When it comes to designing better customer experiences, listening across channels and hearing every voice matters. Knowing and addressing customer needs is at the core of every successful business. And knowing your competitors gives you an undeniable advantage. This is where market research can help you in:
- Determining an actionable marketing strategy based on relevant and real-time data
- Gaining competitor and consumer insights
- Identifying market trends
- Understanding buying patterns and much more
As a one-size-fits-all approach does not work in the market research process, a market researcher may choose a broad range of market research methods for measurable and meaningful outcomes.
Do you want to know the purpose and types of market research in detail? Keep reading to learn more.
Table of Contents
What is the Purpose of Market Research?
Key Concepts of Market Research
- Preliminary/Exploratory Research
- Conclusive Research
- Causal Research
- Descriptive or Statistical Research
- Marketing Mix Modeling
Market Research Based on Utility
- Applied Research
- Basic Research
Market Research Based on Source
- Primary Market Research
- Secondary Market Research
Market Research Based on Information
- Qualitative Research
- Quantitative Research
Market Research Based on Objective
Advertising Research
Audience Research
Branding Research
Competitor Research
Consumer Behavior Research
Customer Satisfaction and Loyalty Research
Customer Segmentation Research
Market Measurement and Forecasting
Motivational Research
Non-profit Research
Opinion Research
Predictive Research
Pricing Research
Product Research
User Experience (UX) Research
How to Choose a Market Research Method?
Conclusion
What is the Purpose of Market Research?
Companies conduct market research to assess company position, analyze customer behavior, and adjust to market trends. Furthermore, guesswork won’t woo today’s well-informed potential customers—it is market research that plays a pivotal role in driving business growth and ensuring customer satisfaction.
Market research helps businesses in:
- Avoiding costly mistakes
- Creating compelling go-to-market content assets
- Identifying customer-centric new products/services
- Identifying new markets and opportunities
- Making data-driven decisions
- Nurturing a culture of innovation
- Providing early updates on industry developments and trends
- Reducing the risk of bad positioning and much more
Inadequate understanding of the target audience or target market is a recipe for disaster in the market environment—from startups and small businesses to mid-tier and large companies.
It is believed that companies that invest in market research gain not only emotional insights into customer experiences but also significant competitor and operational insights.
Before we learn more about the types of market research, it is crucial to know the key concepts of market research:
Key Concepts of Market Research
Preliminary/Exploratory Research
How do you know whether a business opportunity or problem is worth investigating? Preliminary/exploratory research saves time and resources in studying research problems.
When very little information is available about a research problem, exploratory research gives better insights into the problem, establishes the groundwork for further research, and prevents the wastage of precious resources.
Using the deeper context of exploratory research, the researcher gets an idea of the feasibility to conduct or cancel further research.
Conclusive Research
Conclusive research findings are deductive in nature and instrumental in decision-making or reaching conclusions. Conclusive studies achieve research objectives via quantitative methods that rely on data derived from primary and secondary sources.
Conclusive research is divided into:
Causal Research
Using experimentation and simulation, researchers study the cause-and-effect relationship between variables to show how a certain change in one variable impacts the other variable.
For example, causal market research can examine how a change in product packaging affects product durability.
Companies undertake such research to realize a specific research objective such as establishing a causal link between advertising spend and retail sales.
Descriptive or Statistical Research
Descriptive or statistical research provides data about the population or a systematic description of a situation with answers to questions like “what, when, where, who, and how.”
Such research focuses on accuracy, facts, and frequency (the number of times something occurs). Commonly used descriptive research designs include observation and surveys.
Marketing Mix Modeling
Also called “Media Mix Modeling,” Marketing Mix Modeling (MMM) is useful for determining the effectiveness of marketing campaigns and predicting business outcomes.
Using multivariate regressions with variables, the researcher performs a statistical analysis of aggregated data over a multi-year historical period to predict conversions and sales with multiple marketing inputs.
MMM is beneficial for delivering long-term planning insights to marketers. For example, a clothing retailer can run a multivariate test to evaluate expected sales with a change in advertising spend for each media channel.
Now, we will take a closer look at the types of market research.
Market Research Based on Utility
Based on the utility value, market research is divided into:
Applied Research
Applied research is practical in nature and uses existing knowledge to solve a specific problem or a set of problems and answer certain questions.
Example: A study to decrease fraud on social media platforms.
Basic Research
Also known as “pure research” or “fundamental research,” basic research is theoretical in nature and expands the existing scientific knowledge base without immediate application to existing problems.
Example: A study on the origin of cryptocurrency.
While applied research aims to realize commercial objectives or solve practical problems, basic research may not necessarily provide a solution or lead to an invention.
Market Research Based on Source
Data is ubiquitous. However, not all data is created equal—data obtained from primary and secondary research may provide different levels of value in the overall data collection process.
What is the best way to deal with the shortcomings of primary and secondary research? Integrating them offers a unique advantage as it allows a market researcher to produce a much broader and higher-quality research output to meet an organization’s research objective(s).
Based on the source of data, market research is divided into:
- Primary market research (Field research) and
- Secondary market research (Desktop or desk research)
Primary Market Research
Data obtained from primary research is new and original. In primary research, the researcher consults stakeholders across the value chain and industry experts to gather first-hand insights into the market under study.
Primary research can corroborate, augment, or challenge secondary data to better interpret a research topic.
Primary research aids in the filling of information gaps as well as the validation of secondary research findings.
Common primary research methods include:
Focus groups
The main interviewer or researcher conducts a conversation with participants to find answers to questions about a product or service. The sample of participants is based on specific characteristics and demographics.
In-depth one-to-one interviews
One-to-one personal interviews facilitate a two-way conversation between an interviewer and a participant with a series of open-ended questions on various research topics.
Surveys
You might have heard about buyer persona surveys, competitor analysis surveys, employee satisfaction surveys, etc. A survey consists of open and closed-ended questions and is sent either by email or through a survey software to participants.
Examples of surveys include phone surveys and online surveys. Incomplete or improper survey questions are unlikely to receive satisfactory answers from participants.
Secondary Market Research
Secondary research relies on readily available second- and third-party data collected and published by other businesses or organizations.
Secondary research is less expensive and serves as a knowledge base for primary research activities—making it an efficient and a cost-effective method of obtaining information.
In secondary research, data has already been collected, analyzed, and published previously—the researcher uses public domain data from newspapers, educational institutions, government statistics, research journals, and other sources.
In addition, secondary research provides a better understanding of competitors, customers, industry statistics, market size, new trends, relationships in existing data sets, etc.
A combination of primary and secondary research helps in gaining a comprehensive understanding and a holistic perspective for fulfilling the research objective(s).
Market Research Based on Information
Based on the type of information generated (numerical or non-numerical), market research includes:
Qualitative Research
Qualitative market research is non-numerical and relates to what customers think about a product or service. How is such research helpful for achieving organizational goals?
Although it is hard to measure data in qualitative research, strategic insights can be explored to understand customer behavior, competitor behavior, individual experiences, industry-specific trends, and so on.
Example: Why do more women than men purchase from an online retail store?
Quantitative Research
Quantitative market research is numerical and refers to data collection with a high degree of mathematical accuracy for statistical analysis. Quantitative research provides a direction to spend time and money on relevant marketing efforts.
Example: During the 20th century, the world population increased fourfold, with the current world population estimated to be 7.9 billion people as of March 2022.
Market Research Based on Objective
Market research based on functional research objectives eliminates guesswork and guides the research process on a clear path without unwanted ambiguity or bias.
Well-known types of market research based on objective include (listed in alphabetical order):
Advertising Research
Advertising research enables an organization to learn how customers respond to a particular ad or advertising campaign. Based on your budget and the size of your business, an in-house or third-party advertising research study can help you:
- Create customer-oriented marketing messages
- Choose effective advertising media
- Refine advertising strategies
- Optimize the advertising spend to get the best return on investment (ROI)
For example, you can assess the advertising ROI of Google Ads campaigns or user behavior with Google Analytics—a web analytics tool that collects, analyzes, monitors, visualizes, and reports website traffic data.
Audience Research
Audience research in media includes online traffic/audience measurement that enables advertisers and broadcasters to analyze customers’ viewing, listening, or readership patterns and use them to make better decisions, enhance lead generation strategies, and test new ideas/products.
Moreover, social media monitoring or social listening viewing facilitates consistent monitoring of customers’, competitors’, and influencers’ social media activities relevant to an organization.
Branding Research
Branding/Brand research is useful when a company wants to:
- Enhance brand identity
- Improve brand activities and brand positioning
- Know the brand’s performance in relation to the competition
Focus groups, interviews, and surveys can support a company’s efforts to create, manage, and maintain the company brand. For example, brand awareness surveys can provide participants’ responses around brand perception, brand loyalty, and brand value.
Competitor Research
It is not easy to compete for mind share and wallet share. Do you want to create your own competitive advantage? Then, you must explore the competitive landscape in detail with competitor research.
Knowing the strengths and weaknesses of your competitors via a thorough competitive analysis is essential to make your business stand out and understand customer preferences.
Researching competing businesses supports your forward-looking goals and opens up new opportunities to better serve your customers.
Consumer Behavior Research
Consumer behavior research refers to the systematic observation and structural analysis of consumer actions.
As a vital component of consumer behavior research, Mystery Shopping (MS) serves several purposes, such as measuring the consistency of the consumer experience, assessing the quality of sales and service, and gathering market or competitor details, etc.
Collecting unbiased information helps in improving customer service during the sales cycle and increasing organizational efficiency.
Customer Satisfaction and Loyalty Research
Customer satisfaction (CSAT) is a popular key performance indicator (KPI) used to understand how satisfied customers are with your products and/or services. CSAT measures customers’ experiences that demonstrate customer retention and overall business performance.
Net Promoter Score (NPS) and Voice of the Customer are customer loyalty and satisfaction measurement surveys that provide qualitative and quantitative feedback on touchpoints across the customer lifecycle.
Major touchpoints include quality and design of products, service reliability, and timeliness of delivery.
Customer Segmentation Research
Customer segmentation or market segmentation research divides potential customers into discrete groups based on similar needs and buying preferences.
