A Guide to Conducting Market Research
You have a great idea for a small business. You have a great idea of the type of brand you want to build. You know what new product or service you want to bring to the market, and you’re excited to share it with the world. But how well do you know the target market? These are the consumers you will be marketing to. The people who will help you build a sterling reputation and, eventually, sustainable growth built on their repeat business.
Operating on assumed or anecdotal knowledge may prove perilous for your fledgling company. Roll up your sleeves and dive deep into some qualitative and quantitative data to really get to know your potential customers. In short, you need to conduct market research.
What is market research?
Market research refers to the gathering and analysis of data to identify the needs, frustrations, behaviours and preferences of your target market. When planning a business, this data is absolutely vital in establishing proof of concept and determining whether the idea is viable. However, market research is not a one and done affair.
Competitor analysis and other examples of market research
Business owners should conduct market research regularly in order to gain greater insights into their industry, identify new trends and better understand the changing needs of their customers.
Competitor analysis, also known as competitive analysis, is where a business identifies the strengths, weaknesses and opportunities presented by competitors. It is one important example of marketing research in practice, and can help a company secure a competitive advantage over more established companies occupying the same space. The better you understand the place your competitors have in the market, the better positioned your company is to present the same target audience with solutions that appeal to their needs better than those of your competitors.
Market research should also be a core component of a company’s outbound marketing strategy. Marketing departments should conduct copy testing before launching a new campaign. This is where a sample of people from your target audience share their feedback on marketing copy that your team has created.
Market research falls into two camps: primary and secondary market research. Here, we take a close look at both and when they are necessary for your overarching strategy.
Primary market research
Primary research involves gathering qualitative data directly from people within your target audience. It can be used to get a snapshot of consumer sentiment, see how potential customers feel about a new product or see whether your business plan is attuned to the needs of your target market.
There are several methodologies that are used to conduct primary market research.
Let’s take a closer look:
Surveys can be carried out in person, over the phone or online, making them a versatile primary market research methodology. Many companies conduct market research surveys over the phone as this allows them to canvas a broader geographical range than in-person surveys. However, it’s worth considering whether your target market is amenable to cold calls. Millennials and Generation Z generally tend to avoid phone calls. A survey by Bank My Cell revealed that 75% of millennials consider phone calls needlessly time-consuming, and 81% associate them with apprehension anxiety. So, targeting prospects on social platforms to carry out online surveys may be a better option for those seeking to engage a younger target market.
If you choose to survey cold prospects over the phone, here are some things to keep in mind:
Provide your name, company name and reason for calling straightaway
Avoid long pauses or silences as these can make respondents become uncomfortable or lose interest
Ask permission to get in touch again if follow-up questions are necessary
Call back if there is no answer. Do not leave a message
Direct mail can be a useful marketing channel for soliciting responses to surveys or questionnaires from a select group of people within your target audience.
While response rates tend to be low, you may be able to incentivise responses by offering something of value to the prospect such as a discount on future purchases, branded goods or other freebies.
Direct mail can apply to postal or email surveys. Whichever approach you decide upon, it’s important to:
Keep the survey and the questions in it short and simple
Make the letter or email directly address the recipient
If sending out questionnaires in the mail, be sure to include a self-addressed envelope for the response
Send a gentle reminder via email if your response has not been received within 14–21 days
If you’re looking for more complex qualitative data, there’s no substitute for in-person interviews.
These are divided into two separate types of interview:
One-on-one interviews: These can be used to gather meaningful insights and rich data from prospective customers. Furthermore, if you conduct enough of them, this may provide you with useful qualitative data if large numbers of respondents provide similar answers to questions
Focus groups: Focus groups are small sample groups of people within your target market. They can be very useful for gaining a better understanding of the decisions that motivate buyer behaviour, or brainstorming ideas for new products or marketing campaigns
In order to ensure that interviews result in quality data, it’s a good idea to:
Structure interviews and questions in a way that will yield useful results
Try not to make questions too open-ended
That said, be wary of leading questions
Start with more general questions before steering the interview towards a more specific point of focus
Be flexible and responsive. The conversation may veer away from its intended path, but it may still yield very useful information
Secondary market research
Paradoxically, secondary market research is generally carried out before primary market research. This is where data is gathered from secondary sources to get an overview of the quantitative data, before using primary research to get more qualitative detail.
Because it has already been compiled, analyzed and published, secondary research is quicker, cheaper and easier to come by than primary research. If you are limited in time or budget, secondary market research may be enough to provide you with the data you need. However, it can also provide a scope and context for future primary research.
Secondary market research may involve interrogating data from:
Canada’s National Statistics Agency
Canadian government institutes and facilities
Industry-specific data like trade journals, industry publications or content published by your competitors
What market research methodology should I use?
Should you use primary or secondary market research methodologies? Which specific methodologies should you use and where should you look for your secondary data?
Questions like these can easily give rise to indecision and paralysis.
It’s important to ask yourself the right questions to guide your market research planning:
What is the market research intended to achieve?
What audience are you trying to target?
How quickly do you need the data?
What level of detail and insight do you need?
What information do you already have that will lend structure or direction to future research?
How will you implement the data gathered to pursue specific business goals?
The Canadian National Statistics Agency – A useful resource for secondary research
A useful guide to creating customer surveys from the Business Development Bank of Canada
A free market research questionnaire template by GetForms.org
Canadian census data from Statistics Canada
Start Your Business
It’s time to get down to business: the business creation process. You can now take the concrete steps of setting up your new business.
Manage your business
You have successfully completed the previous steps and your business has finally opened its doors. Congratulation ! Now you have to learn how to manage your day-to-day affairs.