Market research is a broad term that has many varying aspects to it – the main one being that it's used to understand audiences. You can conduct market research to look at your current customers, a new target audience, your competitors, and even the wider industry.
The aim, like any form of research, is to maximize your understanding of one area of your marketing campaign, so you can deliver better results armed with that information.
This guide outlines the core market research definition before looking at what it actually entails.
From conducting research to deciphering the data collected, understanding your target customers, and perfecting your marketing materials – market research can do a lot of good.
What Is Market Research: Definition and Purpose
Let's start at the beginning. Market research helps you understand your customers and your industry. Like with any research, it's all about gathering quantitative data that you can react to, in order to improve your brand, product, or service.
You might use market research to shift your communications efforts into new target markets. Or perhaps you'll realize your sales funnel isn't working smoothly.
You can conduct market research in lots of ways, including:
Data analysis
Surveys
Interviews
Social listening
You'll learn about customer needs, preferences, and behaviors. The goal is to make informed decisions about your products, marketing, and business strategy based on this insight.
Why Businesses Need Market Research
As you can see, there are a good few ways you can conduct market research – but why do we need it? Well, selling products and services without doing any research is unlikely to lead to success. A business needs to know who their target market is, gather insights on potential customers and audiences, and align their products and services.
Market research is a great way to start out when you're setting your business goals. However, it's also your ever-present companion throughout your business journey as you keep track of the latest developments in your industry.
Some ways market research helps include:
You are better able to spot new opportunities
You can more easily understand customer pain points
You can quickly test ideas before investing
You can track industry trends
You can improve your customer experience
You can stay ahead of competitors
You can enhance brand loyalty
All successful businesses – whether they're a global corporation like Coca-Cola or an Italian restaurant in downtown New York – use market research. Without it, you're guessing. That can lead to wasted money and failed products. Regular market research keeps you in tune with changing customer needs and helps you adapt to shifts in the market.
In This Guide:
The Different Types of Market Research
Modern Market Research Techniques
Traditional Methods of Market Research
Key Benefits of Conducting Market Research
Common Challenges and Limitations in Market Research
Essential Market Research Tools and Software
Practical Examples of Market Research in Action
Future Trends in Market Research
The Different Types of Market Research
Let's now look at the types of market research that you can conduct. All research can be grouped into two of the following four subsections:
Primary or Secondary
Here's a quick look at these types of market research before we explore the methods you can use to generate your research findings.
1. Primary Vs. Secondary Research
Your research is either primary or secondary. Primary research involves collecting new data directly from sources. This means going out there yourself and being proactive. You can gather primary data through surveys, interviews, or observations. You can collect feedback from customers, listen to their interactions on social media, and look at your web statistics to understand your audience more thoroughly.
You're in control of the research, and it's tailored to your specific needs.
Primary research is the sort of thing polling companies do for political parties and what businesses engage in during their initial fact-finding stages of a marketing campaign.
Secondary research is more passive, and uses existing data from wider sources. You can find this information in published reports, other company websites, and social media profiles, government statistics, or industry studies. It's often quicker and cheaper than primary research and most of the data is publicly available. However, it may not be as specific to your needs.
Both types have their place. Primary research gives you custom data that can really drive your marketing strategy. Secondary research provides a broader context, which is great for helping you establish your initial product, service, or business idea.
It's usually a good idea to start with secondary research to understand the market, then use primary research to dig deeper into your target audience.
2. Quantitative Vs. Qualitative Research
Now, let's look at the second subsection of research: qualitative and quantitative.
Quantitative market research deals with numbers and statistics. This is the type of raw data that marketing tools can help you decipher. You use it to measure things like market size, customer preferences, and buying habits. Media analysis, financial records, surveys with closed-ended questions, and census data are common examples of quantitative research.
Qualitative market research, meanwhile, focuses on non-numerical data like opinions, motivations, and attitudes. It's the sort of thing a media analytics tool can help with, especially when it comes to social listening. It helps you understand the "why" behind customer behavior and gain insight into what they might do next. Social listening is a great place to start here, but focus groups and open-ended interviews are other, more traditional methods for qualitative research.
Using both qualitative and quantitative research methods gives you a well-rounded view of your market. Numbers tell you what's happening, while qualitative insights explain why it's happening.
You can then mix primary and secondary research with qualitative and quantitative practices to create a set of reliable data collection methods that are right for you.
Modern Market Research Techniques
We've already mentioned several ways to conduct market research, but let's dig a little deeper into the best options available to marketers today.
These modern methods are a little different to traditional ways of consulting market research. Every method has its strengths and can be used alone or combined with others for better results.
There's no limit to the amount of research projects you can run when trying to understand your customers, the market, and the wider industry. So, let's take a look at what you can do.
Social Media Listening and Sentiment Analysis
This is a really important market research process that has emerged over the past decade. Social media platforms offer a wealth of customer data thanks to the amount of information we, as users, put on the platform.
By tracking online conversations and profile demographics, companies can understand public opinion about their brand. Tools like CisionOne analyze posts, comments, and reactions to gauge sentiment. This real-time feedback helps businesses respond quickly to issues or trends.
It's qualitative primary research.
Social listening reveals customer preferences, pain points, and emerging needs. With the help of AI, it's possible to spot potential public relations crises before they escalate. With so much data out there on social platforms, a listening tool can identify key influencers and track campaign performance with ease.
This is quantitative primary research.
AI and Big Data Analysis
Speaking of AI, machine learning has transformed market research in recent years. These technologies can process massive datasets to uncover hidden patterns and trends that we otherwise wouldn't know about. AI is also able to analyze customer behavior, purchase history, and demographic info to predict future actions.
But how do you use AI in market research? The easiest way is through software, such as CisionOne, which has AI operations built into the platform.
But why is AI so good? Well, it can help segment customers more accurately, which lets companies create targeted marketing campaigns. Predictive analytics help forecast market trends and consumer demand, while natural language processing can analyze customer feedback from surveys, reviews, and support tickets.
Your team still has to oversee the AI to ensure it's doing the right jobs – but the idea is that it can quickly work through reams of information and pick out the relevant data for you.
Big data analysis is part of this and combines info from multiple sources. This gives a more complete picture of the market.
Competitive Analysis
Businesses have always tried to unearth what their competitors are up to. After all, knowing your rival's marketing strategy means you can cherry-pick the best ideas for yourself and avoid their mistakes.
These days, companies use software to gain a competitive advantage. These digital tools track competitors' online presence, pricing, and marketing tactics. It goes way beyond basic SWOT analysis to provide deeper insights.
Web scraping tools are another way to gather data from competitor websites and social media. This info helps companies benchmark their performance and spot market gaps. In doing so, it's possible to track rivals' product launches, promotions, and customer feedback in real-time. Again, you can take the good things from your rival and avoid the bad.
Traditional Methods of Market Research
The market research process has evolved significantly over the past two decades thanks to technological advancements – and the next decade will see AI come more to the forefront. However, that's not to say traditional methods of primary market research aren't worth conducting.
Here are some traditional methods which, when used alongside modern data collection, can greatly improve your marketing research.
Surveys and Questionnaires
Believe it or not, surveys and questionnaires are still popular ways to understand audiences. Most of us will be aware of political polling and how companies ask voters their views on politicians in order to build an understanding of who might win an election.
Well, brands do the same thing. Surveys and questionnaires gather both quantitative and qualitative data from a large group of people quickly.
Online surveys are cost-effective and reach a wide audience, while phone surveys can get more detailed responses. In-person surveys work well for immediate feedback, although these are more costly and time consuming.
Focus Groups
Focus groups can be perfect for conducting exploratory research into a product or service. People tend to relax when they're in conversation with others and are more willing to open up.
These sessions give you in-depth insights into customer opinions and reactions. You can observe body language and group dynamics, which adds context to the verbal responses. This is valuable qualitative data.
Focus group interviews also work well for testing new concepts. If you have an idea, then pitch it to them and see what comes back. In a group of 20 people, two might love your idea. You can then start to consider whether it's really worth it.
Interviews
Interviews are effectively bigger surveys where you ask your questions directly. They can be really expensive and time consuming – but if you gain the trust of your interviewee, then they may be worthwhile.
Structured interviews use a set list of questions. Semi-structured interviews have some planned questions, but allow for follow-up based on responses.
Observational Research
This form of secondary research comes in plentiful supply if you're willing to get out there and observe your audience and industry.
Observational research involves watching and recording how people and companies behave. It can reveal insights that people might not think to mention in a survey or interview. This is secondary qualitative research and it's hugely important for spotting nuance.
You can conduct observational research in person or through technology like eye-tracking software. Just make sure you get consent before setting a scanner on someone's face. It's useful for understanding how people interact with products or move through a store.
Observational research is a bit like social listening, in that it gives you unbiased data on actual behavior. It's particularly valuable when people's actions might differ from what they say they do.
Key Benefits of Conducting Market Research
Now, let's take a look at how market research actually benefits your brand. You get a lot of valuable insights when conducting primary and secondary market research – but how does that translate into data-driven decisions?
You Can Improve Product Development and Innovation
One of the best takeaways you get from doing market research is an understanding of what you need to do to improve your product or service to meet customer needs. Customers like to give their feedback and feel far more valued if you listen to them.
One famous case of market research done well was when Kellogg's changed the name of the UK cereal brand Coco Pops to Choco Krispies. Customer perception was so negative that, after conducting effective market research, Kellogg's decided to change the name of its cereal back.
You Create Better Marketing Strategies
One of the benefits of Kellogg's badly-judged rebrand was that its marketing strategy to return the name Coco Pops became a huge marketing success. Their strategy was based around accepting that they got it wrong, and thanking consumers for expressing themselves.
This is about understanding your audience and listening to them. Market research provides crucial data on consumer behavior and preferences, which helps you align your strategy so that it resonates with potential customers.
You also know your audience far better with market research data. Customer segmentation becomes more precise and you can tailor your approach to different groups based on their characteristics. This personalization boosts engagement and conversion rates.
You Reduce Risk and Make More Informed Decisions
Market research minimizes guesswork in business decisions. Sounds obvious, right? Well, you'd be surprised at the sheer amount of insight you can get when researching your market.
Understanding market size, growth potential, the competitive landscape, and how your audience feels about your brand is crucial. After all, this information helps you assess opportunities and threats more accurately.
Avoiding public relations crises is far easier than dealing with the chaos as it unfolds. Market research lets you look ahead and spot upcoming issues before they escalate.
Common Challenges and Limitations in Market Research
Market research is great but there are still several hurdles that can impact its effectiveness. These challenges can affect data quality, consumer insights, and overall research outcomes. It's therefore important to be aware of what challenges you might face when conducting primary and secondary market research yourself.
Bias in Data Collection and Analysis
Bias is a big problem with market research. We all have unknown biases that affect how we work. Survey questions might be worded in a way that leads respondents to answer a certain way, or may overlook things that others would view as important. Researchers might unknowingly select participants that don't represent the whole target market – this is particularly difficult if you're doing social media research without a social listening tool.
So, how do you combat bias? Start by using diverse data sources and collection methods. You can find these in a media marketing tool. Double-check all marketing questions for neutral wording and make sure your sample truly represents your target audience. Again, software can help you here.
Changing Consumer Preferences
Market researchers can never stand still. Consumer tastes can shift quickly – particularly on social media. Your research findings may become outdated in days if you're not careful. What's popular today might be old news tomorrow.
To keep up, do ongoing research instead of one-off studies. Use a tool to create templates for your research, whether that be social media monitoring, surveying, or interviewing. You need to have a constant stream of qualitative and quantitative data.
Data Reliability Issues
Of course, data's great when you have it but you need to be able to trust it. Online surveys might attract only certain types of respondents, for example, while focus groups can be swayed by a few loud voices.
Even social listening data collection requires you to think about the types of people who use each social platform.
The best way to improve reliability is to cover various sources. Cross-check findings from different places and look for patterns that show up across various data sets.
For example, you might notice that the same demographic of people who buy your product through shop links on X and Facebook all say the same kind of things on surveys.
Essential Market Research Tools and Software
We've spoken a lot about the tools and software you need to conduct marketing research from scratch. These market research tools help businesses understand their audience and gain a competitive edge. It's really difficult to even do the basics without some form of software because so much of a company's market segment is now online.
Let's take a look at the type of tools that are available.
Survey and Questionnaire Tools
Survey tools are really good for gathering direct feedback from your target audience. Just bear in mind that people who respond to surveys are probably part of the same demographic, so it might skew your data.
These platforms let you create customized questionnaires to collect data on customer preferences, opinions, and behaviors.
Popular options include SurveyMonkey and Qualtrics. Some key features to look for include:
Multiple question types (e.g., multiple choice, rating scales)
Skip logic to personalize survey paths
Mobile-friendly design
Real-time reporting and data visualization
Social Media Analytics Tools
Social listening tools like CisionOne help you track brand mentions, analyze sentiment, and identify trends across social platforms. They're really good at picking up qualitative secondary data. You get insights into what people are saying about your brand and industry online.
CisionOne and Sprout Social are reliable options here. They allow you to monitor multiple social channels from one dashboard. That's the sort of thing market researchers really come to value.
You can track keywords, hashtags, and competitors to stay on top of conversations. You can analyze your brand's industry and get direct feedback on your product or service.
Things that are usually included in social media analytics tools include:
Sentiment analysis
Audience demographics
Content performance metrics
Competitor comparisons
AI-Driven Data Analysis Platforms
AI-powered market research tools can catapult your brand to a whole new level of understanding. CisionOne, for example, is able to process vast amounts of data and uncover hidden patterns and predict trends. This data looks at everything from the media landscape to your marketing funnel.
Machine learning algorithms give these sorts of tools the ability to analyze consumer behavior, market dynamics, and emerging opportunities. With a tool like CisionOne, you can:
Identify new market segments
Forecast demand for products or services
Personalize marketing campaigns
Automate reporting and data visualization
AI platforms often integrate with other data sources like CRM systems and website analytics for a comprehensive view of your market landscape.
Frequently Asked Questions
You should now know enough about market research to get started. From establishing your goals to using specific tools, it's time to develop your company's brand based on the research you do today.
However, we understand that you may still have a lot of questions about market research, primary and secondary data, what market trends are, and how everything is collected in a single tool.
Below are answers to these types of questions that anyone working in the industry rightly asks before they start.
Why is conducting market research crucial for a business strategy?
Market research is really important because it gives you a wider insight into your brand, your competitors, and your industry. It shows what customers want and need, what others are doing, and what you need to be doing. This lets you create products and services people will buy.
From a strategy perspective, market research saves you money in the long run. It stops you from wasting resources on bad ideas, which means you can more confidently plan ahead with your wider plans for the business.
What role does market research play in product development?
Market research is the guide that informs your product creation. It tells you what features customers care about most. For example, a motor vehicle company will do market research on what customers like about SUVs before designing a new model.
It can also show gaps in the market that you can fill. You might spot a need no one else is meeting.
How can one identify the target demographics with market research?
Market research tools are the best way to begin to understand your target customers. Demographics come in all shapes and sizes, and a tool that can crunch data and generate quick reports will highlight where your audience is.
You can also do manual research, such as conducting surveys and focus groups. They let you talk directly to potential customers and collect primary market research.
Can you describe a successful case where market research had a significant impact?
Yes we can. In 1998, Kellogg's UK renamed its popular Coco Pops cereal. Customers didn't like the new brand: Choco Krispies. Kellogg's did qualitative research and found customers wanted Coco Pops back. So, they changed the name again and launched a memorable marketing campaign to highlight their mistake.
What are the steps involved in the market research process?
The first thing you need to do when starting market research is to define your goals. What do you want to learn? Do you want to understand your audience? Figure out why clicks aren't converting into sales? Maybe you want to see how your rivals are becoming so successful?
Once you have your goals, it's time to choose your research methods. This could be surveys, interviews, or data analysis.
Then, collect your data. Make sure to get a good sample size and use a market research tool to help. After that, analyze what you've gathered and create a market research report. Look for trends and insights. See where you can start to make an impact.
From here you can put your research into action and either improve or realign your product or service to match the demands of your market.
