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SME Guide

A Beginner’s Guide to Conducting Market Research

Introduction to Market Research

Market research is the process of gathering crucial information about target markets and customers to help guide business strategy decisions. It provides insights into customer preferences, needs, behaviours, and perceptions. For startups and entrepreneurs launching new products, market research is invaluable for validating business ideas and models early on. Even established companies conduct market research regularly to track changing consumer trends over time.

Types of market research

There are two fundamental approaches to conducting market research:

Primary market research

This involves gathering new information directly from a sample population of potential target customers through tools like surveys, interviews, focus groups, and more. It provides customised insights related to a particular business, product, or innovation.

Secondary market research

Instead of direct consumer engagement, this makes use of already existing information in the form of industry reports, government data, academic studies, census data, and more to understand target customer segments. It is more affordable, but it provides indirect insights. Companies leverage both simultaneously.

Define your market research objectives.

Having clear objectives provides direction for the research.

Idea Generation

  • Exploring needs, problems, and interests for new ideas

Concept Evaluation

  • Testing acceptance of product or service ideas

Business Model Validation

  • Will customers pay for it?

Product Optimisation

  • Improving existing products

Pricing Studies

  • Consumers’ perceived value

Brand Health Tracking

  • Brand awareness/associations

Advertising Testing: Message Resonance

Market Entry Research: Viability in New Markets

Market Size Estimation: Volume Potential

Demand Forecasting: Likely Adoption Rates

Well-defined goals allow for focus on relevant questions and metrics for the research. It also facilitates the analysis process later.

Determine your market research budget.

While some secondary research leverages free data sources, most methods have monetary costs involved. Define an appropriate budget aligned to research goals, considering:

Primary Research: Surveying or interviewing 200 potential customers costs differently than 500. Determines the sample size.

Agency Engagement: Third-party research agencies charge fees but also provide experience and tools.

Incentives for Respondents: Paying incentives encourages survey and interview participation.

Travel Costs: In-person recruiting or on-ground surveys involve additional costs.

Analysis Complexity: More advanced analytics or modelling requires bigger data sets and more hours, impacting cost.

Market research need not entail huge budgets, especially for startups. But some minimum viable expenditure is required for statistical validity and actionable insights.

Choose your market research methodology.

Primary Research Techniques:

Online surveys are easy to administer via email or web link on a large scale with closed-ended questions on attitudes, behaviours, and preferences. Qualitative, open-ended questions can also be incorporated.

In-person interviews: one-on-one guided discussions for qualitative, ethnographic insights through open-ended probing on emotions, motivations, barriers, and user journeys.

Focus Groups: Group discussions amongst 6–10 recruited participants provide perspectives into social and peer acceptance regarding concepts, messaging, products, etc. beyond individual preferences.

Ethnographic research: direct observation of real behaviours during shopping or purchase in physical spaces or through photos or videos online. Requires discretion but provides authentic insights.

Secondary research leverages:

Industry Databases: Provide market size statistics, growth rates, trends, and segmentation data through portals like IbisWorld, FirstResearch, Hoovers, and Passport.

Financial Reports: Listed competitors’ investor presentations give intelligence on market shares, products in pipeline, and future strategies.

Government Data: Trade departments offer import and export data. Census statistics offer demographic insights. Useful for market sizing.

Academic Studies: University papers present adoption rate models, clinical trial data, and technology forecasts relevant to markets.

Publications: Industry magazines, niche websites, and associations provide news on product launches, customer preference surveys, and expert interviews.

Desk research on Google, leveraging advanced operators, can reveal trends in information-scattered markets.

Choose the method(s) delivering the required data given constraints on timeline and budget while ensuring an adequate sample size for analysis. Multimodal research provides broader, well-rounded insights.

Design your market research instruments.

Carefully designed research instruments are vital for extracting maximum insights from chosen methodologies.

Survey Questionnaires

  • Limit to max 15–25 multiple-choice or scale questions.
  • Group into logical segments, e.g., brand awareness, consumption habits, pricing perceptions, etc.
  • Use balanced matrix or scale formats for rating questions.
  • Ask demographic questions at the end only.
  • Make it mostly closed-ended for convenient analysis, but include 2-3 open-ended questions.

In-Depth Interview Guides

  • Include a project overview and discussion guidelines for consistency.
  • Start with broad questions on category experiences and gradually become more focused.
  • Use mainly open-ended, exploratory questions to unearth deep-rooted perspectives.
  • Prepare follow-up “prompts” to expand on interesting responses.

Focus Group Moderator Guides

  • Intro guide explaining purpose, ground rules
  • A series of open-ended questions to stimulate group discussion
  • Include activities like ranking brands, grouping concepts, etc.
  • Probes to seek consensus or explore diversity of opinions

The quality of findings depends hugely on how well instrument guides are structured based on defined objectives.

Define your target market segmentation.

Markets comprise a variety of customer groups. Targeting specific homogeneous sub-segments for research provides actionable insights. Useful bases for segmentation include:

Demographics: age, gender, and income groups

Needs/Usage: Light/heavy user groups

Psychographics: values, lifestyles, and personality traits

Behaviours: purchase journey stages, channel preferences, consumption occasions

Firmographics: Size, Industry, Location (B2B)

The relevance of any chosen segment depends on the product and objectives. Try combining a few bases, e.g., young urban female fashion shoppers or mid-sized retailers in the electronics sector.

Determine your sampling approach.

The sample of target respondents recruited determines the reliability of insights uncovered from research. Useful sampling approaches include the following:

Random: Each prospect has an equal chance of selection. Provides unbiased, statistically projectable data from a subgroup to the overall target population.

Stratified: better representation for small but critical segments in the sample via oversampling instead of pure random chance.

Cluster: cost-efficient for pan-country research by surveying target groups concentrated in a few geographical areas only.

Quota: Ensures fixed quotas for specified traits like gender, income, age group, ethnicity, etc. are filled.

Convenience/judgmental: easily accessible prospects that meet the segment criteria define the sample. Not statistically reliable but offers indicative directional insights.

Sample diversity in key target characteristics removes bias. Balance qualitative coverage with quantitative needs based on methodology minimums.

Create your survey panel.

Access to your desired target audience sample is crucial. Useful respondent panel sources include:

Customer Databases: Connect via email or web surveys

Loyalty Programmes: Offer incentives for participation.

Website pop-ups are good for quick polls.

Social media posts can boost visibility for recruiting.

Market Research Panel Aggregators: Provide access to profile-based consumer panels globally, like SurveyMonkey, Qualtrics, Dynata, Lucid, etc.

Physical Intercepts: Malls and public spaces work for some demographics.

Panel mixing minimises sample bias. Purchase additional completes from aggregator panels if internal channels have limited reachability.

Conduct pilot testing.

Any newly created research instrument should first undergo pilot testing before launch. Recruit 5–10 respondents matching the target criteria for:

  • Checking survey question clarity
  • Timing interview guide length
  • Assessing activity formats, etc.

Take feedback to refine instruments before the main data collection phase, enhancing reliability.

Analyse your market research findings.

The crux lies in correctly analysing research data to derive insightful conclusions guiding business strategy.

Quantitative Data Analysis

  • Use graphs and frequency tables to visualise response distributions question-wise.
  • Cross-tabulation to filter responses by sub-groups
  • Stat testing for sub-group differences: ANOVA, t-tests
  • Advanced modelling like regression, discrete choice, etc.

Qualitative Data Analysis

  • Thematic coding to categorise verbatim texts from open-ended interviews
  • Identify patterns in the keywords, metaphors, and imagery used.
  • Capture emotional expressions, biases, and mental frameworks.
  • Surface trends, consensus, and contradictions

Integrated Analysis

  • Combine qualitative signals to interpret and explain quantitative findings.
  • Powerful for well-rounded perspectives

Implement your market research.

For maximum ROI on research efforts, findings need clear presentation formats for internal stakeholder buy-in on proposed growth strategies.

Create actionable deliverables.

Impactful deliverables to catalyse decision-making include:

Key Highlights Deck

  • 2-3 slides summarising key objectives, methodology, and critical insights
  • Visually impactful graphs, charts, and recommended next steps
  • Hook attention for detailed report reading.

Market Research Report

  • In-depth 10–15 slide deck with detailed data analyses
  • Logically structured
  • A mix of graphs, verbatims, and explanatory narratives

Interactive Data Dashboard

  • Online interface with dynamic filtering capabilities
  • Users can customise analyses in real-time.

Management Presentations

  • Findings synthesised into strategy inputs
  • Scenario modelling and growth planning simulations
  • Risk considerations and mitigation plans

Stakeholder Workshops

  • Cross-functional buy-in generation
  • Address queries and enrich perspectives.
  • Align on the way forward.

Formulate your strategic response.

Key aspects include:

Product Development

  • Address consumer needs gaps through innovations.
  • Enhance messaging as per the attitudes uncovered.

Business Model

  • Pivot offering and pricing elements based on willingness-to-pay signals

Organisational Restructuring

  • Priority focus area identification
  • Budgets, talent, and capability enhancement

Culture Transformation

  • Imbibe a consumer-centric mindset using verbatims.
  • Commit to continuous research.

Financial Growth Planning

  • Market size forecasts feed into sales projections.
  • Business case sharper, risks highlighted

Implementation Roadmaps

  • Phase launch sequence aligned to demand momentum
  • Mitigation tactics for fallbacks

Tracking impact over time

  • Repeat research for monitoring key metrics
  • Ensure strategy efficacy and fine-tune approaches.

The path from consumer insights to responsive strategies completes the market research value loop for commercial success!

Conclusion

Market research offers every company a profound opportunity to gaze into the hearts and minds of their customers, guiding offerings to delightfully resonate with evolving needs. Done right, it provides the competitive edge for both new entrants and industry stalwarts to unlock sustainable growth in turbulent times.

With new technologies expanding possibilities for how data can be harnessed for intelligence gathering every day, the power to derive actionable wisdom lies in the rigour and imagination with which marketing leaders formulate questions and connect the dots uncovered.

Though intensive investments might appear daunting initially, ultimately no expenditure matches the commercial returns obtained from risk-proofing innovation investments through market research and increasing customer relevancy.

The time for companies to embrace research-based strategic planning as core to their business culture has arrived. The above guide presents a good starting blueprint on key considerations, methodologies, and best practices for new executives embarking on the mission to know markets better than competitors do. Master these basics well, but also keep pushing the boundaries on usage through a spirit of bold experimentation and curiosity to unravel ever deeper human truths. Therein lies the real, sustainable differentiation!