In today’s fast-paced business world, market research management plays a pivotal role in guiding organizations towards success. Achh. That’s a boring ‘business speak’ intro to market research stuff. Given it’s our business, we sort of have to say this. But we also think it’s true. Deeply understanding the people who use your products or services and why, can make the difference between winning or losing in the market. It’s just that simple.
The reality is, not all market research is created equal; there is such a thing as “bad research.”
- Research that starts with the wrong objectives
- Research that asks the wrong questions
- Research that happens at the wrong time
- Research that involves the wrong people
- Research that uses the wrong supplier
- Research that arrives at the wrong conclusions
This isn’t meant to scare you, but let’s face it. Doing market research for just the sake of it isn’t going to help anyone. Not only is it a waste of precious resources (like people’s time, supplier bandwidth… oh, and money! Lots and lots of money), but it can create even more problems than it solves if the intent behind the work isn’t crystal clear from the very beginning. And yet, businesses often find themselves in this undeniably awkward position, sitting around a board meeting table after 3 months of vigorous research, asking themselves:
- What was it that we wanted to get out of this work again?
- How are we going to share this across our business?
- How are we going to use this work?
And as a research supplier, believe us, we don’t want this for you either. It breaks our little consulting hearts when the work we produce doesn’t get used (or even worse, gets misused).
So let’s start from the very beginning, shall we? Let’s go back to the basics and look at what the world of market research looks like today, why it’s so important, and how businesses can learn to manage it and lead to success.
What is market research?
At a very foundational level, market research is the process of gathering, analyzing, and interpreting data about a particular market, including its consumers, competitors, and industry trends. It enables people to make informed decisions based on data-driven insights. Simple… right?
Well, not really. Market research comes in many forms, serves many purposes, and is influenced by many external factors (some of which are outside of our control). So, despite our very rudimentary understanding of what it is and how it serves us, the reality is as people change, markets change, and as markets change, so does market research (um, hello AI).
What makes market research more complex?
- Changing consumer behavior: Human behavior is dynamic and influenced by numerous factors such as culture, technology, trends, and economic conditions. Understanding and predicting these changes requires continuous monitoring and analysis. In other words, you have to keep looking.
- Changing global markets: With globalization, businesses often operate in diverse markets with varying cultural norms, regulations, and consumer preferences. Conducting research across different regions adds complexity due to these differences. And it is critically important that cultural nuances don’t get missed.
- Changing technologies: Technology evolves quickly, impacting how consumers interact with products and brands. Keeping up with technological advancements and their influence on people’s behavior requires constant vigilance.
- Changing guidelines: Making sure research is conducted ethically, respecting privacy and avoiding bias, is crucial to protecting people and the integrity of the work, and adds another layer of complexity to be mindful of.
In many ways, changes in the market research industry reflect changes in the wider world. Which means it is the responsibility of those in the industry (and those using market research to inform their business decisions) to keep up.
Why is it important?
So why do market research in the first place? Because conducting market research is crucial to the health and success of most companies. It helps organizations gain a deeper understanding of their customers, competitors, and the marketplace so they can make the right decisions for their business that will not only serve them well, but will serve the people they serve well. Without it, businesses would be rummaging around in the dark, making decisions based on guesswork or opinion rather than concrete data. Which is not a place anyone wants to find themselves in.
Market research helps businesses:
1. Understand people
It helps brands comprehend their target audience—what they want, need, and prefer—which is essential for creating products or services that will truly resonate with them. It’s one thing to say you’ve “reviewed the monthly numbers” and a whole other thing to say that you understand your audience’s daily lived experience.
2. Identify opportunities
Research uncovers market gaps, unmet needs, or emerging trends, allowing businesses to capitalize on new opportunities and stay ahead of competitors. More specifically, it provides insights for developing effective marketing strategies, pricing models, distribution channels, and product positioning based on human behavior and market trends.
3. Reduce risk
It minimizes the risk of product failure or entering a market that isn’t viable. Understanding market demands helps in making informed decisions, reducing the likelihood of making costly mistakes.
4. Optimize marketing efforts
Research helps in targeting the right audience with appropriate messaging through the most effective channels, maximizing the impact of marketing campaigns.
5. Guide expansion
For businesses considering expansion into new markets or launching new products, market research provides valuable insights to make informed decisions.
6. Allocate resources
It helps companies allocate resources effectively—whether it’s finances, time, or people power—by focusing efforts on areas with the highest potential for success.
7. Keep in touch
This is probably the most important aspect. It’s very easy to assume that the people who use a particular product are ‘like us’, or like your niece, or uncle Joe. This is seldom true. The reality is people have a vast array of motivations for thinking things, doing things, buying things, most of which they don’t really understand themselves. If you’ve spent months or even years developing or marketing a product, your perspective is almost certainly not the same as the shopper, or more likely the huge range of very different shoppers. Not least because you are way more informed than they are. Plus, things change, fast, so what was true last year probably isn’t anymore. Even if it’s “just a nuance”, in marketing, nuance matters. A lot. Just ask a certain beer company about transgender influencers.
Primary vs. secondary research
Before you can decide on the specific approach you’d like to take, you need to decide on the kind of research you’re going after. Let’s start here. There are two main types of market research: primary research and secondary research. Primary research involves collecting data directly from original sources – people. In other words, you go out there and get it yourself. While secondary research involves analyzing existing data. This also comes from people, but it’s often indirect or aggregated. In other words, the data is already out there waiting for you. Think retail sales for major brands or products or volume information, etc. It can come from some form of ‘tracking’ right down to the individual level – like online behavior, etc. You get the picture.
Just like qualitative vs quantitative research, primary and secondary research are different, yes, but they serve an equally important function. Here’s what we mean.
Primary Research
- Purpose: Specifically conducted to address a particular research question or objective. It’s tailored to gather data directly relevant to current research needs.
- Data Collection: Involves collecting data firsthand. This can be through surveys, interviews, observations, or focus groups.
- Time and Cost: Often more time-consuming and costly because it involves gathering data from scratch, conducting surveys and analyzing results.
- Control: Researchers have full control over the data collection process, allowing them to tailor methods, questions, and approaches as needed.
Secondary Research
- Purpose: Serves to gather existing information that might provide background context, historical data, or general insights. It’s not customized for a specific research question but can offer a broader perspective.
- Data Collection: Involves using existing data that others have already gathered. This data could be from reports, articles, statistics, or studies conducted by other sources.
- Time and Cost: Generally quicker and more cost-effective as it involves using existing data, saving time and resources on data collection.
- Control: Researchers have limited or no control over how data was initially collected. They rely on what’s available and might face limitations due to the methodology or scope of the original research or data capture.
So then, how do you decide?
Good question. Deciding on whether to conduct primary or secondary research depends on your research question and the context of what you’re doing.
Take secondary data, for instance. The world is full of it and is often underused by most companies. It can tell you masses about what people have done and is great for spotting trends. But sometimes it falls short on why.
Primary market research, on the other hand, often focuses on the why or how, or is done to explain what is showing up in the secondary information or to get specific information that isn’t tracked or easily available. But it costs more time and money and introduces a whole plethora of biases, including researcher bias that can lead to skewed results or interpretations.
The important thing when deciding on what research approach to use, is to choose wisely and recognize your limitations.
Types of market research
Once you decide between primary or secondary research, then you can start to build a research plan. There are a lot of different ways to go about conducting a research project. Gone are the days where you’d just run a survey or a string of focus groups and call it a day. Let’s focus on primary market research for a moment. The first choice one often has to make is whether they want to invest in qualitative or quantitative research (or the combination if they’re smart). We’ve written about that here, so we aren’t going into that again. Other than to say, if you aren’t really sure what you are specifically looking for or are just trying to understand how others see something, qualitative research is probably the better option. If you need to put robust numbers to something, quantitative research (almost by definition) is probably the better choice.
Now, if you want to go one level deeper, the next step is deciding what specific approach you want to take to answer the research objectives. And that depends… well, on the research objectives.
For example:
- If you are looking to understand your consumer target, how they live, and how they engage with your category and brand… you may want to conduct a multi-day diary assignment and run some in-home ethnography sessions.
- If you’re looking to track the health of your brand before and after you launch a new ad campaign… you may want to run a pre-post survey.
- If you’re looking to fill your innovation pipeline for the next 5 years… you may want to conduct a trends scan, followed by consumer focus groups, and finish with a 3-day ideation workshop.
But once again, the choice of method depends on the research objectives and the group of people you want to understand. No two research projects are alike, and you need to treat each one like the unique little snowflake it is.
How market research works
So let’s imagine you have a nice healthy budget to work with; you’ve found a supplier you can trust (the SOW is signed!), and you know the timeline you’re working with… it is time to do the damn thing.
Research suppliers may claim they offer a unique, bespoke process that only they can do, that they’ve designed over decades of working with some of the biggest companies in the world, across a multitude of industries, using tools they’ve created… which may be correct. But the foundation of a research project is often the same across suppliers… and thank the research heavens for that.
The basic steps of a market research project should be straight-forward. And in fact, modern technologies, including AI, have revolutionized the process, making it more efficient and accessible than ever before. It’s when research approaches get too complicated that suppliers (and their clients) start to lose the plot. Here, let us explain the basic steps of a market research project and you’ll see what we mean.
The basic steps:
1. Define the research objectives and outcomes
Start by reminding yourself why you are doing the research in the first place and what business decisions you are going to make with what you get back… and keep reminding yourself. It would surprise you how easy it is to lose sight of the prize. This is when you come up with your key list of research questions (aka objectives). You want your questions to be specific enough that they capture the essence of what you’re studying but also broad enough that you don’t miss important context.
2. Find your people
The next most important step is picking the group of people to study. Because ‘everyone’ is never the right answer. ‘Lots of people’ usually isn’t the right thing either, even if you take away the issue of expense. You want to come up with a list of specs (which is just a cool word for specifications) that describe the type of people you want to talk to, such as their demos (e.g. age, education, household income), category behavior (e.g. frequency of purchase) and brand affinity (e.g. loyalty). The key is to be thoughtful when deciding on what specs to recruit against and to use reputable recruiting partners. The quality of a study is often only as good as the quality of the sample you recruit.
3. Collect the data
Then off you go into the field to collect your data, whether that’s running a set of focus groups, conducting a series of IDIs, or fielding a 10-minute survey. Data can come in all shapes and sizes, such as numbers, words, pictures, and videos. We’ll like it all. The most important thing to remember at this stage is to come with an open mind and let the people you’re studying tell their story. The best researchers (and research buyers) tend to be the best listeners.
4. Analyze the data
Once the data comes back, that is when things can get a little messy (which is a good thing). This is when your research supplier will lock themselves away in a room with an ample amount of chart paper, white boards, and markers, and cover the walls with ideas and emerging insight. As they comb through the data, they are looking for themes, essentially patterns in human behavior and experience. Then they look for patterns by identifying larger connections between themes, and collect brand implications along the way. The important thing is that you, as the client, work in partnership with your research supplier. Having strategic touch points with each other to build the story together will be critical to the success of the project.
5. Deliver the report
Once you’ve uncovered your themes and emerging insights, it’s time to write headlines. Your research team will write a series of headlines that bring the key learnings to life and organize those headlines into a cohesive, strategic narrative. Sounds easy, right? Well, not quite. Anyone can string some headlines together and call it a story. The beauty of it all is when you can build a story that evokes emotion and inspires thought. But most importantly, a story that ladders up to a key set of strategic recommendations that inspire action.
Benefits of efficient market research management
Most of us can agree that there is value in conducting market research. However, the reality is market research budgets are not unlimited. In fact, more often than not, companies have to be incredibly careful about how they spend their research dollars. This is where efficient market research management comes in. Ironically, doing research well and building a deeper understanding of your audience, your category, or your brand can mean less research.
To do this successfully, you have to:
1. Know what you know.
Take stock of all of the research you’ve conducted in the past (that is still relevant to your business) and synthesize the learnings to confirm the knowledge you currently have. This involves not only looking across studies over time but also across brands and products (if you have more than one).
2. Know what you don’t know.
Once you have a solid understanding of what you know, you can then identify gaps in your knowledge and places to watch for change. Gap analysis often sparks new questions (and new research projects) and can be very illuminating.
3. Come up with a plan to execute.
Ok, now it is time to make some tough decisions on how you’d like your research budget to be spent. We call this a learning plan – a prioritization of the things you need to explore, understand, and measure that coincide with your business goals and fit with your timeline and budget. Developing a learning plan forces you to think about what you are confident about (and what you’re not), where uncertainties and sensitivities lie, and to scenario plan what will need to happen if things change.
I know we all wish we had a crystal ball. But market research should never be considered the holy grail in business decision making. However, it can be used as an important tool to assist you in making the right decision for your business. So, if you’re sitting there with your team thinking maybe now’s the time to invest in a research project, remember to ask yourself these 4 simple questions before you sign on the dotted line.
- Why this project and why now?
- What do we want to learn?
- Who do we need to talk to?
- What do we need this work to inform?
Have a research project on your mind and are curious how to approach it? We’re here to help. Give us a shout.
Written By:
Simon Dannatt
With over 200 years experience, Simon joined The Sound from Cello where he was President of Cello USA and CEO of the Value Engineers US. With his English accent and silver fox hair he's known affectionately around the office as 'the old English man with grey hair'. Claims to have a limp from running marathons but we think it’s a war wound.
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