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 economic to social.
The results derived from these studies are defined based on the encounter they have with the natural or legal persons who demand or offer services and goods.
Likewise, this study takes place in particular spaces or environments, not necessarily in businesses or commercial facilities.
In order to know the components of market research and its usefulness in the practice of 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 instrument 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 know what the audience's reaction will be 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.
In the same way, many times the market study serves to consult the potential needs and tastes of customers, which are analyzed and evaluated to then design the product.
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Characteristics of the market study
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 clients or the market) and indirect information (obtained from outside 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 that contains the objectives, methodology, results, conclusions and recommendations of the study.
Objectives of a market study
In general, a market study aims to recognize the market (pardon the redundancy) and everything it implies.
Therefore, its purposes are to identify and study the internal and external variables that have an impact on the future or probable output of a product or service. Some of the most common elements that the market study seeks to investigate are:
- Political and legal conditions.
- 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 must be carried out (with support) through research, which implies design, obtaining, analysis and communication of data and results. The general objectives of a market study are:
- Measurement of potential markets.
- Analysis of specific market environments or niches .
- Short, medium and long term forecasts.
- Testing of similar products on the market.
We must not leave aside that there are other types of purposes related to administrative, social and economic aspects. It is important to satisfy all the items 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 avoid customer turnover in the future , as well as enhance business growth.
Likewise, there are other reasons why carrying out a market study is important, among which we can find the following:
Market research helps you stay ahead of your competitors . It is a practical tool that helps carry out comparative studies and denote advantages and disadvantages that exist, allowing them to be used or fixed, as the case may be.
It works as an excellent resource for determining what customers want and need. In other words, valuable information is obtained that can then be used to create new marketing strategies .
The information and data recovered from a market study allows us 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 determine the optimal inventory stock.
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Obtaining valuable information
Although implicit in its realization, this information generates opportunities about 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 that is required, research (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
It is a combination of qualitative and quantitative research. In general terms, it is understood as the process in which companies, organizations or brands come into contact with those who would be their "end consumers", this to carry out a series of important studies to collect data and information. Data can be qualitative and quantitative.
The main methods to carry out this type of research are:
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 widely received methods, since the information is collected remotely without interacting in person.
Also known as " one-to-one " interviews, they are nothing more than personal interviews (mostly physical or in-person) with respondents. This action makes it easier to have much greater freedom in collecting information.
This method requires the interviewer to adapt to the respondents' environment. They are not so used in the field of marketing, since 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 interviewees, secondary market research recovers data and information from external sources, such as:
- Governmental agencies.
- Non-governmental agencies.
- Chambers of Commerce.
- Company websites.
In general, secondary market research has public, commercial and educational sources as its main research sites.
The work carried out in this type of study leans 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 forecast excellent outlooks for any action that the organization or company wishes to take. Among the main benefits of an efficient market study are:
- Making well-informed decisions.
- Ability to determine the size of a market and improve profits.
- Know the preferences, tastes, inclinations and trends among clients.
- Study the methods of communication with the client.
- Obtain accurate and updated information.
- Choose an appropriate and optimal sales channel.
- Compilation of data and details on customer perception of our brand .
- Promote productive business investment.
3 tips to do an efficient market study
There are different methodologies to carry out an optimal market study or research. In fact, there are different guides on how to conduct good research, some even supported by different academic entities. However, it is different to have the potential to do an efficient market study in your hands.
Next, we will present you the best tips to make your market research a totally efficient method.
Define the objectives of the research
Any research has no essence or substance if it does not have established objectives. It is important to remember that goals 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 the clients of the commercial sector to which our future product or service belongs think and expect.
The objectives are a key piece to have an excellent development of research and information processing.
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Know and study the competition
The market is enormous, and with it, companies emerge 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 in the wrong way.
Learn from customers and users
Knowing and researching the client has many advantages. For example, during market research, it is possible to understand what type of language customers and users use, a phenomenon that can be used to our advantage to create material and content that appeals to their way of being.
In other words, when we take the time to get to know customers, the easier it is to define target customers, so it will be 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 allows you to know:
- Who your potential customers are, what characteristics they have, what needs and preferences they have, how they behave and where they are 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 are positioned in the market.
- What is the size and growth of the market, 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 it, 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.
- Conduct surveys, interviews, observations or tests on a group of people who represent your target market. These would be examples of primary information.
- Apply mathematical, statistical or graphic techniques to analyze data and draw conclusions. These would be examples of quantitative techniques.
- Apply creative, interpretive or narrative techniques to understand clients' meanings and emotions. These would be examples of qualitative techniques.
Finally, you could present the results of your market study in a document that contains 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.
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 maintain their services or services within the life cycle. products.
Market research favors the recognition of the commercial environment, in order to know all the factors that influence customers' decision 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 enhancing 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