When you have questions about your customers or competitors, market research is a great way to find answers. But there are a number of paths you can go down, and each one will give you a different piece of the puzzle.
Below are seven frequently used types of market research. Which one should you use? That depends on the information you need and your specific business goals.
Jeevan Balani at Accela Coach says that by surveying consumers for a particular category of products or for a specific brand, you can determine several things about their decision journey:
- Their motivation for purchasing your product or service
- How they decide between competing products or brands
- Their unmet needs with existing products on the market
“These insights can inform a company on what channels to use to market to their consumers, what new features to build into their products, and how they can differentiate themselves from competitors,” Balani says.
Whether you’re deciding on a price for a new product or optimizing the price for an existing product, pricing research helps determine the price elasticity of a product based on a given customer segment and set of features.
Balani explains that you can get to know which features and capabilities a customer is willing to pay a premium for and which types of customers are more price sensitive. “You can then create different pricing plans based on who a customer is (e.g., student or professional), and what features you’re including (e.g., unlimited use vs limited use).”
Reviewing publicly available information about a competitor (e.g., their website, third-party review sites) can tell you a lot. “Combining this info with interviews of their previous customers can give you great insight into how your company’s products and services compare,” says Balani.
For example, Balani notes that in a B2B environment, you can benchmark the effectiveness of your sales team and customer service staff, and track how your net promoter score (NPS) compares to the competition. “This can be used to prioritize strategic initiatives to close the gaps between you and your competition, and double down on areas where your company is stronger.”
Brand awareness is the level of familiarity consumers have with your brand or product(s). According to Brian Cairns, three types of brand awareness are typically measured through market research, each indicating a different degree of purchase intent:
- Aided brand awareness. Have you heard of brand X? This is a general guide and is the least predictive of purchase.
- Unaided brand awareness. What make is this car? This is a more specific measure of a customer’s consideration set, the subset of brands they evaluate when making a purchase decision.
- Top of mind. What is the first brand you think of when considering kitchenware? This is the most specific and best predictor of purchase.
To ensure your marketing message and method of delivery will be effective, Cairns suggests exposing someone in your target market to your marketing communications within the context of other “dummy” messages — to represent the marketing noise most people deal with every day.
“To test, step one is asking the person to recall your message,” Cairns says. “Step two, assuming they were able to recall it, is asking to what degree the message motivated them to take action.”
Nick Galov at Review42 says that researching market segmentation is important, as it provides valuable data on customer demographics, needs, values, attitudes, and behaviors. As you better define target groups, you’re able to further develop your marketing strategy. “You can then tailor your message and positioning for the different segments you’ve identified.”
Jaykishan Panchal at E2M Solutions says product development research is used when introducing new products, concepts, or brands, or adding a new product line to an existing product suite. It can also be useful for modifying existing products or exploring new product verticals.
This research will help you answer several questions:
- What do customers need?
- Which customer needs aren’t currently being met?
- How do we improve the existing product or introduce a new product?
- What type of customer will be interested in a new or modified product?
- Are people aware of the products currently available in the market?
- Are people satisfied with existing products?
Looking for more help in your market research journey? Check out our lengthy guide on performing market research.