What is market research?
What you need to know to improve your business's marketing efforts
What is market research? Why do you need market research? How do you know if market research is working? What are the benefits of using market research? Hopefully, after reading this article, you won’t have many questions about market research or what it can do for your business. Keep reading for an introductory guide and a look into how our team uses market research for your tailored marketing strategy.
What is market research?
The dictionary defines market research as “the action or activity of gathering information about consumers’ needs and preferences.” It sounds pretty simple. However, it gets a little more detailed than simply gathering information. You have to get the right information, which is what market research is about. You need to find the information specific to your business or product and use that to your advantage. Market research can and should be used to help create solutions for some of the business-related problems that are sure to occur.
Market research should cover the four Ps: product, price, people, and promotion. Being informed on those four elements is important to the success of your business venture. Your market research is incomplete if you’re not informed on all four areas.
What does market research consist of?
You should be digging into the four Ps, but that’s not where you should stop. Market research is useful for being informed about your specific market. It should help you with your marketing efforts as well. Market research is about discovering as much as possible so you can improve. When you know what kind of market you’re in, you can start working on how to stand out. Here are a few aspects of your market you should be familiar with:
- Market size
- Sales Analysis
- Geographic location
- Market segmentation
- Demographic description
- Analysis of market demand
- Competition in the market
- Consumer insights & requirements
Why should I do market research?
Market research works! And it can really help your business. Market research is supposed to help you find solutions to issues with your business. These solutions can come from various places – market research helps you know where to look to find what you need. These solutions can come from branding, efficiency, marketing, or productivity. This knowledge discovery should boost your business when you find the right information.
Why is market research important
Market research gives you insights you wouldn’t normally consider pursuing. Without market research, you may lack the direction needed for a solid position in your market. Here are some questions you should be able to answer confidently:
- Who are my potential customers?
- What are my customers’ shopping and buying habits?
- How large is my target market?
- How much are potential customers willing to pay?
- Who is my competition?
- What are my competitors’ strengths and weaknesses?
How to do market research
- What actions to take
- Where to look
- What to look at
- How to apply this to my business specifically
Market research can be accomplished in six easy steps. It’s important to note there’s no one right way to do market research. You have many tools, resources, and options for gathering information. Here are some ways you can gather market research for your business:
- Focus groups
- Product/service usage research
- Observation-based research
- Buyer personas research
- Market segmentation research
- Price Research
- Competitive analysis research
- Customer satisfaction and loyalty research
- Brand awareness research
Without further ado, here are those six steps to conducting market research.
- Define the purpose:
Determine your “why.” There are several reasons why you should coordinate market research efforts. You might want to reduce risk, create opportunities, assess possible threats, or analyze successes. First, determine whether or not this research is for internal reasons like improving cash flow or external reasons like trying to get a loan. The analysis from this research can improve your business plan by letting others know you’re serious about the potential of your business.
- Look at your industry’s current views
You should be familiar with the history and have an idea of what the future may hold. You need to be aware of the state of your industry. Look at projected growth, size, and trends. Have the data to back up your findings.
- Identify target customers
It would be unreasonable to expect every person you see to be interested in your business- and that’s normal! When you perform market research, you’ll identify who you’re marketing to. This is your target audience or the people you’re trying to sell to. These people will be interested in your product, the people you want to please. Look at things like:
- Education level
- Marital or family status
Once you’ve identified your target audience, figure out how to reach them. Familiarize yourself with their demographics, interests, personalities, wants, and needs. You can even create a buyer persona to help your marketing efforts. Check out our article on buyer personas to learn more (link).
- Compare your competition
You need to know what you’re up against. Look at any deals they offer, prices, locations, and how they might be disadvantaged. Identify their strengths and weaknesses, and compare your business to theirs from a customer’s perspective. Why should they choose you over them? Make it a priority to give your customers a reason to choose you every time.
- Gather data
Gathering as much relevant information as possible is in your best interest. Make sure to look at reputable sources with factual, unbiased material to make the most accurate findings. Some good resources to look at are:
- The Bureau of Labor Statistics
- The Census Bureau
- State and local commerce websites
- Trade journal articles
- Competitors’ strengths and weaknesses
- Target market surveys or questionnaires
- Information from interviews or focus groups within your target market
- Analyze your findings
After you’ve gathered all the relevant data, it’s time to analyze. Organize your research into sections for competition, target market, and purpose. Some things you need to have on standby:
- An overview of your industry’s size and growth rate
- Your projected market share percentage
- Your outlook for the industry
- Discounts you plan on offering
- Buying trends
- Your business’s forecasted growth
- Prices of your offerings
- How much are customers willing to pay
- Your cash flow projection
- Your customer groups
- Results of your other analyses
You can use this research to make predictions relevant to your business, like customers’ buying habits and cash flow. Now that you’ve sorted all your information, it’s time to put it to use!
Nuvo & market research
Performing market research can seem like a daunting task. You need to know a lot, and it can take a while to become totally familiar with your market. That’s why we’re here. Nuvo exists to take all of the pressure off you. We’re data-driven and passionate about improving the digital presence of our clients. Every marketing strategy we create is customized to your needs and wants! Here are some things our tailored marketing strategy service, Nuview, can accomplish for your business:
- Company SWOT Analysis (Strengths, Weaknesses, Opportunites, and Threats
- Competitor Research and Analysis
- Target Audience Research and Identification
- Design Style Guide: Color Scheme, Logo Usage, Fonts
- Brand Voice and Style
- Detailed Marketing Budget Recommendations
Figure out where you’re at so you can plan on getting to where you want. Reflect on your brand. What works and what doesn’t? What do you want to change? What value do your services or products provide? Figure out your SWOT: strengths, weaknesses, opportunities, and threats. Use this analysis to enhance your marketing plan.
Describe your product. How does your product relate to the market? What does your market need? what do they currently use? What do they need above and beyond current use? You should know why your audience should prefer your product or services.
Your mission statement should include a few things, like your key market (who you’re selling to), contribution (what you’re selling), and distinction (your unique selling proposition). Your mission statement should reflect your brand.
Find the niche or target markets for your products or services and describe them. This is important. You have to know who would take you up on your offer so that you can impress them.
Describe your competition. What makes you stand apart from your competition? What is your competition doing about branding? What do you admire about their approach, and what do you dislike?
Collect and organize data about your market. Some things to consider:
- Market dynamics and patterns, including seasonality
- Customer demographics, market segments, target markets, needs, and buying decisions
- Products – what’s out there now, what the competition’s offering
- Current sales in the industry
- Benchmarks in the industry
- Vendors you’ll rely on
Unique selling proposition
Your unique selling proposition (USP) should capture the essence of your brand. It should focus on your target market, what you have to offer them, and why your brand is the best option for them. Your USP needs to be original, memorable and focused on what your customers value. Don’t take a generic stance on selling your products/ services, be specific.
Determine how best to promote your brand to your target audience. What tools would be most efficient to use? Is direct mail or email marketing more appropriate? Would social media advertisements catch your audience’s attention better than TV ads? Or, maybe your brand will benefit from launching a creative marketing campaign. The choices are endless and all dependent upon your business’s marketing goals. Your activity plan should align with your goals in a way that makes sense.
Write down the marketing and promotion strategies you want to use or have considered. Some strategies to consider are:
- Networking – go where your market is.
- Direct marketing – sales letters, brochures, and flyers
- Advertising – print media and directories
- Training programs – to increase awareness
- Write articles, give advice, and become known as an expert.
- Direct/personal selling
- Publicity/press releases
- Trade shows
- Business website
Pricing, Positioning, and Branding
Use market research to establish strategies for determining the price of your product, where your product will be positioned in the market, and how you will achieve brand awareness.
Budget your dollars. What strategies can you afford? What can you do in-house? What do you need to outsource? Research this as well to get the most bang for your buck. Throwing money at something is not always the best way to improve it, so be sure about what you want to spend your dollars on.
Research Marketing Tactics
There are more marketing tactics available today than ever before. Trying to determine which one is best for your business can be overwhelming. Take the time to research all marketing vehicles, which range from traditional (billboard, television, radio, newspaper, and magazine) to digital (pay-per-click ads with Google, social media efforts with Facebook and Twitter, etc.). A full understanding of these tactics will make you more comfortable in selecting which ones are best for your business.
Plan Your Marketing Tactics
Once you have completed the research, choose the tactics and channels you’ll use to accomplish your goals and reach your target audience. This could be determined by customer habits and should align with your sales strategy.
Establish a timeline and budget for your marketing strategy that reaches your audience throughout the year. It should include all scheduled promotions for the entire year and a complete breakdown of their cost. Examples of items in a marketing timeline include increased advertising during the holiday season and a month-long promotion to boost sales.
It is also important to remember that a marketing strategy is not set in stone. As your business grows and evolves, so will your marketing strategy.
Your existing and potential customers fall into particular groups or segments characterized by their needs. Identify these groups and their needs through market research.
Once you have decided on your marketing strategy, draw up a marketing plan to determine how you intend to execute that strategy and evaluate its success. The plan should be constantly reviewed and, if necessary, updated so you can respond quickly to changes in customer needs and attitudes in your industry and in the broader economic climate.
A buyer persona is a representation of your target audience. It’s a picture you paint based on research and interviews with actual customers. This persona is fictional but based on deep research.
Your plan is nothing without goals. You have to know what you’re working toward to determine the best way to get there. The best kind of goals are SMART goals. Specific, Measurable, Achievable, Relevant, and Time-bound goals are easy to meet. Your goals should cover a full calendar year and align with your business plan, including the products or services you offer.
Select the Appropriate Tools
Don’t waste money paying for things you won’t use. For instance, paying for a billboard wouldn’t make sense if you’re trying to increase your social media engagement.
Review Your Media
Measure twice, cut once! It’s hard to edit a campaign that’s already live. Review your media to make sure it aligns with your brand and the message you’re trying to send.
Monitor Your Results
Test and analyze. Identify the strategies that are working. Survey customers, track sales, leads, visitors to your website, and percentage of sales to impressions. By establishing goals for your marketing campaign, you can better understand whether or not your efforts are generating results through ongoing review and evaluation of results. By researching your markets and your competition and determining your unique positioning, you’re in a much better position to promote and sell your product or service.
We hope you feel more prepared for your marketing endeavors! We at Nuvo offer marketing services tailored to your wants and needs. We are driven by results and motivated to make and keep you satisfied. Interested in what we can do for you? Check out our Capabilities tab for more info on how we can help improve your business’s digital presence.