need more detailed answers to make informed decisions, so be sure to ask follow-up questions as necessary.  Also leave out any leading questions as they may unintentionally influence the interviewee's response, skewing your research results.

It's essential to identify your competitors accurately and you may even have some hidden in plain sight.  There are some instances where your company's business division might compete with your main product or service, even though that company's brand might have a different focus. Take a look at Apple:  the company is known primarily for its laptops and mobile devices, but Apple Music competes with Spotify over its music streaming service.

From a content perspective, you might compete with a blog, YouTube channel, or similar publication for inbound website visitors — even though their products don't overlap with yours. An example of this is when a toothpaste company might compete with publications like Health.com or Prevention on specific blog topics related to health and hygiene, even though the magazines don't sell oral care products.

Here are a few ways to build your competitor list:

• Check your industry quadrant on G2 Crowd: This is a significant first step for secondary market research in some industries. G2 Crowd aggregates user ratings and social data to create "quadrants" that show companies as contenders, leaders, niche players, or high performers in their respective industries. G2 Crowd specializes in digital content, IT services, HR, e-commerce, and related business services.
• Download a market report: Companies like Forrester and Gartner offer free and gated market forecasts yearly on the vendors leading their industry. On Forrester's website, for example, you can select "Latest Research" from the navigation bar and browse Forrester's latest material using a variety of criteria to narrow your search. These reports are good assets to save on your computer.
• Use social media : Social networks can be excellent company directories if you use the search bar correctly. On LinkedIn, for example, select the search bar and enter the name of the industry you're pursuing. Then, under "More," select "Companies" to narrow your results to the businesses that include this or a similar industry term on their LinkedIn profile.

Identifying Content Competitors

Search engines can be beneficial when it comes to secondary market research . To identify the online publications competing with your business, start with the overarching industry term you identified earlier, and then come up with more specific industry terms that are related to your company . For example, if you run a catering business, you might consider yourself a "food service" company, as well as a vendor in "event catering," "cake catering," "baked goods," and so on.

Once you have this list, follow these steps:

• Google it: Running a search on Google for the industry terms that describe your company can be very beneficial. You may come across a mix of product developers, blogs, magazines, and other websites.
• Compare your search results against your buyer persona: Remember the persona you created during the primary research stage? You can use it to evaluate whether a publication you found through Google could steal website traffic from you. If the website's content aligns with what your buyer persona would want to see, it is a potential competitor and should be added to your list of competitors.

After a series of similar Google searches for the industry terms you identify with, look for repetition in the website domains that have come up.

When searching, examine the first two or three pages of results. These websites are considered reputable sources of content in your industry and should be monitored closely as you create your collection of videos, reports, web pages, and blog posts.

Market Research Examples

Mcdonald's focus on customer feedback and profiling.

McDonald's invests in developing a detailed consumer profile to attract and retain customers, including parents of young children who appreciate the family-friendly atmosphere and menus. The brand seeks feedback from customers through surveys and questionnaires in stores, social media, and its mobile app. It also monitors customer feedback on digital channels.

Nike's Extensive Research and Collaboration for Running Shoes Development

Nike invests heavily in creating running shoes that cater to the needs of its customers, which it determines through extensive market research and customer surveys. The brand goes to great lengths to understand its customers' preferences, such as the type of running surface, the distance they run, and their running style, to develop shoes that meet their specific needs.

In addition to customer surveys, Nike also collaborates with athletes to develop shoes that cater to their specific requirements. This research helps Nike improve its existing running shoe models and innovate new ones, ensuring that the brand stays ahead of the competition.

Disney employs focus groups that specifically cater to children to test out their new characters and ideas.

The Walt Disney Company invests millions of dollars in creating captivating stories tested for their effectiveness with children, the intended audience. Disney executives hold focus groups with preschoolers and kindergartners several times a year to gather their opinions and feedback on TV episodes, Disney characters, and more. 

This market research strategy is effective because children are the ultimate audience that Disney aims to please. The collected feedback helps the company improve existing content to meet the preferences of its audience and ensure continued success as a multi-billion dollar enterprise.

KFC tested its meatless product in specific markets before launching it nationwide.

In 2019, KFC began developing and testing a meatless version of its famous chicken. However, instead of immediately launching the product nationwide, they decided to test it in select stores in the Atlanta, Georgia area. 

This is an innovative and practical approach to market research, as it allows the company to determine the product's sales performance on a smaller scale before committing too many resources to it. If the meatless chicken fails to gain popularity in Georgia, KFC can make the necessary changes to the product before introducing it to the broader market.

Yamaha conducted a survey to determine whether to use knobs or sliding faders on the Montage keyboard.

Yamaha is a Japanese corporation that produces various products, from motorcycles to golf cars to musical instruments. When it began developing its new Montage keyboard, the team was unsure whether to use knobs or sliding faders on the product. 

To address this dilemma, Yamaha used Qualtrics to send a survey to their customers. Within just a few hours , they received 400 responses. By using survey feedback, Yamaha ensured that it was designing a product that would perfectly meet the preferences of its audiences.

The Body Shop used social listening to determine how to reposition brand campaigns based on customer feedback.

The Body Shop is a well-known brand that offers ethically sourced and natural products. They take pride in their core value of sustainability. The Body Shop team tracked conversations to understand the sustainability subtopics that were most important to their audiences. 

They found that their customers cared a lot about refills. Based on this information, the Body Shop team confidently relaunched their Refill Program across 400 stores globally in 2021, with plans to add another 400 in 2022. Market research confirmed that their refill concept was on the right track and also highlighted the need for increased efforts to demonstrate how much the Body Shop cares about its customers' values .

VideoTranscript

The takeaway.

Fratzke Consulting offers a comprehensive suite of market research services to help brands gain valuable insights into their target market, competitors, and industry trends. Our expert team utilizes various primary and secondary research methods to gather accurate and unbiased data, including surveys, competitive research, and industry reports. With Fratzke Consulting, you'll have the tools to succeed in today's rapidly evolving business landscape.

Interested in learning more? Book a free audit consultation today.

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Market research definition

Market research – in-house or outsourced, market research in the age of data, when to use market research.

• Types of market research 

Different types of primary research

How to do market research (primary data), how to do secondary market research, communicating your market research findings, choose the right platform for your market research, try qualtrics for free, the ultimate guide to market research: how to conduct it like a pro.

27 min read Wondering how to do market research? Or even where to start learning about it? Use our ultimate guide to understand the basics and discover how you can use market research to help your business.

Market research is the practice of gathering information about the needs and preferences of your target audience – potential consumers of your product.

When you understand how your target consumer feels and behaves, you can then take steps to meet their needs and mitigate the risk of an experience gap – where there is a shortfall between what a consumer expects you to deliver and what you actually deliver. Market research can also help you keep abreast of what your competitors are offering, which in turn will affect what your customers expect from you.

Market research connects with every aspect of a business – including brand , product , customer service , marketing and sales.

Market research generally focuses on understanding:

• The consumer (current customers, past customers, non-customers, influencers))
• The company (product or service design, promotion, pricing, placement, service, sales)
• The competitors (and how their market offerings interact in the market environment)
• The industry overall (whether it’s growing or moving in a certain direction)

Free eBook: 2024 market research trends report

Why is market research important?

A successful business relies on understanding what like, what they dislike, what they need and what messaging they will respond to. Businesses also need to understand their competition to identify opportunities to differentiate their products and services from other companies.

Today’s business leaders face an endless stream of decisions around target markets, pricing, promotion, distribution channels, and product features and benefits . They must account for all the factors involved, and there are market research studies and methodologies strategically designed to capture meaningful data to inform every choice. It can be a daunting task.

Market research allows companies to make data-driven decisions to drive growth and innovation.

What happens when you don’t do market research?

Without market research, business decisions are based at best on past consumer behavior, economic indicators, or at worst, on gut feel. Decisions are made in a bubble without thought to what the competition is doing. An important aim of market research is to remove subjective opinions when making business decisions. As a brand you are there to serve your customers, not personal preferences within the company. You are far more likely to be successful if you know the difference, and market research will help make sure your decisions are insight-driven.

Traditionally there have been specialist market researchers who are very good at what they do, and businesses have been reliant on their ability to do it. Market research specialists will always be an important part of the industry, as most brands are limited by their internal capacity, expertise and budgets and need to outsource at least some aspects of the work.

However, the market research external agency model has meant that brands struggled to keep up with the pace of change. Their customers would suffer because their needs were not being wholly met with point-in-time market research.

Businesses looking to conduct market research have to tackle many questions –

• Who are my consumers, and how should I segment and prioritize them?
• What are they looking for within my category?
• How much are they buying, and what are their purchase triggers, barriers, and buying habits?
• Will my marketing and communications efforts resonate?
• Is my brand healthy ?
• What product features matter most?
• Is my product or service ready for launch?
• Are my pricing and packaging plans optimized?

They all need to be answered, but many businesses have found the process of data collection daunting, time-consuming and expensive. The hardest battle is often knowing where to begin and short-term demands have often taken priority over longer-term projects that require patience to offer return on investment.

Today however, the industry is making huge strides, driven by quickening product cycles, tighter competition and business imperatives around more data-driven decision making. With the emergence of simple, easy to use tools , some degree of in-house market research is now seen as essential, with fewer excuses not to use data to inform your decisions. With greater accessibility to such software, everyone can be an expert regardless of level or experience.

How is this possible?

The art of research hasn’t gone away. It is still a complex job and the volume of data that needs to be analyzed is huge. However with the right tools and support, sophisticated research can look very simple – allowing you to focus on taking action on what matters.

If you’re not yet using technology to augment your in-house market research, now is the time to start.

The most successful brands rely on multiple sources of data to inform their strategy and decision making, from their marketing segmentation to the product features they develop to comments on social media. In fact, there’s tools out there that use machine learning and AI to automate the tracking of what’s people are saying about your brand across all sites.

The emergence of newer and more sophisticated tools and platforms gives brands access to more data sources than ever and how the data is analyzed and used to make decisions. This also increases the speed at which they operate, with minimal lead time allowing brands to be responsive to business conditions and take an agile approach to improvements and opportunities.

Expert partners have an important role in getting the best data, particularly giving access to additional market research know-how, helping you find respondents , fielding surveys and reporting on results.

How do you measure success?

Business activities are usually measured on how well they deliver return on investment (ROI). Since market research doesn’t generate any revenue directly, its success has to be measured by looking at the positive outcomes it drives – happier customers, a healthier brand, and so on.

When changes to your products or your marketing strategy are made as a result of your market research findings, you can compare on a before-and-after basis to see if the knowledge you acted on has delivered value.

Regardless of the function you work within, understanding the consumer is the goal of any market research. To do this, we have to understand what their needs are in order to effectively meet them. If we do that, we are more likely to drive customer satisfaction , and in turn, increase customer retention .

Several metrics and KPIs are used to gauge the success of decisions made from market research results, including

• Brand awareness within the target market
• Share of wallet
• CSAT (customer satisfaction)
• NPS (Net Promoter Score)

You can use market research for almost anything related to your current customers, potential customer base or target market. If you want to find something out from your target audience, it’s likely market research is the answer.

Here are a few of the most common uses:

Buyer segmentation and profiling

Segmentation is a popular technique that separates your target market according to key characteristics, such as behavior, demographic information and social attitudes. Segmentation allows you to create relevant content for your different segments, ideally helping you to better connect with all of them.

Buyer personas are profiles of fictional customers – with real attributes. Buyer personas help you develop products and communications that are right for your different audiences, and can also guide your decision-making process. Buyer personas capture the key characteristics of your customer segments, along with meaningful insights about what they want or need from you. They provide a powerful reminder of consumer attitudes when developing a product or service, a marketing campaign or a new brand direction.

By understanding your buyers and potential customers, including their motivations, needs, and pain points, you can optimize everything from your marketing communications to your products to make sure the right people get the relevant content, at the right time, and via the right channel .

Attitudes and Usage surveys

Attitude & Usage research helps you to grow your brand by providing a detailed understanding of consumers. It helps you understand how consumers use certain products and why, what their needs are, what their preferences are, and what their pain points are. It helps you to find gaps in the market, anticipate future category needs, identify barriers to entry and build accurate go-to-market strategies and business plans.

Marketing strategy

Effective market research is a crucial tool for developing an effective marketing strategy – a company’s plan for how they will promote their products.

It helps marketers look like rock stars by helping them understand the target market to avoid mistakes, stay on message, and predict customer needs . It’s marketing’s job to leverage relevant data to reach the best possible solution  based on the research available. Then, they can implement the solution, modify the solution, and successfully deliver that solution to the market.

Product development

You can conduct market research into how a select group of consumers use and perceive your product – from how they use it through to what they like and dislike about it. Evaluating your strengths and weaknesses early on allows you to focus resources on ideas with the most potential and to gear your product or service design to a specific market.

Chobani’s yogurt pouches are a product optimized through great market research . Using product concept testing – a form of market research – Chobani identified that packaging could negatively impact consumer purchase decisions. The brand made a subtle change, ensuring the item satisfied the needs of consumers. This ability to constantly refine its products for customer needs and preferences has helped Chobani become Australia’s #1 yogurt brand and increase market share.

Pricing decisions

Market research provides businesses with insights to guide pricing decisions too. One of the most powerful tools available to market researchers is conjoint analysis, a form of market research study that uses choice modeling to help brands identify the perfect set of features and price for customers. Another useful tool is the Gabor-Granger method, which helps you identify the highest price consumers are willing to pay for a given product or service.

Brand tracking studies

A company’s brand is one of its most important assets. But unlike other metrics like product sales, it’s not a tangible measure you can simply pull from your system. Regular market research that tracks consumer perceptions of your brand allows you to monitor and optimize your brand strategy in real time, then respond to consumer feedback to help maintain or build your brand with your target customers.

Advertising and communications testing

Advertising campaigns can be expensive, and without pre-testing, they carry risk of falling flat with your target audience. By testing your campaigns, whether it’s the message or the creative, you can understand how consumers respond to your communications before you deploy them so you can make changes in response to consumer feedback before you go live.

Finder, which is one of the world’s fastest-growing online comparison websites, is an example of a brand using market research to inject some analytical rigor into the business. Fueled by great market research, the business lifted brand awareness by 23 percent, boosted NPS by 8 points, and scored record profits – all within 10 weeks.

Competitive analysis

Another key part of developing the right product and communications is understanding your main competitors and how consumers perceive them. You may have looked at their websites and tried out their product or service, but unless you know how consumers perceive them, you won’t have an accurate view of where you stack up in comparison. Understanding their position in the market allows you to identify the strengths you can exploit, as well as any weaknesses you can address to help you compete better.

Customer Story

See How Yamaha Does Product Research

Types of market research

Although there are many types market research, all methods can be sorted into one of two categories: primary and secondary.

Primary research

Primary research is market research data that you collect yourself. This is raw data collected through a range of different means – surveys , focus groups,  , observation and interviews being among the most popular.

Primary information is fresh, unused data, giving you a perspective that is current or perhaps extra confidence when confirming hypotheses you already had. It can also be very targeted to your exact needs. Primary information can be extremely valuable. Tools for collecting primary information are increasingly sophisticated and the market is growing rapidly.

Historically, conducting market research in-house has been a daunting concept for brands because they don’t quite know where to begin, or how to handle vast volumes of data. Now, the emergence of technology has meant that brands have access to simple, easy to use tools to help with exactly that problem. As a result, brands are more confident about their own projects and data with the added benefit of seeing the insights emerge in real-time.

Secondary research

Secondary research is the use of data that has already been collected, analyzed and published – typically it’s data you don’t own and that hasn’t been conducted with your business specifically in mind, although there are forms of internal secondary data like old reports or figures from past financial years that come from within your business. Secondary research can be used to support the use of primary research.

Secondary research can be beneficial to small businesses because it is sometimes easier to obtain, often through research companies. Although the rise of primary research tools are challenging this trend by allowing businesses to conduct their own market research more cheaply, secondary research is often a cheaper alternative for businesses who need to spend money carefully. Some forms of secondary research have been described as ‘lean market research’ because they are fast and pragmatic, building on what’s already there.

Because it’s not specific to your business, secondary research may be less relevant, and you’ll need to be careful to make sure it applies to your exact research question. It may also not be owned, which means your competitors and other parties also have access to it.

Primary or secondary research – which to choose?

Both primary and secondary research have their advantages, but they are often best used when paired together, giving you the confidence to act knowing that the hypothesis you have is robust.

Secondary research is sometimes preferred because there is a misunderstanding of the feasibility of primary research. Thanks to advances in technology, brands have far greater accessibility to primary research, but this isn’t always known.

If you’ve decided to gather your own primary information, there are many different data collection methods that you may consider. For example:

• Customer surveys
• Focus groups
• Observation

Think carefully about what you’re trying to accomplish before picking the data collection method(s) you’re going to use. Each one has its pros and cons. Asking someone a simple, multiple-choice survey question will generate a different type of data than you might obtain with an in-depth interview. Determine if your primary research is exploratory or specific, and if you’ll need qualitative research, quantitative research, or both.

Qualitative vs quantitative

Another way of categorizing different types of market research is according to whether they are qualitative or quantitative.

Qualitative research

Qualitative research is the collection of data that is non-numerical in nature. It summarizes and infers, rather than pin-points an exact truth. It is exploratory and can lead to the generation of a hypothesis.

Market research techniques that would gather qualitative data include:

• Interviews (face to face / telephone)
• Open-ended survey questions

Researchers use these types of market research technique because they can add more depth to the data. So for example, in focus groups or interviews, rather than being limited to ‘yes’ or ‘no’ for a certain question, you can start to understand why someone might feel a certain way.

Quantitative research

Quantitative research is the collection of data that is numerical in nature. It is much more black and white in comparison to qualitative data, although you need to make sure there is a representative sample if you want the results to be reflective of reality.

Quantitative researchers often start with a hypothesis and then collect data which can be used to determine whether empirical evidence to support that hypothesis exists.

Quantitative research methods include:

• Questionnaires
• Review scores

Exploratory and specific research

Exploratory research is the approach to take if you don’t know what you don’t know. It can give you broad insights about your customers, product, brand, and market. If you want to answer a specific question, then you’ll be conducting specific research.

• Exploratory . This research is general and open-ended, and typically involves lengthy interviews with an individual or small focus group.
• Specific . This research is often used to solve a problem identified in exploratory research. It involves more structured, formal interviews.

Exploratory primary research is generally conducted by collecting qualitative data. Specific research usually finds its insights through quantitative data.

Primary research can be qualitative or quantitative, large-scale or focused and specific. You’ll carry it out using methods like surveys – which can be used for both qualitative and quantitative studies – focus groups, observation of consumer behavior, interviews, or online tools.

Step 1: Identify your research topic

Research topics could include:

• Product features
• Product or service launch
• Understanding a new target audience (or updating an existing audience)
• Brand identity
• Marketing campaign concepts
• Customer experience

Step 2: Draft a research hypothesis

A hypothesis is the assumption you’re starting out with. Since you can disprove a negative much more easily than prove a positive, a hypothesis is a negative statement such as ‘price has no effect on brand perception’.

Step 3: Determine which research methods are most effective

Your choice of methods depends on budget, time constraints, and the type of question you’re trying to answer. You could combine surveys, interviews and focus groups to get a mix of qualitative and quantitative data.

Step 4: Determine how you will collect and analyze your data.

Primary research can generate a huge amount of data, and when the goal is to uncover actionable insight, it can be difficult to know where to begin or what to pay attention to.

The rise in brands taking their market research and data analysis in-house has coincided with the rise of technology simplifying the process. These tools pull through large volumes of data and outline significant information that will help you make the most important decisions.

Step 5: Conduct your research!

This is how you can run your research using Qualtrics CoreXM

• Pre-launch – Here you want to ensure that the survey/ other research methods conform to the project specifications (what you want to achieve/research)
• Soft launch – Collect a small fraction of the total data before you fully launch. This means you can check that everything is working as it should and you can correct any data quality issues.
• Full launch – You’ve done the hard work to get to this point. If you’re using a tool, you can sit back and relax, or if you get curious you can check on the data in your account.
• Review – review your data for any issues or low-quality responses. You may need to remove this in order not to impact the analysis of the data.

A helping hand

If you are missing the skills, capacity or inclination to manage your research internally, Qualtrics Research Services can help. From design, to writing the survey based on your needs, to help with survey programming, to handling the reporting, Research Services acts as an extension of the team and can help wherever necessary.

Secondary market research can be taken from a variety of places. Some data is completely free to access – other information could end up costing hundreds of thousands of dollars. There are three broad categories of secondary research sources:

• Public sources – these sources are accessible to anyone who asks for them. They include census data, market statistics, library catalogs, university libraries and more. Other organizations may also put out free data from time to time with the goal of advancing a cause, or catching people’s attention.
• Internal sources – sometimes the most valuable sources of data already exist somewhere within your organization. Internal sources can be preferable for secondary research on account of their price (free) and unique findings. Since internal sources are not accessible by competitors, using them can provide a distinct competitive advantage.
• Commercial sources – if you have money for it, the easiest way to acquire secondary market research is to simply buy it from private companies. Many organizations exist for the sole purpose of doing market research and can provide reliable, in-depth, industry-specific reports.

No matter where your research is coming from, it is important to ensure that the source is reputable and reliable so you can be confident in the conclusions you draw from it.

How do you know if a source is reliable?

Use established and well-known research publishers, such as the XM Institute , Forrester and McKinsey . Government websites also publish research and this is free of charge. By taking the information directly from the source (rather than a third party) you are minimizing the risk of the data being misinterpreted and the message or insights being acted on out of context.

How to apply secondary research

The purpose and application of secondary research will vary depending on your circumstances. Often, secondary research is used to support primary research and therefore give you greater confidence in your conclusions. However, there may be circumstances that prevent this – such as the timeframe and budget of the project.

Keep an open mind when collecting all the relevant research so that there isn’t any collection bias. Then begin analyzing the conclusions formed to see if any trends start to appear. This will help you to draw a consensus from the secondary research overall.

Market research success is defined by the impact it has on your business’s success. Make sure it’s not discarded or ignored by communicating your findings effectively. Here are some tips on how to do it.

• Less is more – Preface your market research report with executive summaries that highlight your key discoveries and their implications
• Lead with the basic information – Share the top 4-5 recommendations in bullet-point form, rather than requiring your readers to go through pages of analysis and data
• Model the impact – Provide examples and model the impact of any changes you put in place based on your findings
• Show, don’t tell – Add illustrative examples that relate directly to the research findings and emphasize specific points
• Speed is of the essence – Make data available in real-time so it can be rapidly incorporated into strategies and acted upon to maximize value
• Work with experts – Make sure you’ve access to a dedicated team of experts ready to help you design and launch successful projects

Trusted by 8,500 brands for everything from product testing to competitor analysis, Our Strategic Research software is the world’s most powerful and flexible research platform . With over 100 question types and advanced logic, you can build out your surveys and see real-time data you can share across the organization. Plus, you’ll be able to turn data into insights with iQ, our predictive intelligence engine that runs complicated analysis at the click of a button.

Related resources

Market intelligence 10 min read, marketing insights 11 min read, ethnographic research 11 min read, qualitative vs quantitative research 13 min read, qualitative research questions 11 min read, qualitative research design 12 min read, primary vs secondary research 14 min read, request demo.

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How to Perform and Present a Comprehensive Market Analysis

Navigating the vast expanse of the market requires more than just intuition; it demands a systematic approach. A comprehensive market analysis not only deciphers the current market dynamics but also highlights potential opportunities and pitfalls.

This guide delves into the intricacies of conducting a thorough market analysis, ensuring that marketing professionals are equipped with the knowledge to make informed decisions and craft strategies that stand out in the marketplace.

What Is Market Analysis?

Market analysis is a methodical evaluation of the various forces, trends, and factors influencing a specific industry or market segment. At its core, it seeks to understand the essence of a market, including:

• Demand and Supply Dynamics: What are consumers looking for? How much are they willing to pay? On the flip side, what's the volume and nature of products or services available?
• Customer Segmentation: Who are the primary consumers? What are their preferences, behaviors, and purchasing patterns?
• Competitive Overview: Who are the key players? What strategies are they employing, and what market share do they hold?
• External Factors: How do economic, political, social, and technological factors impact the market?

By dissecting these elements, market analysis provides a holistic view of the market's current state and potential trajectory. This insight is invaluable for companies aiming to position themselves advantageously, identify gaps in the market, or anticipate shifts in consumer behavior.

Understanding the Purpose and Use Cases of Market Analysis

When and why conduct a market analysis? Every strategic move in business should be rooted in a deep understanding of the market landscape. Here's a breakdown of specific scenarios that call for a comprehensive market analysis:

• New Product or Service Launch: Before introducing a new offering, it's crucial to gauge the potential demand, identify the target audience, and understand their preferences. A market analysis can also help in pricing the product or service competitively.
• Entering a New Market: If a company is considering expanding geographically or venturing into a new segment, understanding the nuances of that market is paramount. This includes cultural preferences, regulatory environment, and existing competition.
• Rebranding or Repositioning: If a company is considering a shift in its brand image or targeting a different demographic, a market analysis can provide insights into how the market might react and what gaps can be filled.
• Responding to Market Shifts: In rapidly changing industries, regular market analyses can help companies stay ahead of trends, anticipate consumer behavior changes, and adjust strategies accordingly.
• Setting & Revising Budgets: Financial planning should be aligned with market potential. An analysis can provide insights into where to allocate resources for maximum ROI.

Benefits of Market Analysis

Market analysis serves as a vital tool, providing in-depth insights into various aspects of the market such as customer preferences, competition, and emerging trends. The following are some of the key benefits of market analysis that demonstrate why it's an indispensable part of business strategy.

Understanding Target Audience

Conducting customer market analysis helps in understanding the preferences and needs of potential customers. By recognizing what drives the customers, companies can tailor products or services that directly address those needs, resulting in increased satisfaction and loyalty.

Identifying Opportunities and Threats

Through market share analysis and trend analysis, companies can identify areas of growth and potential risks. Understanding the market trends helps in recognizing the demands of the future. Recognizing potential threats early allows the company to develop strategies to counter them, minimizing potential harm.

Competitive Edge

With the help of market analysis, companies can identify their competitors' strengths and weaknesses. Understanding the competition allows for strategic positioning and leveraging unique strengths. By gaining insights into what competitors are doing right or wrong, businesses can differentiate themselves and stay ahead in the marketplace.

Informed Decision Making

Business plan analysis allows making data-driven decisions that align with market conditions. Using real data and insights gathered through market analysis, companies can make more accurate and confident decisions, reducing the uncertainty and risks that come with relying on intuition or guesswork.

Market Positioning

Market analysis helps in positioning the product or service within the marketplace. By understanding where the product fits among competitors and what makes it unique, businesses can create effective marketing strategies that resonate with the target audience.

Adjusting to Market Changes

Markets are constantly changing, and companies that regularly analyze the market can adapt more quickly. Whether it's a change in customer preferences or a new competitor entering the field, continuous market analysis helps businesses stay flexible and responsive.

Resource Optimization

Knowing the market helps in utilizing resources effectively. Companies can focus their energy and funds on areas that are most likely to yield results, thus minimizing waste and maximizing return on investment.

Another way to optimize resource allocation and get more with every dollar invested is to integrate an advanced marketing analytics solution. Analytics solutions can yield 140-400% 3-year ROI, primarily through marketing spend optimization. ROI potential depends on an organization's analytics maturity level.

Enhancing Product Development

Understanding the target audience and competition can guide product development. With clear insights into what customers want and what competitors offer, companies can innovate and design products that meet specific needs, offering something unique or superior in the market.

Market Analysis vs. Conjoint Analysis vs. Sentiment Analysis

It's essential to distinguish between different analytical methods. Market analysis, conjoint analysis, and sentiment analysis each offer unique insights, but they serve varied purposes and employ distinct methodologies. 

Market Analysis: This method evaluates the overall dynamics and trends of a specific market or industry segment. It's your go-to when you want a holistic view of market demand, the competitive landscape, and customer behaviors.

Conjoint Analysis: If you're looking to understand how consumers value different product attributes, conjoint analysis is the tool. It helps in product development and pricing strategies by determining the most influential features in consumer decision-making.

Sentiment Analysis: This is all about gauging emotions. By analyzing subjective information, it determines the sentiment behind it, be it positive, negative, or neutral. To do this analysis, you can use sentiment analysis tools like Brand24 or Survicate. It's especially useful for brand monitoring and understanding public sentiment on social platforms

How to Conduct a Market Analysis

Conducting a market analysis involves a systematic examination of various factors that can influence the success of a product or service. Here's a step-by-step guide on how to perform market analysis.

Defining the Target Audience

A comprehensive customer analysis in the marketing plan identifies the intended audience. By recognizing the needs, preferences, and behaviors of potential customers, businesses can develop targeted marketing strategies that resonate with the audience.

Analyzing Competition

Using market analysis techniques, assess competitors' performance. This includes understanding their strengths, weaknesses, strategies, and market position. Such an analysis helps in identifying opportunities and threats and in formulating strategies to gain a competitive edge.

Market Trends Analysis

Understanding market trends helps in predicting future movements. By staying abreast of the latest trends, businesses can anticipate changes and adapt accordingly. It aids in recognizing opportunities for innovation and growth.

Size and Growth Analysis

Determine the market size and potential for growth using market analysis data. This includes understanding the current market share and estimating future growth based on trends and other influencing factors. Knowing the market's potential helps in setting realistic goals and in creating strategies to achieve them.

Pricing and Cost Analysis

Understanding market price analysis helps in creating appropriate pricing strategies. By analyzing the pricing of competitors and understanding the cost structure, businesses can price their products or services competitively, ensuring they offer value to customers without compromising profitability.

Methods of Market Analysis

Understanding the market is vital for any business. It helps in planning strategies and making informed decisions. Market analysis consists of various methods that can be broadly categorized into different approaches. Here's an overview of some key methods:

Qualitative Methods

This approach includes focus groups, interviews, and customer analysis examples. By engaging with real people, qualitative methods provide deep insights into customer preferences, attitudes, and behaviors. Some examples might include in-person interviews with target customers or observation of customers in a retail environment. These methods are particularly valuable when seeking to understand the why behind consumer choices.

Quantitative Methods

Quantitative methods employ statistical market analysis, surveys, and numerical data. This can include conducting online surveys or analyzing existing market data to derive insights. Quantitative methods are often used to quantify specific aspects, like market size analysis, market share analysis, or sales analysis. These methods are essential for answering the 'how much' or 'how many' types of questions.

PEST Analysis

PEST analysis examines political, economic, social, and technological factors. Understanding these external factors can help in anticipating changes in the market, such as regulatory shifts or technological advancements. It's often used in conjunction with SWOT to provide a complete market analysis.

Online Market Analysis

Leveraging online marketing analysis tools to gather insights from web traffic and online behavior is crucial. This includes analyzing data from social media, search engines, and website analytics. Online market analysis can help in understanding customer behavior, market trends analysis, and the effectiveness of online marketing strategies.

Competitive Analysis

Understanding competitors is vital in gaining a competitive edge. This method involves analyzing competitors' products, pricing, marketing strategies, and market position. This can help in identifying opportunities and threats, making it an integral part of a market analysis business plan.

Consumer Analysis

Consumer analysis focuses on understanding the needs, preferences, and behaviors of the target audience. It may involve segmentation, buyer analysis, or customer analysis in a marketing plan. By knowing what motivates the target market, businesses can tailor their products and marketing efforts accordingly.

How to Present a Market Analysis

Presenting a market analysis is an integral part of the business planning process. It is not just about sharing information; it's about telling a story that can influence decisions and shape strategies. Here's how to present a market analysis effectively:

Utilize Visual Aids

Charts, graphs, and tables can make complex data easier to understand. By transforming numbers into visual elements, these aids help convey the key findings in an engaging way. For instance, market share analysis or trend analysis marketing data can be represented using line graphs or bar charts to illustrate growth patterns or competitive positioning.

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Prepare a Market Analysis Report

A well-written report with a clear market analysis outline conveys findings efficiently. The report should include an introduction, methodology, key findings, and conclusions. This document serves as a tangible record that stakeholders can refer to for a detailed understanding.

Interactive Presentations

Utilizing marketing analysis tools for interactive presentations keeps the audience engaged. Including interactive elements such as clickable links, embedded videos, or real-time polls can make the presentation more interactive. For example, during a market analysis for a business plan presentation, interactive infographics can help stakeholders visualize data like market trends analysis or customer market analysis more vividly.

Clear and Concise Language

Use clear and straightforward language to ensure that the market analysis is accessible to everyone in the audience. Avoid jargon and use simple terms to explain complex concepts such as market analysis economics. The goal is to make the information easily digestible, even for those who may not have a background in marketing or analysis.

Tailored to the Audience

Knowing the audience is essential in presenting a market analysis. Whether it's a detailed market analysis for executives or a simple market analysis for non-specialist stakeholders, tailor the content and approach accordingly. Understanding the audience's needs and expectations can make the presentation more relevant and engaging.

Practice and Rehearsal

Before the actual presentation, practice and rehearse the material. This includes understanding how to perform market analysis and being prepared to answer questions such as "What is a market analysis in a business plan?" or "How is market analysis done?" Rehearsing ensures a smooth delivery and builds confidence.

Market analysis is a multifaceted practice vital for informed business planning and strategy. From defining what market analysis is, the benefits it brings, how to perform it, to the methods used, this guide has covered all the essentials. With the right market analysis in a business plan, success is not just a goal; it's a well-defined path.

Frequently Asked Questions

What is market analysis, how does market analysis differ from swot analysis, what are the benefits of conducting market analysis, how do i conduct a market analysis, how does market analysis aid in product development, what are some methods of presenting market analysis.

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Market research provides an in-depth understanding of consumer sentiment, buying behavior, and demand within the market. Learn how to use market research to stay relevant in your industry.

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• What is market research?

What is the purpose of market research?

Why is market research important, types of market research, how is market research conducted, power well-informed business decisions with ai-driven market insights, all in one unified customer experience management (unified-cxm) platform, .css-1qemmfx{font-weight:700;} what is market research.

Market research is the process of collecting, analyzing, and interpreting data about competitors, target markets, or an industry as a whole. Entrepreneurs can use market research to make well-informed decisions, as it takes some of the guesswork out of how to interact with customers and provides ideas for projects that have the most potential.

Companies use market research at various stages of growth for different reasons. Market research can be used to:

Identify new markets . Market research may help you discover a need for your product in markets you’ve never considered.

Stay on top of new market trends . Market research can show new trends and help you determine strategies to adapt to new market conditions.

Determine the demand for a new product or service . Focus groups and surveys can give you an idea of how useful your product will be for consumers.

Find an ideal product-market fit . Market research can help you discover the best time, place, and audience for your product.

Fortify your business . Any problem areas in your business can be identified early to prevent expensive disruptions later.

The main purpose of market research is to learn more about your target audience and get feedback from consumers about their interest in certain products or services. This data can be used for:

Making critical business decisions

Any time your company is faced with an important decision, the more information you have, the better. Information about your competition and market allows you to make the most well-informed business decisions. A lack of information can lead to poor decision-making because these decisions are made based on outdated or otherwise irrelevant information.

Learn more: How AI-powered insights can boost your omni-channel CX strategy

Obtaining investor funding

Securing funds from investors is one of the biggest steps after coming up with a new idea for a company or product. Investors are going to be interested in what you know about the market and how your company or product will add to it. Market research will let them know whether your product will solve a current need in the market.

Identifying business opportunities

Market research can be used to identify new business opportunities. It can show new markets to enter or a need for a product that doesn’t yet exist. This allows you to develop products to meet the needs and wants of consumers and gives you an advantage over your competition.

Preventing company failure

Market research is often viewed as being proactive (i.e., it helps you determine consumer needs or helps find new market opportunities). However, research can also mitigate risk by helping you decide what not to do. Research may tell you that a certain decision could hurt your brand image or cause a loss in revenue. This aspect of market research is often overlooked but plays an important part in helping companies achieve their goals.

Why AI is a “Must-Have” in Digital Research

The most effective way to increase customer satisfaction , reduce churn, and elevate your business is to conduct market research. Market research is essential to any business; here are some reasons why.

Important data . Market research provides valuable information about new and existing products, which can help companies create appropriate product development and marketing strategies .

Customer-focused . Market research can help you determine customer needs. Marketing focuses on the customer and understanding their needs, helping companies create products or services that best benefit them.

Forecasting . Knowing customer needs helps business owners forecast production, inventory, and sales.

Competitive edge . Market research is a crucial tool for conducting comparative studies to benchmark your business against competitors and stay agile in your industry or market.

Market research also provides insights into many things that affect your marketing strategies, including:

Where your current customers and target audience are researching products or services

Which of your competitors your audience is buying from

Trends in the markets

What your target audience is willing to pay for certain products or services

What is influencing your target audience to make purchases

What challenges your target audience is facing

How consumers feel about certain products, services, brands, and topics

Unmet customer needs that could be potential selling opportunities

Market research can be either quantitative or qualitative, depending on the market and the questions you want answered. Quantitative research refers to data that can be counted or measured and is based on numeric data. Qualitative research is about the “why” behind the numbers. It is subjective and based on consumer opinions rather than hard data. It can be difficult to conduct one without the other as they both have advantages and disadvantages and typically complement each other.

There are several types of market research, many of which consist of both quantitative and qualitative data. Which type you use depends on your market and any questions you are trying to answer. Here are the most popular types of market research.

In-depth interviews

Interviews provide opportunities for face-to-face conversations, allowing for a more natural flow and exchange of information. They help you design buyer personas as your interviewees answer questions about their age, employment, demographics, and interests. Buyer personas paint a picture of your ideal customer based on the shared traits interviewees discussed. These personas help you develop effective marketing strategies so you can better appeal to your target customers.

Focus groups

Focus groups involve selecting a small group of people to test your product, provide feedback, watch a demo, or answer questions. They help you determine what makes your product or service unique from the competition. By asking your focus group questions about your products, you can gather valuable feedback and make any necessary company or product improvements.

Learn more: How to build a customer-centric product strategy using real-time product insights

Surveys and questionnaires

Surveys and questionnaires are used to understand consumers’ perceptions and opinions on certain subjects. Consumers are asked a series of questions related to product feasibility, their needs or interests, and pricing options. Based on these answers, companies can determine if there is a need for their product, if they’re charging the right price, or if any changes or upgrades are needed to make products more appealing.

Market analysis

Market analysis is an in-depth assessment of the market. It analyzes market size, consumer purchase patterns, competitors, and economic conditions. Market analysis provides data on competitors, consumers, and the industry as a whole. You can also get an idea of the demand for certain products in the market. With market analysis, you can assess your current markets or explore new ones to see how suitable your product or services are for these markets.

Learn more: Benchmarking your way from information to action with competitive insights

Market insights

Market insights are the results of deep analysis of a target market, revealing relevant needs and previously unrealized aspects. The goal of market insights is to benefit the consumer while making a profit.

Insight research is used to learn new facts about the market that can be leveraged to increase profits. Market insights can be defined as an attempt to get a deeper understanding of the consumer, their aspirations, and what can be used to encourage growth in the market. Market insights should be credible, actionable, and practical recommendations that will truly benefit the consumer.

Learn more: 5 questions to answer about customer insights

Market share

Market share metrics are used to show the size of a company in a market compared to its competitors. It is the percentage of an industry’s sales earned by a specific company over a certain period of time. The formula is Total Company Sales/Total Industry Sales = Market Share . This metric helps you learn how your sales are doing compared to competitors and what can be done to improve sales and increase your share of the market.

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Market trends

A market trend is what causes markets to move in a particular direction over time. Trend market research involves looking at what’s currently popular in the market to make trend forecasts. Forecasting is used to take a look at today’s popular new products and what is driving your target customers to them. It gives businesses an idea of what will sell in the next several months. Market trend data can be used by businesses to gauge the response in the market to their product or service.

Learn more: 4 ways to maximize social listening and propel your brand with trend analysis

Market segmentation

Market segmentation involves categorizing your target market into groups based on shared characteristics. This helps you understand their needs, pain points, goals, expectations, and more. This information can then be used to create marketing strategies to solve these issues and meet the goals of each segment.

Location analytics

The purpose of location analytics is to add a layer of geographical data to a company’s data assets in order to enhance insights. Market research data often includes information about people, transactions, business assets, or events. Adding a geographic component may unlock new insights that provide more context when discussing different business processes and strategies.

Learn more: Here Are 6 Industries That Need to Use Location-Based Intelligence

Industry research

Industry research is a collection of data about factors that affect the industry, such as economic, market, and political factors. When people look for industry research, they are usually looking for data about a certain industry in order to:

Determine new markets they can enter

Assess industry risk

Create new business plans or marketing strategies

Understand how the industry is growing, and discover opportunities for investment

B2B market research

In B2B marketing research, you survey a representative sample of market participants to gain insight into the B2B industry. These participants could include former, existing, or potential customers and influencers. In competitive employer markets, participants may also include current or potential employees. B2B market research is crucial because it helps businesses:

Understand B2B buyers and create buyer personas

Assess how customer needs are changing

Improve their products or services

Provide buyers with valuable content to aid research

Distinguish themselves from the competition

Sprinklr named a leader in The Forrester Wave, Social Listening Platforms, Q4 2020

There are two ways market research can be conducted:

Primary market research

Primary market research is data you gather yourself. It is the process of going directly to the source (usually existing customers and potential customers in your market) to ask questions and gather information. The cost and time spent on primary research are typically higher than secondary research, but produces more conclusive results. Some examples of primary research include:

Online surveys and questionnaires

Personal interviews

Field trials

Observation

Social listening

When conducting primary research, two types of information are gathered:

Exploratory research . This type of research is used to examine a problem that isn’t clearly defined. Its purpose is to better understand an existing issue but will not provide definitive results.

Specific research . This type of research is more precise and can be used to solve problems found in exploratory research. More structured and formal interviews are required.

Learn more: AI-powered insights to competitive benchmarking: features you need in your social listening tool

Secondary market research

Secondary research is data that has already been collected and analyzed by others. It is best for gathering broad research, while primary research is better for specifics. Secondary research is especially common for small businesses with tighter budgets because it is quicker and less expensive than primary research.

Most secondary research is readily available on the internet. You can enter simple keywords or phrases that are related to the type of information you’re looking for. This research may also be obtained through articles in magazines, industry reports, or through a reference library or industry associations. Government agencies are also great sources of free secondary research. At the same time, data published by private businesses may require permission or fees to access it. When gathering secondary research, ensure your data is not outdated.

Popular secondary research sources included:

Government studies and reports

Trade journals, newspapers, and magazines

Radio and television

Academic papers or other educational sources

Online articles

Case studies

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To learn more about harnessing consumer insight and expressing your brand authenticity, download our strategic brand management handbook today.

Sprinklr Insights gives you a real-time understanding of customer feedback on your brand — plus key insights on your competitors’ offerings and strategies — so you can identify and capitalize on critical market trends and unmet customer needs.

With Sprinklr Social Listening , you can transform data from millions of conversations — including 200 billion historical messages across 30+ digital channels — into actionable insights for your entire business, giving you a single, unified, 360° view of your customers to drive faster, smarter business decisions.

Sprinklr helps accelerate market research strategies by translating real-time, voice-of-the-customer data into actionable insights you can share across your organization to drive innovation. You can use these insights to:

Analyze and search social data without limits — across countries, industries, and audiences — with Quick Search Dashboard and Smart Quick Insights.

Capture valuable customer feedback on specific products or services, leveraging AI to surface actionable insights from surveys, reviews, social channels, or any other data source to identify the perfect product-market fit

Identify a potential competitive advantage over competitors’ products and strategies and stay ahead of market trends

Discover influential audiences and identify key market trends you can capitalize on

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Market Analysis: What It Is and How to Conduct One

Learn what market analysis is and the steps to conduct your own market analysis.

What is market analysis?

Market analysis is a detailed assessment of your business’s target market and the competitive landscape within a specific industry. This analysis lets you project the success you can expect when you introduce your brand and its products to consumers within the market. Market analysis includes quantitative data such as the actual size of the market you want to serve, prices consumers are willing to pay, revenue projections, and qualitative data such as consumers’ values, desires, and buying motives. 

Conducting a market analysis can benefit you in several ways by helping you to: 

Spot trends and opportunities in your industry 

Differentiate your business from competitors 

Reduce the risks and costs of launching a new business (or pivoting an existing one) 

Tailor products and services to your target customers’ needs 

Analyze successes and failures 

Optimize your marketing efforts 

Reach new market segments

Monitor your business’s performance

Pivot your business in new directions

In researching this topic, you may come across terms with similar meanings, including market research and marketing analytics. Here are some distinctions: 

Market research is the process of gathering information about a target market, including its customers’ needs and behaviors, in order to market products to it effectively.

Marketing analytics is the process of studying the metrics of specific marketing efforts, such as landing page sign-ups and social media engagement, in order to increase return on investment.

Here, we focus on market analysis as one component of a thorough business plan. Continue reading to begin conducting your market analysis and lay a strong foundation for your business.

Ready to advance your marketing skills? Find resources and course recommendations to start your marketing analyst career .

How to do a market analysis in 6 steps

This section covers six main steps of market analysis, including the purpose of each step and questions to guide your research and reflections.

1. Research your industry.

The purpose of this step is to gain an understanding of your industry at large so that you know how to enter it, can spot trends, and compete with other brands. 

Here are questions to get you started:

What statistical information can you gather about your industry from sources like the US Bureau of Labor Statistics, BMI Research, and professional associations? 

How many businesses are in this industry?

What’s the market size in terms of the number of potential customers?

How much revenue does the industry generate?

What are the industry standards by which companies and consumers operate?

What external factors affect how businesses in this industry operate, including laws and regulations, new technologies, world events, and economic and social change?  

Where do you spot opportunities to innovate within the industry?

2. Investigate the competitive landscape.

This next step takes you from broad industry insights to looking specifically at brands you’ll be competing against as you seek to attract potential customers in your target market. Here are questions to guide your process:

What brands are the most well-known in your industry? Who sets the trends and captures the attention of customers? 

What are these brands’ offers, price points, and value propositions? 

What sales tactics, technologies, and platforms do these brands use to create a customer journey?

How do these brands use content to educate and engage an audience? 

What can you learn from customer reviews of these brands?

3. Identify market gaps.

With insights into how competing brands fare, you can find market gaps, differentiate your products and services, and stand out within your industry. 

Market gaps are needs that are currently not being filled by existing brands. For example, in the online education industry, learners might be interested in topics that existing courses do not cover, in which case you could develop a course to fill this need. 

Here are some questions to help you identify market gaps:

Looking back at your industry research findings, what will external factors like social change and new laws mean for developing products and services? 

Ask consumers directly: “What do you want or need that you currently can’t find?”

How specifically do competitors’ products and services fall short? 

In what ways would you be able to create better products and services, given your strengths and expertise?

4. Define your target market.

Now that you know your industry, the competitive landscape, and the market gaps you can fill, the next thing to do is get specific about the kinds of customers you want to serve. Define your target market according to the characteristics that make individual consumers more likely to purchase products and services from you:

Of the potential customers in your industry, which specific market segment can you target effectively?

How can you describe this segment according to their demographics (age, ethnicity, income, location, etc.) and psychographics (beliefs, values, aspirations, lifestyle, etc.)?

What are their daily lives like?

What problems and challenges do they experience?

What words, phrases, ideas, and concepts do consumers in your target market use to describe these problems when posting on social media or engaging with your competitors?

What are the features and benefits of your offers, and how will these provide solutions to your target market’s needs?

What marketing messaging can you use to appeal to this target market and exhibit empathy and understanding? 

5. Identify barriers to entry.

As you’re getting to know your target market and tailoring your offers and messaging to consumers, it’s important to have a clear sense of factors that might prevent you from entering your market successfully. That way, you can devise a strategy to address challenges. 

Here are some questions to make barriers to entry more visible:

What are the startup costs of building your business, including product development, technology, suppliers, patents, and certifications? 

What legal requirements will you need to fulfill before launching? 

What political, economic, and social factors might affect customers' behavior and their likelihood of purchasing your offerings?

How much do your top competitors spend on their advertising to earn customers' loyalty? 

What will you need to do to present your offerings as better alternatives in terms of value, price, and ease of purchase?

6. Create a sales forecast.

Sales forecasting is the process of estimating future sales so that you can make confident business decisions or secure funding from investors and lenders. You may find it useful to create forecasts for specific increments of time, such as the next three months, six months, or a year. 

To generate a sales forecast, answer these questions:

What products and services do you intend to sell?

How many units do you expect to sell during each increment of time, based on your market size and the behaviors of your target market?

What prices will you assign to each product or service?

What is the cost of producing and advertising each offering? 

Use this formula to quantify your forecast:

(No. of units to sell X price for each unit) – (cost per unit X No. of units) = sales forecast

Your market analysis checklist

Use this checklist and the steps above to guide your market analysis process.

Gain a holistic understanding of everything happening in your industry and prepare to navigate it.

2. Investigate competitors.

Know who the big players are and how you can differentiate your brand.

Find unsolved problems and unmet desires in your market.

Know your customers’ unique characteristics and tailor your offers and marketing accordingly.

Know what stands in your way and address challenges head-on.

Estimate future sales and make confident business decisions. 

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How to identify and analyze market opportunities

Market opportunity analysis is the pivotal first step in crafting both a company’s initial strategy and its product strategy.

Product managers bear the responsibility of identifying and assessing market opportunities. A comprehensive market opportunity analysis serves as the compass that directs all strategic product decisions, allowing product managers to align their product initiatives with market demands and user needs.

Thoroughly analyzing the target market — including its size, growth potential, trends, and user preferences — enables product managers to strategically position their products, optimize pricing strategies, refine marketing efforts alongside product marketing managers, and uncover overlooked segments and issues ripe for growth.

What are market opportunities?

Market opportunities refer to favorable circumstances or conditions within a specific industry that present businesses with the potential for success, profit generation, and competitive advantage. These opportunities arise from various factors and are identified through rigorous market analysis and research .

The process of identifying market opportunities involves evaluating the dynamics of the market and pinpointing areas of deficiency or unmet demand (also known as user problems). Through careful examination of market data and diligent research, product teams can reveal potential opportunities that align with their core product strategy. These opportunities can then be monetized directly or indirectly by the business:

Market opportunities may manifest in several forms, including:

Untapped user segments or markets

Emerging technology trends, market expansion, changes in user behavior.

This could involve identifying a group of users or entire niches typically overlooked by your competitors. For instance, a social media platform might identify a growing segment of elderly users with unique needs and develop a dedicated set of features to cater to these requirements.

This could entail monitoring the market for technological trends capable of disrupting it, then leveraging these trends to enhance your company’s competitive edge.

A prime example is the emerging trend of AI technologies like ChatGPT. Companies have harnessed generative AI capabilities to create various features addressing multiple user problems.

Market expansion could involve spotting opportunities to penetrate new geographical locations or target entirely different user demographics.

User preferences, problems, and values evolve over time. Recognizing this presents an opportunity for companies and product teams to remain sustainable by retaining their target users while attracting new ones.

An example would be the global trend toward reducing plastic bag usage and cardboard packaging in shopping. For an e-commerce platform, this might mean adding an option for users to choose whether they want a plastic bag or prefer eco-friendly alternatives.

What is market opportunity analysis?

Market opportunity analysis is a strategic process employed by product managers to assess and evaluate potential opportunities in the market. This strategic framework aids product managers in analyzing the potential success of various opportunities, thereby informing decisions about the overarching product strategy.

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The ideal outcome of an effective market opportunity analysis is a clear direction on whether to pursue (invest in), pause (wait on), or skip (kill) an opportunity.

The role of market opportunity analysis in product strategy

Analyzing market opportunities is a crucial step in crafting a robust product strategy. It equips the product team with vital insights needed to make data-driven decisions about the direction of the product strategy. Here are some top benefits of conducting a market opportunity analysis for your product strategy:

• Aiming accurately — Market opportunity analysis and the insights it generates assist product teams in examining different user groups and identifying the most promising user segment and market to target. By correctly identifying their targets, product teams can concentrate their efforts and technical resources on developing specifically for their target audience, ensuring that their needs are met
• Outperforming competitors — Market opportunity analysis enables product teams to thoroughly analyze their competitors, understand their weaknesses and strengths, and devise the best value proposition for their products
• Uncovering growth opportunities — Insights gleaned from this strategic process can help product teams identify overlooked growth opportunities. These opportunities can be leveraged by the product team to optimize several business and product key performance indicators (KPIs)

How to conduct a market opportunity analysis (10 steps)

Market opportunity analysis differs from the typical research activities product managers engage in daily, such as user research. It’s usually undertaken by the head of product or the VP of product to identify and explore significant opportunities.

Here are the 10 steps involved in conducting a market opportunity analysis:

• Define your objective
• Identify your target market and users
• Gather market data
• Analyze competitors
• Understand user needs
• Uncover market gaps
• Evaluate technological trends in the market
• Assess market viability
• Develop/update your product strategy
• Experiment and adapt

1. Define your objective

The first step is for the product manager to clearly define the objective behind the market opportunity analysis initiative. This could be identifying new target markets or users, reassessing user needs, or exploring product diversification.

2. Identify your target market and users

Next, plan and specify which market and user segment they will focus their research on. Factors such as demographics, geographic location, industry verticals, user personas, and products used should be considered.

3. Gather market data

Collect all relevant data about the existing market and user personas, as well as those you plan to target. This includes data points like total addressable market size , growth rate, trends, user preferences, competitive landscape, and regulatory and environmental factors. Both primary and secondary research methods should be utilized at this stage.

4. Analyze competitors

The next step involves conducting a competitive analysis to understand competitors’ strengths, weaknesses, and strategies within your target market. The aim here is to identify gaps where your product can differentiate itself and offer unique value. A lot of brainstorming and ideation sessions will take place at this stage with the goal of formulating a clear value proposition for the strategic direction being pursued.

5. Understand user needs

Techniques like surveys, interviews, focus groups, contextual inquiry, and diary studies can be used to gather insights into user needs, pain points, preferences. Understanding their behavior patterns helps align the product strategy with user expectations.

6. Uncover market gaps

Once all data has been collected from previous steps, it’s time for synthesis sessions. Work with your team to identify gaps in the market or unmet user needs that your product could potentially address. You should mainly look for areas where problems aren’t adequately solved or where competitors are underserving certain segments.

7. Evaluate technological trends in the market

You should also conduct minor research into technological trends so that you’re fully updated on advancements that may impact your target market. Assess how these emerging technologies can create new opportunities or disrupt planned markets. Then, reflect on these findings with your team to see how they can utilize these trends when building better products.

8. Assess market viability

Working closely with management teams allows you to evaluate potential growth opportunities in terms of profitability and sustainability within a given marketplace. Strategic frameworks such as Porter’s Five Forces are often used at this stage for thorough viability assessment before deciding whether an opportunity is worth investing in.

9. Develop/update your product strategy

Assuming that you’ve decided to invest in an opportunity, it’s time to develop or update your product strategy accordingly. This outlines next steps for teams, including what features need developing, along with respective roadmaps.

10. Experiment and adapt

Last but not least, remember that markets are dynamic. Keep monitoring changes based on feedback from users as well as competitor moves. Your team should remain agile enough to change strategies even within short business quarters if necessary.

Final thoughts

Market opportunity analysis plays an integral role in a product’s success. It involves identifying target markets, understanding user needs, standing out from competitors, managing risks, and maximizing growth potential.

By conducting thorough analysis and research, product managers can make informed decisions that drive successful product strategies. This helps create products that meet market demand, gain a competitive edge, and achieve sustainable growth.

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One Reply to "How to identify and analyze market opportunities"

Very well and simply written. 👍

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