Market Research: The 2 Main Types with Tips and Examples

Market research is an important part of a business's overall plan and can significantly help a company better understand how to reach its ideal customer. There are two main types of market research, with several methods of each that you can use.

In this article, we'll cover what market research is, the primary and secondary types of market research and why market research is important for any company's marketing efforts.

What is market research?

Market research is the process of collecting and analyzing data related to the marketplace. Many companies use market research to collect and assess data about a target market or consumer to better understand their ideal audience. For example, if a company wants to target primarily females in their 20s who make more than $50,000 a year, they would compile as much data as possible from this particular market and use this data to influence their marketing decision.

Market research has several purposes that include identifying a potential new market to break into or determining whether launching a new product will be successful with a company's target audience. Performing market research allows businesses to make informed decisions and use their resources in a way that is most beneficial.

Related: A Guide To Conducting Market Research

Why is market research important?

There are several reasons why market research is important. A few of the key reasons include that it:

• Allows a company to determine whether a new business, product or service is feasible

• Helps companies identify and develop new sectors in the marketplace

• Enables companies to test the demand for a new service, product or feature before actually launching it

• Boosts the overall success of marketing, advertising and promotional campaigns

• Assesses current market trends to allow companies to develop strategies to adapt to these trends

• Helps companies determine the optimal product placement for a product

Two main types of market research

There are two different types of market research that a company or marketing professionals perform: primary and secondary market research. The following are examples of each:

1. Primary market research

Primary market research refers to any research that a person, company or a person/company conducts or hires another company or individual to conduct. This type of research entails going directly to the source to obtain market research. For example, a person may conduct a survey by asking customers a few questions in person. Other examples of primary market research include:

Interviews

Interviews are a common type of primary market research that can be either in-depth or as simple as asking a question. An example of an interview in market research is when a business calls a current customer to ask how they are enjoying a product they recently purchased. Marketers can interview a person in their home, on the street, in the office or in a market research facility. This type of primary market research takes the most time but also typically yields the most valuable information.

Focus groups

A focus group is a group of individuals who have been selected to take part in a discussion about a certain area of interest, product or topic. A marketer or organization typically facilitates these groups to to gain more insight on how a particular business, product or service will be received by their target audience. For example, a marketer may ask the focus group a series of questions that gives the marketer a better idea of how the group feels about a certain topic.

Questionnaires

Some companies choose to perform market research by sending questionnaires to their existing customers or users who have shown interest in their product or service. A company may ask the customer or person to fill out a survey while in the store or they may send out a survey via mail or email. Examples of questions that a questionnaire may ask include:

• What benefits do you get from this product?

• How does this product compare to other products like it that you've used?

• What would you change about this product?

• What would make you a perfect company or brand?

• What is your primary method of communication (for future questionnaires or marketing efforts)?

• What made you purchase this product from our company?

• What features are the most valuable to you?

• Where do you typically do your shopping?

• What income range are you in?

• How old you are?

• What gender do you identify with?

Related: Target Market Analysis: What It Is and How To Make One

Surveys

Surveys allow companies to ask their target audience various questions based on their preferences, demographics and other important factors that influence their spending. When creating a survey, it's important to first define the problem you wish to explore with your survey. For example, maybe your company wants to improve a particular feature on a product. Knowing this problem will ensure you ask the right questions to better understand how to best address the issue in a way that suits your target demographic.

Next, you should target the right audience by getting clear on the population you wish to survey. You can also incorporate screening questions into your survey that qualify or disqualify the survey takers based on your desired criteria. Lastly, it's important to use resources when conducting surveys, especially if you want to conduct larger surveys. There are several online survey tools that allow you to survey a large number of people and compile that data in one succinct location for easy analysis.

Related: 20 Marketing Tactics That Work and How To Use Them (With Examples)

2. Secondary market research

Secondary market research involves assessing data that has already been collected and published by others. For example, you may research a particular topic and note any trends you find based on data already published about that topic. Businesses often use this form of market research when they have a smaller budget or when ample market research has already been performed on a particular topic.

An example of market research is conducting an online search on a particular topic and making note of the most recent data published on that topic. Other examples of secondary market research include:

• Reading trade journals.

• Contacting trade organizations and asking specific questions about a topic.

• Going to a reference library to perform research.