By definition, market research is the process of gathering, analyzing, and interpreting any information about a product, service, or market and its potential customer base. It delves into the psychology, characteristics, spending behaviors, location, needs, preferences, and context of the business’s target market, the industry, and the competitors to watch out for.
Development
We can trace the origins of formal market research back to the 1920s in Germany. Parallelly around that time, US advertising companies were conducting market research to understand demographics during the Golden Era of the Radio.
By the 1950s, focus group interviews were first used in the 1950s to examine the effects of the US government’s propaganda efforts. Sociologists Robert Merton and Paul Lazarsfeld tried evaluating the responses from American radio listeners during World War II. They helped determine how people were compelled to think or behave when influenced by specific lines, phrases, and imagery.
Purpose
At the core of good market research is the need to understand the viability, demand, and feasibility of the offering. Your audience drives the purpose. This may mean you gather information, conduct market segmentation, understand your differentiation and unique position in the market, drive advertising campaigns and branding efforts to determine what offerings your customers like, and make sure it’s a win-win for both the business and your target audience.
A few reasons why market research is a prerequisite to any venture:
- Secures crucial information.
- Ensures a customer-centric approach.
- Helps foresee events by studying patterns.
- Determines your competitive advantage.
The market research process comprises multiple functions and tasks. First, you gather information based on the market sector. Then you analyze, interpret, and draw meaningful information from the data. Any significant patterns and data points may be converted into actionable insights when your executives make business decisions. Market research is crucial to identify your competitive advantage in an increasingly complex digital world where every competitor can make magic.
Objectives
Market research projects may usually be anchored by one or more of the following objectives:
Administrative goals
Administrative objectives help a company, through optimal planning, control of human and other resources, and organizational needs, to ultimately fulfill a market need in good time.
Social goals
Social objectives aim to satisfy customer needs through understanding their behavior and preferences toward a product or service in question.
Economical goals
Economic objectives determine the competitive advantage/ disadvantage, the degree of success or failure of an idea, the viability of a product or service, etc.
Types of market research
How do you determine if your customers will like your product or service? There are two fundamental ways to gather data about your customers, their preferences and the market. You may outsource a market research firm to do it or hire industry experts to give you real-world insights, or you may use a secondary source of information that already exists.
Primary data
It is the data that you compile for yourself or hire a firm or a professional to gather it for you. It is directly collected by a person or a business entity — for instance, through focus groups, one-on-one interviews, and ethnographic research.
Secondary data
It is the data that is gathered from an outside source like white papers, reports, research theses, etc. For example, public sources, commercial sources, and educational sources. It may include population information from the government census data, trade organization reports, or research papers presented by other market research firms in the sector.
The bottom line
Market research involves researching your customers, competitors, industry, and market environment. You may decide to do this on your own or hire someone else to do it. But each factor that influences your business needs to be researched separately. After that, you can collaborate your findings to get a big-picture view of your positioning in the market.
Market research with CleverX
CleverX, by conducting a deep, thorough background check, ensures that none of the professionals on its platform are faux. Furthermore, it lets businesses find their own set of leading industry people to conduct their market research, resulting in data that is not 100% authentic but also reliable.
Take a look at how we are changing the market research industry and how research firms are making a hit with us!