What Are the Basics of Market Research A Step-by-Step Guide to Better Decisions Using Data
Introduction to Market Research Fundamentals
Market research is a structured process that allows for the systematic collection, analysis, and interpretation of all relevant data about an organisation’s customers, competitors and the market(s) where they operate. It provides the factual information foundation from which organisations can determine the associated risks and validate their opportunities and make strategic decisions.
By basing decisions on objective, factual evidence rather than speculative information or assumptions, organisations will face less risk, have a stronger competitive position, optimise their product/service offerings, and have better overall performance throughout the lifecycle of the business.
Establishing Clear Research Objectives The first step is determining clear objectives for your research based on business objectives. Objectives define your research scope, methodology, timeline and deliverables. Defined objectives clearly lay out the decisions that will be based on the research findings, the hypotheses to be tested and the metrics that will be used to assess those hypotheses. Examples of research objectives include identifying customer needs, estimating market size, validating pricing sensitivity and measuring brand perception.
As a result of strong research objectives, you will receive:
Actionable insight into the decisions you will make.
Measurable criteria to determine whether or not your research was successful.
An opportunity to allocate resources efficiently to conduct your research as planned. Understanding Market Segmentation Market segmentation is used to separate a broad market into smaller more meaningful segments based on their common characteristics. Understanding the segments of the market will define who your target audience is along with how to provide value to them.
Common types of segmentation:
Demographics — age, income, education
Geography — region, climate, urbanization
Psychographics — values, lifestyles, motivations
Behaviour — frequency of use, loyalty, triggers for purchase.
Tactical use of effective segmentation enables you to send more targeted messaging, offer product features tailored to specific segments and use the most efficient channels to get your products into the hands of customers.
The distinction between primary research and secondary research allows us to achieve a balance between depth, speed, and cost-effectiveness in research projects.
Working with Primary Research
We collect original data at the source to answer specific questions. Examples of this type of research include surveys, interviews, focus groups, usability tests, and observational studies. Our goal when working with primary research is to provide our clients with tailored, high-quality insights relevant to their needs.
Working with Secondary Research
We use existing data from several different types of sources such as industry reports, academic research, government statistics, trade publications, and our clients’ internal records. By utilizing secondary research, we provide context for the data collected from our clients’ primary research, we can identify benchmarks for measuring success, and we can identify trends for forecasting future growth.
A robust research plan should utilize both primary and secondary research methods to produce the highest quality of insights for our clients.
Selecting Appropriate Research Methods
We choose research methods based on the purpose of the research project, the intended audience for the results, and available resources. The two general types of research are qualitative and quantitative.
Qualitative Research
Qualitative research is focused on understanding the motivations, attitudes, and perceptions of respondents through the use of open-ended approaches. The outputs of qualitative research provide insights into the reasons for the behaviours that occur.
Some of the common tools utilised in qualitative research include:
In-depth interviews
Focus groups
Ethnographic studies
Diary studies
Quantitative Research
We quantify our variables to inform us of the degree and frequency of occurrences and the relationships we see within our sample.
Quantitative Tools of Measurement
In quantitative research, there are several types of measurements that we use:
- Structured Surveys
- Experimental Studies/A-B Testing
- Polls and Panels
Combining the two methods creates a more valid and interpretable result.
How to Create Effective Research Instruments
We create questionnaires, discussion guides, and tests that are “clean” of bias and “clear” of intent. To be clear, an effective research instrument has clear wording, logical order, and is neutral in its framing. We conduct pilot studies on research instruments to validate understanding and timing before utilizing the instruments completely.
Best Practice Guidelines
- Use clear/easy to understand language
- Avoid leading questions or double barreled questions
- Balance scale choices
- Apply standardized measures
Sampling and Representativeness
We identify a sampling strategy that reflects the target market. The choice of sampling method plays a large role in the level of confidence, generalizability, and cost of the results.
Sampling Types:
Probability Sampling: random sample, stratified sample, cluster sample
Non-Probability Sampling: convenience sample, quota sample, purposive sample
Our sample sizes are based on confidence intervals, margins of error, etc., which produce reliable results. Here’s a breakdown: 1 sample = 100% confidence; 3 samples = 98% confidence; 10 samples = 90% confidence; and 30 samples = 85% confidence. Therefore, in order to achieve the highest level of confidence and reliability for quantitative studies, one should always determine the correct sample size.
Fieldwork and Data Collection
Quality Control during the Data Collection Process. We establish a quality assurance process to ensure sufficient quality control exists in the data collection process to maintain data integrity. Timing/Method of Contact/Quality of Respondents has a Direct Impact on both the Rate of Responses Received as well as Accuracy in Responses Collected. We have implemented a system to allow the real-time monitoring of all fieldwork and to provide immediate feedback to our clients regarding any issues we have discovered during data collection.
Types of Quality Control:
Verification Checks
Attention Filters
Duplicate Prevention
Ethical Compliance
Data Analysis and Interpretation
The purpose of data analysis is to convert raw data into meaningful insights through statistical analysis, thematic coding and visual representation of results. The goal of data analysis is to determine trends, correlations, relationships, and anomalies between data sets.
Examples of Data Analysis Techniques:
Descriptive Statistics
Cross-tabulation
Regression Analysis
Factor and Cluster Analysis
Sentiment Analysis and Thematic Analysis
While interpreting data analysis results, attention is given to identifying and addressing implications for decision making and not just viewing the results as numbers.
Competitor and Industry Research
Competitive analysis is a method used to assess the structure of the market and positions of companies and products in the marketplace. Product, Pricing, Distribution Channel, Message, benefit, and Gap Analysis of Competitors Identify Opportunities and Gaps.
An Industry Analysis Considers:
Market growth Rates
Regulatory Forces
Technological Advancements
Supplier Power/Buyer Power
The environment in which we operate influences the decisions and risks we need to manage as an organization.
Developing Strategies Based on Research Insights
We develop practical solutions based on all research insights; we help you identify where to focus your limited resources, give clear direction for implementation, and identify timelines and who owns each part of the solution from the start.
Strategically Applied Research Insights
Refining your value proposition
Creating a go-to-market plan
Determining price strategies
Improving customer experience
Ethics, Privacy, and Data Protection
We have ethical and legal standards that we must uphold in the way we conduct research and treat confidential data. By being transparent, obtaining informed consent, and securely managing personal data, we protect our respondents and build trust in your company or organisation.
Core Values:
Obtaining informed consent
Ensuring respondent anonymity and confidentiality
Meeting regulatory requirements
Using data in a responsible manner
Assessing the Impact of Your Research Efforts
We evaluate how well your research produced the desired outcomes by following up with customers about their experiences with the research findings, tracking customer behaviour, and monitoring how quickly you make changes to the research findings based on customers’ feedback.
Indicators of Success:
Increased conversion and retention rates
Decreased risk of failure
Quicker decision-making cycles
Improved return on investment from research projects.
To Conclude
There are core components to effective market research which include clearly defined objectives, sound methodology, sample selection that reflects the target market and in-depth analysis of collected data; however, it is the ability to take data from market research and convert into meaningful “knowledge” (insights) and use this “knowledge” to successfully take action over the long term by providing a benefit (sustained competitive advantage) for the organization.
Questions to Ponder
What can we do to make sure that our research supports our decision-making process for the foreseeable future?
How do we determine what is the best combination or the best balance of both qualitative and quantitative research methods to address our information gaps that exist now?
How do we develop a process to apply insights gained by identifying market segments to product, price, and advertising decisions?
What type of governance does an organization implement to ensure that trust and adherence to regulations will be maintained over the long haul?
