Imagine you are a founder with a new product. Launching this product in market will take considerable time and money, and you can’t afford a lack of early adoption. You believe this product will change the lives of those who consume it, but you don’t know for sure what kind of person this product will appeal to.
This is where market research comes in.
Market Research is the cost-efficient process of answering key questions to ensure your business’ next steps bring you success in the most effective and efficient way possible. It collects data that leads to insights that lead to confidence in your go-to-market strategies without risk of taking the wrong steps that will cost significant money and time to rework later on.
This article explains what market research is, when you need it, and how to do it right, whether you are doing it yourself or working with a partner.
What Is Market Research?
Market research is the process of gathering and analysing information about a market, including customers and markets to target, stakeholder, competitors, and industry conditions, to support business decisions.
The endpoint to market research is informing better business decisions. This boils down to three crucial parts, each needing to be done the right way to reach the endpoint properly:
1) Research Design: identifying the right questions, methodology, and audience to collect data from,
2) Collecting the data, and
3) Analyzing and translating the data collected into clear and actionable insights that are right-fitted to your goals.
Market research is risk mitigation – it is not a crystal ball, but it reduces uncertainty significantly so that you take your next steps with confidence that you will avoid gaps that cost far more time and money than the small investment to do the work upfront to gain the insights needed.
When Do You Need Market Research?
Market Research should be used in any situation where a business’ strategic decision making can be strengthened by uncovering key points that are currently unknown to them. This can take many forms, but often starts with one (or multiple) of the following questions:
- Will a new product or service resonate with target markets?
- What / who should be prioritized as “target markets” (either in terms of customer segments or geographically) for products, promotions, messaging and marketing campaigns for a given product or service?
- How can we define our different types of customers or potential customers, and how can we best build appeal among each of them respectively?
- Who are our biggest competitors in market, and what are our brand’s biggest gaps, similarities, or differentiators to position ourselves (or aspire to positions ourselves) towards?
- Are our consumers happy with our products/services? And what can make them even happier?
- What is the awareness of our product/services in different markets, and how can we best optimize our path-to-purchase funnel (awareness, consideration to consume, consumption, retention)?
- What is the size of our market and what share do we have within it currently (in terms of $ and/or people)?
- What are our opportunities to grow to better achieve our objectives (products, process, people, etc.)? And where are we currently losing the most potential revenue and/or customers?
- How are consumer preferences shifting and what trends should we be planning around in the future?
- What will be the impact of a new evolution from our company be on our current state?
- What should our KPIs and targets be for assessing our business’ progress vs. our goals and purpose?
- What does the current “customer journey” look like from decision to purchase to actual purchase point, and how does this compare with your desired state?
- Etc.
If you are facing a decision that requires more than a gut feeling, Bondar Group can help. We design and deliver market research studies built around your specific question, not a generic template. Get in touch to start a conversation.
Types of Market Research
Market research is based on business needs, and as different sectors and types of businesses have evolved so much over the years, market research methodologies have evolved with it. The best market research firms should have a methodology for every need. While the list of specific tools and methodologies is vast and expansive, they can generally be fit into four main categories:
Primary vs. Secondary Research
- Primary research: Primary research is original data you collect directly from sources. It is specific to your question and your context. This can be done through customized online surveys, one-on-one interview, focus groups, etc.
- Secondary research: Secondary research (also called desk research) uses existing data collected by others. It is faster and less expensive, but may be less specific to your situation- as every business is unique in its own way, so too are the context of their needs. Examples of secondary research sources include analyzing Statistics Canada data, industry reports, academic studies, published surveys, etc.
- Depending on your needs, many projects can (and should) use a combination of both, combining the rigour of your customized primary research with widely accepted secondary research that supports your findings.
Qualitative vs. Quantitative Research
- Qualitative research: Qualitative research informs the universe of the “why” behind behaviour. It produces rich, descriptive, and comprehensive insights around what may drive behaviour of all different consumers. Common examples of this would be in-depth interviews (one-on-one with participants), focus groups, online bulleting boards and/or diaries, shop-alongs (ethnographies), etc.
- Quantitative research: Quantitative research measures the “what” and “how many.” It produces numbers and patterns. It can also help measure the “why” and key drivers of behaviours, with the main difference being this provides a robust and quantified set of metrics, often taking inputs that would be found in a qualitative methodology and providing a hierarchy of drivers and needs to inform what should be prioritized within the larger set of options. This is typically done through custom surveys (online or telephone), sales data analysis, web analytics, etc.
- It is crucial in market research to select the methodology that will best lead to your objectives being achieved. Depending on your needs, it may the case that a combination of both qualitative and quantitative phases are optimal.
Common Methods and Tools
Choosing your methodology is as important as any decision made in your market research. While there are many different qualitative and quantitative methodologies beyond just the below, here is a brief definition of some of the most common today:
Qualitative Methods
- In-depth interviews (IDIs): one-on-one conversations that explore attitudes, motivations, and experiences in depth
- Focus groups: facilitated group discussions that surface shared and divergent views and attitudes towards a specific topic
- Online bulletin boards and diaries: asynchronous qualitative research conducted over days or weeks
Quantitative Methods
- Online surveys: scalable, cost-effective, and fast; best for measuring attitudes and behaviours across a larger sample of your optimal audience(s).
- Secondary data analysis: using existing datasets (Statistics Canada, industry associations, published reports) to understand population size, demographics, and trends
A Seven-Step Framework for Doing Market Research Right
Whether you are conducting market research on your own, or with a partner company, doing it the right way requires the right decisions to be made throughout the entire process. Below is a brief framework you can follow to make sure you make the right decisions at each key step to ultimately best achieve your desired results.
Step 1: Define the decision
Before collecting any data, be clear about what decision you are trying to make. Vague research produces vague answers.
Example: “Should we launch this product nationally across Canada from day one, or just in our British Columbia base first?”
Step 2: Define the audience
Who do you need to hear from? Be specific. The more precisely you define your target respondents, the more useful your findings will be.
Example: If your product is for Mothers of children in school, you should survey only mothers of children in school across the country (with a proportional representation across each country).
Step 3: Write your research questions
Turn your business question into specific, answerable research questions. Avoid leading questions that push respondents toward a preferred answer, or a question that doesn’t allow for respondents to answer thoughtfully with all comparable options considered.
For example:
Bad question: Does factor X make you want to purchase a product for your children more?
Yes / No
Good question: When deciding which products you may or may not want to purchase for your children’s needs, which of the following factors (if any) are most important? (And then provide a comprehensive list of factors to choose from).
The first example may exhibit a much more promising (but misleading) data point, as this factor may make them want to purchase something more in general, but the second question provides a more accurate data point as it makes the respondent qualify how much that factor drives their decision making when compared to all other real factors it is competing against – thus providing a more real life example where there are typically competing options and drivers, and a finite wallet.
Step 4: Choose your methods
Match your methods to your questions. Use qualitative methods to explore and understand; use quantitative methods to measure and validate.
For example, if your goal is to understand likelihood to consume a product in British Columbia compared to other provinces, you would want to use a quantitative survey where you can quantify a metric across thousands of people, rather than a few dozen across the country in a qualitative focus group setting.
Step 5: Collect data ethically and mindfully
Obtain informed consent from participants, protect their personal information, and be transparent about how data will be used. In Canada, this means being mindful of PIPEDA and applicable provincial privacy legislation.
Ask the right questions, in the right order, and through the right vehicle to collect the truest viewpoint of the metrics you need to ultimately gain the insights you need.
Step 6: Analyse and synthesise
Look for patterns, not just individual responses. And translate your data points into real meaning towards your objectives within the context of your business. The goal is to move from raw data to insight: what does this mean for our business?
Bad takeaway: X% of women in British Columbia say they are likely to do this, whereas Y% of women in other provinces say this.
Better takeaway (one that actually tells you what it means for your business): Appeal for your product is higher in British Columbia then any other province; consider launching in British Columbia before on a national scale.
Step 7: Translate into decisions
Research that does not lead to a decision is wasted. Connect findings directly to the original business question and document the recommended course of action.
When should I hire a market research firm instead of doing it myself?
Consider hiring a professional firm when the decision is high-stakes, when you need a larger or more representative sample than you can recruit yourself, when you need an objective third party to validate findings for stakeholders, or when your team lacks the time or expertise to design and analyse a rigorous study.
Good research does not have to be slow or expensive.
Bondar Group’s market research service is designed to give you the insights you need, faster and with better value and lower costs than you might expect. See how we work.
Common Mistakes and How to Avoid Them
As mentioned, doing market research “the right way” requires the right decisions to be made at every step of the process. Some common mistakes for you to avoid are as follows:
- Not properly establishing your problem statement/decision to be made. This can lead to a list of questions asked that are not focussed nor connected to your real goals.
- Choosing the wrong methodology for your objectives. This can leave you with gaps in your findings, and filling these gaps is the main point of conducting market research.
- Asking questions in the wrong way, wrong order, or even worse, among the wrong audiences. This can produce hidden biases in responses or disconnects between your insights and your goals.
- Not supporting your custom research findings with other supporting data points (such as secondary research, sales data, etc.).
- Asking too many questions – respondents in any methodology have a limit, and too many questions can lead to fatigue or lack of thoughtful answers. You can’t ask everything in a survey or focus group, so ask what you need and use other pieces that tell you what you know.
- Skipping data quality checks and processes- make sure your sample is all of high quality and representative of your audience. Bad data should be replaced. It is useless.
- Surveying friends and colleagues, or trusting your gut without collecting the data. You would be shocked to see how the masses differ from your core group!
- Misinterpreting the nuances of your methodology selected – for example, if you are doing a quantitative survey, are you asking the right sample size? If you are doing a focus group, are you splitting the groups up into the right audiences of interest?
- Misinterpreting data collected – are your metrics created and analyzed with statistical rigour? Not doing so will deem the data collected as useless.
- Not translating your data collected into actual, real and feasible insights for your company to follow. The data points collected are integral, but they are just numbers. What do they actually mean, in plain English, for you moving forward? If you are not answering the question that set the need for the study in the first place, your research study has been a waste of your time and money.
Conclusion
Market research is about making better decisions. Its not just collecting data, and it must be done right the whole way to give you the insights that will leave your company better off.
The businesses that invest in understanding their market before they act are the ones that move with more confidence and fewer costly surprises in the long-run.
Every business has its own unique goals, plans, and questions. The Bondar Group exists to help companies.
Think you may have a question that could be answered through market research? Not sure where to start? That is exactly where we come in.
Tell us what decision you are trying to make, and we will help you figure out the right research approach, even if you are doing it on your own! Let’s talk.