The 4 Types of Market Research
What is market research?
Market research involves gathering information about your competitors, your industry, and (most importantly) your customers so you can predict their future needs and understand the size, characteristics, and composition of your audience. This information can then be used to tailor your core messaging to that subgroup of the population.
Personalized content drives more sales because it resonates with your customer on a deeper level, causing them to engage more with your online content and leading to earned media—a kind a free marketing where consumers share your content because they like your brand personality and care about what you have to say.
Market research can be further broken down into four subcategories of research, all of which you should conducted prior to developing your marketing strategy.
4 Types of Market Research:
- Cultural Research
- Industry Trend Research
- Competitive Research
- Audience Research
In this article you will learn about the four sub-types of cultural research and how each type of research will help you build and refine your marketing strategy. Market research can be though of as the mental note-taking involved when you build a new friendship.
All About Building a Friendship
To illustrate the benefit of market research, picture meeting a stranger for the first time. What do you talk about? Do you start out with broader topics, getting more specific as you learn of similar interests? While some people you first meet you may never run into again, others you keep bumping into become acquaintances. In cases where you share common interests and likes, these relationships may develop into friendships. Essentially this is the role of market research for marketing. While simply putting marketing materials out there may build brand visibility, or “acquaintances”, getting repeat customers requires relationship building. It’s about creating a brand personality that so strongly aligns with your audience’s values and interests that they feel loyalty and trust towards your brand. When it comes down to it, market research is about knowing your target audience as well as you know your friends.
1. Cultural Research
Cultural research involves studying the impact of culture on individual experiences, everyday life, social relations, and power. So, why is cultural research necessary before creating a marketing strategy? A good case example of why it is important is when Snapple failed to market to a Japanese population because they simply assumed they could use the same marketing strategy tat lead to their success in North America.
Adapt Campaigns for Other Cultures
If you are expanding your company globally, it is crucial that you study how cultural influences may impact how people view your company. Cultural and social influences can impact what it is okay to talk about and influences what people may find attractive in a product.
Refine Product Positioning & Offer
People from different social environment may see a different benefit to the products you offer. Or maybe the product you offer isn’t currently useful, but would be interested in buying a related product that you must develop. Knowing what people from another culture are interested in buying and what they find to be good selling features are crucial to how you position your products in a new marketplace.
Prevent Political Misconceptions
Some brands have seen backlash over things that they posted online because they failed to look at it from multiple cultural perspectives. Doing cultural research can make sure your messages are not offensive to people of different cultural backgrounds.
2. Industry Trend Research
Industry trend research considers factors such as technological breakthroughs, changes in consumer behaviour, and changes in the market that may impact upon your industry. So, how can industry trend research help with your marketing strategy? A great case example is when ecommerce company Amazon noticed the trend of movie streaming services and launched its own Amazon Prime Instant Video service.
Identify Communication Style & Medium
Knowing what platforms your target customers are using is important for determining where you should be spending your time marketing. As new social networks are created, some audiences may spend less time on a social network they used to frequent, opting for a newer social platform instead. For example, perhaps your target audience has moved from using Facebook to Twitter. Knowing where your audience is spending there time can help you be present on the right channels.
Identify Market Opportunities
Knowing emerging trends can help you anticipate what products your customers may want in a year’s time. Being first to offer a new trending product can help you be one step ahead of your competitors who are stuck selling more dated products.
Plan Marketing Efforts
As industry trend changes, so should your marketing campaigns. Even very successful marketing campaigns may not work a second time if you are sharing something that has gone out of style. For example, perhaps sharing quizzes was very popular three years ago but now sharing videos is the way to go.
3. Competitive Research
Competitive research involves knowing your competitors’ products, messaging, and business positioning. This information can then be used to develop a communication and engagement strategy as well as to identify market gaps. Why is competitive research important? Just look at major social platforms, Facebook and Twitter.Twitter and Instagram, pivoted their product positioning following competitive research and this likely fueled their success.
Identify Communication Strategies
Study how your competitors talk to their customers online – on social media, their website, and in response to customer reviews – to learn their communication strategy. Make a note of where their communication style is working and also what needs improvement, so you can be more engaging than your competition.
Identify Customer Needs
Is there a product your competitor sells that their customers aren’t fully happy with? Perhaps there is an issue your customers are facing and there isn’t a product on the market that will serve their need. In this way, you can meet a need of your customer that isn’t being addressed by your competition.
Identify Market Gaps
By knowing what products your competitors are selling you can identify market gaps. Market gaps exist when your customers have a need not being met by your competition. If you are first to the market with the new product or service that your customers need you will have a competitive advantage because you are offering something that your competition can not provide.
Refine Product Positioning
Product positioning is the way you communicate your products’ attributes with a carefully crafted core messaging. Your core messaging should highlight how you stand out from your competition, also called your unique value proposition.
4. Audience Research
Audience research involves learning about the demographic, psychographic and behavioural makeup of your audience. This information is uses to determine the size, composition, and characteristics of your target audience for use in your marketing strategies and campaigns. Why is audience research important? Let’s take the case study of luxury jewelry brand Cartier. Cartier saw a 2X return on their ad spend compared with past campaigns in a Valentine’s Day Facebook Ad because the ad only targeted people with related interests, such as jewelry, art, and fashion.
Market research involves analyzing three main market segments based on: demographic data, psychographic data and behavioural data. All three should guide your approach, as each provides a different side of your audience.
Demographic data includes the hard facts about your target customers and it is the first level of understanding who your target customers are.
- Marital Status
- Social Aspects
Psychographic data involves know what your customer’s thoughts, feelings, and beliefs and how it shapes their personality and lifestyle.
- Life Goals
- Musical Tastes
Behavioural Data: involves studying how your target customer interacts with your website, social media, and products.
- Website Navigation on your site
- Interaction on social media
- Other online actions
- Product use
- Product Adoption
- Retail expectations
- Product testing
Community density is defined as a measure of how concentrated the relationships and conversations are within a community and area of interest. For example, let’s say you own a yoga studio and you are interested in starting a kid’s yoga class. In order to know whether enough people will sign up you will have to research the number of families with kids in the area who are interested in yoga. In this example, the level of interest in kids’ yoga is the community density.
When it comes to marketing, your strategy should always begin with your customer. Getting to know your target customers on a very personal level occurs during the Initiate Phase of marketing. The initiate Phase of marketing research involves a good deal of market research. Market research can be broken down into four sub-tapes of research: cultural, industry trend, competitive, and audience. at the base level, market research is an exercise in relationship building. Following market research, you will know how to engage with your target audience in a way that resonates. This will lead to more likes, shares, followers, and customers.
Lean Marketing Research
At Lean Marketing, before strategizing your marketing plan, we listen. Telling your brand’s story begins with knowing your brand inside and out.