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According to the Oxford Dictionary, a market survey is “an investigation into the market state for a particular product or service, including an analysis of consumers’ needs and preferences.” Think of it like you’re Sherlock Holmes trying to solve a murder mystery. Instead of analyzing someone’s motives behind the unsolvable crime, the task is understanding consumer behavior.
Like a detective examining clues, a market survey gathers insights, analyzes trends, and identifies patterns that influence buying behavior. Why do people opt for one brand over the other of the same product? What drives their behavior, and how do they shape the market? Small and large businesses use the information collected to understand their target consumers, predict their needs, and tailor their products and services to better meet customer needs.
Research is conducted by in-house marketers or third parties specializing in this. It can be done in many ways, including focus groups and surveys. Subjects are either compensated with freebies, samples, or a stipend.
Market research allows a company to define its target demographics and potential customers and get consumer feedback about their interest or disinterest in a product or service. The results can be used to re-design the product or service and streamline the strategy of launching it to the public. This includes data gathered to determine market segmentation. It is also the basis of product differentiation used to tailor advertising.
A business carries out various tasks to conduct thorough market research.
It gathers information based on the market segment the product is targeting. The information collected is then analyzed, and key points are interpreted to conclude how the product can be designed and marketed to the market segment for which it has been developed. It is a critical part of a product cycle’s Research and Development phase.
While marketing research began taking shape in 1920s Germany, Charles Coolidge Parlin is regarded as its father due to his systematic research method for Curtis Publishing Company. Before Parlin, companies mainly relied on anecdotal evidence and intuition to gauge consumer preferences. He introduced a scientific, qualitative method by conducting in-depth interviews, field studies, and surveys to gather insights into consumer behavior.
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It became popular in the United States with the advent of the Golden Age of Radio. Companies that created advertisements for this new means of entertainment listened to each radio play, comedy skit, and music program being played. Before radio, they tried to reach as many people as possible by advertising through billboards or popular magazines. With the invention of the radio, their avenues widened. Now, their product or service could be advertised to consumers from all walks of life. Furthermore, they could also now judge the results by the sales made that followed.
The best market research combines primary and secondary research. Primary research is gathered by the company or by an external company, while secondary research draws data from external sources.
This form of market research falls under two categories: exploratory and specific.
All market research is based on previous research on consumer wants and needs. Today, much of this research is available on the web.
Secondary research includes data from government censuses, polling results, and research from businesses in the same market sector.
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A focus group is a small group chosen to try out a new product or service or watch an advertisement before it is released to the market. Once they have done so, the group is asked for feedback on what they think about the product or service, the company’s brand, and competing products. The company then uses this information to decide whether to release the product, change it, or abandon it altogether.
Think of a cost-effective focus group that’s survey research. They help determine consumer attitudes without having to interview anyone in person. Perfect for those marketers who avoid small talk.
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Earlier, consumers were sent surveys in the mail along with a coupon or voucher to incentivize participation. Nowadays, due to the feasibility of smartphones, they’re conducted over online forms to understand the preferences of Gen Z consumers. They help determine customers’ feelings about the brand, product, and price point.
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With people spending more and more time on their phones, market research has also shifted online. Nowadays, data collection is done through survey-style forms. But instead of companies actively seeking participants by cold-calling or seeking them, people volunteer or sign up and offer their opinions when they can.
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The face-to-face market research method dates back to when mankind knew how to barter and trade. Specialized companies would interview people on the street to inquire about which newspaper or magazine they enjoy reading and if they recall any published advertisements. Data collected from this method was then compared with the publication’s coverage to determine the success of these ads.
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Following the success of man-on-the-street interviews, marketers realized they could also conduct market research through phone interviews. This became a personal favorite due to its cost-effectiveness and efficiency. This was the preferred tactic for many years until the advent of less accessible mobile phones and low landline usage.
The first step to conducting solid market research is to determine what you wish to achieve from the study. Each research should aim to solve one well-defined problem. For example, a company may seek to identify consumer needs and wants brand recognition or comparative effectiveness of advertisement campaigns.
The next step is to determine who will be selected for the research. Market research is a high-cost process thus, companies cannot waste their resources collecting useless data. The company should, in advance, determine who it will target and how the data will be collected. They also need to factor out the possibility of statistical errors and sampling bias.
The third step is to gather data and analyze the results. If steps one and two are properly done, this should be easy. Researchers will gather results, recording the gender, age, and other relevant data of every respondent. The results are then analyzed and presented in a marketing report summarising key findings.
The last step is when company executives use their market research to draw conclusions. Depending on the data gathered, they can refine their target audience, modify product features, or adjust pricing to align with market demand.
Market research is essential to a company’s research and development process. It allows businesses to gauge market potential before investing in a new product.
Rather than making uninformed decisions, businesses rely on market research to fine-tune their product and services, change their audience, or discard the product altogether. It also helps to determine the most effective way to market and sell their product, from marketing strategies to choosing the right price.
Simply put, without it, any product or service isn’t a success.
Kelvin Stiles is a tech enthusiast and works as a marketing consultant at SurveyCrest – FREE online survey software and publishing tools for academic and business use. He is also an avid blogger and a comic book fanatic.
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