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Marketing research is the cornerstone of marketing activities, serving as the foundation for defining target audiences, creating successful strategies, and launching advertising campaigns. It's essential for businesses because it helps understand the factors that influence consumer behavior.

In this article, we'll discuss:

• What marketing research is
• Who needs it
• What insights it can provide
• Types of marketing research
• How to conduct research
• Tools for conducting research

What Is Marketing Research?

Marketing research is the process of collecting information about the target audience and relevant markets using various methodologies and digital tools. It's necessary for:

• Creating and launching new products
• Assessing the company's health indicators
• Understanding brand perception and evaluating the effectiveness of communications
• Investigating market specifics—features, competition, and trends
• Entering new markets

Businesses are increasingly investing in marketing research. According to GlobalNewswire, the market for marketing research services will grow from $75 billion in 2021 to $90 billion in 2025.

Who Needs Marketing Research

The results of marketing research help determine, for example, the current design and effective positioning of a company in the market. Here's who benefits from it:

• Brands: Helps identify competitive advantages through objective, consumer-insight-based ideas and recommendations regarding promotion strategies.
• Product Sellers: Uncovers potential product-related issues. This knowledge aids in developing an improved product and sales plan that's more likely to resonate with target buyers.
• Service Businesses: Provides valuable information about customer needs and preferences, enabling companies to enhance their services.
• B2B Companies: Identifies current needs of the target audience. According to Accenture, 80% of B2B clients change providers at least every two years when their expectations aren't met.

What Insights Can Marketing Research Provide

Here are some types of data that quality marketing research can offer.

Target Audience Profile

Research will identify customers who are most likely to benefit from your product. A company can learn аbout:

• Socio-demographic characteristics: age, gender, residence, ethnic background
• Socio-economic information: education, income, employment status, etc.

These data help segment the audience and provide personalized offers to different subgroups of buyers.

Case Study: Sprintzeal conducted marketing research for Nike and found:

• The target audience includes people engaged in sports across various age groups and regions.
• It comprises athletes aiming for high performance and consumers who value comfort and style, as well as socially conscious individuals who share the brand's values.
• Customers are highly loyal due to inspiring marketing campaigns and athlete endorsements.
• Social media platforms are key channels for engaging with consumers.

Behavioral Characteristics of Buyers

Understanding your customers is the first step to successful business operations. Marketing research allows you to grasp the motives and needs of current and potential buyers and their price sensitivity.

For example, data may show that older buyers are more likely to purchase based on price, while younger ones are motivated by company values. Based on this information, a brand can adapt its marketing strategy.

Marketing research tools help understand when, why, and what consumers buy. For instance, if customers are more inclined to make purchases between 5 PM and 8 PM, consider sending promotional offers via email at 4:45 PM.

Industry Trends

Analyzing market trends is a way to gain a competitive advantage. It involves studying data and identifying patterns and consumer tendencies in a specific market.

The information obtained allows companies to make decisions regarding strategies and promotional offers.

For example, research may show that informational products need to consider the active use of artificial intelligence in the market and think about integrating it into their own processes.

It's also essential to analyze market features: the type of competition, seasonality, specific market structures (with dealers or direct seller-to-buyer), and whether there's a monopoly.

Identifying Competitors

Competitive analysis is the process of gathering data about competitors' products, sales, and marketing strategies. Companies use this data to identify their own strengths and weaknesses, as well as potential opportunities.

Factors included in competitor analysis depend on the company's goals and industry. For example, the owner of an online pet store might want to know what products competitors are selling, while a SaaS company might analyze competitors' features and pricing pages.

Ways to identify direct competitors:

• Market Research: Ask your sales department which competitors are frequently mentioned during interactions with prospects.
• Customer Reviews: When customers choose your product, ask whom else they considered.
• Social Media and Online Communities: Many people seek recommendations on social networks or forums like Reddit and Quora. Study customer dialogues to find potential competitors.
• Competitor Analysis Tools: Tools like Market Explorer provide an overview of the industry landscape.

Assessing Market Demand

Understanding the motivations of people at the beginning of the customer journey helps turn clicks into conversions. Analyze market demand, which is determined by:

• The presence of unmet consumer needs and your company's ability to satisfy them
• The number of people actively searching for a similar product
• How much they're willing to pay
• How accessible the product is to consumers

Case Study: LEGO studied the market to understand if there was demand among girls, as the company had long focused on boys. Over four years, they conducted research involving 3,500 girls and their mothers to understand play habits.

Result: Released a new line of toys based on the "Friends" series to attract female buyers.

Setting Prices

Research allows you to find out how much customers are willing to pay and determine the optimal price. It should be low enough for customers to be willing to spend but high enough to ensure profitability.

Correct pricing is crucial. According to Bain & Company, price is the most important factor in profitability. McKinsey reports that if companies from the Global 1200 raise prices by 1%, profits increase by 11%.

Trends in the B2B Market

B2B marketing research focuses on industrial consumers—the intermediary between the manufacturer and the end buyer. The research targets decision-makers acting on behalf of companies.

Types of Marketing Research

Marketing research is based on:

• Primary information collected from consumers through field research—surveys, observations, etc.
• Secondary information collected during desk research.

Field Research

This involves obtaining primary information and is carried out:

• By the company's own efforts through in-house marketing specialists
• By an agency or consulting company outsourced

Although outsourcing field research involves higher costs, it's often advantageous. External researchers have experience, established processes, and a fresh perspective, helping avoid bias and subjectivity.

Methods of collecting primary information include:

Surveys

Conducted online, offline, via SMS, and more. They're relatively inexpensive since participants fill out questionnaires themselves, and much of the process can be automated. According to Statista, nearly 90% of market researchers regularly use online surveys.

Tips for Conducting Surveys:

• Prepare questions to obtain the necessary information from each participant.
• Start with a clearly defined goal to focus efforts.
• Keep surveys short and clear to increase response rates.
• Remove any redundant questions.
• Ensure questions are unbiased and don't suggest specific answers.

Sample Questions:

• Name the chocolate brands you know.
• How often do you buy these brands? (Provide answer options.)
• What associations do you have with the mentioned brand?
• What information sources do you use to monitor news?

Interviews

More labor-intensive than surveys, requiring time and costs for a qualified interviewer and possibly special equipment or setups. Personal interviews rely on respondents' answers and the interviewer's observations.

Tips for Conducting Interviews:

• Choose the most convenient communication method: in person, online, or by phone.
• Approach interviews as conversations with open-ended questions.
• Define your sample size—5-10 participants per segment is minimal.
• Start with small talk to make respondents comfortable.
• Be flexible and ready to ask additional or clarifying questions.

Focus Groups

An interview with several participants, often in a moderated discussion format. Useful for identifying insights through group dynamics but requires skillful moderation to stay on topic.

Observation-Based Research

Collects data by observing consumer behavior in natural or controlled settings. Used to understand interactions with products, packaging, and advertising in real situations.

Example: Observing how consumers use smartphones daily to inform product design and marketing strategies.

Desk Research

Involves collecting secondary information—previously published data on the topic of interest. Helps lay a foundation for research projects and provides a knowledge base to support hypotheses.

Sources:

• Industry Articles: Market overviews from reputable publications.
• Marketing Research Reports: Secondary research from professional agencies with reliable methods.

How to Conduct Marketing Research

A step-by-step guide:

Step 1: Define Objectives

Determine what you want to achieve to guide methodology and budgeting.

Step 2: Develop a Methodology and Plan

Create a document outlining steps needed to achieve your goal.

Step 3: Collect Data

Implement your research plan, whether conducting surveys, desk research, or mystery shopping.

Step 4: Analyze Information

Aggregate data to identify patterns and differences in consumer behavior.

Step 5: Conclusions and Recommendations

• Determine how to use identified patterns in marketing activities.
• Formulate recommendations for future actions based on insights.

Finding Data for Research

Automate work to avoid errors and speed up results.

Tools for Surveys

• SurveyMonkey: Free version available; paid plans from $25/month.
• Google Forms: Free and accessible.
• Typeform: Excellent for simple forms; plans from €21/month.
• Qualaroo: Quick feedback from website visitors; free for first 50 responses.

Tools for Market Trends

• Google Trends: Free tool for search behavior analysis.
• Statista: Free service for statistics and trends.
• IBISWorld: Detailed industry reports; subscription required.

Tips and Best Practices

• Set Clear Goals: Define objectives before starting.
• Use Various Methods: Combine surveys, focus groups, interviews, and data analysis.
• Utilize Multiple Data Sources: Enrich research and confirm findings.
• Be Flexible: Adjust methods and questions as needed.
• Focus on Actionable Insights: Prepare recommendations for strategies and growth.

Common Mistakes in Marketing Research

Bias

Companies often think they know their audience but may be mistaken.

Example: American fast-food chains failed in Vietnam due to cultural differences. Burger King and McDonald's struggled because they didn't consider local preferences for chicken and communal dining, leading to a 31% drop in visits by 2018.

Underestimating Effort

Companies may underestimate the work involved in conducting research. Hiring experienced partners can save time and resources, ensuring reliable methods and unbiased assessments.