Complete Guide to Different Types of Market Research
Why do companies like Coca-Cola, Apple, etc dominate the market? It’s not luck because businesses, specifically B2B businesses, are generating terrific Roi using market research.
They position their product so effectively that it appeals to a larger audience. Because of this, their sales go up, and they end up making more profit than their competitors.
Well, that’s what market research can do for any business.
Knowing customer desires helps businesses make crucial decisions based on data (not assumptions). Plus, it lets you see the gaps between what you think and what consumers want.
In this blog post, we’ll go into more details other than the market research definition.
The concept of market research became common in the early 20th century. It was when Daniel Starch designed the Starch test to check the effectiveness of magazine ads. Later on, number guy George Gallup introduced polls and surveys to predict target audience attitudes. That’s how it started. Over the decades, it evolved with the introduction of different methods like focus groups, interviews, and more.
What is Market Research?
Market research is a practical way to know what people like and don’t like. What’s going on in the marketplace, and what do consumers need? Typically, businesses use that info to design products or services and grow.
For startups and medium-sized businesses, market research channels the route to growth. When they get insights into needs and market trends, they view their solution through the lens of the consumer. As a result, they develop a solution that fits the audience’s demand.
On top of that, it enables them to turn their vision into a reality that drives results.
According to ESOMAR:
Companies that used market research saw a 37.25% growth from $102 billion in 2021. It’s expected to reach $14 billion by 2024.
In fact, Nexus Expert has seen many businesses grow from scratch using market research. They’ve even helped many decision-makers connect with the right experts to gain actionable insights.
Why is market research important?
Market research may not seem very important to businesses. After all, now it’s so easy to access information online. It has become standard to go on Google or online forums to figure out the:
Key Benefits of Market Research
- Market trends
- Consumer desires
- Buying behavior
- Pain points/challenges
| Key Benefits of Market Research | ||||
|---|---|---|---|---|
| Improve Decision-Making | Enhance Customer Understanding | Competitor Analysis | Enhance ROI | Identify Growth Opportunities |
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Different types of market research
Now you know that market research is important in making informed decisions for your business. It’s crucial for you to know the different forms of market research because every type serves a different purpose.
Depending on a company’s objectives, the need for research varies. What works for your strategy consulting business may not work for private equity.
So, let’s have a look at 2 types of market research:
Primary Market Research
Primary market research is the process of collecting data directly from the target audience. It may be the consumers, potential customers, or industry experts. No matter the method, the goal is to get insights relevant to your business needs so that your given solution meets the client’s needs and builds credibility.
Part of primary market research is to identify several aspects of the market. They can be customer satisfaction, purchasing habits, or competitors’ patterns.
When you want to launch a new product or improve your existing strategy, it’s important to use primary market research. There are a lot of methods available for primary market research. You can understand your audience better using the method relevant to your business.
At Nexus, we provide insights to businesses using the 2 main types of primary market research. One is qualitative, and the other is quantitative.
Qualitative Research:
In this, research depends on observations and feedback. These findings explore the reasons behind particular behavior. The opinions enable businesses to know the customer experience.
Using this, they can refine the marketing strategy or product positioning. This data is not based on numbers. It provides insights based on perspectives. So, if you want to know the “why” and “how” part of your target audience, this research is for you.
Methods of Qualitative Research:
There are different types of qualitative research: interviews, focus groups, and observations. Let’s explore these one by one.
Interviews
This type of research is based on 1:1 interactions or conversations. These might be between the experts and decision-makers, or it might be between two experts. This research mostly includes open-ended questions. Such queries are exchanged to get insights.
To specify, this type of research depends on questions. The insights you’ll get in the end depend on the questions you ask experts. Once you ask the right questions, the insights you’ll get from an expert can change everything for you.
Nexus experts have helped dozens of decision-makers ask the right questions and get the right insights. Not only that, but Nexus also gives experts the opportunity to participate in market research or provide insights.
FocusGroups:
It’s somehow similar to the interviews. Like in this, you know the perspectives of the experts, too. But the key difference is that you connect with a focused group of experts. The experienced people come together at one virtual table and exchange their opinions. This one is best if you want diverse opinions.
For example, if you have designed a product and you want an expert opinion on it, focus groups can make it possible for you.
Seeing different reactions and knowing different points of view gives a better understanding of the audience. It’s like a small practical you do with a smaller audience.
If you’re in a service-based business, using this research can help you refine your strategy after analyzing the market’s thoughts.
Quantitative Research:
Quantitative research is analyzing the market statistically. Its main aim is to collect data numerically. You can collect it using various methods. As a result, you’ll be able to measure the patterns and outcomes. Most particularly, it’ll support you in decision-making.
Making important decisions in business itself is very challenging. The numeric data gives you the exact answers to “how many,” “how often,” and “what” of your target audience. With this, you can create a better strategy and run at peak efficiency.
| Why use quantitative market research |
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| When to use quantitative market research? |
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Methods of Quantitative Research:
Just like quantitative, this type of research has many different types. You can use the following quantitative research to test the hypothesis or analyze the trends.
Surveys:
As the name suggests, this research includes a large data set. It lets you know the market trends or broad patterns in a structured way. Surveys are done in the form of questionnaires. They primarily include open-ended and specific questions. These are sent to large groups of targeted people. The end goal is to get actionable data. The data might be feedback, or it may include questions that help businesses understand customer preferences.
Whatever it is. In the end, you’ll come to know your potential target in a better way.
Experiments:
When you think of the strategy, you think about your audience’s desires. The experiment is best to know the audience’s exact needs. An experiment with specific variables in a control environment can give you a better understanding of the market. You might have to spend money or time, but you’ll know your solution’s pros and cons before you launch it.
Market Testing
Let’s suppose you are a tech company, and you want feedback on your app. Using market testing, you can evaluate its performance. You can get feedback on its features. This will help your business in the long run.
Like you’ll get to know the potential issues. By knowing this, you can reduce the risk and drive success.
Like you’ll get to know the potential issues. By knowing this, you can reduce the risk and drive success.
| Choosing Between Qualitative and Quantitative Research | |
|---|---|
Use Qualitative Research when:
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Use Quantitative Research when:
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Secondary Market Research
Secondary market research is research based on existing data. This is usually done to get general insights rather than specific ones. Businesses do this research when they need vast information from various sources. The sources might be internal or external. More specifically, they might be industry reports or government data.
Methods of Secondary Research:
Industry Reports
Market research firms like Nexus mainly conduct this form of research. They collect authentic and original data from genuine sources. Businesses get this data from them. They analyze the data and gain insights into market trends. Businesses mostly rely on them because of their authenticity.
Customer Database
You are in the e-commerce business, and you want to know the customer’s past behavior. Right? This research covers the data businesses already have. This data might be generated through the operations team.
By using this data, decision-makers come to know the buyer’s choices and purchasing trends.
It will ultimately help them take the right step at the right time.
Competitor Analysis
Creating a perfect strategy is crucial if you are in the B2B service business. You can only design a better and executable strategy by knowing the competitors better. This research method is perfect for this. You can know your competitors’ wins by analyzing the information on their websites or other online material.
The only problem lies in analysis. If you are not an expert in a specific industry, you can’t analyze the competitors’ wins and losses strategically. Only experts can help you with this.
Nexus Experts is one such firm. They help businesses get competitor analysis from experts.
There are many other methods of secondary research. Here we’ve compiled the methods and sources of this research for your better understanding.
| Sources of Secondary Market Research | |
|---|---|
| Internal Sources | External Sources |
| Sales Data: Records of sales transactions showing customer preferences and purchasing trends. | Government Publications: Official reports on demographics, trade, and economic trends. |
| Financial Records: Data on revenue, expenses, and profit margins to assess performance. | Academic Research: Studies and white papers from universities and research institutions. |
| Historical Marketing Data: Performance metrics from past marketing campaigns. | Public Databases: Subscription-based or free resources offering market data and trends. |
| Employee Feedback: Insights from staff about customer interactions and operational challenges. | Media and News Articles: Insights from newspapers, blogs, and magazines about market trends. |
| Operational Data: Internal records of production, supply chain, or logistics performance. | Trade Associations: Industry-specific organizations providing research and reports. |
| Customer Service Logs: Data from customer complaints, inquiries, and feedback. | Social Media and Forums: User feedback and discussions on platforms like Reddit or Twitter. |
Final Verdict
Market research is an essential part of business growth. It determines what strategy will work in the market and where to improve. Interviews and focus groups offer qualitative insights into target audience behavior. However, both of them work in different ways. But in the end, they both give you knowledge about the audience’s behavior and thinking patterns.
On the other hand, quantitative research gives you numeric data when you have to test the hypothesis. Also, you can validate your findings using this and make informed decisions.
In market research, using the right method offers insights relevant to your business. By doing the right type of research, you can achieve more ROI and grow exponentially.
Now that you understand the types and importance of market research, you can connect with Nexus Expert. They can help you get actionable insights using the right research method.
FAQs:
Terms like consumer insights, business research, and business intelligence are used for market research. Some businesses also call it consumer research or industry research. In a nutshell, it’s known by many names.
Businesses who want to know the market trends. The ones who have to make important decisions. And they can’t make them without knowing what’s going on in the market. More specifically, you need market research if you’re a:
Let's suppose you have a clothing brand. You want to know whether this fabric and design will work in the market. For this, you can do market testing. By doing this, you can know the customer preferences. It will help you make an informed decision and grow without any struggle.
There are 4 stages of market research. They include defining the problem, planning the research, crafting research instruments, and analyzing the data.
It depends on the business need. If you’re in the e-commerce business and you want to know something related to your product, a survey can work for you. But if your business model is different, then there are other research methods, too.
