5 things to consider when conducting market research
Market research can be an important component in the development of your company. It helps you and your company to understand market trends and gives you the opportunity to quickly adapt your business strategy to the latest trends. With well-founded, market-driven data, it’s easier to make the right decisions, increase your competitiveness, and understand the real needs of your customers.
Further, business decisions often have a high alternative cost, and well-conducted market research is an effective tool to ensure an efficient investment and that important decisions are based on a solid foundation.
Here are 5 important things to consider when conducting market research.
1. Select the right audience
For most products or services, there are a large number of different potential audiences that can be analyzed. By defining and prioritizing the target groups relevant to your business at an early stage, it will not only be easier to choose a method, but also to achieve more cost-effective market research.
The first step is to determine whether the market analysis should be targeted towards companies or end users, i.e. the B2B or B2C market. In both cases, it is important to reach people with the right knowledge and insight into the area of research.
Within the B2B market, you commonly want to reach decision-makers or industry experts with good knowledge of the desired industry. Sometimes it may be desirable to talk to competitors as well. Within the B2C market, it is important to properly segment by factors such as gender, age and geographic region, and to ensure that the research maintains a high statistical level. It is also possible to segment through a range of niche parameters such as income, interests, occupation, type of education, travel habits, etc. With the right combination of technologies and methods, there are hundreds of different parameters to make use of.
2. The method is important for reaching the right person
Just as there are many different potential audiences, there are also different methods available for the execution of the market research. Different methods are better suited than others to reach different audiences. It is also common to combine different methods to achieve greater accuracy and cost efficiency.
Examples of some common methods are:
- Qualitative Interviews – These are well suited for open and exploratory questions where you do not want to limit the answering alternatives in advance. They are often carried out on audiences such as decision-makers, business customers or other people with a high level of knowledge of a certain subject, but can also be carried out on consumers. Qualitative interviews normally poses high demands on the interviewer and are usually conducted with the support of a written interview guide, which should be prepared in advance. Depending on the nature of the research, different balance between openness and structure can be used in the interview guide.
- Survey Poll – This method can be used in both B2B and B2C market research, and is best suited to obtain a greater amount of responses. Thus, the method is well suited for quantitative market research. For a good impact, a survey should be mostly constructed of multiple-choice questions. However, by using well thought-through questionnaire logic and coding, it is possible to successfully obtain answers to more open questions. Also, keep in mind that you often have to compensate respondents for their time.
- Existing data and trends – Existing data, normally referred to as secondary data, can be an important part of a market analysis as it can save a lot of time and energy. In general, there is more data available than you might think, given that you know where to look. Examples of sources are various statistical databases and data providers. You can sometimes also purchase parts of previously conducted market research that may be relevant. When making use of secondary data, it is important not to blindly trust the data or information without first understanding the methodology and the sources behind it. If you conduct many market analyses, it is a good idea to build a good relationship with data providers that are central to the industries you normally work with.
Keep in mind that all personal data that you come into contact with in a market analysis project needs to be managed in accordance with relevant integrity and data protection regulations. It is therefore a good idea to consider in advance how this should be communicated to those participating in the survey.
3. Consider geographic scalability
Often, a product or service can be marketed in several different regions/countries. It is usually a good idea to start with the market research in the regions that have your highest priority – new information often arises that may be helpful to take into account when expanding the research to other regions. However, it is important that the design of the market research already from the outset takes into consideration the potentially succeeding regions, with regard to, for example, target group and strategy. This way, the research can be easily and cost-effectively scaled in the future, and in addition, will yield data that is comparable between the different regions.
4. Be clear with the purpose
By being clear with the end-purpose of the market research, the result can be more suitably packaged. Possible applications include, for example:
- Decision material for a potential expansion
- Supplementary material for raising of capital
- Designing a more competitive customer offer
- Designing a geographically adapted market strategy
The different purposes place different demands on the market research and should therefore be discussed in advance. In terms of the final result, it is almost always desirable to package the insights into some sort of graphical report. This way, different sections can easily be re-packaged for different purposes, and it will also be easy for decision makers to quickly grasp the essence of the material at a high level.
5. Selection of potential supplier
Sometimes it may be wise to get assistance with the market research from an established supplier. This allows you to save much of the initial learning and set-up costs, and also ensures an objective assessment of the market. When using an external supplier, there are several things that may be useful to have in mind. For example, consider the supplier’s experience of several different methods, as well as their geographic reach across your core geographical markets. In addition, it’s a great advantage if they understand your business situation, and can add strategic value that will help your business get the most out of the market research.
In summary, it can be said that market research (or a market analysis), if performed correctly, usually is a very worthwhile investment that will assist you in developing your business. We hope that the tips above will help you to successfully carry out your next market research project, and ultimately help your company in reaching new heights.
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