Lego has always been a toy geared towards boys. A research conducted by the company reported that the toys were purchased only by 9% of the female children. Seeing this, the company decided to introduce a new product that would entice more girls to play with Legos.
Researchers were sent out to conduct a study for four years, participating 3,500 girls and their mothers. This market research focused on studying the girls’ playing behavior patterns and elaborate questioning concerning what it takes Legos to be more interesting for the girls. After the extensive market research, Lego rolled out a new line of toys on January 1st, 2012, called “Friends”. More vibrant colors replaced the brick colors for this line. The packaging too changed along with the figurines included in the set. Figurines had to be made slightly bigger to accommodate accessories such as purses and hairbrushes in their grips. All of these changes were in tune to the market research.
Market research is conducted to identify the reasons for which the consumers buy your product or services. It focuses on such things as consumer behavior, including cultural, social and personal factors. There are different reasons that make companies use this research, and these reasons drastically change along with the different stages that the product goes through.
Before introducing a product, a company makes use of market research to establish the needs of the targeted audience. Once the product has hit the market, the company uses market research to recognize the features that can be leveraged to generate hype about the product.
Once that is over, the objective shifts to find out how to improve the performance of the product. The last stage is when the company uses the research to understand where to take the product in the future. This helps the company to acquire a sense of direction and tells them whether they are on the right track. All well-known companies have made it this far by utilizing market research.
6 Reasons To Conduct A Market Research
1. To Test Your New Product
When you have a random group of customers, how would you verify and understand their needs? Conducting a market research helps you to conduct focus group discussions. You could collect data through various methods. You could conduct focus group discussions, interview customers and investors… This helps you to listen to what the customer has to say. You could even give a preliminary version of your product to verify its performance and how it is perceived.
2. To Examine The Size Of The Market
Once you have understood whether your product will be accepted or not, you could move on to the next stage. That is to decide the number of products you are going to roll out. You cannot produce an unlimited amount of products. Having an estimate of how many you need to produce can save your money and time and resources.
3. To Choose The Right Method
Now you know who wants to buy and how many they are. Now decide on the features that are going to be there on the product. How else will you be able to know whether you will be capable to carry out the demands? Focus groups can help you a lot here, in this stage. Run your ideas by them. And at the same time ask what they would pay for the product.
4. To Know Your Competitors
Having a clear idea about your competitors can give you an edge. The most recommended way to understand your competitors is to use their services. Examine their products, services, marketing techniques, pricing, location, etc.
5. To Measure Customer Satisfaction
One of the best ways to make a valuable conclusion is by conducting an evaluation. It requires the use of various data collection methods, for example by observing clients, interviewing them, administering questionnaires with them you get to collect first-hand information.
6. To Know Whether Your Marketing Worked
Conducting marketing research gives you an opportunity to conduct an evaluation of the advertising and promotion strategies too. Isn’t that alone reason enough to plan your market research?
Now that the ‘Why’ is covered, let us finally get into how a market research is conducted.
Market research can be split into two: Primary and Secondary.
While the primary research studies the customers directly, secondary research method studies the information that have been gathered by others about the customers.
Primary research can be conducted via telephone or online with random participants. Secondary research might leverage the reports that are found on various websites
Market research is further split into two varieties: primary and secondary. Primary research studies customers directly, whereas secondary research studies information that others have gathered about customers. Primary research might be telephone interviews or online polls with randomly selected members of the target group. You can also study your own sales records to gather primary research. Secondary research might come from reports found on the websites of various other organizations or blogs written about the industry. For your plan, you can use either type of research or a combination of both.
5 Steps To Conduct A Market Research
How to conduct a market research that is going to help you take information-driven decisions? If done the right way, a market research can help you in every step on the way. You will be able to predict your market’s future and to which side they are going to sway. Being able to foresee the trends and patterns that are going to hit the market, gives you an edge over your competitors. Now let us see how to conduct a market research in five steps the right way. The first three steps fall under primary research and the latter under secondary research.
Step #1: Outline Your Buyer Persona
Knowing your audience would help you to make better decisions for them. When you are rolling out a new product or finalizing the improvements to be made, it is essential to know the pulse of your audience. It would be impossible for you to ask each and every customer out there and to generate a product that suits each one of them. In such situations, buyer personas would come in handy. Buyer personas are generalized representations of your ideal customers. You should be creating the personas considering demographics such as age, gender etc. The concept is to have a guideline for you to visualize your target audience and to design apt strategy.
Step #2: Find Your Target Audience
After defining who your buyer personas are to be, it’s time to find a sample of your target audience. This would help you to absorb the real characteristics, the challenges they face and their buying patterns. The customers you have chosen is the key factors that decide how fruitful the entire process would turn out. Start with filtering people using the buying personas you have created. Start with the characteristics that apply to your buyer persona.
A mix of participants would help you to formulate a balanced and unbiased view. You should have people who have already bought and used your product, who have purchased the product from your competitor and also a bunch who have not decided on anything.
Usually, the so-called big-shot companies have panels of people they could utilize for their studies. Not all companies have that and honestly not many need that. For others, the easiest method is to ask your CRM system to pull a list of recent buyers and recruit them. You could also include customers who did not make a purchase in the last minute. Giving incentives to motivate your participants is also an option. Time is precious and as they are spending 30-45 minutes to help you with the study, it is totally justified.
Step #3: Prepare Your Research Questions
You have now got the handpicked people waiting to contribute to your study. It is extremely important for you to make the most of the opportunity. To make sure that you don’t miss out on anything and for using the time craftily, you should consider creating a discussion guide. You cannot treat this as a script you should abide by. It is just a framework of the questions you are going to ask along with the time allotted to each open-ended question.
Open-ended questions are the most valued golden question type when it comes to the question types. Asking yes or no questions might unintentionally sway their thoughts. It is not one-word answers we can rely on for developing deep insights. You need information to work on and to analyze.
Which Questions though?
The main areas that you need to brush upon are background information, their awareness about your products and company, and their decision making processes. Through questions, you can make a transition to re-account the purchase or interaction they have made recently. While asking questions about how aware they are of your brand using a Likert scale question type, you could also interject a few questions that would get you specific answers about how they realized their need and how they decided to deal with it.
For example, imagine you are a pet food brand. You could collect information about the phase where they decided to give store-bought pet food a shot. Ask what made them move on from homemade pet foods. It is in that answer that lies the potential for a new marketing strategy for your brand. Asking, where they went for further details, can give you a few ideas about new ways to reach your customers. Utilize these questions to identify the factors that come into play while decision making. Asking the right questions is the proper way to fetch the right answers. While you are at it, why don’t you find out how to identify the perfect market research tool for your purpose?
Step #4: Get to Know Your Primary Competitors
From here, the secondary market research begins. Competition is not always between two companies, it could be between certain products or divisions of the company. With whom does Apple compete with? Well, when it comes to mobiles, you could say it is with Samsung. But if we take Apple music, then the competitor is Spotify. To identify your competitors, consider the companies with products and services that overlap with yours. From reviewing your industry quadrants to reviewing market reports that are offered by many companies, you have many ways to identify your competitors. In today’s technology-driven world you could leverage social media or even better Google to pull out.
The better you know your competitors the better you can be prepared to counter their strategies. You would be able to generate a few devious strategies to retain your customers if you know the strengths and weaknesses of your competitor.
Step #5: Put Your Findings Together
The frightening heaps of data in front of you might look like it is about to swallow you up. It is quite natural to be overwhelmed with all the notes at the end of the study and might put you off. Having well-defined objectives and tailored questions can curtail the amount of irrelevant data to a large extent. Even then the data might look like they are spread everywhere. To make this process easier, you can rely on presentation software to help you to construct a rich and distinct summary with an excellent action plan to effectively reach out to the entire target audience.
‘How to conduct a market research?‘ is not a question that we can answer in one word. It requires tremendous focus and persistence to see it through. If you think you know your buyers, conduct a market research. It can be an eye-opening experience. You will be able to uncover new mediums and ideas to better your relationship with your customers. Market research can help you to adopt a more people-based approach.
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