How To Analyze Market Research in 6 Steps
By Indeed Editorial Team
Published June 1, 2021
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Businesses analyze marketing research to find out information about their competitors and customers. Analyzing the research they conduct helps them find important patterns and trends in their markets they can use to improve revenue. In this article, we define market research analysis, explain why businesses conduct it and list six steps to analyze market research.
What is analyzing market research?
Analyzing marketing research is the act of conducting research to determine how current or potential markets may receive a product, then analyzing the results of the research to determine a marketing strategy. Analyzing market research is an important part of building and growing your business and can be a large part of a marketing team's job duties.
Here are six models of analysis that professionals may use to analyze market research:
Multiple regression is a statistical model that tries to find the equation that best explains how the changes of an independent variable affect dependent variables. For example, to determine what a successful new product design would be for your notepad company, you could analyze what colors, sizes and paper types had higher sales revenue in the past.
Discriminant analysis organizes data into two or more categories. You can use this method to find out why some factors result in specific outcomes. This can help you determine best practices for any aspect of your business, like your products, your customers or even your distribution styles for each product. For example, you can use data about customers' purchasing habits to determine which of your products appeal to which demographics. This can help you segment your products for more direct marketing.
Factor analysis determines which factors in any given situation have the strongest correlation. You can use this to identify the factors that determine your revenue. If the notepad company is trying to understand what makes its notepads appealing to specific demographics, it can use factor analysis to determine two or three factors about its notepads that make one set appeal to teenage girls and one set appeal to adult men in business. The company can then use these factors to guide new product designs.
Cluster analysis is establishing clusters of things that have similarities. The idea is to create as many clusters of similarities as possible. There may be some clusters that overlap, which can help you identify multiple ways to market to a specific audience. Essentially, cluster analysis is useful for recognizing patterns, and the more patterns you can recognize, the more information you can use in your marketing.
You can use cluster analysis to determine market segmentation. For example, if you work for the notepad company, all your customers write on paper. However, some customers work in business and some customers are teachers. Recognizing the similarities and differences between these groups can help you market to them more effectively.
Conjoint analysis is identifying the attributes of a product, then conducting research to determine which attributes influence the customer's decision to buy and at what price point. Conjoint analysis tries to determine the utility of each attribute, meaning what the customer uses it for, and the relative importance of each attribute, meaning how important it is to the customer's decision to buy that product.
Multidimensional scaling is a type of analysis that compares a company or product to its competitors by organizing them on a map. The similarities of the product's attributes determine where each competitor is on the map.
For instance, as a notepad seller, you may place other notepad brands with the same target markets and price points very close to your product in the center of the map. A little further away, you may place notepads that are at different price points or have different target markets. On the part of the map the furthest away from your product, you may place other stationary brands that sell items similar to your notepads but aren't direct competitors. This can help you determine where you are in your market and what your strengths are compared to your competitors.
Read more: Exploring 7 Methods of Market Analysis
Why conduct market research?
Conducting market research gives insight into your potential customers that can inform many aspects of your business, including what products you should produce, how to advertise, what price you can set and what your product might look like. It helps you position yourself in the existing market so that you can differentiate yourself from your competitors and identify unmet needs in potential customers that you can address with your products.
It can also help you understand what other potential markets you can move into and continue to grow your business.
There are two types of marketing research that can help you answer these questions:
Primary marketing research: Businesses can conduct primary marketing research by directly contacting their customers through phone calls, surveys and focus groups to find out customer opinions and experiences with the company's brand.
Secondary marketing research: Businesses can conduct secondary marketing research by analyzing pre-published data about their markets and their customers.
Read more: How To Conduct Market Research
Reasons for analyzing market research
Here are some reasons to analyze market research:
Helps with strategic planning: Analyzing your marketing research can help you draw conclusions about your company's financial health and where you can continue to grow and improve, whether it be into new markets or with new initiatives. You can analyze the strength of each potential plan and determine the strategic benefits.
Identifies trends: Analyzing your market research can help you identify patterns in competitors' products and your own revenue to help you stay up to date with the changing needs of your customers. Depending on the timing of your analysis, you may be able to identify relevant trends before your competitors and stay ahead of the market.
Clarifies your position: Analyzing your market research can help you place your product or brand in relation to your competitors. You can get a better understanding of what you offer compared to other brands or products, so you can clarify how to best position yourself to potential customers.
Forecasts business projections: Analyzing your market research can help you create an idea of what the future of your business might look like. You can compare information about competition and trends with the expected results from your strategic plans to project future growth for your company.
Read more: What Is a Market Analysis?
How to analyze market research
Here are some steps you can follow to analyze your market research:
1. Identify an objective
To have a successful analysis, it's helpful to start with a clear goal or question that you want to answer to help you focus your research. Speak with your team or managers to determine why you're conducting the marketing research. Determine if there's one key question and any peripheral questions that you'd like to answer. Understanding what you want to know can also help you determine how you go about conducting your research.
For example, if you work for a notepad company and you want to expand your markets, your key question can be whether it would be profitable to expand your market to reach into other North American markets.
When conducting marketing research, you can gather data that will answer the following questions:
Who are my potential customers?
What are common shopping habits for these customers?
How large is my target market and how many competitors are there?
What are the price points for this market?
How do I compare to the competition?
2. Develop a research plan
Once you establish the question you want to answer, you can devise the most efficient plan to conduct your research. In this step, you can determine if you want to conduct your own primary research, if you can rely on secondary research or if you want both. You can figure out which markets you want to reach out to and how best to contact your target customers. You can also determine what parameters you would like to set for the research.
3. Collect data
Collecting data is a large part of analyzing market research because it's time-intensive and can encompass many initiatives. For example, secondary market research might entail developing and delivering multiple surveys. During this step, you gather the data you can analyze later, so you want to be as thorough as possible. You might put together a team to conduct various types of research. You may also want to look into different technologies or web services that can help you conduct your research in the most organized way.
4. Analyze data
Once you have collected the data, you can organize it into categories and look through it to identify patterns. You can use any of the analysis models listed above for this portion of your research analysis. During this step, you look for any information that may help you answer your objective or key question.
For example, if you're trying to determine if you can move your notepad company into international markets, you can look for patterns regarding revenue in those new markets, costs associated with expanding, interest in those new markets and competitors in those markets. Finding patterns associated with those topics can help give you an idea of what moving into those markets may entail.
5. Present findings
Once you have identified patterns, you can organize your data into a presentation to share with your team or managers. This step helps you communicate what you learned during your research and analysis. Additionally, you may want the input of other teams and managers when creating an action plan based on your market research, which is why presenting it to them can be helpful.
For example, if you sell notepads and are interested in moving into new markets, you can confer with your distribution department and your accounting department to determine if international shipping is a possibility for your company.
6. Draw conclusions
At this point, you can usually answer the key question you set out to answer in step one because you've conducted your research, analyzed it and shared it. In order to draw a conclusion, you can follow the steps appropriate for the type of analysis you used, including the feedback from your team and coming up with an answer that fulfills your objective.
For example, if you're analyzing market research for the notepad company, your analysis may have found that there's little competition and a possibility of high revenue at your company's price point in Mexico and Canada. Once you confer with your team about distribution possibilities, you conclude that these markets would help your company achieve its goal of successfully expanding into North American markets.
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