What is a market study? Advantages, types, examples and how to make one

Talking about the market and its study means addressing different aspects, from the economic to the social.

The results derived from these studies are defined based on the encounter they have with individuals or legal entities that demand or offer services and goods .

Also, this study takes place in particular spaces or environments, not necessarily in businesses or commercial facilities.

In order to understand the components of market research and its usefulness in marketing, it is necessary to learn and analyze its concepts, elements and variables.

If you want to discover why a market study is important for your company or organization, this article is for you. Continue reading all the content we have for you.

What is a market study?

Market research, also known as “market research,” is a marketing tool whose main purpose is to evaluate the viability of a new product or service among consumers . This type of research helps organizations, companies, or brands understand and examine the market associated with their product or service.

In other words, market research is used to find out how the audience will react to a new product or service.

Similarly, market research turns out to be an excellent marketing information system, since the data needed can be managed and consulted whenever desired.

Similarly, market research often serves to assess the needs and potential tastes of customers, which are analyzed and evaluated in order to later design the product.

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Characteristics of market research

Some of the most important characteristics of a market study are:

• It is based on rigorous and logical methods to collect and process data.
• It focuses on a specific issue or opportunity that you want to solve or exploit.
• Both direct information (obtained first-hand from customers or the market) and indirect information (obtained from external sources such as statistics, reports, etc.) are used.
• Both numerical techniques (such as surveys, experiments, etc.) and qualitative techniques (such as interviews, observation, etc.) are used to obtain a complete view of the market.
• It is carried out with a representative sample of the target market, that is, a group of people who have characteristics similar to those of the public you want to reach.
• It is presented in a document containing the objectives, methodology, results, conclusions and recommendations of the study.

Objectives of a market study

Generally speaking, a market study aims to identify the market (redundancy intended) and everything that it entails.

Therefore, it positions as objectives to identify and study the internal and external variables that have an impact on the future or probable release of a product or service. Some of the most common elements that the market study seeks to investigate are:

• Customers.
• Marketing.
• Competence.
• Political and legal conditions.
• Consumption.
• Demand.
• Tastes.
• Offer.
• Price.
• Preferences.
• Technologies.
• Consumer trends.

However, in order to have this type of information, it is necessary to establish objectives that guide the study and research work.

In this sense, formal studies (with support) must be carried out through research, which involves design, obtaining, analyzing and communicating data and results. The general objectives of a market study are:

• Measuring potential markets.
• Analysis of specific market environments or niches .
• Short, medium and long term forecasts.
• Testing of similar products existing on the market.

We must not forget that there are other types of purposes related to administrative, social and economic aspects. It is important to satisfy all the areas that are decisive for the correct reception of a product or service in the market.

Why is market research important?

Market research is important because it allows you to achieve customer satisfaction and prevent customer churn in the future , as well as boost business growth.

There are also other reasons why conducting market research is important, including the following:

Competitive advantage

Market research helps you stay ahead of your competitors . It is a practical tool that helps you carry out comparative studies and identify existing advantages and disadvantages, allowing you to take advantage of them or fix them, as the case may be.

Customer-centric

It works as an excellent resource for determining what customers want and need. In other words, you gain valuable information that can then be used to create innovative marketing strategies .

Forecast generation

The information and data retrieved from a market study allows you to understand customer needs, making it easier to forecast the production and sales of a product or service. More specifically, market research is vital to determining the optimal inventory stock.

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Obtaining valuable information

Although implicit in its implementation, this information generates opportunities regarding the value of existing or new products or services. In addition to this, it works as an excellent element for developing and planning strategies.

Types of market research

In any field where research is required, (understood as a process) will have different aspects and methods of carrying it out. Likewise, and depending on the methods and tools used, the following types of market research can be identified:

Primary market research

This is a combination of qualitative and quantitative research. In general terms, it is understood as the process in which companies, organizations or brands get in touch with those who would be their “final consumers” in order to carry out a series of important studies to collect data and information. The data can be qualitative and quantitative.

The main methods for carrying out this type of research are:

Focus groups

It is understood as a small group of people who respond to surveys that are given to them. It is one of the most popular and most well-received methods, since the information is collected remotely without personal interaction.

Individual interviews

Also known as " one-to-one " interviews, they are nothing more than personal interviews (mostly in person) with respondents. This action facilitates having much greater freedom to collect information.

Ethnographic research

This method requires the interviewer to adapt to the respondents' environment. They are not as widely used in the marketing field, as they can last from just a few days to a few years.

Secondary market research

While primary research requires obtaining information directly from users or respondents, secondary market research retrieves data and information from external sources, such as:

• Government agencies.
• Non-governmental agencies.
• Media.
• Chambers of Commerce.
• Company websites.

In general, secondary market research has as its main research sites public, commercial and educational sources.

The work carried out in this type of study is inclined towards searching, collecting and interpreting information.

Benefits of market research

Although the main benefit of a well-conducted market study is to gain an advantage over the competition, there are other benefits that can enhance strategies and predict excellent scenarios for any action that the organization or company wishes to take.

Among the main benefits of an efficient market study are:

• Making informed decisions.
• Ability to determine the size of a market and improve profits.
• Knowing the preferences, tastes, inclinations and trends among customers.
• Study the communication methods you have with the client.
• Obtain accurate and up-to-date information.
• Choose an appropriate and optimal sales channel.
• Collecting data and details about customer perception of our brand .
• Promote productive business investment.

3 tips for conducting an efficient market study

There are different methodologies for carrying out an optimal market study or research. In fact, there are different guides on how to carry out good research, some even supported by different academic entities. However, having the potential to carry out an efficient market study is different.

Below, we will present the best tips to make your market research a totally efficient method.

Define the objectives of the research

Any research has no substance or support if it does not have established objectives. It is important to remember that objectives must be realistic and achievable.

Therefore, it is important to look for objectives that you want to achieve. What do you want to achieve? Increase traffic? Maybe find out what customers in the business sector to which your future product or service belongs think and expect.

Objectives are a key element for having an excellent development of research and information processing.

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Know and study the competition

The market is huge, and with it, companies spring up one after another without respite. It is important to know the experience offered by the competition. Why is this important? Easy, as a business experiences the environment of another business as a customer, it is easier to identify elements that are being implemented incorrectly.

Learning from customers and users

Knowing and researching your customers has many advantages. For example, when conducting market research, you can understand what kind of language your customers and users use, which can be used to your advantage to create material and content that appeals to their personality.

In other words, when we take the time to get to know our customers, it is easier to define our target customers, which makes it much easier to find the best products and services to sell to them.

Example of a market study

Imagine that you want to open a clothing store in your city and you want to know if your idea is successful. To do this, you could do a market study that will allow you to know:

• Who are your potential customers, what characteristics do they have, what needs and preferences do they have, how do they behave and where are they located?
• Who are your competitors, what products or services they offer, how they differ from you, what advantages and disadvantages they have and how they position themselves in the market.
• What is the market size and growth, what trends and opportunities exist, what external factors may affect the market and how it is expected to evolve in the future.
• What is the best way to design, promote and distribute your product or service, what price to set, what communication and sales channels to use and what strategies to follow to achieve your objectives.

To obtain this information, you could use different sources and methods, such as:

• Search for statistical data, reports, studies or news about the fashion sector, consumption, population, etc. These would be examples of secondary information.
• Conducting surveys, interviews, observations or tests on a group of people who represent your target market. These would be examples of primary data.
• Apply mathematical, statistical or graphical techniques to analyse data and draw conclusions. These would be examples of quantitative techniques.
• Applying creative, interpretive or narrative techniques to understand customers' meanings and emotions. These would be examples of qualitative techniques.

Finally, you could present the results of your market research in a document containing the following sections:

• Introduction: where you explain the purpose, objectives and scope of the study.
• Methodology: where you describe the sources, methods and techniques you used to collect and analyze the data.
• Results: where you show the data obtained and organize it in tables, graphs or images.
• Conclusions: where you summarize the most important findings and answer the questions posed in the objectives.
• Recommendations: where you propose actions or solutions based on the conclusions.

Conclusion

An excellent information and research system, such as market research, serves to collect data and elements that organizations like to have, since it is information that they need and can manage to keep their services or products within the life cycle.

Market research helps to identify the business environment in order to understand all the factors that influence customers' decisions to purchase a product or service.

Written by Moises Hamui Abadi : I am an entrepreneur, founding partner of Viceversa and SoyMacho. After leading several digital businesses and advising several other businesses, I decided to form MHA Consulting, a digital marketing consultancy dedicated to growing and empowering digital businesses in more than 7 countries and generating more than 1,500 million pesos.

If you want more information on this topic or are looking for other options to profile your ideal client, at MHA you will find the solution you need. Schedule a call