Is Your Business Doing Effective Market Research?
Components of Meaningful Market Research
Market research is the practice of gathering and analyzing information about consumers, businesses, and the commercial marketplace. Market research is used to create business plans, launch new products or services, refine existing products or services, analyze competitors, and expand into new markets. Businesses use market research to determine how many consumers will purchase a product or service, who those consumers are, and how to advertise to those consumers.
Primary market research is the practice of collecting information from the marketplace through surveys, focus groups, panels, or other methods designed to elicit information. Secondary market research is compiling research conducted by other sources to apply to an industry or business issue. Both primary research and secondary research can provide very effective insights to help guide business development. In fact, some market research is a blend of both methods or integration of data gathered from both methods.
Some important informational components in market research that help analyze the consumer population include:
- Opinions and Attitudes
Each of these informational components provides great value when analyzing consumers to help plan a marketing campaign for your business.
Demographics are characteristics of individuals, families, and population groups within particular areas. Gender, age, income, race, ethnicity, education, etc. are all demographics. Just as population groups' demographic measures are vital for the planning of societies, demographics of consumer groups are also vital for the planning of successful businesses and industries. Consumer demographics help business planners understand who consumes particular products and services and assess the market potential of new products and services.
Informing consumers of your product or service is critical to bringing in customers and driving revenue for your business. Therefore, knowing how to reach consumers is an important component in the research, you should be executing to plan your marketing campaigns.
Advertising-supported media such as broadcast television, newspaper, cable TV, radio, internet, etc. can effectively get your business' message in front of consumers. In fact, that's what most media is all about. But before you go out and spend your marketing budget on advertising, make sure you know which media options will be more effective at reaching the type of consumers that will buy from you -- your target customers.
Opinions and Attitudes
Opinion and attitude research helps businesses and their advertising agencies explore the mindset of the consumer. Insight on consumer opinions and attitudes often guide the creative "look" and "feel" of advertisements as well as the marketing message in advertisements.
The primary aim of market research is to help predict consumer behaviors. Market research strives to estimate whether a consumer will shop at a particular store or buy a particular brand and determine what will motivate a consumer's purchasing behavior. While demographics, opinions, and media consumption are useful insights that help put consumer behavior in context, the best predictor of behavior is the behavior itself. That is to say, understanding a consumer group's past purchasing behavior is the best way to predict future purchasing behavior.
Geographic research is especially important for local businesses. With a limited distribution footprint or trade area and typically a limited marketing budget to match, local businesses need information about where their customers are and where to find more customers. With the need for geographic insight increasing, the market research industry invests heavily in developing solutions that will deliver effective consumer insights down to the ZIP code, block group, or even household level with targeted direct marketing lists.
Source: Saylor Academy
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