How to Do Product Market Research in 2023

The key to success lies in understanding customers, anticipating market trends, and making informed decisions. This is where market research comes in, guiding businesses and empowering companies with valuable insights and data.

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From launching new products to entering untapped markets, from optimising marketing campaigns to enhancing customer satisfaction, market research helps companies shape the direction and success of their business. It minimises risks and might shine a light on potential opportunities.

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This article covers the importance of market research, its goals and benefits, providing a step-by-step guide to companies that see how research can help their growth. By understanding how to apply market research, companies can gain a competitive edge and establish a strong connection with their audience.

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Whether you are a seasoned entrepreneur or a budding startup, this article will equip you with the knowledge to harness the true potential of market research in today’s dynamic landscape.

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What Is Market Research?

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Market research is the process of gathering, analysing, and interpreting information about a specific market, industry, or target audience.

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Businesses will first collect data to understand consumer behaviour, preferences, trends and the brand’s competitors. There are many different methods to gather this information; we will cover a few of them in this article.

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However, access to reliable and accurate data is crucial in market research. The data helps businesses identify opportunities, assess market viability, understand customer needs, evaluate the competition, and make informed business decisions.

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The goals of market research

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There is not a single goal of market research, but rather many different applications of a deeper understanding of consumers.

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Some of the aspects companies can investigate when conducting market research include:

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Customers

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One of the primary goals of market research is to understand customers and identify behaviours, needs, preferences, and expectations.

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By understanding customers, businesses can develop products, services, and marketing strategies that effectively communicate with their target audience. The information collected by market research aimed at knowing customers is valuable for developing products aligned with people’s expectations.

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Market opportunities

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Market research helps businesses identify potential opportunities for growth and expansion.

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Since research will analyse market trends, customer segments, and emerging needs to uncover untapped markets, this information can guide businesses in entering a new sector or targeting specific customer segments.

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By identifying opportunities, companies can develop well-informed business strategies.

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Market viability

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Before launching a new product or entering a new market, research helps assess the feasibility and viability of the venture.

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In this case, research involves evaluating the market size, demand, competition, and potential barriers to entry. As a result, businesses make informed decisions, setting realistic sales targets and forecasting future performance.

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Competition

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Market research helps businesses gain insights into their competitors, strategies, strengths, weaknesses, and market positioning.

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Understanding the competitive landscape enables companies to develop effective strategies, differentiate their offerings, and identify opportunities to succeed and stand out.

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Marketing campaigns

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Before launching a marketing campaign, businesses can use market research to test and refine their messaging, branding, advertising channels, and promotional strategies.

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This helps optimise marketing efforts and increase the effectiveness of campaigns.

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Research helps understand how customers perceive brand communication, which channels are most effective, and how to reach and engage the target audience.

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Customer satisfaction

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Market research plays a crucial role in assessing customer satisfaction and identifying areas for improvement.

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By gathering customer feedback, businesses can understand how people perceive a brand or a product, identify pain points, and make adjustments to enhance the customer experience. This helps in building customer loyalty and improving customer retention rates.

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Product development

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Research also provides insights into customer needs, preferences, and expectations, which can guide product development processes. With more information, brands can identify what features, functionalities, and improvements customers desire.

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Strategic decision-making

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Data and insights inform strategic decisions, helping businesses reduce risks and uncertainties.

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It is possible to focus research on a specific topic to make better decisions and plan according to insights.

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The Benefits of Market Research

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Knowing the potential uses of market research might have already given you a glimpse of why collecting data is important.

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When launching a product or entering a new market, this type of research is not only beneficial but essential.

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Some of the benefits of market research are:

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1. Understanding the target market

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Market research helps businesses identify their target audience’s needs, preferences, and behaviours. With this information at hand, businesses can tailor their products to meet customer expectations.

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2. Identifying market demand

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Before launching a product, it’s crucial to assess the demand and potential market size.

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Market research helps businesses gauge customer interest and evaluate the demand for the product. This information is valuable for setting realistic sales targets, production volumes, and pricing strategies.

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3. Evaluating competition

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With market research, companies can assess their competitors and understand their strengths, weaknesses, positioning, and pricing strategies. This knowledge helps businesses identify opportunities to differentiate their product and develop effective marketing and sales strategies.

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4. Refining product features and messaging

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Through market research, businesses can gather feedback and insights about their product concept, features, pricing, and value position.

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The feedback can be even more precise and valuable if the market research process involves sending customers samples. With this information, companies can refine their product, ensuring it meets customer expectations.

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5. Optimising marketing and distribution strategies

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Market research provides insights into the most effective marketing channels, messaging, and promotional tactics to reach and engage the target audience. It helps businesses understand the best way to sell and communicate their products, ensuring efficient resource management.

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6. Mitigating risks and reducing costs

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Conducting market research minimises the risks associated with launching a new product. Companies can identify obstacles, challenges and barriers through data-driven insights, adjusting their strategies accordingly.

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This helps in avoiding mistakes and mitigating risks.

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Types of Market Research

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There are many different ways of conducting market research. The practice can be broadly categorised into two main types: primary and secondary research. Each type will then have various methods or approaches to collect data.

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Primary research

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Primary research involves collecting original data directly from the target market audience.

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This research is conducted specifically for a particular project or purpose and can be done through many different methods.

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1. Surveys

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You can send customers a structured questionnaire asking them about your business or your product.

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Surveys can be conducted through various channels, such as online platforms, phone interviews, face-to-face conversations, or even through the mail. The responses can provide quantitative data and insights about your target audience.

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2. Interviews

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Interviews are not as structured as surveys but interactions with individuals or small groups of people. They can be conducted in person or remotely.

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This method provides in-depth qualitative information. By talking to customers, brands can gather detailed insights.

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3. Focus Groups

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Beyond one-on-one conversations, focus groups are small, moderated discussions with a selected group of people. Participants share their opinions, perceptions, and experiences regarding a product, service, or even a topic.

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Focus groups also provide qualitative data. The interactions between participants can encourage some responses and provide more insights about customers’ behaviours.

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4. Observations

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Observational research involves directly observing and recording behaviours, interactions, and activities of individuals in real-life or controlled settings.

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This method is particularly useful for understanding consumer behaviour and gathering data on how people use products.

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5. Experiments

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Experiments involve manipulating variables and observing the impact on participant responses.

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This method tests hypotheses, assesses cause-and-effect relationships, and measures the effectiveness of different product features, pricing strategies, or marketing campaigns.

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Secondary research

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With secondary research, companies will use existing data and information that has been collected from other sources. It involves analysing and interpreting data.

Some common sources of information are:

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1. Market reports and studies

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Published reports and studies conducted by research organisations or market research firms can offer a substantial amount of information to companies. They provide comprehensive analysis, trends, and insights into specific markets, industries, or sectors.

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2. Government and publicly available data

Government agencies are often a source of data on demographics, economic indicators, population trends, and other key statistics.

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Since the information is provided by an official source, data is reliable and can be valuable for understanding market trends.

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3. Academic research

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Academic journals, research papers, and dissertations often contain valuable insight and data related to specific industries, consumer behaviours, or market trends. They can offer a deeper understanding of underlying factors and research findings.

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4. Online databases

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Market research databases, industry-specific portals, and online publications can also offer a wide range of information, articles, and reports that can be useful in understanding market trends.

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5. Company reports

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Annual reports, financial statements, and regulatory filings of companies can provide valuable insights into their strategies, performance, and market positioning. They are a great source of information about competitors and the market.

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The Role of Product Sampling in Market Research

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As explained, market research can offer valuable insights into how your target audience responds to your product. Product sampling can make this feedback more precise and reliable.

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Offering samples of your product to customers can significantly improve the quality of your research, giving people the opportunity to comment on what they love about your product or what they think can improve. You can send customers a sample and a survey, inviting them to share what they thought of the product and how they used it.

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By distributing product samples to a specific target market, businesses can gauge the acceptance and demand for the product. Sampling helps assess consumer interest, purchase intent, and willingness to pay. It provides a glimpse into the market potential and helps businesses determine if there is sufficient demand to justify a full product launch or expansion into new markets.

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Product sampling can also be used to conduct a comparative analysis between different product variations or competitors. By offering samples of multiple products or variants, businesses can gather feedback on consumer preferences, identify strengths and weaknesses, and make data-driven decisions regarding product development, pricing, or marketing strategies.

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How to Conduct Market Research

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As discussed, market research is crucial for the success of a brand and a product. Conducting research involves a systematic approach to collect, analyse, and interpret data.

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Here are the steps a business should take when conducting its market research:

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Step 1: Define your research objectives

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Clearly identify the purpose and goals of your market research.

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Determine what specific information or insights you need to collect and how you plan to use the research findings to inform your business decisions. This will help you determine your research method.

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Step 2: Determine the research method

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Select the appropriate research methods based on your goals, budget, timeline, and target audience.

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You can use a mix of primary and secondary research methods to collect a comprehensive set of data.

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Step 3: Identify your target audience

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Define your target market and the audience you want to gather data from.

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Your audience can be existing or potential customers, industry professionals, or experts.

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This will determine how you will reach out to people and will help in creating an effective strategy to collect information.

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Step 4: Develop research instruments

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For primary research, design the questionnaires, interview guides, or discussion protocols based on your research objectives.

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Ensure that the questions are clear, unbiased, and relevant to your research goals. Pre-test these instruments to identify any issues before they are sent out.

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Step 5: Collect primary data

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Conduct surveys, interviews, focus groups or any other method chosen to gather primary data. At his stage, it is important to follow ethical guidelines and obtain informed consent from participants.

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Ensure all data is documented and registered accurately.

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Step 6: Gather secondary data

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Collect relevant secondary data from other sources; You can use any of the methods we have listed in this article that you find appropriate. Use these sources to supplement and validate your primary research findings.

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Step 7: Analyse and interpret the data

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Once the data is collected, interpreting it is crucial. Use statistical analysis to identify patterns, trends, and relationships.

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Interpret the information and the analysis result according to your objectives. You can use these insights to make informed decisions.

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In-House or Outsourced Market Research?

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There is another decision that businesses must make when it comes to market research: conducting it in-house or outsourcing it to a specialised agency.

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In-house market research involves conducting a study within the organisation, which means complete control over processes, methodologies, and analysis. It is a more cost-effective approach, and it is benefited from the company’s knowledge and deep understanding of its own products and services.

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However, taking on this responsibility can be challenging. Market research requires dedication and expertise that might not always be available in-house.

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Outsourcing this activity offers more experience, skills and resources to conduct thorough research. Insights will also be objective and unbiased, while analyses will be more precise.

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The choice between in-house and outsourced market research depends on various factors, such as the scope and complexity of the research, available resources, the expertise required, and timelines. In some cases, a combination of the two may be the optimal approach.

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Conclusion

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Market research serves as a powerful tool that empowers businesses to navigate the complexities of the marketplace with confidence and clarity. By understanding the goals and significance of market research, organisations can harness their potential to make informed decisions, drive growth, and establish a competitive edge.

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Through comprehensive customer understanding, market research enables businesses to tailor their products and services to meet evolving customer needs and preferences.

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It uncovers market opportunities, identifies untapped segments, and guides strategic initiatives, ensuring that businesses stay ahead of the curve.

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In an era of rapid change and disruption, market research acts as a compass, providing businesses with a clear direction to navigate through uncertainty. It minimises risks associated with new ventures, guides product development, and helps organisations make well-informed choices in an ever-evolving landscape.

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As businesses strive for success, embracing the power of market research is no longer a choice but a necessity. By investing in thorough research methodologies, businesses can unlock a wealth of information, gain a deep understanding of their target market, and position themselves for sustainable growth and profitability.

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So, let market research be the guiding force that propels your business forward.

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Embrace its insights, seize opportunities, and let data drive your decisions. With market research as a cornerstone of your business strategy, you can navigate the complexities of the marketplace and embark on a path toward lasting success.

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