8 Types of Market Research: Methods & Examples

Imagine that you are stepping out to buy a car. You first decide whether you want a hatchback, a sedan, or an SUV. Once that is finalized, you shortlist cars that fall within your budget. There may be a host of features that you would want included in your vehicle. You would look for those features among your selected cars and then come to a conclusion.

This research happens at a very micro-level, that is, at the consumer level. When consumers spend this much time and effort on their purchase decisions, you can rest assured that companies will examine their target market down to the last detail while optimizing their sales and marketing strategies. This is where market research comes into the picture.

What Is Market Research?

Market research is a process that involves collecting information about your target audience and competitors, using that information to define your company’s objectives, conceptualize your methods, and finalize your findings. The information collected can include your customers' needs and preferences, a thorough analysis of your competitors' strategies, and emerging trends in the market.

It can be conducted using various types of research like primary, secondary, qualitative, and quantitative research. Brand research, customer research, and competitor research will help you understand the direction your brand is supposed to take. Market research tools include but are not limited to surveys, questionnaires, field trials, and experiments.

Why Is Market Research Important?

Market research is critical not just for the expansion, but even for the very survival of any brand. It will tell you what you need to know about your target audience. Effective market research can help you understand how the market works, and it will illuminate the various gaps in the market that you can exploit. Let us see in detail, some of the benefits of market research.

Understand your customers better

It should come as no surprise that customers are at the core of every business venture. The future of your business depends on how well you understand your customer base and accordingly optimize your sales and marketing strategies. Market research helps you do just that. It helps you analyze your customers and segment them into various groups based on their needs, preferences, and pain points.

Identify market trends

The consumer market is constantly evolving. The needs and preferences of consumers keep evolving. Their values and beliefs are in a state of constant flux. For example, an advertisement that was funny a while ago may be considered offensive today. Brands must be on their toes constantly to not miss out on societal changes and shifts in purchase behaviors.

Spot opportunities for growth

Evolution applies not only to consumers but also to industries as a whole. For example, electronics is one of the most quickly evolving industries. A feature on a phone that was considered mind-blowing a couple of years ago will not produce the same effect today. Brands must identify market gaps and implement changes to stay on top of their game.

8 Types of Market Research

Like a customer who looks at all the possible options in the market before choosing which car to buy, brands must also ensure they leave no stone unturned when picking the right type of research for their analysis. Here, we look at 8 types of market research, along with the benefits and limitations associated with them.

1. Primary research

This is one of the most widely used research methods out there. Under this method, the business owner conducts the research himself or hires someone capable of doing it. This research typically involves contacting customers individually and inquiring about their needs, preferences, and the possibility of availing your product or service.

There are several ways that this inquiry can be done.

Surveys are one way through which you can carry out primary research. Surveys are open or close-ended research questions sent to consumers or potential customers through various mediums to derive information from them that is related to the sale and marketing of your products. These surveys can be done either online or offline.

The use of focus groups for research is also prevalent among primary researchers. A focus group is a set of carefully handpicked participants who share attributes like age, gender, and location. These participants are interviewed to gain valuable insights either during the launch of a new product or when a firm is trying to foray into a new market.

Some researchers prefer interviews to focus groups as this will eliminate factors like acquiescence bias that may creep in during the focus group analysis.

2. Secondary research

Secondary market research is the process of utilizing preexisting data to form informed inferences regarding your target audience. This data – consumer surveys, industry reports, or research papers – has already been collected and compiled for reference.

Unlike primary research, you do not have to spend time doing the research yourself. The data is already out there. You just have to pick the data relevant to your research objectives. This will save you a lot of time otherwise spent on data collection, which would inevitably involve a lot of fieldwork and analysis.

A possible pitfall of secondary research is that the data may not always be the one you are looking for. This data may be outdated, or it may be irrelevant to your research goals. Also, since you did not collect the data yourself, the accuracy of the data cannot be verified.

3. Qualitative research

Qualitative market research focuses on acquiring non-numerical data that focuses more on the emotional aspect of purchase decisions. Not all spending behavior can be quantified using market metrics. The needs and preferences of customers are multi-dimensional and would thus require a comprehensive analysis. Qualitative research can help answer ‘why’ a consumer buys or avoids a product.

Qualitative data can be obtained through open-ended surveys, in-depth interviews, or ethnographic research. Open-ended surveys allow researchers to delve deep into the minds of consumers who will not be bound by the constraints of a straightforward yes-or-no kind of question. In-depth interviews will help researchers move past mere statistics and gain knowledge of consumer needs, preferences, and possible pain points.

Ethnographic market research is a qualitative method that observes consumers in their natural environment, like their homes and offices. It gives brands a better idea of how customers interact with their products and the social and cultural factors influencing consumers’ choices. What better place to figure it out than in one’s own home?

4. Quantitative research

Quantitative market research is done with the help of numerical data collected over the years using polls, surveys, and statistical analysis. Quantitative data shows historical trends in consumer buying habits that would otherwise go unnoticed.

Quantitative questions are close-ended questions that do not leave much scope for the respondent to stray from the line of questioning. This kind of research is apt for researchers who have preset goals in mind and want the research process to stay fixed on said goals.

Quantitative market research is used to provide concrete evidence that companies who are looking to expand their business opportunities are searching for. Expanding your business network, devising marketing strategies, and R&D are all strategies that need to be anchored in foolproof data.

5. Branding research

Every brand will have a carefully laid out marketing strategy which will be the cornerstone for all their future business decisions. Possessing such a one-time strategy will not suffice. As a brand owner, you will have to make necessary course corrections every once in a while to make sure that your progress is rightly aligned with your company goals.

This is where brand research comes into play.

Brand research, at the risk of sounding painfully obvious, is you getting to know more about your brand. How do people perceive your brand? What are their complaints regarding your products? What are the untapped avenues where you could expand your business? These are some of the questions you could hope to get answered when you truly engage yourself in researching your brand.

A brand is a vision. The vision demands that multiple factors work together towards a common goal. Brand research involves looking at variables like brand awareness, brand associations, brand perception, brand equity, brand loyalty, and brand preference. Ultimately, it tells you how far you have come and how far you have left to go.

6.

Customer research helps you gain valuable insights into the needs and preferences of your customers. Think of it this way: if brand research tells you what waters to sail on, customer research will tell you which direction to steer your ship. Customer research enables you to get inside the heads of your customers, providing inputs that would otherwise be missing from your market research.

One way that customer research is done is through customer segmentation. Customer segmentation gives you a bird’s eye view of your target audience, which enables you to provide personalized marketing campaigns and tailor-made products and services fine-tuned for each customer group. This helps minimize wastage and provides higher returns on investment.

Several kinds of customer segmentation are intended to cater to the needs of multiple variables. Demographic segmentation classifies your audience based on shared demographics like age, gender, job title, and so on. Psychographic segmentation classifies your audience based on traits like beliefs, values, and interests.

7. Product research

One could argue that product research is an extension of brand research and customer research. Once you have figured out what exactly your customers want and how your company fares in the scheme of things, the next step would be to find what products you should offer to satisfy customer needs.

Product research is necessary, not just before the product launch but after it as well. It helps analyze market demand and identify your customers' needs and preferences. Ultimately, the goal is to meet user needs, increase their satisfaction, and reduce risks associated with using the product.

Product research is the final piece of the puzzle. The stage is set with brand research, where you develop a plan by fine-tuning your development goals. Then comes customer research, where you put those plans into action by aligning your goals with the needs and wants of your customers. Finally, you bring product research into the mix by providing products and services your customers are looking for.

8. Competitor research

In a free market economy, there is very rarely a monopoly at play. Competition is inevitable, irrespective of the industry in question. To stay ahead of the curve, brands must learn to compare themselves with the industry benchmark regularly and optimize their marketing and sales strategies accordingly.

Brands can gain a comprehensive understanding of factors like market gaps, pricing strategies, and emerging trends only by doing the necessary competitive analysis using tools like SWOT analysis and web analytics. SWOT (strengths, weaknesses, opportunities, threats) gives you an idea of where your brand stands compared to the competition. Web analytics show you competitor website traffic as well as relevant keyword rankings.

Competitor research primarily involves identifying your major competitors, analyzing their online and offline presence, and doing a complete analysis of their products and services. You would also need to audit their marketing channels to see what their preferred modes of communication are.

Market Research Methods

In this section, we will discuss many different types of market research methods like surveys, field trials, and social media listening. But what if there was a one-stop solution for starting your research? This is where Persona by Delve AI comes into play.

Buyer personas

A buyer persona is a profile of your ideal customer created based on demographic, geographic, and psychographic data. The data consists of qualitative and quantitative data. The qualitative data is collected using surveys, interviews, and focus groups. The quantitative data is sourced from government records, industry reports, CRM data, and more.

Buyer personas are created using demographic factors like name, age, gender, income, education, location, and occupation. It also delves deep into customer goals, interests, hobbies, and values. You have negative buyer personas, which tell you about customers who provide very few to no returns to your marketing efforts.

Buyer personas help you understand your audience better, which will pave the way for effective marketing strategies. Personas enable you to build better products and deliver top-notch services, which improve the overall customer experience. Buyer personas help you formulate a well-defined target audience, which also improves ad targeting.

Synthetic personas

A synthetic persona is an AI-generated version of an ideal customer, more like a digital twin of a customer. This synthetic persona is created using first and second-party data from various sources fed into a large language model (LLM) and then prompted to adopt the identity of an ideal customer. This persona will have the same demographic and psychographic attributes as a real person.

As discussed earlier, data collection in primary research is often very time-consuming. Synthetic personas aim to supplement the efforts of primary researchers by letting AI do the work of transforming raw data into a practical plan of action. It helps in product development, design, and testing, as well as in marketing segmentation and branding.

The inaccuracies associated with data collected during secondary research could also be reduced with synthetic personas. Since LLMs analyze data from over 40+ public data sources (eg, data from reviews, ratings, feedback, and online forums) in addition to first and second-party data, the possibility of errors in data collection is reduced to a great extent.

Surveys

Surveys are among the most common qualitative research tools. They consist of closed or open-ended questions that researchers put forward to gain deeper insights into a particular query that would otherwise not be possible through a quantitative analysis. Market research surveys are easy and inexpensive to conduct, and the responses are not too difficult to analyze.

The most common types of surveys are face-to-face, telephone, paper-and-pencil, and online surveys. Online surveys are the most widely used type of survey. They’re cheaper to run, faster to implement, and get more responses. Online surveys are also more accurate because, in the case of offline surveys, you would have to manually input data, which could lead to errors.

A wide variety of information about your customers, like their demographic profiles, opinions, purchasing habits, desires, and intentions, can be obtained using surveys. There are different types of survey questions – multiple choice, rating scale, Likert scale, matrix type, dropdown, and open-ended questions. Researchers can select the type that best suits their needs.

Interviews

Interviews are among the oldest forms of market research in use today. In the early 1920s, American psychologist Daniel Starch, along with a small team of researchers, would go door-to-door asking respondents about the advertisements they came across in magazines and newspapers. Based on the responses, he would conclude which advertisements were the most effective.

Interviews sparked the beginning of market research as a viable field of study. In interviews, the interviewer can get up close with the respondent to conduct his inquiry. Open-ended questions asked during the interview will make sure that no stone is left unturned in the inquiry process. Interviews will require a quality line of questioning and active listening to ensure the process turns out to be as effective as possible.

Through interviews, researchers can get a thorough understanding of their consumers' spending patterns rather than just looking at binary replies on a poll. However, it is to be noted that conducting interviews is not a simple task, not to mention the considerable costs associated with it. If you are conducting the interviews yourself, it will likely take a toll on your time and energy.

Focus groups

Focus groups are a set of people with shared demographic or psychographic attributes who have been handpicked to research a particular topic. This group is intended to replicate a much larger section of society. By questioning the people in this group, researchers can gain valuable insights into how a much larger customer base operates.

Focus groups come with their own set of problems. As with interviews, focus groups are difficult and expensive to execute. Focus groups also come with issues like researcher bias and confirmation bias. When an interviewer proceeds with leading questions to gather a certain response from a respondent, he is succumbing to researcher bias.

Confirmation bias is when respondents in a group agree with others for the sake of not standing out from the crowd. Such a confirmation bias will have disastrous ramifications for the findings of the study. The results would be all over the place, and you will not achieve what you set out to do in the first place.

Experiments and field trials

Experiments and field trials are research techniques that give researchers a hands-on approach to their research. Experiments are conducted in controlled environments where the researcher has control over the multiple variables at play. For example, a soft drink company introducing a new flavor to its lineup but deciding that it will initially launch only in a few stores is effectively experimenting.

You could think of field trials as experiments on a much larger scale. Consider the previous example of the soft drink company. If the company decides that it will now release the drink in select cities as a whole instead of individual retail outlets, then it is conducting a field trial. At its core, field trials and experiments are meant to give brands a taste of user feedback before large-scale adoption.

As you would have guessed, field trials are much more difficult to conduct than experiments. The sheer scale of field trials could be unnerving for some marketers but it comes with its own benefits. It allows brands to assess consumer feedback and resolve any drawbacks. Field trials give brands the ability to optimize their pricing strategies.

Social media listening

Social media has become an irreplaceable facet of our lives and intertwined with nearly all our daily tasks. Choices relating to the products we buy and the services we avail of are also tied to the content we see online. Hence, brands must keep an eye on social media to stay abreast of industry trends and developments.

Social media listening will give you a better idea of how your products and services are faring in the eyes of the public. It will tell you more about how your competitors are going about their marketing campaigns. You will be able to see how customers are responding to your products and services.

At this juncture, it is essential to differentiate between social monitoring and social listening. Social monitoring is merely looking at ‘what’ is trending. It is social listening that delves deep into ‘why’ something is trending. Brands could utilize various listening tools to undertake the task of effective social listening and thereby improve their sales and marketing strategies.

Wrapping Up

The importance of market research cannot be overstated. Whether you are a budding startup trying to make a name for yourself or an established corporation looking to foray into a new market segment, market research is essential. Market research is a key factor that will determine the success of your brand.

There are various types of market research for everyone and with deliberate planning, you can figure out the one that best suits your needs.