Market research is a well-organized effort to collect data on potential customers and target markets: understand them, beginning with who they are, where they are going. It’s a big factor in keeping competitiveness and business plan at the fore front of every business. Whether we like it or not, businesses have a need to learn about our competitors and what works and what doesn’t in their areas of activity.
Market research and surveys have been used for decades. Initially the focus was more on soliciting general information on the customer base and then on identifying characteristics that would help turn that base into customers, but there has been a trend toward using the information more extensively. Some companies have even gone so far as to outsource this research to get closer to their target markets. Market research objectives range from understanding tastes and preferences, identifying groups that are likely to buy a product and defining the features of those products, evaluating marketing strategies to drive sales and evaluating customer service techniques.
Market researchers have developed many ways of gathering this complex data. One of the simplest is through online surveys. Online surveys offer several advantages over other types of market research: they’re easy, they’re fast and you can collect responses in the privacy of your home. However, online surveys don’t give you the same kind of in-depth information as in-person research. As mentioned earlier, online surveys can only offer information about a particular group of people: for large-scale actionable insights the researchers will need to visit the sites directly and talk with representatives of the targeted groups. Also, for more specific questions, the responses may need to be typed in manually.
Another popular way for market research is by using focus groups. The participants in focus groups are all consumers, which make them unique and giving them one on one interaction with a company can provide a unique opportunity to discover hidden desires, flaws and opportunities. However, the problem with focus groups is that they usually consist of a smaller pool of consumers and so the available information is often not that diversified. In addition, unlike online surveys, participation in focus groups is not compulsory and some participants may not be particularly interested or even knowledgeable about the product or service being surveyed. Finally, the costs for conducting a focus group study can be prohibitive and so the information gathered from focus groups are not as insightful as market research data from larger samples.
Lean market research relies on two main sources to get the best possible insights into consumer behavior: questionnaires and focus groups. A questionnaire is designed to collect detailed information from a specific set of people; it has normally been designed for use by marketing managers or business owners. The information gathered from these questionnaires can tell marketing managers important things like: do customers shop or do they simply buy what they see? Do customers change shopping locations once they find a product attractive? Do customers find the same product appealing in different stores?
The focus group, on the other hand, is typically formed from a panel of customers themselves and is designed to provide an unqualified insight into a specific product or service. Common market research questions include: do customers like this product? how does this product make them feel? what does this product do for me?. These are all good questions that will allow a marketing professional to gain insight into the customer journey and thereby create effective marketing campaigns.