The 4 Types of Market Research
- Branding, Digital Marketing, Market Research
- Branding, Digital Marketing, Market Research
- October 12, 2018
What is market research?
Market research involves gathering information about your competitors, your industry, and (most importantly) your customers. This is done to help you predict the 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 gives your customers a deeper feeling of connection to your content, encouraging them to engage with it more. This leads to earned media, a kind of free marketing where customers share your content because they enjoy it.
Market research can be broken down into four subcategories. We highly encourage you to look into these before 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 their benefits to your marketing strategy. Building a strategy with these principles as your research framework will greatly improve your chance of success in new markets.
All About Building a Friendship
Market research can be thought of as the mental note-taking involved when you build a new friendship. To illustrate the benefit of market research, picture meeting a stranger for the first time. Do you start out talking about broader topics, getting more specific as you learn of similar interests? 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. Market research is about building loyalty and trust with your audience by creating a brand personality that aligns with their interests. 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 example of the importance of cultural research is when Snapple failed to market to the Japanese population. They assumed that they could use the same marketing strategy in North America and Asia, ignoring the feedback of Japanese consumers. This led to dismal sales.
Adapt Campaigns for Other Cultures
If you are expanding your company globally, it is crucial that you study how other cultures might view your company. Cultural and social influences can impact what is okay to talk about or 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. A product that you offer may not even be useful to them until you customize it to suit their circumstances. Knowing what they are interested in buying is 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 lacked a multicultural perspective. 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 technological breakthroughs, changes in consumer behaviour, and changes in the market that may impact your industry. So, how can industry trend research help with your marketing strategy? It puts you in a position to take advantage of new trends. For example, when ecommerce company Amazon noticed the trend of movie streaming services and launched the 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 divide their time between them or switch altogether. For example, perhaps your target audience has moved from using Facebook to Twitter. Knowing where your audience is spending their time can help your online marketing 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. If you can be the first to offer a new trending product, that gives you a huge advantage over your competitors.
Plan Marketing Efforts
As industry trend changes, so should your marketing campaigns. Even very successful marketing campaigns may not work a second time. Things constantly go in and 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, Instagram and Twitter. Each pivoted their product positioning following competitive research and this likely fueled their success.
Identify Communication Strategies
Study how your competitors talk to their customers on social media, their website, and in response to customer reviews. These things provide insight into their communication strategy. Make a note of where their communication style is working and what needs improvement. Applying that information correctly will help you become 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 local product 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 in the market to provide what your customers need, you will have a competitive advantage. 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 used to determine the size, composition, and characteristics of your target audience for use in your marketing strategies.
Why is audience research important? Let’s take the case study of luxury jewelry brand Cartier. Recently, Cartier saw a 2X return on their ad expense compared with past campaigns in a Valentine’s Day Facebook Ad. This was 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. 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 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. How do you estimate this venture’s success? You research the number of families with kids in the area who are interested in yoga, which 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-types 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 digital marketing plan, we listen. Whether marketing in Edmonton or abroad, telling your brand’s story begins with knowing it inside and out.
Has market research caused you to pivot your business or marketing strategy? Our team at Lean Marketing wants to hear from you!