10 Methods of Market Research

By Indeed Editorial Team

Updated December 5, 2022

Published May 17, 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.

In business, information can serve as the foundation for successful strategies and models. Having extensive and accurate market research allows you to better understand your target audience, fill any gaps in your market, learn from your competitors and allocate your resources in the most profitable ways. There are various methods of market research that can help you collect the information you need to give you an advantage in the marketplace.

In this article, we examine why companies conduct market research, look at the major categories of market research and describe 10 methods of market research.

Related: A Guide To Conducting Market Research

Why do companies conduct market research?

Market research allows for a deeper, more complete understanding of consumer values. This information can be useful when developing products and creating marketing strategies. For instance, if market research shows that ingredient sourcing influences the purchasing habits of people aged 20 to 30, companies might strengthen their efforts to get their ingredients from sustainable, fair-trade sources to attract younger consumers.

Market research can also reveal consumer opinions about companies and products. Knowing where a company stands in relation to others in the forum of public opinion, one can assess the factors that contribute to a company's success and determine how to incorporate successful strategies into one's own model. For example, if market research shows that a coffee chain's focus on well-trained baristas has resonated well with customers, a competitor can use that information to shift its own focus to training or to develop another angle to appeal to a different subsection of potential consumers.

What are the major categories of market research?

The two major categories of market research are primary research and secondary research. Every method of market research falls into one of those categories. Both primary and secondary market research fulfill the same purpose, but they differ in how they collect information. The differences are:

Primary

Primary market research is original research conducted by you or an entity that you hire. It involves collecting information directly from consumers to serve a present need. Primary market research has the advantage of being more specific and more recent, as companies conduct primary research to meet needs as they arise. It usually entails asking people a variety of questions and recording their responses. It involves extensive planning, resources and analysis to arrange, execute and use primary market research.

Secondary

Secondary market research is research already completed by another company or entity and that is available to you. Secondary research often appears in journals or publicly accessible online sources. It relies on questions that others have devised, which you would apply to your own research parameters, so it may not perfectly serve your research needs. It's useful, however, if you have limited resources to carry out your own market research.

Read more: Primary vs. Secondary Data in Market Research: Definitions and Differences

10 methods of market research

There are several specific methods of research that you can use to collect market data. These include:

1. Surveys

With surveys, companies reach out to participants to answer questions. They can conduct surveys through various means, including:

  • Phone: Company representatives make cold calls to ask people to respond to a series of scripted questions.

  • Mail: The company sends the questions in written format to people's mailing addresses.

  • Online: The company reaches out to participants by email or with a link to an online form they can fill out.

  • In-person: The company communicates with people they encounter in high-traffic areas. In-person surveying allows participants to sample products or services.

Surveys can be a cost-effective way to gather a large quantity of data for analysis. Written surveys may also provide the advantage of encouraging candid responses since they allow participants to feel as though they're expressing their opinion in private.

Related: Survey Templates and How To Use Them Effectively

2. Focus groups

A focus group is a group of people who take part in a moderated discussion. To conduct a focus group, companies gather individuals who represent a consumer demographic, ask questions and record the responses. Because the participants represent a larger group of people, their responses may provide insight into what consumers want in a company or a product. Focus groups provide an advantage over surveys in that they allow for longer periods of interaction with participants.

Companies may use focus groups when they are developing a new product or service and wish to ask questions that are difficult to ask or answer in written form. For example, with a new product, the company may have the participants begin the session by using the product and then ask them questions about the product. The focus group environment allows the participants to gain experience with the product, helping to ensure that they base their responses on firsthand knowledge.

Related: How To Conduct Effective Product Focus Groups

3. Qualitative interviews

A qualitative interview combines elements of the focus group and the one-on-one survey. It involves surveying one participant at a time and recording their responses. The questions are often open-ended, and the researchers encourage the interviewee to give in-depth answers. The researchers can ask follow-up questions and sometimes allow the interviewee to ask their own questions. Qualitative interviews require more time and other resources to execute, but they often produce profound insight into consumers' values and priorities.

4. Social media listening

Users of social media often offer opinions about a wide variety of topics, including companies and their products. With social media listening, researchers can search for topics of discussion and analyze what consumers are saying. For example, a company might search for mentions of their flagship product and see the opinions of people who have bought it. In this way, they can gather data about perceived strengths, weaknesses and potential areas of improvement. Because the opinions are unsolicited, the data is likely to represent honest, unfiltered views.

Related: Social Listening: What It Is, Why It's Important and How To Do It

5. Observations

In market research, observation refers to the act of studying how consumers actually behave when they shop. Often, it involves filming shoppers in a market environment, such as a store, and analyzing their shopping habits or patterns. If they are unaware of the observation, this method can show their natural selves, as opposed to how they think of themselves. For example, observation can show researchers what stimuli in the store might affect shoppers' purchases, what products attract the most buyers and how packaging or displays influence decisions.

6. Field trials

In a field trial, a company allows users to use a product under normal conditions and then collects data provided by the participants. For example, a company developing a novel type of toaster might recruit individuals to use the toaster for a specified period. The participants would record and submit their impressions, which the company would analyze to improve the product.

Alternatively, a company might place a new product in a store to see how shoppers respond to it. The aim of the trial might be to analyze shoppers' reactions to advertising, to determine the extent of the product's appeal to casual shoppers or to offer sample use of the product before gathering opinions.

7. Competitive analysis

Competitive analysis is a secondary market research method where a company collects and analyzes information about competitors in their market. It involves identifying all the primary and secondary rivals to your business and determining their offerings, profits, marketing strategies and more. This information can give you a sense of your competitors' strengths and weaknesses and your position relative to them. It can also provide insight into successful business models and consumer preferences, allowing you to implement strategies that are more likely to be profitable.

Related: What Is a Competitive Analysis?

8. Public data

Public data is a secondary market research method that involves seeking and analyzing market-related data that's available to the public. Often, this research is available for free on the internet or at the library. The sources for this information might be research centers, polls or government databases. Often, companies supplement their primary market research with public data in order to confirm information or measure it against other data.

9. Purchased data

Companies that lack the time or resources to conduct their own market research can purchase research data from various sources. There are several market research companies that sell subscriptions to access their research databases. An annual subscription can be as much as $8,000, which provides you with market research spanning various industries and countries. This option may be helpful to small or medium-sized companies that cannot afford to invest in primary market research.

10. Sales data analysis

Analyzing sales data can be a helpful secondary market research method used alongside other methods, such as competitive analysis, to show the relationships between a business's strategies and sales. It can also give insight into the buying habits of consumers in your market and help you spot consumer trends.

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