Why You Need Market Research
Market research is an important tool that solves marketing problems before they even happen. Many of the most successful marketing campaigns are backed by market research. In fact, the role of market research is to provide a business with pertinent data before that business embarks on a particular marketing strategy, therefore ensuring that strategy’s relevancy, efficacy and success.
What Is Market Research?
Market research involves:
- market segmentation
- identifying specific target markets and their media habits
- analyzing consumer behavior and needs
- tracking customer satisfaction
- developing new products
- evaluating various forms of advertising executions and pricing tactics
Market research is a culmination of the following:
- Primary information: Information gathered by you or by someone directly related to you.
- Secondary information: Information that has already been compiled. Most market research is informed by secondary information.
- Quantitative research: Think numbers. Quantitative data measures information with cold, hard facts.
- Qualitative research: Instead of measuring information, qualitative research seeks to describe it. While less structured than quantitative research, qualitative data informs strategy through interviews and forums.
Additionally, there are four different functions of market research. Each provides your business with valuable insights about your business.
These four functions are:
- Exploratory: The first step in the research process.
- Descriptive: Answers a specific question established in the exploratory stage.
- Diagnostic: The diagnosis – determining next steps based on the findings of the exploratory and descriptive stages.
- Predictive: Predict how a customer will respond to a campaign based on the data collected in the previous stages.
Read on to discern why your business might need all four, and how the parameters of market research intertwine.
Why You Need Exploratory Market Research: Qualitative Data
Exploratory research should be the first step in any marketing strategy. Without exploratory research, you won’t even know what questions to ask. In other words, you need to formulate your hypothesis.
In order to formulate a hypothesis, it’s crucial to collect qualitative data. Use this data to inform your strategy and goals moving forward. Discover what your audience might be struggling with or what they love about your business and create a hypothesis. Businesses need exploratory research to establish a baseline goal for future campaigns.
Why You Need Descriptive Market Research: Quantitative Data
Descriptive and exploratory market research methods can complement each other. What makes descriptive research unique from exploratory research, however, is the quantitative nature of descriptive market research.
Quantitative data is a great way to collect large-scale data about consumer behavior through surveys and other methods. Descriptive market research, likewise, is designed to answer a specific question. These answers tend to be expressed in a numerical format, such as with percentages and averages.
Businesses need descriptive market research to get real numbers from real consumers. For example, if 75% of a business’s audience doesn’t use a desktop computer to shop on their online store, then that business should put all their efforts into establishing their online store for mobile use.
Why You Need Diagnostic Market Research: Qualitative Data
Think of the diagnostic function of market research as a medical diagnosis. The doctor performs some tests and determines which label your symptoms fall under. Then, the doctor explains this categorization to you with what we know as a diagnosis. Market research follows a similar process. The exploratory and descriptive research functions serve as the medical tests; the diagnostic function of market research represents the conclusions following those tests. Diagnostic market research employs qualitative data to determine next steps.
Sure, it’s great to have compiled relevant data, but what happens next? That’s where diagnostic market research comes in, to quite literally diagnose your marketing problem. Diagnostic market research helps define relationships seen during the exploratory and descriptive research process. For instance, if exploratory research indicated that males were less likely to subscribe to your Facebook page, then diagnostic research would provide insight as to why. Where exploratory research provided the data, diagnostic research helps to break it down and make sense of it all.
Why You Need Predictive Market Research: Qualitative and Quantitative Data
Combining all three of these functions is predictive market research. Predictive market research is the method of utilizing the data gathered and analyzed in previous market research strategies to predict how a consumer will respond to a particular marketing campaign. In other words, predictive market research makes adds some humanity to your research project.
When you’re online shopping, for example, and you’re on the checkout screen, many stores will have a “You might also like…” section on the checkout page (or somewhere nearby). This marketing strategy is effective because it uses data gathered from specific consumers to analyze their interactions with specific products in order to predict which products they are also likely to purchase.
Other implications of predictive market research include:
- The ability to predict the outcome of marketing campaigns
- The performance of a coupon
- The engagement rates on an email.
The data you compile throughout your market research endeavors is the most valuable asset to your marketing department.
This data informs your entire marketing strategy. Each function of market research is intertwined; it would be very difficult to have diagnostic research without the data from your exploratory or descriptive research already compiled.
By following the market research process to completion, you are ensuring that your marketing strategies will be relevant to your audience. Because of the campaign’s relevancy, your audience will find your content increasingly more valuable.
We’re Here to Help!
Here at Oneupweb, we know all about the importance of market research. We are well versed in the different processes of market research and their respective roles within a broader research strategy. If you need help with your market research or any of its steps, reach out to our expert team of marketing strategists.