Types of Market Research: Explanation and Application

As a small business, understanding your market, target customers, and brand is crucial. This knowledge greatly influences your decision-making, marketing effectiveness, and potential for business growth. While the steps for conducting market research are relatively simple, the available research options are more complex. Let’s explore the different types of market research and how to apply them to your business.

1. Primary Research

Primary market research involves collecting firsthand information from customers within your market. Use this method to validate your business idea, categorizing the results into exploratory and specific feedback. Exploratory feedback measures interest or emotional responses, while specific feedback provides quantifiable data. This helps evaluate product or service value, market direction, and product/market fit. The goal is to gain numerical insights (purchases, revenue, estimated sales, etc.) to support decision-making.

Research methods: Surveys, 1:1 Interviews, Focus groups, Observations

2. Secondary Research

Secondary research encompasses all other available data, including public sources (e.g., government research projects), commercial sources (e.g., private organization studies), and internal sources (e.g., data collected through business operations). Use secondary research as a cost-effective way to gather existing information on your industry, market trends, and competitors. It helps benchmark against industry standards and identify potential market opportunities. This research should inform the direction of more costly primary research methods.

Research methods: Industry reports, Market statistics, Academic publications, News articles, In-house data

3. Qualitative Research

Qualitative research collects non-numerical information to measure sentiment or collect responses to open-ended questions. It adds depth and context to quantitative research. This type of research delves deep into customer psychologies, aiding in understanding the reasons behind their choices. It guides product development, branding, and marketing strategies to better resonate with your audience.

Research methods: In-depth interviews, Focus groups, Case studies

4. Quantitative Research

Quantitative research involves the collection and analysis of numerical data. It serves as a starting point to uncover evidence or trends that can be further explored through qualitative research. Quantitative research helps make data-driven decisions, forecast trends, and understand market size and segmentation. It establishes a baseline for performance that can be referenced in additional market research efforts.

Research methods: Surveys, Polls, Financial data

5. Observational Research

Observational research involves observing and recording participant actions in formal or informal settings. It provides real-time insights into how customers interact with products or services. You can identify potential pain points, evaluate feature effectiveness, and make improvements based on observations.

Research methods: Direct observation, Participant observation, Time-lapse videos, Eye-tracking studies

6. Competitive Analysis

Competitive analysis involves researching competitors in the market to understand their strategies, strengths, and weaknesses. It helps position your business by identifying unique selling points, areas for improvement, and potential threats.

Research methods: SWOT analysis, Competitor benchmarking, Mystery shopping, Online monitoring

7. Branding Research

Branding research focuses on how your brand is perceived in the market, including tone, imagery, design, and values. It aids in creating, managing, or maintaining your brand. Research awareness, loyalty, perception, value, and positioning to enhance performance and identify areas for improvement.

Research methods: Brand awareness surveys, Brand loyalty assessments, Social listening

8. Customer Research

Customer research involves gathering insights directly from current or potential customers to understand their needs, preferences, and experiences. It guides customer service improvements, enhances loyalty, and increases customer lifetime value.

Research methods: Customer satisfaction surveys, NPS surveys, Customer feedback forms, Customer interviews

9. Product Research

Product research evaluates a product’s performance, acceptance, and potential improvements. It helps refine product features, understand market fit, and identify areas for innovation. The testing can cover hypothetical solutions, features, branding, and marketing collateral to inform decision-making at each step.

Research methods: Product usage surveys, Product testing and trials, Feature preference studies, Concept testing

10. Experimental Research

Experimental research involves manipulating variables to determine their impact on other factors. It helps test hypotheses about market behaviors, optimize product features, pricing strategies, or marketing campaigns based on actual results.

Research methods: Controlled experiments, Field experiments, A/B testing, Lab experiments

11. Field Trials

Field trials test products, services, or promotions in a real-world setting before a full-scale launch. They gauge effectiveness and allow for necessary adjustments. Physical products can be tested geographically, while software or services can be beta-tested with dedicated customers to gather feedback.

Research methods: Product sampling, Test marketing, Beta testing, Store audits

Choosing the Best Research Methods for Your Business

Multiple types of market research will likely be used. Your selection depends on factors such as your goals, budget, and time investment. Focus on getting market data and direct customer insights when starting a business. Consider online tools for affordable options, but be prepared for deeper research to require more investment. Remember, time spent on research now can save time and money in the future.

Explore More on Marketing Research

Choosing the research methods is just one part of the process. Check out our curated selection of resources to learn more about finding your customer, getting to know your competitors, and using market research tools.

Andrew Brooks

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I’m Andrew Brooks, a seasoned finance consultant from the USA and the mind behind phonenumber247.com.

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