Market research is the process of gathering and analyzing information and data around a new business opportunity, product, or service. It reveals the customers, possible competitors, and the general need (or not) in the marketplace.

Having this critical information can better inform a variety of business and marketing decisions. It can determine pricing, messaging, the target market, and overall positioning within the marketplace to give the product the very best chance of success.

What is Market Research?

So what is market research? When you conduct market research, you’re looking at important information that will impact a product, service, or business. This deep dive uncovers things like, is it needed? Who will use it? How can it be made better? How much should it cost? Are there competitors? These are just some of the questions that need to be explored and answered if your product is to have a good shot at being successful in the marketplace.

Market research is an essential part of product development services. This kind of in-depth analysis explores demographics, trends, and competitors to create a well-informed strategy for developing and marketing a new product or making changes to an existing one.

Market research, like that conducted by Enki’s product development services, can save time and money, and get your idea to market faster.

How Does Market Research Work?

Market research begins with an objective: What do you want to find out? Once that’s determined, a plan is outlined for how to gather the information to answer those questions. Can the answers be determined by existing data or by analyzing your competitors? Does it require talking to potential customers through surveys, one-on-one interviews, or focus groups?

After the research plan has been determined and executed, then it’s time to review the findings of your primary research. Next, an analysis of existing data – like that from trade journals – and information on your competitors is performed. All of these elements are reviewed and folded into your overall strategy.

For long-term success, market research needs to be ongoing to keep up with your customers. That starts by monitoring the state of your initial findings: has anything changed over time? Are improvements needed? Have your customers’ needs evolved?

A successful business will continually “check in” via research to ensure that its product remains relevant and useful to its customers.

The Importance of Market Research

If you wonder what is the purpose of market research, it’s a practice that provides critical insights that can determine the success (or failure) of a new idea for a product, or service.

Market research is an important part of product development services or product testing services. It reveals essential information about the needs and preferences of consumers. It shines a light on competitors, upcoming trends to capitalize on (or avoid), the right kind of pricing, and other critical insights. The right kind of market research can minimize risk and significantly increase the chances of success in the marketplace.

Understand Customer Needs

Market research uses focus groups, surveys, and other forms of data to determine what customers want or need. By analyzing it, the development, marketing, and production processes move much more smoothly. Even after the product goes to market, staying in touch with customers is essential to ensure that their needs are still being met.

Understand Customer's Preferences and Trends

Market research can help you better make decisions on things like colors, textures, benefits, certain functions, and more. You can also be ahead of the curve by adapting to upcoming trends.

Analyse Your Competitors

Analyzing your competitors is a key element of market research. It uncovers their strengths, weaknesses, and other elements that you can take advantage of.

Identify Market Gaps

Market research can identify “what’s missing,” either a feature in an existing product or in the marketplace overall. This provides exciting opportunities!

Create Better Products

From improving on a competitor’s product to refining your own, market research ensures that the customer’s needs and wants are continually being met.

Optimise Your Marketing Strategies

The insights from research are essential to creating an effective marketing strategy. Knowing what’s most needed from your customers allows you to create messaging that will perform at its best.

Build Trust and Credibility

Understanding and addressing the needs and wants of your target market gives you credibility among your customers. Regular research helps you maintain that commitment to delivering on their needs and builds trust. Trust is an important aspect of a successful business.

Types of Market Research

There are several ways to gain research into a market and its customers.

Quantitative research uses survey questions to identify behaviors, attitudes, and more. Those numbers are then analyzed.
Qualitative research explores opinions.
Interviews are direct, one-on-one conversations to gain information.
Focus groups are the same, only with small groups of the target audience.
Surveys gather feedback on specific topics.
Market analysis examines trends, conditions, and opportunities.
Product research analyzes the performance of a product and potential improvements.

Key Components of Market Research

The first element of market research is establishing the reason behind it: what are you trying to find out? Then determine the target market you want to explore. You can gather firsthand information from customers through surveys, interviews, and focus groups. That’s termed “primary research.”

Secondary research comes from analyzing existing data that can be found in industry reports, trade journals, and the like.

Competitive analysis is a deep dive into competitors to uncover their strengths and weaknesses, along with any external threats or opportunities.

Market segmentation divides potential customers into ever-smaller groups based on things like demographics, behaviors, and social attitudes.

How to Conduct Market Research

Market research begins by defining your goals and the target audience, and then developing clear research questions that will allow for substantive responses. These can be things like thoughts on competitors or a better understanding of customer needs.

These questions will be used in surveys, questionnaires, or interviews to gain deeper insights. Once the data is collected and analyzed, match it against industry trends and information, as well as a deep dive into your competitors.

You may want to break your audience participants into smaller segments based on demographics or behaviors as a way to further refine and understand the market.

Once your market research is completed, use it to create an actionable plan for further development.

Conclusion

Market research is an essential first step in any successful product development. It provides key insights into customer needs and wants, opportunities in the marketplace, and the strengths and weaknesses of potential competitors.

Not only does this research streamline the physical production process, saving time and money on design elements, but it’s also vital to an effective marketing strategy. Quality market research, like what we conduct at Enki Product Development, helps create vibrant messaging to successfully launch a product.

Ongoing market research ensures that the needs of your target audience are still being met. That helps maintain confidence and trust in your product, elements that are priceless in business.

What is Market Research and Why is It Important?