There is a “How To” manual on just about any subject, but not all guides are created equal. When it comes to market research, creating a well-designed study and executing it properly is the key to ensuring your data and insights are reliable for informing decisions. So if you want to learn how to do market research from the experts, our team at Communications for Research (CFR) will guide you through these seven steps:
Step 1: Recognize the Opportunity for Market Research
Step 2: Determine the Research Question
Step 3: Consider Your Sources
Step 4: Choose Your Data Collection Method(s)
Step 5: Pick Your Participants
Step 6: Collect Your Data
Step 7: Analyze and Act on Your Findings
Most of us understand that luck only takes us so far in this world. No matter how charmed our circumstances or how successful we become, we know that good fortune is really no substitute for conscientious and persistent, hard work. In a business setting, especially, hard work both enhances and ensures performance, making it essential for a company’s sustained growth and success. But hard work isn’t just about the effort that we put into the actions we execute for our companies in real-time. It’s also about the diligence with which we approach the actions we ultimately take.
Market research, then, becomes the basis of good business decisions. As with any type of research, it strives to answer a question, in this case, “What are the defining characteristics of XYZ market?” We use market research to better understand the consumers in and the trends affecting a specific market. It’s the preparation phase of our companies’ plans of action and serves as the best — indeed, the only — way to maximize the actions that promote profitable performance and minimize risk.
You may associate market research with surveys and focus groups. And while these tools can help businesses gather informative data, they are not the only ways “to do” market research. Good market research utilizes many data collection and analysis instruments to ensure that any insights gained are representative of the right people in the right ways.
Of course, the first step in “How to Do Market Research” is embracing the value of market research itself. Fortune 500 companies, “mom-and-pop” stores, new businesses and established ones can all benefit from asking the right questions to the right people at the right times. The questions, the people and the times will differ according to each company’s own background, situation and goals, but the process will likely follow a similar course. For instance, startups might not be ready to assess the popularity of a specific marketing campaign, but they could (and should) use market research to validate consumer need for a product before they attempt to launch it. Similarly, a large, public company might use market research to explore the reasons behind its low web conversion rate, while a local, private establishment would do better using it to determine which mobile technologies will encourage walk-in traffic. All of us have things we can learn to improve our products and services, as well as our business practices; recognizing that market research can teach us those things is the starting point.
Once you know you should do market research, you then need to determine what question you are looking to answer. This can be the hardest part of the research plan, as it often requires a company to guess at what it might not know. The good news, though, is this: you don’t have to know what you don’t know, you just have to realize that there are things you don’t know! Are you confused yet? Don’t be. Step 2 is really just understanding that you need to begin with a question. Some possible starting questions include:
Questions are written verbatim from Anne Beall’s “Strategic Market Research” (2019)
Make sure you pick a question that is neither too broad (i.e., “How can we increase sales?”) nor too narrow (“Why do consumers think our products are priced too high?”). The first allows too many possible reasons to fully explore and the second already assumes an answer that may or may not be true. Each limits the breadth and depth of your data collection. A better strategy would be to consider the reasons for a broad problem, such as “Why aren’t we selling more?,” and picking the most probable ones to explore more fully with a subsequent research project. For more on this subject, check out one of our favorite references, Anne Beall’s “Strategic Market Research: A Guide to Conducting Research that Drives Businesses”.
Think of yourself as a scientist testing a hypothesis. Your objective is to understand why you aren’t growing sales. You develop a list of possible reasons this is happening: your pricing isn’t competitive; there isn’t a need for your products; your products are inferior in some way; your sales team is ineffective; consumers don’t like your branding; your products’ perceived benefits are too low; your company has no exposure; and more. It would be hard to fully examine all of these hypotheses with only one research endeavor, so it’s important that you closely evaluate information from multiple departments to understand which one(s) are the most likely contributing factors to your problem. If you already know you have the lowest priced product on the market, then your sales aren’t stagnant because your prices aren’t competitive. Likewise, if you don’t have an excessive number of customer complaints, it’s not likely that your products don’t work. After discussions with customer service, sales associates, marketing personnel and other company stakeholders, you might conclude that the most reasonable explanation for your low sales is low consumer awareness and/or confidence in your brand and/or products. Thus, exploring customers’ experiences with your company could be a good place for your research to begin.
Lastly, you should also ask what potential decisions will be informed by the research and what is the expected impact on plans being made? All too often, the market research question will end up being too vague so that when the research plan is crafted, you may not find any actionable insight. Asking this question usually helps inform which research questions actually matter while narrowing focus, and bringing up better, more specific hypotheses that need tested. In this step, we also find that larger organizations will create quantitative and qualitative measures for how they will measure return on investment (ROI) for the research. This can also help focus your research question!
How you do market research will depend on your resources, your budget and your timeline. Regardless of how much you have of each, you should start your research by looking through secondary source material. Secondary source material is information that has already been collected and reported. While more general in scope, it is usually less expensive than custom (or primary) market research, making it a solid foundation on which to initiate your data collection. Some examples of secondary sources include government reports, books, trade journals and commercial studies. The facts and figures in these types of records can help you develop a basic understanding of consumer demographics and the industry trends affecting your business practices, making them invaluable as you focus your own primary research later on.
After your preliminary overview of existing data, you must determine how you will go about getting data that is specific to your own situation. You should ask yourself questions like these:
The answers to these kinds of questions will enable you to plan your research design, picking qualitative or quantitative measures (or a combination of the two) to help you solve your overall objective. Convenience shouldn’t be a factor in this decision and shouldn’t drive your methodology choice; neither your budget nor your available resources should dictate the way in which you gather the information you need. Instead, you should allow the questions you have to point you to the tools you need to answer them!
This is easier said than done. Figuring out what needs to be uncovered and how to uncover it sets the groundwork for actionable insight. If you get it wrong, your results will be wrong, too. Take your time and carefully consider what you need to know and which methodology (or methodologies) will give you the best data to supply the answer. If you can’t do that with the money or time you have available, consider reevaluating your objective.
Going back to our above research goal, if you are interested in learning how to better promote your brand image so that you can increase sales, you would probably want to consider a qualitative methodology that allows you to more fully explore the things customers like (and don’t like) about your company. Such techniques include interviews and focus group research. However, if you had decided to explore the effectiveness of your salesforce as a contributing factor to your low sales, you might instead choose to use a quantitative research design (such as surveys and questionnaires) that can statistically measure the number of sales calls against the number of products sold to see if any correlations exist between the two.
Market research is all about feedback. Thus, you need to ensure that the feedback you get is relevant and accurate by presenting questions to the right group of people. Identifying your research sample is pivotal to the success of your research project. Target the wrong kind of people, and your results are meaningless. Similarly, target the wrong number of people, and the results are the same. With too few, you risk inferential errors, and with too many, you can’t always verify respondent credentials. Use a variety of resources to help you identify people who will give you unbiased feedback.
A professional research firm can help you capitalize on industry relationships and/or provide telephone and online sampling to engage respondents, but you can also use your own resources. Whatever the case, make sure that you maintain the integrity of your sample by properly screening and recruiting your potential respondents. Too often, market research studies taint their data with incentives that draw the wrong type of respondents, those who only want compensation. This isn’t to say that you shouldn’t use incentives to recruit your sample, only that you should offer ones that appropriately balance your needs with those of your potential participants.
Now comes the time to finally get your answers. With your preparatory work finished, you can draft a questionnaire; organize a focus group; interview top executives; phone potential respondents; or begin any other process that allows you to gather the data you need. Data collection is both exciting and scary; with it, you have the capacity to solve a pressing problem, but you still don’t know what that solution will ultimately entail. Furthermore, you still have to make certain that you deliver your data collection instrument via a route that will guarantee the best response. Depending on the type of respondent you’re targeting, as well as your budget, you will need to choose the right delivery mode: email, phone, paper, in-person, etc. Pick the wrong method, and you inhibit your reach; pick the right method, and you maximize it.
But even if you maximize your collection measures, you can’t extrapolate any useful conclusions if you can’t access the data you gather. Today’s technologies facilitate easier storage with better labeling and sorting and faster retrieval options that ever before. Pay attention to where and when and how you file your findings so that you can accurately recover them when and how you need to in the future. You can only find actionable insight if your data is organized in a way that allows retrieval and analysis of it!
Finally, the last step in our “How to Do Market Research” guide is data analysis. But really, analysis is useless if you don’t take action. Thus, our last step is actually a two-part process. As we mentioned at the beginning of this guide, success depends on hard work, both as we prepare and as we perform. Market research helps us do both.
You many prefer to use trained researchers to help you statistically evaluate your data. You may also prefer to do some of the analysis yourself. Frequently, just arranging your data graphically can help you pinpoint significant trends impacting your business operations. However, it’s easy to misinterpret or become overwhelmed with information, especially if you gather a lot of it.
A seasoned research analyst knows how to infer insight according to the cultural, political and social factors that affect a market, as well as your research respondents. He or she can utilize skills you might not have yourself, moving past the mere summary of data points to effectively applying meaning to them. Some possible analysis techniques he or she might use include mean, median, mode (descriptive techniques); multiple regression analysis, discriminant analysis, factor analysis, clustering, conjoint analysis and multidimensional scaling (inferential techniques) for quantitative data sets; and content analysis, narrative analysis, conversation analysis, grounded theory and discourse analysis for qualitative sets and other subjective material. Analysts can help review and code textual data so that it can be more easily manipulated, allowing you even further awareness of any nuanced meaning.
All in all, bringing Insights to action within your organization is a topic of its own. From tailoring your analysis to your audience with data visualization tools, to using research outcomes as the inflection point toward broad organizational change, knowing how you plan to take action on what you learn is a very important part of Steps #1-3.
The bottomline: market research is an essential component of good business practice. This guide will help you learn the basics, but to really learn how to do market research you will need to do it over and over again. Nothing stays the same. People don’t. Markets don’t. And companies don’t. You must commit to ongoing market research to improve your skills and remain informed of changing needs, attitudes and trends. When designed thoughtfully and administered appropriately, market research can help you:
Market research provides the context for past and future market behavior, serving as both magic mirror and crystal ball. It can indicate “what is” and “what could be” for the companies who make use of it. When conducted and applied well, market research drives intellectual acuity and generates opportunities that engage market interest and, hopefully, increases sales!
Our team at Communications for Research (CFR) knows how to approach market research and execute at a high level. We have over two decades of experience designing and implementing research projects that deliver actionable results to our clients. Whether you need assistance with the entire research process or just one of the steps, we can provide a custom plan than addresses your company’s unique needs. We can help you narrow your research focus, examine existing literature, target the correct sample, write meaningful questions, collect data and/or evaluate your results. Contact us to learn how we can leverage our experience so that you have the best chances for success!
