When it comes to running a business, making assumptions about your customers, market, competitors, or systems can cause you to waste time, money, and effort.
To make effective decisions that will grow your business and use your resources wisely, you will need to put some of those resources toward conducting market and marketing research.
Market Research vs. Marketing Research
Marketing research has a broader scope that market research. It is used to examine the entire marketing process of a company, rather than only looking at the consumers that the company is targeting.
The Importance of Market Research
Successfully running and growing your business depends on understanding your target customers. Once you have a clear picture of their goals, needs, and values, you are more able to drive them towards purchasing your products or services.
Market research is one of the best tools you have for understanding your customers. It gives you hard data that you can use to drive your marketing strategy, making both marketing and selling easier and more effective.
Market research helps you:
- Improve communication. It drives your communication not only with your current customer base but with target prospects as well. Market research shows you where your customers can be reached, as well as what language will be most effective in attracting their attention and resonating with them on an emotional level.
- Identify opportunity. Market research helps you identify both high-level and more accessible opportunities for reaching and converting new customers. It can be the best way to discover new platforms for advertising, consumer concerns you were unaware of, and gaps within your market that you can fill.
- Lower your risk. Concrete data keeps you focused on the real opportunities and helps you avoid unproductive effort. When you understand your customers, you can use your resources to reach them more effectively, with less risk of wasting time, money, and effort on marketing initiatives that don’t work. Market research also helps you identify low-risk, high-reward areas where your company can expand or offer new services,
Marketing research is important for evaluating what is and is not working in your business model. It includes research into your target market, as well as the systems in your business that make up your marketing conditions.
Marketing research looks at every aspect of the Four Ps of marketing: product, price, place, and promotion. This includes:
- Public Relations
- Modes of distribution
- Development of new products/services
- Promotions and advertising
- Market conditions
Marketing research helps you learn not just what your customers want, but how successful your business is at reaching and connecting with them. It helps you identify problems and opportunities, refine your systems, and evaluate your marketing strategy.
How to Conduct Research for Your Business
Though they look at different aspects of your business, both market research and marketing research should follow the same pattern of data collection and analysis.
- Define the problem. Start by identifying the focus of your research. Knowing what question you are trying to answer will help you structure your research effectively.
- Determine your budget and timeframe. How much can you afford to spend on the research process? How soon will you need to have data collection completed? Like all the strategies that you use to grow your business, research should be conducted within your available resources. However, depending on the urgency of the questions you are answering, it may be worth spending more money to get the most comprehensive results possible.
- Design your method and needs. Identify what data needs to be collected and how you will gather it. Some options are observation, surveys, telephone calls, or focus groups. If you are unsure how to structure your data collection, consider working with a professional research firm.
- Choose a sampling method. How will you select the participants for your research? You may need a random sampling from the general population of consumers, a group that all have a single lifestyle factor in common, or responses only from people who are already your customers. Create a plan for identifying and contacting your participants.
- Plan for data analysis. Decide how you will analyze your data. Will you need quantitative data for statistical analysis or qualitative, observational data to give you a broad picture? Will you use software or do it by hand? Take time to learn about various methods of analysis to find the one that will best answer your research question.
- Data collection. Once you know what question you want to answer and have designed a research method to answer it within the constraints of your available budget and time, it’s time to collect data. Many businesses work with professional firms or consultants to conduct their actual research.
- Analysis of the data. No matter how straightforward your data seems at first glance, you’ll want to use specific methods of analysis to ensure that you understand what it is telling you. The methods of analysis that you use will depend on the type of data you collected. This should also be when you check for errors, which can occur in your sampling method, data collection, and analysis.
- Create your report. The final step of the research process is drafting a report on your findings. Your report should outline the entire research process, from developing your problem statement to the results of your data analysis.
No matter what type of research you are conducting, you will need to follow the full research method to arrive at a conclusion that will benefit your business. If your findings lead to a solution to your problem statement, you will be able to decide on the next steps for your business.
If you were unable to answer your research question, that doesn’t mean your research was done incorrectly. You may discover that you need to ask different questions or that the situation was more complicated than you anticipated. When that happens, it’s time to continue your research until you’ve arrived at a solution.