Market research is an essential approach to learning from customers and other market players. It is crucial not only for this section dedicated to customers but also for all other aspects of the product mix, product/solution offering, positioning, distribution, and communication/promotion.
Effective market research combines customer insights, competitive analysis, and benchmarking with industry trends to guide business decisions.
In this chapter, we propose several recommendations that can significantly contribute. These recommendations are not focused on the direct methods of conducting market research but rather on understanding the “why” behind it.
Clarifying the “why” is, in fact, the best approach to successfully address marketing initiatives. It determines the potential for success, ensuring that objectives are clearly defined and achievable.
In essence, having a clear “why” acts as a compass for the solitary captain on a boat. It provides guidance and proves invaluable when decisions need to be made.
Market research, whether primary or secondary, owned by by own compagny or shared, should be viewed as an investment.
This means evaluating the return on investment (ROI), considering cost, time, and the quality of customer insights obtained. What gains can be derived from well-conducted market research? By answering these questions, you create a foundation for impactful studies, gaining support from your management organization. Moreover, you enhance the ability of your marketing team to prioritize relevant research studies.
The foremost objective is to establish why a market study is necessary. What specific business need is at stake? This question must be clearly articulated and shared with all participants.
A well-defined objective serves as a reference for all involved parties, ensuring that the market research study is organized to address business needs. It acts as a unifying force, preventing diverging forces from influencing the project.
Without a clearly defined objective, projects tend to deviate, with participants entertaining multiple considerations. Management may assume larger expectations for the project, and the budget becomes bound to varying deliverables. Such projects are often challenging to manage, and the budget may prove insufficient. Even if exceptional results are achieved within the original timeframe and budget, there remains a sense of unaccomplished mission if new objectives are introduced.
For a successful project, solidify the question, ensuring objectives are validated by management and project leaders. Stay aligned with the initial target and secure ongoing support from management.
In a market research project, several individuals may be involved, but it’s crucial to have one individual in charge of the project.
Familiarize yourself with the RACI approach and ensure its clarity to all team members.
Accountability must not be shared; only one person should be accountable for project success. If you identify multiple accountable persons, they become responsible persons, and one individual among them becomes the accountable person for the project. If determining accountability is challenging, refer to the management hierarchy and identify the person involved across those individuals. This person, not deeply involved in project details, is the ultimate owner and responsible party for project success.
In essence, ensure there’s a singular captain steering the project, avoiding multiple leaders.
It is imperative to clearly define the scope of the market study for effective answers within the intended domain and market.
Without a defined scope, key stakeholders may propose expansions to other markets and segments, significantly jeopardizing project objectives, including cost and timeline.
If the scope is subject to change, consider structuring the project in phases. This phased approach enables the evaluation of market study performance and allows for potential improvements in subsequent phases.
A clear budget and timeline are essential for launching a market study project. These components work hand in hand, prompting market study companies to identify the means and techniques for achieving your objectives and presenting trade-offs. Well-defined objectives, scope, management team, budget, and timeline provide clarity on the approach and deliverables, critical factors for securing approval on budget, scope, and objectives from sponsors. A project with these well-defined elements is crucial for achieving success.
Various methods exist for market studies, ranging from qualitative to quantitative.
An insightful article on market research, available on Wikipedia (https://en.wikipedia.org/wiki/Market_research), provides a useful overview.
Additionally, distinctions between qualitative (https://en.wikipedia.org/wiki/Qualitative_research) and quantitative studies (https://en.wikipedia.org/wiki/Quantitative_research) are explored.
For a comprehensive understanding of different approaches, this article (https://www.qualtrics.com/experience-management/research/market-research-types/) lists and compares them. Depending on objectives, techniques can include interviews, focus groups, NPS approaches for qualitative insights, and conjoint studies for quantitative analysis.
Survey design, sampling methodology, and representative samples are critical to ensure data validity and avoid bias in both qualitative and quantitative research.
Leveraging available sources and resources is crucial. Some technical approaches are cost-effective, requiring fewer resources and benefiting from widely available sources, resulting in lower overall costs.
Market research often includes loyalty metrics such as the Net Promoter Score (NPS).
Clear market research insights help refine customer personae, ensuring they represent real behaviors and attitudes.
External market research often complements structured tools like PESTLE analysis for a full market view.
Secondary research, like market share or product utilization data, is often more cost-effective as it can be shared among multiple companies. This type of data is challenging for individual companies to gather and is typically inaccurate when estimated from CRM systems.
Primary research is dedicated to essential market decisions, such as product positioning, technology investments, and optimizing the market distribution funnel.
There are no limitations to techniques for an in-house study, but certain methods may prove more effective when executed by external companies. External firms bring experience, unbiased personnel, and the ability to visit customers without disclosing ties to your company. This can result in less biased feedback compared to an internally conducted study. For instance, a focus group facilitated by an external company typically provides more relevant and neutral feedback compared to an internally conducted group, resembling more of a user group meeting.
In markets where public customers are involved, conducting a market study with them may pose potential issues, as any direct or indirect interaction with public tenders is often not tolerated. Caution is advised to avoid interference with public tenders, which could lead to long-term exclusion from the public market.
External research firms also provide benchmarking against industry peers and access to trend analysis that in-house teams may not easily achieve.
While creating an in-house market study, consider various options and methods for success. The effectiveness of your study relies on crucial elements outlined in this chapter:
Of course, techniques should be tailored to the market study to ensure deliverables meet identified objectives.
To strengthen results, use dashboards and reporting tools to disseminate findings across the organization, ensuring customer insights inform strategic decisions.
Effective research provides the foundation for customer segmentation design, supporting precise market targeting.
Numerous valuable tips and recommendations for market research can be found online. Here are some noteworthy resources.
Indeed offers a comprehensive view of market research approaches, serving as an excellent introduction to various techniques:
Methods of Market Research https://www.indeed.com/career-advice/career-development/methods-of-market-research
Guide to conducting Market Research https://www.indeed.com/career-advice/career-development/market-research
Explore multiple recommendations for successful market research on the web. Consult external agencies for their insights on how to best allocate your marketing budget. Assess various options for running in-house market research to effectively address your key needs.
Market research studies are crucial for gaining an external focus and a deep understanding of the market environment. The success of market studies hinges on having a clear, well-defined project with an identified project team and distinct objectives and deliverables. The “why” is critical in ensuring projects are grounded.
Strong market research combines customer insights, Voice of Customer (VOC), benchmarking, and emerging trend analysis to give companies a forward-looking view.
Consider all technical approaches, whether in-house or outsourced, to determine the optimal strategy for your market study. Market research is an investment in people, time, and money, requiring prioritization and funding for successful outcomes.
Ultimately, market research is a powerful tool for resolving business challenges. Understanding and qualifying the needs for market research projects and their associated resources is the best approach to ensure projects are completed to the full satisfaction of all.
Customer insights derived from market research are at the core of value creation and long-term business growth.
Research clarifies how customers perceive benefits, directly shaping solution perceived value.
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Successful market research projects are those that not only meet their objectives but often exceed them. Crucially, only projects with clearly defined objectives can achieve this level of success.
To ensure clarity and alignment, engage teams early on—using tools such as stakeholder analysis—to define the project’s scope and objectives. Regularly report on project progress to keep expectations aligned and to reinforce the project’s goals over time.
Consider using the “value ladder” approach to consolidate and prioritize needs for a market research project. A practical method is to hold a post-it session—similar to the frame in/out exercise—where the “frame” is replaced by the “value ladder” on the board. During this session, encourage the team to propose “Why” post-its as a priority, while also welcoming “What” and “How” post-its to illustrate their reasoning.
This exercise is highly beneficial, as it encourages teams to share their perspectives on why a market research project should be initiated. An additional benefit is that it helps teams distinguish between the “why,” “what,” and “how” questions. Since the focus is on the “why,” avoid treating the “what” and “how” suggestions as a comprehensive list of techniques. Plan a separate round of discussions—possibly using the same frame in/out format—to address the “what” and “how” in greater detail.
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