Market Research is the systematic collection, storage, and analysis of data on issues related to the marketing of goods and services.
Market Research is primarily concerned with the study and analysis of expressed behavior and decision-making processes of consumers in a market economy, or the structure of a market definition. They are a source of information for those who, within a company that produces goods or services, must take marketing decisions.
Market Research can be defined as the study to select all relevant items of information that can be used for decisions regarding the products, distribution, effectiveness of advertising and promotional techniques and the assessment of the company's overall position . it aims at a more limited scope of analysis, being rigidly connected to the identification of market information of a particular good. All these principles can be applied to the digital version of Market Research which is known as Digital Research.
One of the significant tasks company and organizations are facing today is understanding their customers, their needs and their preferences. Businesses should continually conduct market research to get into the head of their customers and to be confident in the marketplace.
The whole idea of Market Research was born in the USA in the '50s when brands started to develop products and services due to higher demand and a more significant competition. It was then that companies began to do the very first focus groups and interviewed their clients. These are the same techniques marketers use today, but since the market, as now become a digital market, market research has to move forward towards a more modern conception using digital tools on top of the most classic tools just mentioned. Things have changed so has the technology and companies have to move away from that subjective approach towards a more analytical, modern and objective one which is fact and not opinion based.
As Philip Graves affirms in his book "Consumerology" if companies are not doing market research in the right way they could send themselves in the wrong direction. Market Research is, therefore, a potent tool but it has to be used correctly. Sometimes it can also be misleading. Consumers may initially say that a product will not work but eventually once launched it can turn to be one of the best selling product ever. Market research needs, therefore, to be done professionally, scientifically and with some effort.
Some of the tools that can be employed for proper market research are:
Online Surveys: a cost-effective method of researching large samples via self-completion questionnaires and user journey surveys using software tools;
In-depth Interviews: an independent interviewer talks to respondents in person allowing for a deeper understanding of their attitudes and opinions;
Focus Groups: a discussion amongst a group of individuals moderated by an independent researcher to uncover emotional responses to a particular subject;
Telephone Interviews: interviews can be structured or semistructured and can be especially helpful for researching a specific target audience;
Usability Testing: involves one-to-one observational meetings with users while they freely explore a website and perform typical tasks.
Unfortunately, people often rely on one form only of market research and sometimes companies when doing research would ignore the results if they do not support their initial thoughts and opinions.
Fifty years ago all media channels were at the disposal of organizations and businesses; today the power has shifted away from them towards customers as they are more informed than they used to be. Companies still live in a very antiquated structure where the most relevant and essential opinion belongs to the highest person in charge. They have to learn to be more data led than opinion led and use market research to decide what to do and how to move.
Another big problems companies may face the so-called Curse of Knowledge, i.e. when the manufacturer thinks its product is excellent and believes its consumers will feel the same.
Group Thinking too is another big issue as a team always working together will start thinking the same way seeing things the same way. These two visions are subjective, and that's when market research becomes fundamental to see things from the other side. Not doing proper research companies will lose that sense of direction they need, to be customer oriented. The business's reality is not the consumers' reality, and the company behavior needs to be adjusted based on research. Most companies will publish pieces of content on their websites that the audience will not find attractive and, therefore, will not read. What many companies will issue is what they want to tell the consumers whereas they should concentrate on what customers would like to read and consequently buy.
There are four main things consumers do when they are online, and these are the things businesses should focus on when trying to promote their products. They are:
Email what do customers want from emails?
Social Networks people are more likely to spend time on social networks rather than watching Tv or reading a web page.
Companies need to make sure their content works on mobile devices, and that web pages look good on small screens or tablets. Moreover, they should research the most used apps or telephone brands.
The Web customers turn to the web for everything from information to shopping. Useful research might be to see how people use it and what types of websites they like.
These are only a few points companies should concentrate their market research on, to develop the right selling strategies.
When people use websites, they scan read pages and are impatient. They usually spend only a few moments on them. How do people interact with sites? What does analytics say about the way people look at websites?
Because of data privacy, customers are very much concerned about sharing their data with strangers and about what happens to their data once on the web. Because marketing nowadays has turned digital, companies need to have those customers data to send them personalized emails, Facebook advertising and so on.
People are also becoming more active on social media. Companies should then find out which social media or websites consumers prefer to build their community in the right place. Constant research is, therefore, essential not to have things shifting in the wrong place.
In the end, companies are dealing with people, and regarding research, this means that they need to be understood as technical people using modern devices as well as humans with their psychology.
Organizations need to think what they look for regarding market research. They need to understand the buying process customers go through. These are the stages:
Satisfied the customer does not know he needs a particular product or service;
Recognized a Need the customers realize he/she needs a new product or to change an existing one;
Search for Information the customers searches online for information about the product or service he/she wants to buy;
Evaluate Opinion the customer reads other consumers' opinion on the product or service he/she is interested in;
Decide to acquire the customer is ready to buy.
Each of the stages needs to be identified and companies should also understand what consumers are like at each of these stages, what are the trigger points that move them from one stage to the following, and how to encourage them to move forward. That process develops into what is known as the Awareness Ladder where after research all the stages are mapped from where clients do not know anything about the product or service until the last one when they become loyal customers. This ladder is handy to understand if some stages need to be looked into more carefully than others. A good thing about the ladder is that if a company has limited resources, they do not need to focus on all the stages but only on those areas where they knowledge is weakest.
The next step is planning the market research activity. Outsourcing companies can be used but organizations can also use the SOSTAC Plan (Situation Analysis, Objectives, Strategy, Tactics, Actions, Control). What does a company need to know? In the situation analysis, the company will do its research to find out some specific questions. Clarity in the research process is, therefore, fundamental.
There are a lot of tools available on the web that can explain how people use digital around the world. Among those: Pew Research, Ofcom, Niesen.
A good suggestion is also Focus Groups and Interviews. It is much better to outsource this type of research since customers tend to be reticent to tell the absolute truth if it is the company itself conducting the study. Some other digitals tools are also available to create surveys with dedicated websites to send out to customers. Some of the most popular are SurveyMonkey, Zoomerang, SurveyGizmo and PollDaddy.
Keyword Research, in this case, is also very useful. Some powerful free tool available is Google Suggestions, Google Trends, Google Adwords. Among the paid for Moz, Wordtracker, MarketSamurai and so on. With these tools, companies can see what people are searching for and what they are interested in. The purpose of the research is understanding the customers' journey and see patterns. Through research companies can eventually decide what words will work on their website, blogs, Facebook or Twitter.
Some other sites organizations might find interesting in addition to the one listed above are Buzzsumo, which can see all the favorite pages online when entering a term; Alltop, Ubersuggest and so on. Some other sites like Yahoo Answers have forums that have been there for many years, and companies can have access to a vast archive where they can find discussions and questions and see what consumers are interested in. These tools add extra power to the most common research tools (interviews, focus groups, etc...) that have always been used in the past to get additional data sources and have a very powerful combination.
Social Media Monitoring Tools are also available. Using these tools (unfortunately, these are not for free) like Sysomos, organizations can enter a search term or a brand name as well as their competitor's name and look at a vast amount of social media to see what consumers talk about across the entire web. They will give an overview of all the conversation online without having to visit them individually. If a company cannot afford Social Media Monitoring Tools, they can use Google Advanced to do searches or Twitter Advanced Search and see what people talk about and what they think. These tools give a Sentimental Analysis, which is how people feel about a particular topic or issue. Sentimental Analysis a growing field developing very quickly which goes out on social web picks up all sorts of terms and conversations (positive, negative, neutral) and give a score in real time. The only negative point is that Sentiment Analysis sometimes can interpret the terms in the wrong way. If a negative word is used sarcastically, for example, the tool will not recognize the tone and decide it is a negative comment.
Usability Tests can also be run as a form of digital research. Professional companies will bring a targeted audience which will test the website and tell if something is wrong with it and what needs to be changed. These companies can also help with apps, mobile and software development. Since these tests can be very expensive and not all the organization can afford them; there is a fascinating book by S. Krug called "Rocket Surgery Made Easy" which explains how to run in-house usability tests.
Card Sorting also helps understanding digital customers. An audience is given a selection of Post-it notes and writes what they like about the company's website, what the main section should be, what they would like to see and so on. It is an efficient approach which is also very cheap. The same test can be done electronically. There are a lot of tools that can be used to conduct research; a company, therefore, needs to be clear about what they want to find out to pick the right ones for them not to waste any precious time.
Moreover, sites like Qualaroo can help. Here companies need to insert a tiny piece of code on their website and decide that once a visitor has been on the site for a short while a pop-up box will appear on the screen and ask a few questions. Most people would probably ignore the box, however, a few of them will answer and give some useful information. These things can also be set for a certain amount of time and only once if necessary.
Businesses also need to understand their customers as human beings. Cognitive Research is about how the human brain makes decisions. People think they are rationally making decisions, however, scientists affirm that they emotionally make them. Modern marketers need to understand clients as emotional people to sell them their products or services. The conscious mind is tiny compared to the subconscious one. The brain takes mental shortcuts, and if marketers know what the trigger points are then, they could use them to guide people along their customers' journey towards purchase. Reviews are also important and very influential. Human beings like to have social proof and to be assured that other people have tried a product and rated it.
Customers like to be part of the modern marketing effort and when companies do research, they find out about their customers asking them their opinion and by doing that they feel more connected to the brand. Tesco, for example, has created a combination of marketing and market research with its "Orchard" platform. Here they invite their customers to be members of their social network and at the same time, they can ask them their opinion. Once a client feels involved, then he/she will be more likely to be brand advocates.
To finish companies should have their marketing people well trained. However, some further help can be found online. The Market Research Institute in the UK has some free and useful resources that can contribute to developing market research plans.