How to Do Market Research: The Complete Guide

Learn how to do market research with this step-by-step guide, complete with templates, tools and real-world examples.

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What are your customers’ needs? How does your product compare to the competition? What are the emerging trends and opportunities in your industry? If these questions keep you up at night, it’s time to conduct market research.

Market research plays a pivotal role in your ability to stay competitive and relevant, helping you anticipate shifts in consumer behavior and industry dynamics. It involves gathering these insights using a wide range of techniques, from surveys and interviews to data analysis and observational studies.

In this guide, we’ll explore why market research is crucial, the various types of market research, the methods used in data collection, and how to effectively conduct market research to drive informed decision-making and success.

What is market research?

Market research is the systematic process of gathering, analyzing and interpreting information about a specific market or industry. The purpose of market research is to offer valuable insight into the preferences and behaviors of your target audience, and anticipate shifts in market trends and the competitive landscape. This information helps you make data-driven decisions, develop effective strategies for your business, and maximize your chances of long-term growth.

Business intelligence insight graphic with hand showing a lightbulb with $ sign in it

Why is market research important? 

By understanding the significance of market research, you can make sure you’re asking the right questions and using the process to your advantage. Some of the benefits of market research include:

  • Informed decision-making: Market research provides you with the data and insights you need to make smart decisions for your business. It helps you identify opportunities, assess risks and tailor your strategies to meet the demands of the market. Without market research, decisions are often based on assumptions or guesswork, leading to costly mistakes.
  • Customer-centric approach: A cornerstone of market research involves developing a deep understanding of customer needs and preferences. This gives you valuable insights into your target audience, helping you develop products, services and marketing campaigns that resonate with your customers.
  • Competitive advantage: By conducting market research, you’ll gain a competitive edge. You’ll be able to identify gaps in the market, analyze competitor strengths and weaknesses, and position your business strategically. This enables you to create unique value propositions, differentiate yourself from competitors, and seize opportunities that others may overlook.
  • Risk mitigation: Market research helps you anticipate market shifts and potential challenges. By identifying threats early, you can proactively adjust their strategies to mitigate risks and respond effectively to changing circumstances. This proactive approach is particularly valuable in volatile industries.
  • Resource optimization: Conducting market research allows organizations to allocate their time, money and resources more efficiently. It ensures that investments are made in areas with the highest potential return on investment, reducing wasted resources and improving overall business performance.
  • Adaptation to market trends: Markets evolve rapidly, driven by technological advancements, cultural shifts and changing consumer attitudes. Market research ensures that you stay ahead of these trends and adapt your offerings accordingly so you can avoid becoming obsolete. 

As you can see, market research empowers businesses to make data-driven decisions, cater to customer needs, outperform competitors, mitigate risks, optimize resources and stay agile in a dynamic marketplace. These benefits make it a huge industry; the global market research services market is expected to grow from $76.37 billion in 2021 to $108.57 billion in 2026 . Now, let’s dig into the different types of market research that can help you achieve these benefits.

Types of market research 

  • Qualitative research
  • Quantitative research
  • Exploratory research
  • Descriptive research
  • Causal research
  • Cross-sectional research
  • Longitudinal research

Despite its advantages, 23% of organizations don’t have a clear market research strategy. Part of developing a strategy involves choosing the right type of market research for your business goals. The most commonly used approaches include:

1. Qualitative research

Qualitative research focuses on understanding the underlying motivations, attitudes and perceptions of individuals or groups. It is typically conducted through techniques like in-depth interviews, focus groups and content analysis — methods we’ll discuss further in the sections below. Qualitative research provides rich, nuanced insights that can inform product development, marketing strategies and brand positioning.

2. Quantitative research

Quantitative research, in contrast to qualitative research, involves the collection and analysis of numerical data, often through surveys, experiments and structured questionnaires. This approach allows for statistical analysis and the measurement of trends, making it suitable for large-scale market studies and hypothesis testing. While it’s worthwhile using a mix of qualitative and quantitative research, most businesses prioritize the latter because it is scientific, measurable and easily replicated across different experiments.

3. Exploratory research

Whether you’re conducting qualitative or quantitative research or a mix of both, exploratory research is often the first step. Its primary goal is to help you understand a market or problem so you can gain insights and identify potential issues or opportunities. This type of market research is less structured and is typically conducted through open-ended interviews, focus groups or secondary data analysis. Exploratory research is valuable when entering new markets or exploring new product ideas.

4. Descriptive research

As its name implies, descriptive research seeks to describe a market, population or phenomenon in detail. It involves collecting and summarizing data to answer questions about audience demographics and behaviors, market size, and current trends. Surveys, observational studies and content analysis are common methods used in descriptive research. 

5. Causal research

Causal research aims to establish cause-and-effect relationships between variables. It investigates whether changes in one variable result in changes in another. Experimental designs, A/B testing and regression analysis are common causal research methods. This sheds light on how specific marketing strategies or product changes impact consumer behavior.

6. Cross-sectional research

Cross-sectional market research involves collecting data from a sample of the population at a single point in time. It is used to analyze differences, relationships or trends among various groups within a population. Cross-sectional studies are helpful for market segmentation, identifying target audiences and assessing market trends at a specific moment.

7. Longitudinal research

Longitudinal research, in contrast to cross-sectional research, collects data from the same subjects over an extended period. This allows for the analysis of trends, changes and developments over time. Longitudinal studies are useful for tracking long-term developments in consumer preferences, brand loyalty and market dynamics.

Each type of market research has its strengths and weaknesses, and the method you choose depends on your specific research goals and the depth of understanding you’re aiming to achieve. In the following sections, we’ll delve into primary and secondary research approaches and specific research methods.

Primary vs. secondary market research

Market research of all types can be broadly categorized into two main approaches: primary research and secondary research. By understanding the differences between these approaches, you can better determine the most appropriate research method for your specific goals.

Primary market research 

Primary research involves the collection of original data straight from the source. Typically, this involves communicating directly with your target audience — through surveys, interviews, focus groups and more — to gather information. Here are some key attributes of primary market research:

  • Customized data: Primary research provides data that is tailored to your research needs. You design a custom research study and gather information specific to your goals.
  • Up-to-date insights: Because primary research involves communicating with customers, the data you collect reflects the most current market conditions and consumer behaviors.
  • Time-consuming and resource-intensive: Despite its advantages, primary research can be labor-intensive and costly, especially when dealing with large sample sizes or complex study designs. Whether you hire a market research consultant, agency or use an in-house team, primary research studies consume a large amount of resources and time.

Secondary market research 

Secondary research, on the other hand, involves analyzing data that has already been compiled by third-party sources, such as online research tools, databases, news sites, industry reports and academic studies.

Build your project graphic

Here are the main characteristics of secondary market research:

  • Cost-effective: Secondary research is generally more cost-effective than primary research since it doesn’t require building a research plan from scratch. You and your team can look at databases, websites and publications on an ongoing basis, without needing to design a custom experiment or hire a consultant. 
  • Leverages multiple sources: Data tools and software extract data from multiple places across the web, and then consolidate that information within a single platform. This means you’ll get a greater amount of data and a wider scope from secondary research.
  • Quick to access: You can access a wide range of information rapidly — often in seconds — if you’re using online research tools and databases. Because of this, you can act on insights sooner, rather than taking the time to develop an experiment. 

So, when should you use primary vs. secondary research? In practice, many market research projects incorporate both primary and secondary research to take advantage of the strengths of each approach.

One rule of thumb is to focus on secondary research to obtain background information, market trends or industry benchmarks. It is especially valuable for conducting preliminary research, competitor analysis, or when time and budget constraints are tight. Then, if you still have knowledge gaps or need to answer specific questions unique to your business model, use primary research to create a custom experiment. 

Market research methods

  • Surveys and questionnaires
  • Focus groups
  • Observational research
  • Online research tools
  • Experiments
  • Content analysis
  • Ethnographic research

How do primary and secondary research approaches translate into specific research methods? Let’s take a look at the different ways you can gather data: 

1. Surveys and questionnaires

Surveys and questionnaires are popular methods for collecting structured data from a large number of respondents. They involve a set of predetermined questions that participants answer. Surveys can be conducted through various channels, including online tools, telephone interviews and in-person or online questionnaires. They are useful for gathering quantitative data and assessing customer demographics, opinions, preferences and needs. On average, customer surveys have a 33% response rate , so keep that in mind as you consider your sample size.

2. Interviews

Interviews are in-depth conversations with individuals or groups to gather qualitative insights. They can be structured (with predefined questions) or unstructured (with open-ended discussions). Interviews are valuable for exploring complex topics, uncovering motivations and obtaining detailed feedback. 

3. Focus groups

The most common primary research methods are in-depth webcam interviews and focus groups. Focus groups are a small gathering of participants who discuss a specific topic or product under the guidance of a moderator. These discussions are valuable for primary market research because they reveal insights into consumer attitudes, perceptions and emotions. Focus groups are especially useful for idea generation, concept testing and understanding group dynamics within your target audience.

4. Observational research

Observational research involves observing and recording participant behavior in a natural setting. This method is particularly valuable when studying consumer behavior in physical spaces, such as retail stores or public places. In some types of observational research, participants are aware you’re watching them; in other cases, you discreetly watch consumers without their knowledge, as they use your product. Either way, observational research provides firsthand insights into how people interact with products or environments.

5. Online research tools

You and your team can do your own secondary market research using online tools. These tools include data prospecting platforms and databases, as well as online surveys, social media listening, web analytics and sentiment analysis platforms. They help you gather data from online sources, monitor industry trends, track competitors, understand consumer preferences and keep tabs on online behavior. We’ll talk more about choosing the right market research tools in the sections that follow.

6. Experiments

Market research experiments are controlled tests of variables to determine causal relationships. While experiments are often associated with scientific research, they are also used in market research to assess the impact of specific marketing strategies, product features, or pricing and packaging changes.

7. Content analysis

Content analysis involves the systematic examination of textual, visual or audio content to identify patterns, themes and trends. It’s commonly applied to customer reviews, social media posts and other forms of online content to analyze consumer opinions and sentiments.

8. Ethnographic research

Ethnographic research immerses researchers into the daily lives of consumers to understand their behavior and culture. This method is particularly valuable when studying niche markets or exploring the cultural context of consumer choices.

How to do market research

  • Set clear objectives
  • Identify your target audience
  • Choose your research methods
  • Use the right market research tools
  • Collect data
  • Analyze data 
  • Interpret your findings
  • Identify opportunities and challenges
  • Make informed business decisions
  • Monitor and adapt

Now that you have gained insights into the various market research methods at your disposal, let’s delve into the practical aspects of how to conduct market research effectively. Here’s a quick step-by-step overview, from defining objectives to monitoring market shifts.

1. Set clear objectives

When you set clear and specific goals, you’re essentially creating a compass to guide your research questions and methodology. Start by precisely defining what you want to achieve. Are you launching a new product and want to understand its viability in the market? Are you evaluating customer satisfaction with a product redesign? 

Start by creating SMART goals — objectives that are specific, measurable, achievable, relevant and time-bound. Not only will this clarify your research focus from the outset, but it will also help you track progress and benchmark your success throughout the process. 

You should also consult with key stakeholders and team members to ensure alignment on your research objectives before diving into data collecting. This will help you gain diverse perspectives and insights that will shape your research approach.

2. Identify your target audience

Next, you’ll need to pinpoint your target audience to determine who should be included in your research. Begin by creating detailed buyer personas or stakeholder profiles. Consider demographic factors like age, gender, income and location, but also delve into psychographics, such as interests, values and pain points.

The more specific your target audience, the more accurate and actionable your research will be. Additionally, segment your audience if your research objectives involve studying different groups, such as current customers and potential leads.

If you already have existing customers, you can also hold conversations with them to better understand your target market. From there, you can refine your buyer personas and tailor your research methods accordingly.

3. Choose your research methods

Selecting the right research methods is crucial for gathering high-quality data. Start by considering the nature of your research objectives. If you’re exploring consumer preferences, surveys and interviews can provide valuable insights. For in-depth understanding, focus groups or observational research might be suitable. Consider using a mix of quantitative and qualitative methods to gain a well-rounded perspective. 

You’ll also need to consider your budget. Think about what you can realistically achieve using the time and resources available to you. If you have a fairly generous budget, you may want to try a mix of primary and secondary research approaches. If you’re doing market research for a startup , on the other hand, chances are your budget is somewhat limited. If that’s the case, try addressing your goals with secondary research tools before investing time and effort in a primary research study. 

4. Use the right market research tools

Whether you’re conducting primary or secondary research, you’ll need to choose the right tools. These can help you do anything from sending surveys to customers to monitoring trends and analyzing data. Here are some examples of popular market research tools:

  • Market research software: Crunchbase is a platform that provides best-in-class company data, making it valuable for market research on growing companies and industries. You can use Crunchbase to access trusted, first-party funding data, revenue data, news and firmographics, enabling you to monitor industry trends and understand customer needs.

Market Research Graphic Crunchbase

  • Survey and questionnaire tools: SurveyMonkey is a widely used online survey platform that allows you to create, distribute and analyze surveys. Google Forms is a free tool that lets you create surveys and collect responses through Google Drive.
  • Data analysis software: Microsoft Excel and Google Sheets are useful for conducting statistical analyses. SPSS is a powerful statistical analysis software used for data processing, analysis and reporting.
  • Social listening tools: Brandwatch is a social listening and analytics platform that helps you monitor social media conversations, track sentiment and analyze trends. Mention is a media monitoring tool that allows you to track mentions of your brand, competitors and keywords across various online sources.
  • Data visualization platforms: Tableau is a data visualization tool that helps you create interactive and shareable dashboards and reports. Power BI by Microsoft is a business analytics tool for creating interactive visualizations and reports.

5. Collect data

There’s an infinite amount of data you could be collecting using these tools, so you’ll need to be intentional about going after the data that aligns with your research goals. Implement your chosen research methods, whether it’s distributing surveys, conducting interviews or pulling from secondary research platforms. Pay close attention to data quality and accuracy, and stick to a standardized process to streamline data capture and reduce errors. 

6. Analyze data

Once data is collected, you’ll need to analyze it systematically. Use statistical software or analysis tools to identify patterns, trends and correlations. For qualitative data, employ thematic analysis to extract common themes and insights. Visualize your findings with charts, graphs and tables to make complex data more understandable.

If you’re not proficient in data analysis, consider outsourcing or collaborating with a data analyst who can assist in processing and interpreting your data accurately.

Enrich your database graphic

7. Interpret your findings

Interpreting your market research findings involves understanding what the data means in the context of your objectives. Are there significant trends that uncover the answers to your initial research questions? Consider the implications of your findings on your business strategy. It’s essential to move beyond raw data and extract actionable insights that inform decision-making.

Hold a cross-functional meeting or workshop with relevant team members to collectively interpret the findings. Different perspectives can lead to more comprehensive insights and innovative solutions.

8. Identify opportunities and challenges

Use your research findings to identify potential growth opportunities and challenges within your market. What segments of your audience are underserved or overlooked? Are there emerging trends you can capitalize on? Conversely, what obstacles or competitors could hinder your progress?

Lay out this information in a clear and organized way by conducting a SWOT analysis, which stands for strengths, weaknesses, opportunities and threats. Jot down notes for each of these areas to provide a structured overview of gaps and hurdles in the market.

9. Make informed business decisions

Market research is only valuable if it leads to informed decisions for your company. Based on your insights, devise actionable strategies and initiatives that align with your research objectives. Whether it’s refining your product, targeting new customer segments or adjusting pricing, ensure your decisions are rooted in the data.

At this point, it’s also crucial to keep your team aligned and accountable. Create an action plan that outlines specific steps, responsibilities and timelines for implementing the recommendations derived from your research. 

10. Monitor and adapt

Market research isn’t a one-time activity; it’s an ongoing process. Continuously monitor market conditions, customer behaviors and industry trends. Set up mechanisms to collect real-time data and feedback. As you gather new information, be prepared to adapt your strategies and tactics accordingly. Regularly revisiting your research ensures your business remains agile and reflects changing market dynamics and consumer preferences.

Online market research sources

As you go through the steps above, you’ll want to turn to trusted, reputable sources to gather your data. Here’s a list to get you started:

  • Crunchbase: As mentioned above, Crunchbase is an online platform with an extensive dataset, allowing you to access in-depth insights on market trends, consumer behavior and competitive analysis. You can also customize your search options to tailor your research to specific industries, geographic regions or customer personas.

Product Image Advanced Search CRMConnected

  • Academic databases: Academic databases, such as ProQuest and JSTOR , are treasure troves of scholarly research papers, studies and academic journals. They offer in-depth analyses of various subjects, including market trends, consumer preferences and industry-specific insights. Researchers can access a wealth of peer-reviewed publications to gain a deeper understanding of their research topics.
  • Government and NGO databases: Government agencies, nongovernmental organizations and other institutions frequently maintain databases containing valuable economic, demographic and industry-related data. These sources offer credible statistics and reports on a wide range of topics, making them essential for market researchers. Examples include the U.S. Census Bureau , the Bureau of Labor Statistics and the Pew Research Center .
  • Industry reports: Industry reports and market studies are comprehensive documents prepared by research firms, industry associations and consulting companies. They provide in-depth insights into specific markets, including market size, trends, competitive analysis and consumer behavior. You can find this information by looking at relevant industry association databases; examples include the American Marketing Association and the National Retail Federation .
  • Social media and online communities: Social media platforms like LinkedIn or Twitter (X) , forums such as Reddit and Quora , and review platforms such as G2 can provide real-time insights into consumer sentiment, opinions and trends. 

Market research examples

At this point, you have market research tools and data sources — but how do you act on the data you gather? Let’s go over some real-world examples that illustrate the practical application of market research across various industries. These examples showcase how market research can lead to smart decision-making and successful business decisions.

Example 1: Apple’s iPhone launch

Apple ’s iconic iPhone launch in 2007 serves as a prime example of market research driving product innovation in tech. Before the iPhone’s release, Apple conducted extensive market research to understand consumer preferences, pain points and unmet needs in the mobile phone industry. This research led to the development of a touchscreen smartphone with a user-friendly interface, addressing consumer demands for a more intuitive and versatile device. The result was a revolutionary product that disrupted the market and redefined the smartphone industry.

Example 2: McDonald’s global expansion

McDonald’s successful global expansion strategy demonstrates the importance of market research when expanding into new territories. Before entering a new market, McDonald’s conducts thorough research to understand local tastes, preferences and cultural nuances. This research informs menu customization, marketing strategies and store design. For instance, in India, McDonald’s offers a menu tailored to local preferences, including vegetarian options. This market-specific approach has enabled McDonald’s to adapt and thrive in diverse global markets.

Example 3: Organic and sustainable farming

The shift toward organic and sustainable farming practices in the food industry is driven by market research that indicates increased consumer demand for healthier and environmentally friendly food options. As a result, food producers and retailers invest in sustainable sourcing and organic product lines — such as with these sustainable seafood startups — to align with this shift in consumer values. 

The bottom line? Market research has multiple use cases and is a critical practice for any industry. Whether it’s launching groundbreaking products, entering new markets or responding to changing consumer preferences, you can use market research to shape successful strategies and outcomes.

Market research templates

You finally have a strong understanding of how to do market research and apply it in the real world. Before we wrap up, here are some market research templates that you can use as a starting point for your projects:

  • Smartsheet competitive analysis templates : These spreadsheets can serve as a framework for gathering information about the competitive landscape and obtaining valuable lessons to apply to your business strategy.
  • SurveyMonkey product survey template : Customize the questions on this survey based on what you want to learn from your target customers.
  • HubSpot templates : HubSpot offers a wide range of free templates you can use for market research, business planning and more.
  • SCORE templates : SCORE is a nonprofit organization that provides templates for business plans, market analysis and financial projections.
  • SBA.gov : The U.S. Small Business Administration offers templates for every aspect of your business, including market research, and is particularly valuable for new startups. 

Strengthen your business with market research

When conducted effectively, market research is like a guiding star. Equipped with the right tools and techniques, you can uncover valuable insights, stay competitive, foster innovation and navigate the complexities of your industry.

Throughout this guide, we’ve discussed the definition of market research, different research methods, and how to conduct it effectively. We’ve also explored various types of market research and shared practical insights and templates for getting started. 

Now, it’s time to start the research process. Trust in data, listen to the market and make informed decisions that guide your company toward lasting success.

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How to do market research: The complete guide for your brand

Written by by Jacqueline Zote

Published on  April 13, 2023

Reading time  10 minutes

Blindly putting out content or products and hoping for the best is a thing of the past. Not only is it a waste of time and energy, but you’re wasting valuable marketing dollars in the process. Now you have a wealth of tools and data at your disposal, allowing you to develop data-driven marketing strategies . That’s where market research comes in, allowing you to uncover valuable insights to inform your business decisions.

Conducting market research not only helps you better understand how to sell to customers but also stand out from your competition. In this guide, we break down everything you need to know about market research and how doing your homework can help you grow your business.

Table of contents:

What is market research?

Why is market research important, types of market research, where to conduct market research.

  • Steps for conducting market research
  • Tools to use for market research

Market research is the process of gathering information surrounding your business opportunities. It identifies key information to better understand your audience. This includes insights related to customer personas and even trends shaping your industry.

Taking time out of your schedule to conduct research is crucial for your brand health. Here are some of the key benefits of market research:

Understand your customers’ motivations and pain points

Most marketers are out of touch with what their customers want. Moreover, these marketers are missing key information on what products their audience wants to buy.

Simply put, you can’t run a business if you don’t know what motivates your customers.

And spoiler alert: Your customers’ wants and needs change. Your customers’ behaviors today might be night and day from what they were a few years ago.

Market research holds the key to understanding your customers better. It helps you uncover their key pain points and motivations and understand how they shape their interests and behavior.

Figure out how to position your brand

Positioning is becoming increasingly important as more and more brands enter the marketplace. Market research enables you to spot opportunities to define yourself against your competitors.

Maybe you’re able to emphasize a lower price point. Perhaps your product has a feature that’s one of a kind. Finding those opportunities goes hand in hand with researching your market.

Maintain a strong pulse on your industry at large

Today’s marketing world evolves at a rate that’s difficult to keep up with.

Fresh products. Up-and-coming brands. New marketing tools. Consumers get bombarded with sales messages from all angles. This can be confusing and overwhelming.

By monitoring market trends, you can figure out the best tactics for reaching your target audience.

Not everyone conducts market research for the same reason. While some may want to understand their audience better, others may want to see how their competitors are doing. As such, there are different types of market research you can conduct depending on your goal.

Interview-based market research allows for one-on-one interactions. This helps the conversation to flow naturally, making it easier to add context. Whether this takes place in person or virtually, it enables you to gather more in-depth qualitative data.

Buyer persona research

Buyer persona research lets you take a closer look at the people who make up your target audience. You can discover the needs, challenges and pain points of each buyer persona to understand what they need from your business. This will then allow you to craft products or campaigns to resonate better with each persona.

Pricing research

In this type of research, brands compare similar products or services with a particular focus on pricing. They look at how much those products or services typically sell for so they can get more competitive with their pricing strategy.

Competitive analysis research

Competitor analysis gives you a realistic understanding of where you stand in the market and how your competitors are doing. You can use this analysis to find out what’s working in your industry and which competitors to watch out for. It even gives you an idea of how well those competitors are meeting consumer needs.

Depending on the competitor analysis tool you use, you can get as granular as you need with your research. For instance, Sprout Social lets you analyze your competitors’ social strategies. You can see what types of content they’re posting and even benchmark your growth against theirs.

Dashboard showing Facebook competitors report on Sprout Social

Brand awareness research

Conducting brand awareness research allows you to assess your brand’s standing in the market. It tells you how well-known your brand is among your target audience and what they associate with it. This can help you gauge people’s sentiments toward your brand and whether you need to rebrand or reposition.

If you don’t know where to start with your research, you’re in the right place.

There’s no shortage of market research methods out there. In this section, we’ve highlighted research channels for small and big businesses alike.

Considering that Google sees a staggering 8.5 billion searches each day, there’s perhaps no better place to start.

A quick Google search is a potential goldmine for all sorts of questions to kick off your market research. Who’s ranking for keywords related to your industry? Which products and pieces of content are the hottest right now? Who’s running ads related to your business?

For example, Google Product Listing Ads can help highlight all of the above for B2C brands.

row of product listing ads on Google for the search term "baby carrier"

The same applies to B2B brands looking to keep tabs on who’s running industry-related ads and ranking for keyword terms too.

list of sponsored results for the search term "email marketing tool"

There’s no denying that email represents both an aggressive and effective marketing channel for marketers today. Case in point, 44% of online shoppers consider email as the most influential channel in their buying decisions.

Looking through industry and competitor emails is a brilliant way to learn more about your market. For example, what types of offers and deals are your competitors running? How often are they sending emails?

list of promotional emails from different companies including ASOS and Dropbox

Email is also invaluable for gathering information directly from your customers. This survey message from Asana is a great example of how to pick your customers’ brains to figure out how you can improve your quality of service.

email from asana asking users to take a survey

Industry journals, reports and blogs

Don’t neglect the importance of big-picture market research when it comes to tactics and marketing channels to explore. Look to marketing resources such as reports and blogs as well as industry journals

Keeping your ear to the ground on new trends and technologies is a smart move for any business. Sites such as Statista, Marketing Charts, AdWeek and Emarketer are treasure troves of up-to-date data and news for marketers.

And of course, there’s the  Sprout Insights blog . And invaluable resources like The Sprout Social Index™  can keep you updated on the latest social trends.

Social media

If you want to learn more about your target market, look no further than social media. Social offers a place to discover what your customers want to see in future products or which brands are killin’ it. In fact, social media is become more important for businesses than ever with the level of data available.

It represents a massive repository of real-time data and insights that are instantly accessible. Brand monitoring and social listening are effective ways to conduct social media research . You can even be more direct with your approach. Ask questions directly or even poll your audience to understand their needs and preferences.

twitter poll from canva asking people about their color preferences for the brand logo

The 5 steps for how to do market research

Now that we’ve covered the why and where, it’s time to get into the practical aspects of market research. Here are five essential steps on how to do market research effectively.

Step 1: Identify your research topic

First off, what are you researching about? What do you want to find out? Narrow down on a specific research topic so you can start with a clear idea of what to look for.

For example, you may want to learn more about how well your product features are satisfying the needs of existing users. This might potentially lead to feature updates and improvements. Or it might even result in new feature introductions.

Similarly, your research topic may be related to your product or service launch or customer experience. Or you may want to conduct research for an upcoming marketing campaign.

Step 2: Choose a buyer persona to engage

If you’re planning to focus your research on a specific type of audience, decide which buyer persona you want to engage. This persona group will serve as a representative sample of your target audience.

Engaging a specific group of audience lets you streamline your research efforts. As such, it can be a much more effective and organized approach than researching thousands (if not millions) of individuals.

You may be directing your research toward existing users of your product. To get even more granular, you may want to focus on users who have been familiar with the product for at least a year, for example.

Step 3: Start collecting data

The next step is one of the most critical as it involves collecting the data you need for your research. Before you begin, make sure you’ve chosen the right research methods that will uncover the type of data you need. This largely depends on your research topic and goals.

Remember that you don’t necessarily have to stick to one research method. You may use a combination of qualitative and quantitative approaches. So for example, you could use interviews to supplement the data from your surveys. Or you may stick to insights from your social listening efforts.

To keep things consistent, let’s look at this in the context of the example from earlier. Perhaps you can send out a survey to your existing users asking them a bunch of questions. This might include questions like which features they use the most and how often they use them. You can get them to choose an answer from one to five and collect quantitative data.

Plus, for qualitative insights, you could even include a few open-ended questions with the option to write their answers. For instance, you might ask them if there’s any improvement they wish to see in your product.

Step 4: Analyze results

Once you have all the data you need, it’s time to analyze it keeping your research topic in mind. This involves trying to interpret the data to look for a wider meaning, particularly in relation to your research goal.

So let’s say a large percentage of responses were four or five in the satisfaction rating. This means your existing users are mostly satisfied with your current product features. On the other hand, if the responses were mostly ones and twos, you may look for opportunities to improve. The responses to your open-ended questions can give you further context as to why people are disappointed.

Step 5: Make decisions for your business

Now it’s time to take your findings and turn them into actionable insights for your business. In this final step, you need to decide how you want to move forward with your new market insight.

What did you find in your research that would require action? How can you put those findings to good use?

The market research tools you should be using

To wrap things up, let’s talk about the various tools available to conduct speedy, in-depth market research. These tools are essential for conducting market research faster and more efficiently.

Social listening and analytics

Social analytics tools like Sprout can help you keep track of engagement across social media. This goes beyond your own engagement data but also includes that of your competitors. Considering how quickly social media moves, using a third-party analytics tool is ideal. It allows you to make sense of your social data at a glance and ensure that you’re never missing out on important trends.

cross channel profile performance on Sprout Social

Email marketing research tools

Keeping track of brand emails is a good idea for any brand looking to stand out in its audience’s inbox.

Tools such as MailCharts ,  Really Good Emails  and  Milled  can show you how different brands run their email campaigns.

Meanwhile, tools like  Owletter  allow you to monitor metrics such as frequency and send-timing. These metrics can help you understand email marketing strategies among competing brands.

Content marketing research

If you’re looking to conduct research on content marketing, tools such as  BuzzSumo  can be of great help. This tool shows you the top-performing industry content based on keywords. Here you can see relevant industry sites and influencers as well as which brands in your industry are scoring the most buzz. It shows you exactly which pieces of content are ranking well in terms of engagements and shares and on which social networks.

content analysis report on buzzsumo

SEO and keyword tracking

Monitoring industry keywords is a great way to uncover competitors. It can also help you discover opportunities to advertise your products via organic search. Tools such as  Ahrefs  provide a comprehensive keyword report to help you see how your search efforts stack up against the competition.

organic traffic and keywords report on ahrefs

Competitor comparison template

For the sake of organizing your market research, consider creating a competitive matrix. The idea is to highlight how you stack up side-by-side against others in your market. Use a  social media competitive analysis template  to track your competitors’ social presence. That way, you can easily compare tactics, messaging and performance. Once you understand your strengths and weaknesses next to your competitors, you’ll find opportunities as well.

Customer persona creator

Finally, customer personas represent a place where all of your market research comes together. You’d need to create a profile of your ideal customer that you can easily refer to. Tools like  Xtensio  can help in outlining your customer motivations and demographics as you zero in on your target market.

user persona example template on xtensio

Build a solid market research strategy

Having a deeper understanding of the market gives you leverage in a sea of competitors. Use the steps and market research tools we shared above to build an effective market research strategy.

But keep in mind that the accuracy of your research findings depends on the quality of data collected. Turn to Sprout’s social media analytics tools to uncover heaps of high-quality data across social networks.

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Components of market research

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Market research is a cornerstone of all successful, strategic businesses. It can also be daunting for entrepreneurs looking to launch a startup or start a side hustle . What is market research, anyway? And how do you…do it?

We’ll walk you through absolutely everything you need to know about the market research process so that by the end of this guide, you’ll be an expert in market research too. And what’s more important: you’ll have actionable steps you can take to start collecting your own market research.

What Is Market Research?

Market research is the organized process of gathering information about your target customers and market. Market research can help you better understand customer behavior and competitor strengths and weaknesses, as well as provide insight for the best strategies in launching new businesses and products. There are different ways to approach market research, including primary and secondary research and qualitative and quantitative research. The strongest approaches will include a combination of all four.

“Virtually every business can benefit from conducting some market research,” says Niles Koenigsberg of Real FiG Advertising + Marketing . “Market research can help you piece together your [business’s] strengths and weaknesses, along with your prospective opportunities, so that you can understand where your unique differentiators may lie.” Well-honed market research will help your brand stand out from the competition and help you see what you need to do to lead the market. It can also do so much more.

The Purposes of Market Research

Why do market research? It can help you…

  • Pinpoint your target market, create buyer personas, and develop a more holistic understanding of your customer base and market.
  • Understand current market conditions to evaluate risks and anticipate how your product or service will perform.
  • Validate a concept prior to launch.
  • Identify gaps in the market that your competitors have created or overlooked.
  • Solve problems that have been left unresolved by the existing product/brand offerings.
  • Identify opportunities and solutions for new products or services.
  • Develop killer marketing strategies .

What Are the Benefits of Market Research?

Strong market research can help your business in many ways. It can…

  • Strengthen your market position.
  • Help you identify your strengths and weaknesses.
  • Help you identify your competitors’ strengths and weaknesses.
  • Minimize risk.
  • Center your customers’ experience from the get-go.
  • Help you create a dynamic strategy based on market conditions and customer needs/demands.

What Are the Basic Methods of Market Research?

The basic methods of market research include surveys, personal interviews, customer observation, and the review of secondary research. In addition to these basic methods, a forward-thinking market research approach incorporates data from the digital landscape like social media analysis, SEO research, gathering feedback via forums, and more. Throughout this guide, we will cover each of the methods commonly used in market research to give you a comprehensive overview.

Primary vs. Secondary Market Research

Primary and secondary are the two main types of market research you can do. The latter relies on research conducted by others. Primary research, on the other hand, refers to the fact-finding efforts you conduct on your own.

This approach is limited, however. It’s likely that the research objectives of these secondary data points differ from your own, and it can be difficult to confirm the veracity of their findings.

Primary Market Research

Primary research is more labor intensive, but it generally yields data that is exponentially more actionable. It can be conducted through interviews, surveys, online research, and your own data collection. Every new business should engage in primary market research prior to launch. It will help you validate that your idea has traction, and it will give you the information you need to help minimize financial risk.

You can hire an agency to conduct this research on your behalf. This brings the benefit of expertise, as you’ll likely work with a market research analyst. The downside is that hiring an agency can be expensive—too expensive for many burgeoning entrepreneurs. That brings us to the second approach. You can also do the market research yourself, which substantially reduces the financial burden of starting a new business .

Secondary Market Research

Secondary research includes resources like government databases and industry-specific data and publications. It can be beneficial to start your market research with secondary sources because it’s widely available and often free-to-access. This information will help you gain a broad overview of the market conditions for your new business.

Identify Your Goals and Your Audience

Before you begin conducting interviews or sending out surveys, you need to set your market research goals. At the end of your market research process, you want to have a clear idea of who your target market is—including demographic information like age, gender, and where they live—but you also want to start with a rough idea of who your audience might be and what you’re trying to achieve with market research.

You can pinpoint your objectives by asking yourself a series of guiding questions:

  • What are you hoping to discover through your research?
  • Who are you hoping to serve better because of your findings?
  • What do you think your market is?
  • Who are your competitors?
  • Are you testing the reception of a new product category or do you want to see if your product or service solves the problem left by a current gap in the market?
  • Are you just…testing the waters to get a sense of how people would react to a new brand?

Once you’ve narrowed down the “what” of your market research goals, you’re ready to move onto how you can best achieve them. Think of it like algebra. Many math problems start with “solve for x.” Once you know what you’re looking for, you can get to work trying to find it. It’s a heck of a lot easier to solve a problem when you know you’re looking for “x” than if you were to say “I’m gonna throw some numbers out there and see if I find a variable.”

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How to Do Market Research

This guide outlines every component of a comprehensive market research effort. Take into consideration the goals you have established for your market research, as they will influence which of these elements you’ll want to include in your market research strategy.

Secondary Data

Secondary data allows you to utilize pre-existing data to garner a sense of market conditions and opportunities. You can rely on published market studies, white papers, and public competitive information to start your market research journey.

Secondary data, while useful, is limited and cannot substitute your own primary data. It’s best used for quantitative data that can provide background to your more specific inquiries.

Find Your Customers Online

Once you’ve identified your target market, you can use online gathering spaces and forums to gain insights and give yourself a competitive advantage. Rebecca McCusker of The Creative Content Shop recommends internet recon as a vital tool for gaining a sense of customer needs and sentiment. “Read their posts and comments on forums, YouTube video comments, Facebook group [comments], and even Amazon/Goodreads book comments to get in their heads and see what people are saying.”

If you’re interested in engaging with your target demographic online, there are some general rules you should follow. First, secure the consent of any group moderators to ensure that you are acting within the group guidelines. Failure to do so could result in your eviction from the group.

Not all comments have the same research value. “Focus on the comments and posts with the most comments and highest engagement,” says McCusker. These high-engagement posts can give you a sense of what is already connecting and gaining traction within the group.

Social media can also be a great avenue for finding interview subjects. “LinkedIn is very useful if your [target customer] has a very specific job or works in a very specific industry or sector. It’s amazing the amount of people that will be willing to help,” explains Miguel González, a marketing executive at Dealers League . “My advice here is BE BRAVE, go to LinkedIn, or even to people you know and ask them, do quick interviews and ask real people that belong to that market and segment and get your buyer persona information first hand.”

Market research interviews can provide direct feedback on your brand, product, or service and give you a better understanding of consumer pain points and interests.

When organizing your market research interviews, you want to pay special attention to the sample group you’re selecting, as it will directly impact the information you receive. According to Tanya Zhang, the co-founder of Nimble Made , you want to first determine whether you want to choose a representative sample—for example, interviewing people who match each of the buyer persona/customer profiles you’ve developed—or a random sample.

“A sampling of your usual persona styles, for example, can validate details that you’ve already established about your product, while a random sampling may [help you] discover a new way people may use your product,” Zhang says.

Market Surveys

Market surveys solicit customer inclinations regarding your potential product or service through a series of open-ended questions. This direct outreach to your target audience can provide information on your customers’ preferences, attitudes, buying potential, and more.

Every expert we asked voiced unanimous support for market surveys as a powerful tool for market research. With the advent of various survey tools with accessible pricing—or free use—it’s never been easier to assemble, disseminate, and gather market surveys. While it should also be noted that surveys shouldn’t replace customer interviews , they can be used to supplement customer interviews to give you feedback from a broader audience.

Who to Include in Market Surveys

  • Current customers
  • Past customers
  • Your existing audience (such as social media/newsletter audiences)

Example Questions to Include in Market Surveys

While the exact questions will vary for each business, here are some common, helpful questions that you may want to consider for your market survey. Demographic Questions: the questions that help you understand, demographically, who your target customers are:

  • “What is your age?”
  • “Where do you live?”
  • “What is your gender identity?”
  • “What is your household income?”
  • “What is your household size?”
  • “What do you do for a living?”
  • “What is your highest level of education?”

Product-Based Questions: Whether you’re seeking feedback for an existing brand or an entirely new one, these questions will help you get a sense of how people feel about your business, product, or service:

  • “How well does/would our product/service meet your needs?”
  • “How does our product/service compare to similar products/services that you use?”
  • “How long have you been a customer?” or “What is the likelihood that you would be a customer of our brand?

Personal/Informative Questions: the deeper questions that help you understand how your audience thinks and what they care about.

  • “What are your biggest challenges?”
  • “What’s most important to you?”
  • “What do you do for fun (hobbies, interests, activities)?”
  • “Where do you seek new information when researching a new product?”
  • “How do you like to make purchases?”
  • “What is your preferred method for interacting with a brand?”

Survey Tools

Online survey tools make it easy to distribute surveys and collect responses. The best part is that there are many free tools available. If you’re making your own online survey, you may want to consider SurveyMonkey, Typeform, Google Forms, or Zoho Survey.

Competitive Analysis

A competitive analysis is a breakdown of how your business stacks up against the competition. There are many different ways to conduct this analysis. One of the most popular methods is a SWOT analysis, which stands for “strengths, weaknesses, opportunities, and threats.” This type of analysis is helpful because it gives you a more robust understanding of why a customer might choose a competitor over your business. Seeing how you stack up against the competition can give you the direction you need to carve out your place as a market leader.

Social Media Analysis

Social media has fundamentally changed the market research landscape, making it easier than ever to engage with a wide swath of consumers. Follow your current or potential competitors on social media to see what they’re posting and how their audience is engaging with it. Social media can also give you a lower cost opportunity for testing different messaging and brand positioning.

SEO Analysis and Opportunities

SEO analysis can help you identify the digital competition for getting the word out about your brand, product, or service. You won’t want to overlook this valuable information. Search listening tools offer a novel approach to understanding the market and generating the content strategy that will drive business. Tools like Google Trends and Awario can streamline this process.

Ready to Kick Your Business Into High Gear?

Now that you’ve completed the guide to market research you know you’re ready to put on your researcher hat to give your business the best start. Still not sure how actually… launch the thing? Our free mini-course can run you through the essentials for starting your side hustle .

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About Mary Kate Miller

Mary Kate Miller writes about small business, real estate, and finance. In addition to writing for Foundr, her work has been published by The Washington Post, Teen Vogue, Bustle, and more. She lives in Chicago.

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How to Conduct Market Research for a Startup

Entrepreneur conducting market research for a startup

  • 17 Mar 2022

With every innovative product idea comes the pressing question: “Will people want to buy it?”

As an entrepreneur with a big idea, what’s the best way to determine how potential customers will react to your product? Conducting market research can provide the data needed to decide whether your product fits your target market.

Before launching a new venture, you should understand market research. Here’s how to conduct market research for a startup and why it’s important.

Access your free e-book today.

What Is Market Research?

Market research is the process of gathering information about customers and the market as a whole to determine a product or service’s viability. Market research includes interviews, surveys, focus groups, and industry data analyses.

The goal of market research is to better understand potential customers, how well your product or service fits their needs, and how it compares to competitors’ offerings.

There are two types of research you can conduct: primary and secondary.

  • Primary research requires collecting data to learn about your specific customers or target market segment. It’s useful for creating buyer personas, segmenting your market, and improving your product to cater to customers’ needs .
  • Secondary research is conducted using data you didn’t collect yourself. Industry reports, public databases, and other companies’ proprietary data can be used to gain insights into your target market segment and industry.

Why Is Market Research Important for Entrepreneurs?

Before launching your venture, it’s wise to conduct market research to ensure your product or service will be well received. Feedback from people who fall into your target demographics can be invaluable as you iterate on and improve your product.

Performing market research can also help you determine a pricing strategy by gauging customers’ willingness to pay for your product. Additionally, it can improve the user experience by revealing what features matter most to potential customers.

When assessing which startups to fund, investors place heavy importance on thorough market research that indicates promising potential. Providing tangible proof that your product fulfills a market need and demonstrating you’ve taken the time to iterate on and improve it signal that your startup could be a worthwhile investment.

Related: How to Talk to Potential Investors: 5 Tips

How to Do Market Research for a Startup

1. form hypotheses.

What questions do you aim to answer through market research? Using those questions, you can make predictions called hypotheses . Defining your hypotheses upfront can help guide your approach to selecting subjects, researching questions, and testing designs.

An example question you may ask is: “How much are people in my target demographic willing to pay for the current version of my product?” Your hypothesis could be: “If my product contains all its current features, customers will be willing to pay $500 for it.”

Another example question you may ask is: “What’s the user’s biggest pain point, and is my product meeting their needs?” Your hypothesis could be: “I believe the user’s biggest pain point is needing an easy, unintimidating way to learn basic car maintenance, and I predict that my product meets that need.”

You can and should test multiple hypotheses, but try to select no more than a few per test, so the research stays focused.

Related: A Beginner’s Guide to Hypothesis Testing in Business

2. Select the Type of Research Needed to Test Hypotheses

Once you’ve formed your hypotheses, determine which type of research to conduct.

If your hypotheses focus on determining your startup’s place in the broader market, start with secondary research. This can include using existing data to determine market size, how much of that market your startup could reasonably own, who your biggest competitors are, and how your brand and product compare to theirs.

If your hypotheses require primary research, decide which data collection method best fits your needs. These can include one-on-one interviews, surveys, focus groups, and polls. Primary research allows you to gather insights into customer satisfaction and loyalty, brand awareness and perception, and real-time product usability.

3. Identify Target Demographics and Recruit Subjects

To gather meaningful insights, you need to understand your target demographic. Do you aim to cater to working parents, young athletes, or pet owners? Determine the type of person who can benefit from your product.

If you conduct primary research, you need to recruit subjects. This can be done in several ways, including:

  • Word of mouth: The simplest but least reliable way to recruit participants is by word of mouth. Ask people you know to refer others to be research subjects, then screen them to confirm they fit your target demographic.
  • Promoting the study on social media: Many social media platforms enable you to show an ad to people who fall into specific demographic categories or have certain interests. This allows you to get the word out to a large number of people who qualify.
  • Hiring a third-party market research company: Some companies provide full market research services and recruit participants and conduct research on your behalf.

However you recruit subjects, ensure they take a screener survey beforehand, which allows you to determine whether they fit the specific demographic you want to study or have a trait that eliminates them from the research pool. It also provides demographic data—such as age and race—that enables you to select a diverse subset of your target demographic.

In addition, you can offer compensation to boost participation, such as money, meal vouchers, gift cards, or early access to your product. Make it clear that compensation is in appreciation for subjects’ time and honest feedback.

4. Conduct the Research

Once you’ve determined the type of research and target demographic necessary to test your hypotheses, conduct your research. To reduce bias, enlist someone unfamiliar with your hypotheses to perform interviews or lead focus groups.

Ask questions based on your audience and hypotheses. For instance, if you’re aiming to test existing customers’ purchase motivations, you may ask: “What challenge were you trying to solve when you first bought the product?”

If examining brand perception, your audience should consist of potential customers who don’t yet know your brand. Present them with a list of competitor logos—with yours in the mix—and ask them to rank the brands by perceived reliability.

While the questions you ask are vehicles to prove or disprove hypotheses, ensure they don’t lead subjects in one direction. To craft unbiased research questions , use neutral language and vary the order of options in multiple-choice questions. This can keep subjects from selecting the same option each time if they sense the third option is always mapped to a certain outcome. It also helps account for primacy bias (the tendency to select the first option in a list) and recency bias (the tendency to select the final option in a list).

Once you’ve collected data, ensure it’s organized efficiently and securely so you can protect subjects’ identities .

Related: 3 Examples of Bad Survey Questions and How to Fix Them

5. Gather Insights and Determine Action Items

After you’ve organized your data, analyze it to extract actionable insights. While some of the data will be qualitative rather than quantitative, you can detect patterns in responses to make it quantifiable. For instance, noting that 15 of 20 subjects mentioned feeling overwhelmed when attempting to assemble your product.

Once you’ve analyzed the data and communicated emerging trends using data visualizations , outline action items.

If the majority of users in your target demographic reported feeling overwhelmed while assembling your product, action items might include:

  • Creating different versions of assembly instructions to test with other groups, varying diagrams and instructional language
  • Researching instruction manual best practices

Each round of market research can offer more information about how your product is perceived and experienced by potential users.

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Market Research as an Ongoing Endeavor

While it’s useful to conduct market research before launching your product, you should revisit your hypotheses and form new ones over the course of building your venture.

By conducting market research with each version of your product, you can gradually improve it and ensure it continues to fit target customers’ needs.

Are you interested in bolstering your entrepreneurship skills? Explore our four-week online course Entrepreneurship Essentials and our other entrepreneurship and innovation courses to learn to speak the language of the startup world.

market research where to start

About the Author

Market Research: A How-To Guide and Template

Discover the different types of market research, how to conduct your own market research, and use a free template to help you along the way.

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MARKET RESEARCH KIT

5 Research and Planning Templates + a Free Guide on How to Use Them in Your Market Research

buyers-journey-guide_3

Updated: 02/21/24

Published: 02/21/24

Today's consumers have a lot of power. As a business, you must have a deep understanding of who your buyers are and what influences their purchase decisions.

Enter: Market Research.

→ Download Now: Market Research Templates [Free Kit]

Whether you're new to market research or not, I created this guide to help you conduct a thorough study of your market, target audience, competition, and more. Let’s dive in.

Table of Contents

What is market research?

Primary vs. secondary research, types of market research, how to do market research, market research report template, market research examples.

Market research is the process of gathering information about your target market and customers to verify the success of a new product, help your team iterate on an existing product, or understand brand perception to ensure your team is effectively communicating your company's value effectively.

Market research can answer various questions about the state of an industry. But if you ask me, it's hardly a crystal ball that marketers can rely on for insights on their customers.

Market researchers investigate several areas of the market, and it can take weeks or even months to paint an accurate picture of the business landscape.

However, researching just one of those areas can make you more intuitive to who your buyers are and how to deliver value that no other business is offering them right now.

How? Consider these two things:

  • Your competitors also have experienced individuals in the industry and a customer base. It‘s very possible that your immediate resources are, in many ways, equal to those of your competition’s immediate resources. Seeking a larger sample size for answers can provide a better edge.
  • Your customers don't represent the attitudes of an entire market. They represent the attitudes of the part of the market that is already drawn to your brand.

The market research services market is growing rapidly, which signifies a strong interest in market research as we enter 2024. The market is expected to grow from roughly $75 billion in 2021 to $90.79 billion in 2025 .

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Why do market research?

Market research allows you to meet your buyer where they are.

As our world becomes louder and demands more of our attention, this proves invaluable.

By understanding your buyer's problems, pain points, and desired solutions, you can aptly craft your product or service to naturally appeal to them.

Market research also provides insight into the following:

  • Where your target audience and current customers conduct their product or service research
  • Which of your competitors your target audience looks to for information, options, or purchases
  • What's trending in your industry and in the eyes of your buyer
  • Who makes up your market and what their challenges are
  • What influences purchases and conversions among your target audience
  • Consumer attitudes about a particular topic, pain, product, or brand
  • Whether there‘s demand for the business initiatives you’re investing in
  • Unaddressed or underserved customer needs that can be flipped into selling opportunity
  • Attitudes about pricing for a particular product or service

Ultimately, market research allows you to get information from a larger sample size of your target audience, eliminating bias and assumptions so that you can get to the heart of consumer attitudes.

As a result, you can make better business decisions.

To give you an idea of how extensive market research can get , consider that it can either be qualitative or quantitative in nature — depending on the studies you conduct and what you're trying to learn about your industry.

Qualitative research is concerned with public opinion, and explores how the market feels about the products currently available in that market.

Quantitative research is concerned with data, and looks for relevant trends in the information that's gathered from public records.

That said, there are two main types of market research that your business can conduct to collect actionable information on your products: primary research and secondary research.

Primary Research

Primary research is the pursuit of first-hand information about your market and the customers within your market.

It's useful when segmenting your market and establishing your buyer personas.

Primary market research tends to fall into one of two buckets:

  • Exploratory Primary Research: This kind of primary market research normally takes place as a first step — before any specific research has been performed — and may involve open-ended interviews or surveys with small numbers of people.
  • Specific Primary Research: This type of research often follows exploratory research. In specific research, you take a smaller or more precise segment of your audience and ask questions aimed at solving a suspected problem.

Secondary Research

Secondary research is all the data and public records you have at your disposal to draw conclusions from (e.g. trend reports, market statistics, industry content, and sales data you already have on your business).

Secondary research is particularly useful for analyzing your competitors . The main buckets your secondary market research will fall into include:

  • Public Sources: These sources are your first and most-accessible layer of material when conducting secondary market research. They're often free to find and review — like government statistics (e.g., from the U.S. Census Bureau ).
  • Commercial Sources: These sources often come in the form of pay-to-access market reports, consisting of industry insight compiled by a research agency like Pew , Gartner , or Forrester .
  • Internal Sources: This is the market data your organization already has like average revenue per sale, customer retention rates, and other historical data that can help you draw conclusions on buyer needs.
  • Focus Groups
  • Product/ Service Use Research
  • Observation-Based Research
  • Buyer Persona Research
  • Market Segmentation Research
  • Pricing Research
  • Competitive Analysis Research
  • Customer Satisfaction and Loyalty Research
  • Brand Awareness Research
  • Campaign Research

1. Interviews

Interviews allow for face-to-face discussions so you can allow for a natural flow of conversation. Your interviewees can answer questions about themselves to help you design your buyer personas and shape your entire marketing strategy.

2. Focus Groups

Focus groups provide you with a handful of carefully-selected people that can test out your product and provide feedback. This type of market research can give you ideas for product differentiation.

3. Product/Service Use Research

Product or service use research offers insight into how and why your audience uses your product or service. This type of market research also gives you an idea of the product or service's usability for your target audience.

4. Observation-Based Research

Observation-based research allows you to sit back and watch the ways in which your target audience members go about using your product or service, what works well in terms of UX , and which aspects of it could be improved.

5. Buyer Persona Research

Buyer persona research gives you a realistic look at who makes up your target audience, what their challenges are, why they want your product or service, and what they need from your business or brand.

6. Market Segmentation Research

Market segmentation research allows you to categorize your target audience into different groups (or segments) based on specific and defining characteristics. This way, you can determine effective ways to meet their needs.

7. Pricing Research

Pricing research helps you define your pricing strategy . It gives you an idea of what similar products or services in your market sell for and what your target audience is willing to pay.

8. Competitive Analysis

Competitive analyses give you a deep understanding of the competition in your market and industry. You can learn about what's doing well in your industry and how you can separate yourself from the competition .

9. Customer Satisfaction and Loyalty Research

Customer satisfaction and loyalty research gives you a look into how you can get current customers to return for more business and what will motivate them to do so (e.g., loyalty programs , rewards, remarkable customer service).

10. Brand Awareness Research

Brand awareness research tells you what your target audience knows about and recognizes from your brand. It tells you about the associations people make when they think about your business.

11. Campaign Research

Campaign research entails looking into your past campaigns and analyzing their success among your target audience and current customers. The goal is to use these learnings to inform future campaigns.

  • Define your buyer persona.
  • Identify a persona group to engage.
  • Prepare research questions for your market research participants.
  • List your primary competitors.
  • Summarize your findings.

1. Define your buyer persona.

You have to understand who your customers are and how customers in your industry make buying decisions.

This is where your buyer personas come in handy. Buyer personas — sometimes referred to as marketing personas — are fictional, generalized representations of your ideal customers.

Use a free tool to create a buyer persona that your entire company can use to market, sell, and serve better.

market research where to start

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Market research definition

Market research – in-house or outsourced, market research in the age of data, when to use market research.

  • Types of market research 

Different types of primary research

How to do market research (primary data), how to do secondary market research, communicating your market research findings, choose the right platform for your market research, try qualtrics for free, the ultimate guide to market research: how to conduct it like a pro.

27 min read Wondering how to do market research? Or even where to start learning about it? Use our ultimate guide to understand the basics and discover how you can use market research to help your business.

Market research is the practice of gathering information about the needs and preferences of your target audience – potential consumers of your product.

When you understand how your target consumer feels and behaves, you can then take steps to meet their needs and mitigate the risk of an experience gap – where there is a shortfall between what a consumer expects you to deliver and what you actually deliver. Market research can also help you keep abreast of what your competitors are offering, which in turn will affect what your customers expect from you.

Market research connects with every aspect of a business – including brand , product , customer service , marketing and sales.

Market research generally focuses on understanding:

  • The consumer (current customers, past customers, non-customers, influencers))
  • The company (product or service design, promotion, pricing, placement, service, sales)
  • The competitors (and how their market offerings interact in the market environment)
  • The industry overall (whether it’s growing or moving in a certain direction)

Free eBook: 2024 market research trends report

Why is market research important?

A successful business relies on understanding what like, what they dislike, what they need and what messaging they will respond to. Businesses also need to understand their competition to identify opportunities to differentiate their products and services from other companies.

Today’s business leaders face an endless stream of decisions around target markets, pricing, promotion, distribution channels, and product features and benefits . They must account for all the factors involved, and there are market research studies and methodologies strategically designed to capture meaningful data to inform every choice. It can be a daunting task.

Market research allows companies to make data-driven decisions to drive growth and innovation.

What happens when you don’t do market research?

Without market research, business decisions are based at best on past consumer behavior, economic indicators, or at worst, on gut feel. Decisions are made in a bubble without thought to what the competition is doing. An important aim of market research is to remove subjective opinions when making business decisions. As a brand you are there to serve your customers, not personal preferences within the company. You are far more likely to be successful if you know the difference, and market research will help make sure your decisions are insight-driven.

Traditionally there have been specialist market researchers who are very good at what they do, and businesses have been reliant on their ability to do it. Market research specialists will always be an important part of the industry, as most brands are limited by their internal capacity, expertise and budgets and need to outsource at least some aspects of the work.

However, the market research external agency model has meant that brands struggled to keep up with the pace of change. Their customers would suffer because their needs were not being wholly met with point-in-time market research.

Businesses looking to conduct market research have to tackle many questions –

  • Who are my consumers, and how should I segment and prioritize them?
  • What are they looking for within my category?
  • How much are they buying, and what are their purchase triggers, barriers, and buying habits?
  • Will my marketing and communications efforts resonate?
  • Is my brand healthy ?
  • What product features matter most?
  • Is my product or service ready for launch?
  • Are my pricing and packaging plans optimized?

They all need to be answered, but many businesses have found the process of data collection daunting, time-consuming and expensive. The hardest battle is often knowing where to begin and short-term demands have often taken priority over longer-term projects that require patience to offer return on investment.

Today however, the industry is making huge strides, driven by quickening product cycles, tighter competition and business imperatives around more data-driven decision making. With the emergence of simple, easy to use tools , some degree of in-house market research is now seen as essential, with fewer excuses not to use data to inform your decisions. With greater accessibility to such software, everyone can be an expert regardless of level or experience.

How is this possible?

The art of research hasn’t gone away. It is still a complex job and the volume of data that needs to be analyzed is huge. However with the right tools and support, sophisticated research can look very simple – allowing you to focus on taking action on what matters.

If you’re not yet using technology to augment your in-house market research, now is the time to start.

The most successful brands rely on multiple sources of data to inform their strategy and decision making, from their marketing segmentation to the product features they develop to comments on social media. In fact, there’s tools out there that use machine learning and AI to automate the tracking of what’s people are saying about your brand across all sites.

The emergence of newer and more sophisticated tools and platforms gives brands access to more data sources than ever and how the data is analyzed and used to make decisions. This also increases the speed at which they operate, with minimal lead time allowing brands to be responsive to business conditions and take an agile approach to improvements and opportunities.

Expert partners have an important role in getting the best data, particularly giving access to additional market research know-how, helping you find respondents , fielding surveys and reporting on results.

How do you measure success?

Business activities are usually measured on how well they deliver return on investment (ROI). Since market research doesn’t generate any revenue directly, its success has to be measured by looking at the positive outcomes it drives – happier customers, a healthier brand, and so on.

When changes to your products or your marketing strategy are made as a result of your market research findings, you can compare on a before-and-after basis to see if the knowledge you acted on has delivered value.

Regardless of the function you work within, understanding the consumer is the goal of any market research. To do this, we have to understand what their needs are in order to effectively meet them. If we do that, we are more likely to drive customer satisfaction , and in turn, increase customer retention .

Several metrics and KPIs are used to gauge the success of decisions made from market research results, including

  • Brand awareness within the target market
  • Share of wallet
  • CSAT (customer satisfaction)
  • NPS (Net Promoter Score)

You can use market research for almost anything related to your current customers, potential customer base or target market. If you want to find something out from your target audience, it’s likely market research is the answer.

Here are a few of the most common uses:

Buyer segmentation and profiling

Segmentation is a popular technique that separates your target market according to key characteristics, such as behavior, demographic information and social attitudes. Segmentation allows you to create relevant content for your different segments, ideally helping you to better connect with all of them.

Buyer personas are profiles of fictional customers – with real attributes. Buyer personas help you develop products and communications that are right for your different audiences, and can also guide your decision-making process. Buyer personas capture the key characteristics of your customer segments, along with meaningful insights about what they want or need from you. They provide a powerful reminder of consumer attitudes when developing a product or service, a marketing campaign or a new brand direction.

By understanding your buyers and potential customers, including their motivations, needs, and pain points, you can optimize everything from your marketing communications to your products to make sure the right people get the relevant content, at the right time, and via the right channel .

Attitudes and Usage surveys

Attitude & Usage research helps you to grow your brand by providing a detailed understanding of consumers. It helps you understand how consumers use certain products and why, what their needs are, what their preferences are, and what their pain points are. It helps you to find gaps in the market, anticipate future category needs, identify barriers to entry and build accurate go-to-market strategies and business plans.

Marketing strategy

Effective market research is a crucial tool for developing an effective marketing strategy – a company’s plan for how they will promote their products.

It helps marketers look like rock stars by helping them understand the target market to avoid mistakes, stay on message, and predict customer needs . It’s marketing’s job to leverage relevant data to reach the best possible solution  based on the research available. Then, they can implement the solution, modify the solution, and successfully deliver that solution to the market.

Product development

You can conduct market research into how a select group of consumers use and perceive your product – from how they use it through to what they like and dislike about it. Evaluating your strengths and weaknesses early on allows you to focus resources on ideas with the most potential and to gear your product or service design to a specific market.

Chobani’s yogurt pouches are a product optimized through great market research . Using product concept testing – a form of market research – Chobani identified that packaging could negatively impact consumer purchase decisions. The brand made a subtle change, ensuring the item satisfied the needs of consumers. This ability to constantly refine its products for customer needs and preferences has helped Chobani become Australia’s #1 yogurt brand and increase market share.

Pricing decisions

Market research provides businesses with insights to guide pricing decisions too. One of the most powerful tools available to market researchers is conjoint analysis, a form of market research study that uses choice modeling to help brands identify the perfect set of features and price for customers. Another useful tool is the Gabor-Granger method, which helps you identify the highest price consumers are willing to pay for a given product or service.

Brand tracking studies

A company’s brand is one of its most important assets. But unlike other metrics like product sales, it’s not a tangible measure you can simply pull from your system. Regular market research that tracks consumer perceptions of your brand allows you to monitor and optimize your brand strategy in real time, then respond to consumer feedback to help maintain or build your brand with your target customers.

Advertising and communications testing

Advertising campaigns can be expensive, and without pre-testing, they carry risk of falling flat with your target audience. By testing your campaigns, whether it’s the message or the creative, you can understand how consumers respond to your communications before you deploy them so you can make changes in response to consumer feedback before you go live.

Finder, which is one of the world’s fastest-growing online comparison websites, is an example of a brand using market research to inject some analytical rigor into the business. Fueled by great market research, the business lifted brand awareness by 23 percent, boosted NPS by 8 points, and scored record profits – all within 10 weeks.

Competitive analysis

Another key part of developing the right product and communications is understanding your main competitors and how consumers perceive them. You may have looked at their websites and tried out their product or service, but unless you know how consumers perceive them, you won’t have an accurate view of where you stack up in comparison. Understanding their position in the market allows you to identify the strengths you can exploit, as well as any weaknesses you can address to help you compete better.

Customer Story

See How Yamaha Does Product Research

Types of market research

Although there are many types market research, all methods can be sorted into one of two categories: primary and secondary.

Primary research

Primary research is market research data that you collect yourself. This is raw data collected through a range of different means – surveys , focus groups,  , observation and interviews being among the most popular.

Primary information is fresh, unused data, giving you a perspective that is current or perhaps extra confidence when confirming hypotheses you already had. It can also be very targeted to your exact needs. Primary information can be extremely valuable. Tools for collecting primary information are increasingly sophisticated and the market is growing rapidly.

Historically, conducting market research in-house has been a daunting concept for brands because they don’t quite know where to begin, or how to handle vast volumes of data. Now, the emergence of technology has meant that brands have access to simple, easy to use tools to help with exactly that problem. As a result, brands are more confident about their own projects and data with the added benefit of seeing the insights emerge in real-time.

Secondary research

Secondary research is the use of data that has already been collected, analyzed and published – typically it’s data you don’t own and that hasn’t been conducted with your business specifically in mind, although there are forms of internal secondary data like old reports or figures from past financial years that come from within your business. Secondary research can be used to support the use of primary research.

Secondary research can be beneficial to small businesses because it is sometimes easier to obtain, often through research companies. Although the rise of primary research tools are challenging this trend by allowing businesses to conduct their own market research more cheaply, secondary research is often a cheaper alternative for businesses who need to spend money carefully. Some forms of secondary research have been described as ‘lean market research’ because they are fast and pragmatic, building on what’s already there.

Because it’s not specific to your business, secondary research may be less relevant, and you’ll need to be careful to make sure it applies to your exact research question. It may also not be owned, which means your competitors and other parties also have access to it.

Primary or secondary research – which to choose?

Both primary and secondary research have their advantages, but they are often best used when paired together, giving you the confidence to act knowing that the hypothesis you have is robust.

Secondary research is sometimes preferred because there is a misunderstanding of the feasibility of primary research. Thanks to advances in technology, brands have far greater accessibility to primary research, but this isn’t always known.

If you’ve decided to gather your own primary information, there are many different data collection methods that you may consider. For example:

  • Customer surveys
  • Focus groups
  • Observation

Think carefully about what you’re trying to accomplish before picking the data collection method(s) you’re going to use. Each one has its pros and cons. Asking someone a simple, multiple-choice survey question will generate a different type of data than you might obtain with an in-depth interview. Determine if your primary research is exploratory or specific, and if you’ll need qualitative research, quantitative research, or both.

Qualitative vs quantitative

Another way of categorizing different types of market research is according to whether they are qualitative or quantitative.

Qualitative research

Qualitative research is the collection of data that is non-numerical in nature. It summarizes and infers, rather than pin-points an exact truth. It is exploratory and can lead to the generation of a hypothesis.

Market research techniques that would gather qualitative data include:

  • Interviews (face to face / telephone)
  • Open-ended survey questions

Researchers use these types of market research technique because they can add more depth to the data. So for example, in focus groups or interviews, rather than being limited to ‘yes’ or ‘no’ for a certain question, you can start to understand why someone might feel a certain way.

Quantitative research

Quantitative research is the collection of data that is numerical in nature. It is much more black and white in comparison to qualitative data, although you need to make sure there is a representative sample if you want the results to be reflective of reality.

Quantitative researchers often start with a hypothesis and then collect data which can be used to determine whether empirical evidence to support that hypothesis exists.

Quantitative research methods include:

  • Questionnaires
  • Review scores

Exploratory and specific research

Exploratory research is the approach to take if you don’t know what you don’t know. It can give you broad insights about your customers, product, brand, and market. If you want to answer a specific question, then you’ll be conducting specific research.

  • Exploratory . This research is general and open-ended, and typically involves lengthy interviews with an individual or small focus group.
  • Specific . This research is often used to solve a problem identified in exploratory research. It involves more structured, formal interviews.

Exploratory primary research is generally conducted by collecting qualitative data. Specific research usually finds its insights through quantitative data.

Primary research can be qualitative or quantitative, large-scale or focused and specific. You’ll carry it out using methods like surveys – which can be used for both qualitative and quantitative studies – focus groups, observation of consumer behavior, interviews, or online tools.

Step 1: Identify your research topic

Research topics could include:

  • Product features
  • Product or service launch
  • Understanding a new target audience (or updating an existing audience)
  • Brand identity
  • Marketing campaign concepts
  • Customer experience

Step 2: Draft a research hypothesis

A hypothesis is the assumption you’re starting out with. Since you can disprove a negative much more easily than prove a positive, a hypothesis is a negative statement such as ‘price has no effect on brand perception’.

Step 3: Determine which research methods are most effective

Your choice of methods depends on budget, time constraints, and the type of question you’re trying to answer. You could combine surveys, interviews and focus groups to get a mix of qualitative and quantitative data.

Step 4: Determine how you will collect and analyze your data.

Primary research can generate a huge amount of data, and when the goal is to uncover actionable insight, it can be difficult to know where to begin or what to pay attention to.

The rise in brands taking their market research and data analysis in-house has coincided with the rise of technology simplifying the process. These tools pull through large volumes of data and outline significant information that will help you make the most important decisions.

Step 5: Conduct your research!

This is how you can run your research using Qualtrics CoreXM

  • Pre-launch – Here you want to ensure that the survey/ other research methods conform to the project specifications (what you want to achieve/research)
  • Soft launch – Collect a small fraction of the total data before you fully launch. This means you can check that everything is working as it should and you can correct any data quality issues.
  • Full launch – You’ve done the hard work to get to this point. If you’re using a tool, you can sit back and relax, or if you get curious you can check on the data in your account.
  • Review – review your data for any issues or low-quality responses. You may need to remove this in order not to impact the analysis of the data.

A helping hand

If you are missing the skills, capacity or inclination to manage your research internally, Qualtrics Research Services can help. From design, to writing the survey based on your needs, to help with survey programming, to handling the reporting, Research Services acts as an extension of the team and can help wherever necessary.

Secondary market research can be taken from a variety of places. Some data is completely free to access – other information could end up costing hundreds of thousands of dollars. There are three broad categories of secondary research sources:

  • Public sources – these sources are accessible to anyone who asks for them. They include census data, market statistics, library catalogs, university libraries and more. Other organizations may also put out free data from time to time with the goal of advancing a cause, or catching people’s attention.
  • Internal sources – sometimes the most valuable sources of data already exist somewhere within your organization. Internal sources can be preferable for secondary research on account of their price (free) and unique findings. Since internal sources are not accessible by competitors, using them can provide a distinct competitive advantage.
  • Commercial sources – if you have money for it, the easiest way to acquire secondary market research is to simply buy it from private companies. Many organizations exist for the sole purpose of doing market research and can provide reliable, in-depth, industry-specific reports.

No matter where your research is coming from, it is important to ensure that the source is reputable and reliable so you can be confident in the conclusions you draw from it.

How do you know if a source is reliable?

Use established and well-known research publishers, such as the XM Institute , Forrester and McKinsey . Government websites also publish research and this is free of charge. By taking the information directly from the source (rather than a third party) you are minimizing the risk of the data being misinterpreted and the message or insights being acted on out of context.

How to apply secondary research

The purpose and application of secondary research will vary depending on your circumstances. Often, secondary research is used to support primary research and therefore give you greater confidence in your conclusions. However, there may be circumstances that prevent this – such as the timeframe and budget of the project.

Keep an open mind when collecting all the relevant research so that there isn’t any collection bias. Then begin analyzing the conclusions formed to see if any trends start to appear. This will help you to draw a consensus from the secondary research overall.

Market research success is defined by the impact it has on your business’s success. Make sure it’s not discarded or ignored by communicating your findings effectively. Here are some tips on how to do it.

  • Less is more – Preface your market research report with executive summaries that highlight your key discoveries and their implications
  • Lead with the basic information – Share the top 4-5 recommendations in bullet-point form, rather than requiring your readers to go through pages of analysis and data
  • Model the impact – Provide examples and model the impact of any changes you put in place based on your findings
  • Show, don’t tell – Add illustrative examples that relate directly to the research findings and emphasize specific points
  • Speed is of the essence – Make data available in real-time so it can be rapidly incorporated into strategies and acted upon to maximize value
  • Work with experts – Make sure you’ve access to a dedicated team of experts ready to help you design and launch successful projects

Trusted by 8,500 brands for everything from product testing to competitor analysis, Our Strategic Research software is the world’s most powerful and flexible research platform . With over 100 question types and advanced logic, you can build out your surveys and see real-time data you can share across the organization. Plus, you’ll be able to turn data into insights with iQ, our predictive intelligence engine that runs complicated analysis at the click of a button.

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Market intelligence 10 min read, marketing insights 11 min read, ethnographic research 11 min read, qualitative vs quantitative research 13 min read, qualitative research questions 11 min read, qualitative research design 12 min read, primary vs secondary research 14 min read, request demo.

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How to do market research in 4 steps: a lean approach to marketing research

From pinpointing your target audience and assessing your competitive advantage, to ongoing product development and customer satisfaction efforts, market research is a practice your business can only benefit from.

Learn how to conduct quick and effective market research using a lean approach in this article full of strategies and practical examples. 

market research where to start

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market research where to start

A comprehensive (and successful) business strategy is not complete without some form of market research—you can’t make informed and profitable business decisions without truly understanding your customer base and the current market trends that drive your business.

In this article, you’ll learn how to conduct quick, effective market research  using an approach called 'lean market research'. It’s easier than you might think, and it can be done at any stage in a product’s lifecycle.

How to conduct lean market research in 4 steps

What is market research, why is market research so valuable, advantages of lean market research, 4 common market research methods, 5 common market research questions, market research faqs.

We’ll jump right into our 4-step approach to lean market research. To show you how it’s done in the real world, each step includes a practical example from Smallpdf , a Swiss company that used lean market research to reduce their tool’s error rate by 75% and boost their Net Promoter Score® (NPS) by 1%.

Research your market the lean way...

From on-page surveys to user interviews, Hotjar has the tools to help you scope out your market and get to know your customers—without breaking the bank.

The following four steps and practical examples will give you a solid market research plan for understanding who your users are and what they want from a company like yours.

1. Create simple user personas

A user persona is a semi-fictional character based on psychographic and demographic data from people who use websites and products similar to your own. Start by defining broad user categories, then elaborate on them later to further segment your customer base and determine your ideal customer profile .

How to get the data: use on-page or emailed surveys and interviews to understand your users and what drives them to your business.

How to do it right: whatever survey or interview questions you ask, they should answer the following questions about the customer:

Who are they?

What is their main goal?

What is their main barrier to achieving this goal?

Pitfalls to avoid:

Don’t ask too many questions! Keep it to five or less, otherwise you’ll inundate them and they’ll stop answering thoughtfully.

Don’t worry too much about typical demographic questions like age or background. Instead, focus on the role these people play (as it relates to your product) and their goals.

How Smallpdf did it: Smallpdf ran an on-page survey for a couple of weeks and received 1,000 replies. They learned that many of their users were administrative assistants, students, and teachers.

#One of the five survey questions Smallpdf asked their users

Next, they used the survey results to create simple user personas like this one for admins:

Who are they? Administrative Assistants.

What is their main goal? Creating Word documents from a scanned, hard-copy document or a PDF where the source file was lost.

What is their main barrier to achieving it? Converting a scanned PDF doc to a Word file.

💡Pro tip: Smallpdf used Hotjar Surveys to run their user persona survey. Our survey tool helped them avoid the pitfalls of guesswork and find out who their users really are, in their own words. 

You can design a survey and start running it in minutes with our easy-to-use drag and drop builder. Customize your survey to fit your needs, from a sleek one-question pop-up survey to a fully branded questionnaire sent via email. 

We've also created 40+ free survey templates that you can start collecting data with, including a user persona survey like the one Smallpdf used.

2. Conduct observational research

Observational research involves taking notes while watching someone use your product (or a similar product).

Overt vs. covert observation

Overt observation involves asking customers if they’ll let you watch them use your product. This method is often used for user testing and it provides a great opportunity for collecting live product or customer feedback .

Covert observation means studying users ‘in the wild’ without them knowing. This method works well if you sell a type of product that people use regularly, and it offers the purest observational data because people often behave differently when they know they’re being watched. 

Tips to do it right:

Record an entry in your field notes, along with a timestamp, each time an action or event occurs.

Make note of the users' workflow, capturing the ‘what,’ ‘why,’ and ‘for whom’ of each action.

#Sample of field notes taken by Smallpdf

Don’t record identifiable video or audio data without consent. If recording people using your product is helpful for achieving your research goal, make sure all participants are informed and agree to the terms.

Don’t forget to explain why you’d like to observe them (for overt observation). People are more likely to cooperate if you tell them you want to improve the product.

💡Pro tip: while conducting field research out in the wild can wield rewarding results, you can also conduct observational research remotely. Hotjar Recordings is a tool that lets you capture anonymized user sessions of real people interacting with your website. 

Observe how customers navigate your pages and products to gain an inside look into their user behavior . This method is great for conducting exploratory research with the purpose of identifying more specific issues to investigate further, like pain points along the customer journey and opportunities for optimizing conversion .

With Hotjar Recordings you can observe real people using your site without capturing their sensitive information

How Smallpdf did it: here’s how Smallpdf observed two different user personas both covertly and overtly.

Observing students (covert): Kristina Wagner, Principle Product Manager at Smallpdf, went to cafes and libraries at two local universities and waited until she saw students doing PDF-related activities. Then she watched and took notes from a distance. One thing that struck her was the difference between how students self-reported their activities vs. how they behaved (i.e, the self-reporting bias). Students, she found, spent hours talking, listening to music, or simply staring at a blank screen rather than working. When she did find students who were working, she recorded the task they were performing and the software they were using (if she recognized it).

Observing administrative assistants (overt): Kristina sent emails to admins explaining that she’d like to observe them at work, and she asked those who agreed to try to batch their PDF work for her observation day. While watching admins work, she learned that they frequently needed to scan documents into PDF-format and then convert those PDFs into Word docs. By observing the challenges admins faced, Smallpdf knew which products to target for improvement.

“Data is really good for discovery and validation, but there is a bit in the middle where you have to go and find the human.”

3. Conduct individual interviews

Interviews are one-on-one conversations with members of your target market. They allow you to dig deep and explore their concerns, which can lead to all sorts of revelations.

Listen more, talk less. Be curious.

Act like a journalist, not a salesperson. Rather than trying to talk your company up, ask people about their lives, their needs, their frustrations, and how a product like yours could help.

Ask "why?" so you can dig deeper. Get into the specifics and learn about their past behavior.

Record the conversation. Focus on the conversation and avoid relying solely on notes by recording the interview. There are plenty of services that will transcribe recorded conversations for a good price (including Hotjar!).

Avoid asking leading questions , which reveal bias on your part and pushes respondents to answer in a certain direction (e.g. “Have you taken advantage of the amazing new features we just released?).

Don't ask loaded questions , which sneak in an assumption which, if untrue, would make it impossible to answer honestly. For example, we can’t ask you, “What did you find most useful about this article?” without asking whether you found the article useful in the first place.

Be cautious when asking opinions about the future (or predictions of future behavior). Studies suggest that people aren’t very good at predicting their future behavior. This is due to several cognitive biases, from the misguided exceptionalism bias (we’re good at guessing what others will do, but we somehow think we’re different), to the optimism bias (which makes us see things with rose-colored glasses), to the ‘illusion of control’ (which makes us forget the role of randomness in future events).

How Smallpdf did it: Kristina explored her teacher user persona by speaking with university professors at a local graduate school. She learned that the school was mostly paperless and rarely used PDFs, so for the sake of time, she moved on to the admins.

A bit of a letdown? Sure. But this story highlights an important lesson: sometimes you follow a lead and come up short, so you have to make adjustments on the fly. Lean market research is about getting solid, actionable insights quickly so you can tweak things and see what works.

💡Pro tip: to save even more time, conduct remote interviews using an online user research service like Hotjar Engage , which automates the entire interview process, from recruitment and scheduling to hosting and recording.

You can interview your own customers or connect with people from our diverse pool of 200,000+ participants from 130+ countries and 25 industries. And no need to fret about taking meticulous notes—Engage will automatically transcribe the interview for you.

4. Analyze the data (without drowning in it)

The following techniques will help you wrap your head around the market data you collect without losing yourself in it. Remember, the point of lean market research is to find quick, actionable insights.

A flow model is a diagram that tracks the flow of information within a system. By creating a simple visual representation of how users interact with your product and each other, you can better assess their needs.

#Example of a flow model designed by Smallpdf

You’ll notice that admins are at the center of Smallpdf’s flow model, which represents the flow of PDF-related documents throughout a school. This flow model shows the challenges that admins face as they work to satisfy their own internal and external customers.

Affinity diagram

An affinity diagram is a way of sorting large amounts of data into groups to better understand the big picture. For example, if you ask your users about their profession, you’ll notice some general themes start to form, even though the individual responses differ. Depending on your needs, you could group them by profession, or more generally by industry.

<

We wrote a guide about how to analyze open-ended questions to help you sort through and categorize large volumes of response data. You can also do this by hand by clipping up survey responses or interview notes and grouping them (which is what Kristina does).

“For an interview, you will have somewhere between 30 and 60 notes, and those notes are usually direct phrases. And when you literally cut them up into separate pieces of paper and group them, they should make sense by themselves.”

Pro tip: if you’re conducting an online survey with Hotjar, keep your team in the loop by sharing survey responses automatically via our Slack and Microsoft Team integrations. Reading answers as they come in lets you digest the data in pieces and can help prepare you for identifying common themes when it comes time for analysis.

Hotjar lets you easily share survey responses with your team

Customer journey map

A customer journey map is a diagram that shows the way a typical prospect becomes a paying customer. It outlines their first interaction with your brand and every step in the sales cycle, from awareness to repurchase (and hopefully advocacy).

#A customer journey map example

The above  customer journey map , created by our team at Hotjar, shows many ways a customer might engage with our tool. Your map will be based on your own data and business model.

📚 Read more: if you’re new to customer journey maps, we wrote this step-by-step guide to creating your first customer journey map in 2 and 1/2 days with free templates you can download and start using immediately.

Next steps: from research to results

So, how do you turn market research insights into tangible business results? Let’s look at the actions Smallpdf took after conducting their lean market research: first they implemented changes, then measured the impact.

#Smallpdf used lean market research to dig below the surface, understand their clients, and build a better product and user experience

Implement changes

Based on what Smallpdf learned about the challenges that one key user segment (admins) face when trying to convert PDFs into Word files, they improved their ‘PDF to Word’ conversion tool.

We won’t go into the details here because it involves a lot of technical jargon, but they made the entire process simpler and more straightforward for users. Plus, they made it so that their system recognized when you drop a PDF file into their ‘Word to PDF’ converter instead of the ‘PDF to Word’ converter, so users wouldn’t have to redo the task when they made that mistake. 

In other words: simple market segmentation for admins showed a business need that had to be accounted for, and customers are happier overall after Smallpdf implemented an informed change to their product.

Measure results

According to the Lean UX model, product and UX changes aren’t retained unless they achieve results.

Smallpdf’s changes produced:

A 75% reduction in error rate for the ‘PDF to Word’ converter

A 1% increase in NPS

Greater confidence in the team’s marketing efforts

"With all the changes said and done, we've cut our original error rate in four, which is huge. We increased our NPS by +1%, which isn't huge, but it means that of the users who received a file, they were still slightly happier than before, even if they didn't notice that anything special happened at all.”

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Market research (or marketing research) is any set of techniques used to gather information and better understand a company’s target market. This might include primary research on brand awareness and customer satisfaction or secondary market research on market size and competitive analysis. Businesses use this information to design better products, improve user experience, and craft a marketing strategy that attracts quality leads and improves conversion rates.

David Darmanin, one of Hotjar’s founders, launched two startups before Hotjar took off—but both companies crashed and burned. Each time, he and his team spent months trying to design an amazing new product and user experience, but they failed because they didn’t have a clear understanding of what the market demanded.

With Hotjar, they did things differently . Long story short, they conducted market research in the early stages to figure out what consumers really wanted, and the team made (and continues to make) constant improvements based on market and user research.

Without market research, it’s impossible to understand your users. Sure, you might have a general idea of who they are and what they need, but you have to dig deep if you want to win their loyalty.

Here’s why research matters:

Obsessing over your users is the only way to win. If you don’t care deeply about them, you’ll lose potential customers to someone who does.

Analytics gives you the ‘what’, while research gives you the ‘why’. Big data, user analytics , and dashboards can tell you what people do at scale, but only research can tell you what they’re thinking and why they do what they do. For example, analytics can tell you that customers leave when they reach your pricing page, but only research can explain why.

Research beats assumptions, trends, and so-called best practices. Have you ever watched your colleagues rally behind a terrible decision? Bad ideas are often the result of guesswork, emotional reasoning, death by best practices , and defaulting to the Highest Paid Person’s Opinion (HiPPO). By listening to your users and focusing on their customer experience , you’re less likely to get pulled in the wrong direction.

Research keeps you from planning in a vacuum. Your team might be amazing, but you and your colleagues simply can’t experience your product the way your customers do. Customers might use your product in a way that surprises you, and product features that seem obvious to you might confuse them. Over-planning and refusing to test your assumptions is a waste of time, money, and effort because you’ll likely need to make changes once your untested business plan gets put into practice.

Lean User Experience (UX) design is a model for continuous improvement that relies on quick, efficient research to understand customer needs and test new product features.

Lean market research can help you become more...

Efficient: it gets you closer to your customers, faster.

Cost-effective: no need to hire an expensive marketing firm to get things started.

Competitive: quick, powerful insights can place your products on the cutting edge.

As a small business or sole proprietor, conducting lean market research is an attractive option when investing in a full-blown research project might seem out of scope or budget.

There are lots of different ways you could conduct market research and collect customer data, but you don’t have to limit yourself to just one research method. Four common types of market research techniques include surveys, interviews, focus groups, and customer observation.

Which method you use may vary based on your business type: ecommerce business owners have different goals from SaaS businesses, so it’s typically prudent to mix and match these methods based on your particular goals and what you need to know.

1. Surveys: the most commonly used

Surveys are a form of qualitative research that ask respondents a short series of open- or closed-ended questions, which can be delivered as an on-screen questionnaire or via email. When we asked 2,000 Customer Experience (CX) professionals about their company’s approach to research , surveys proved to be the most commonly used market research technique.

What makes online surveys so popular?  

They’re easy and inexpensive to conduct, and you can do a lot of data collection quickly. Plus, the data is pretty straightforward to analyze, even when you have to analyze open-ended questions whose answers might initially appear difficult to categorize.

We've built a number of survey templates ready and waiting for you. Grab a template and share with your customers in just a few clicks.

💡 Pro tip: you can also get started with Hotjar AI for Surveys to create a survey in mere seconds . Just enter your market research goal and watch as the AI generates a survey and populates it with relevant questions. 

Once you’re ready for data analysis, the AI will prepare an automated research report that succinctly summarizes key findings, quotes, and suggested next steps.

market research where to start

An example research report generated by Hotjar AI for Surveys

2. Interviews: the most insightful

Interviews are one-on-one conversations with members of your target market. Nothing beats a face-to-face interview for diving deep (and reading non-verbal cues), but if an in-person meeting isn’t possible, video conferencing is a solid second choice.

Regardless of how you conduct it, any type of in-depth interview will produce big benefits in understanding your target customers.

What makes interviews so insightful?

By speaking directly with an ideal customer, you’ll gain greater empathy for their experience , and you can follow insightful threads that can produce plenty of 'Aha!' moments.

3. Focus groups: the most unreliable

Focus groups bring together a carefully selected group of people who fit a company’s target market. A trained moderator leads a conversation surrounding the product, user experience, or marketing message to gain deeper insights.

What makes focus groups so unreliable?

If you’re new to market research, we wouldn’t recommend starting with focus groups. Doing it right is expensive , and if you cut corners, your research could fall victim to all kinds of errors. Dominance bias (when a forceful participant influences the group) and moderator style bias (when different moderator personalities bring about different results in the same study) are two of the many ways your focus group data could get skewed.

4. Observation: the most powerful

During a customer observation session, someone from the company takes notes while they watch an ideal user engage with their product (or a similar product from a competitor).

What makes observation so clever and powerful?

‘Fly-on-the-wall’ observation is a great alternative to focus groups. It’s not only less expensive, but you’ll see people interact with your product in a natural setting without influencing each other. The only downside is that you can’t get inside their heads, so observation still isn't a recommended replacement for customer surveys and interviews.

The following questions will help you get to know your users on a deeper level when you interview them. They’re general questions, of course, so don’t be afraid to make them your own.

1. Who are you and what do you do?

How you ask this question, and what you want to know, will vary depending on your business model (e.g. business-to-business marketing is usually more focused on someone’s profession than business-to-consumer marketing).

It’s a great question to start with, and it’ll help you understand what’s relevant about your user demographics (age, race, gender, profession, education, etc.), but it’s not the be-all-end-all of market research. The more specific questions come later.

2. What does your day look like?

This question helps you understand your users’ day-to-day life and the challenges they face. It will help you gain empathy for them, and you may stumble across something relevant to their buying habits.

3. Do you ever purchase [product/service type]?

This is a ‘yes or no’ question. A ‘yes’ will lead you to the next question.

4. What problem were you trying to solve or what goal were you trying to achieve?

This question strikes to the core of what someone’s trying to accomplish and why they might be willing to pay for your solution.

5. Take me back to the day when you first decided you needed to solve this kind of problem or achieve this goal.

This is the golden question, and it comes from Adele Revella, Founder and CEO of Buyer Persona Institute . It helps you get in the heads of your users and figure out what they were thinking the day they decided to spend money to solve a problem.

If you take your time with this question, digging deeper where it makes sense, you should be able to answer all the relevant information you need to understand their perspective.

“The only scripted question I want you to ask them is this one: take me back to the day when you first decided that you needed to solve this kind of problem or achieve this kind of a goal. Not to buy my product, that’s not the day. We want to go back to the day that when you thought it was urgent and compelling to go spend money to solve a particular problem or achieve a goal. Just tell me what happened.”

— Adele Revella , Founder/CEO at Buyer Persona Institute

Bonus question: is there anything else you’d like to tell me?

This question isn’t just a nice way to wrap it up—it might just give participants the opportunity they need to tell you something you really need to know.

That’s why Sarah Doody, author of UX Notebook , adds it to the end of her written surveys.

“I always have a last question, which is just open-ended: “Is there anything else you would like to tell me?” And sometimes, that’s where you get four paragraphs of amazing content that you would never have gotten if it was just a Net Promoter Score [survey] or something like that.”

What is the difference between qualitative and quantitative research?

Qualitative research asks questions that can’t be reduced to a number, such as, “What is your job title?” or “What did you like most about your customer service experience?” 

Quantitative research asks questions that can be answered with a numeric value, such as, “What is your annual salary?” or “How was your customer service experience on a scale of 1-5?”

 → Read more about the differences between qualitative and quantitative user research .

How do I do my own market research?

You can do your own quick and effective market research by 

Surveying your customers

Building user personas

Studying your users through interviews and observation

Wrapping your head around your data with tools like flow models, affinity diagrams, and customer journey maps

What is the difference between market research and user research?

Market research takes a broad look at potential customers—what problems they’re trying to solve, their buying experience, and overall demand. User research, on the other hand, is more narrowly focused on the use (and usability ) of specific products.

What are the main criticisms of market research?

Many marketing professionals are critical of market research because it can be expensive and time-consuming. It’s often easier to convince your CEO or CMO to let you do lean market research rather than something more extensive because you can do it yourself. It also gives you quick answers so you can stay ahead of the competition.

Do I need a market research firm to get reliable data?

Absolutely not! In fact, we recommend that you start small and do it yourself in the beginning. By following a lean market research strategy, you can uncover some solid insights about your clients. Then you can make changes, test them out, and see whether the results are positive. This is an excellent strategy for making quick changes and remaining competitive.

Net Promoter, Net Promoter System, Net Promoter Score, NPS, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld, and Satmetrix Systems, Inc.

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How to Do Market Research

Large magnifying glass surveying a city. Represents conducting market research to understand your customers, competitors, and industry.

Noah Parsons

18 min. read

Updated May 10, 2024

Download Now: Free 1-Page Business Plan Template →

One of the biggest and most expensive mistakes I’ve made in my business career could have been avoided by doing a little homework.

In the late 2000s, my team and I came up with what we thought was a great idea for a product . Tons of businesses would need it, and it was almost guaranteed to be a huge hit!

But, we neglected to do our market research. 

We ended up with a product searching for a market instead of figuring out who our ideal customer was and building a product specifically for them.

You can avoid making this same mistake. 

Let’s learn from my experience and go over the basics of how to conduct market research. 

  • What is market research?

Market research is the process of gathering information about your potential customers. 

It helps you define your target market, craft customer personas , and understand the viability of your business, by answering questions like: 

  • Who are your customers?
  • What are their buying and shopping habits?
  • How many of them are there? 

By exploring your ideal customers’ problems, desires, and current solutions, you can build your product, service, and overall business strategy to better serve them.

  • Why is market research important?

When starting a business , conducting market research to get to know your customers is one of the most important things you can do. 

If you don’t understand your customer, you don’t know:

  • How you can solve their problems . 
  • What kind of marketing messages and advertising work. 
  • If your product or service is actually something your customers will spend money on.

Beyond that, market research can help you:

  • Reduce risk: Inform critical decisions with real-world data.
  • Understand your competitors: Know how competitors and alternatives to your business represent themselves in pricing, quality, and placement.
  • Identify market trends: Stay ahead by spotting emerging trends and shifts in the market.
  • Enhance customer experience: Improve customer satisfaction by addressing their pain points.

Gathering data on your customers should become a regular practice for your business. 

The more in tune you are with your customers, the better you can serve them and the more likely you are to grow your business. You should never just let assumptions about your customers drive business decisions.

Developing primary and secondary data through market research is how you get an accurate reflection of your customers’ needs.

Further Reading: 6 things to consider before entering a market

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Things to consider before conducting market research

Market research can be incredibly time-consuming (and even a waste of time) when done without the right preparation.

Here are a few questions to answer to help ensure you make the most of your efforts.

What are your objectives?

A research objective is a stated purpose that explains why you’re doing market research. It should include a specific result you intend to achieve, using available resources within a certain time frame. 

Without an objective, you’ll pour over a sea of data without knowing what you’re looking for. And if you speak to customers without a goal, you’ll struggle to ask useful questions and dig deeper.

Don’t overthink it.

Your objective should be easy to understand and connected to your business needs. 

For example, if you’re just starting, your objective may be to verify before investing in production if your chosen customer base is interested and willing to purchase your product or service.

What research methods will you use?

You don’t need to have every question prepped or a list of people to interview at the start—but you should know what research methods you intend to use.

The research options you choose will impact the data you collect, and the time it will take to complete it. By doing this ahead of time, you’ll be better prepared to create a timeline of when to take specific actions and what milestones to hit to stay on track.

What tools and resources do you need?

You likely won’t know every resource you’ll need until you start doing research. However, that doesn’t mean you can’t be proactive. 

If you know the methods you’ll be using, research what tools you’ll need to:

  • Conduct interviews
  • Create surveys
  • Observe customer behavior

If you use third-party data, identify reputable sources to provide the information you want.

  • How to conduct market research

Every business will do market research differently. The sources, the methods of data collection, and how you’ll use that data are entirely up to you. 

However, the core steps you should take remain the same. Here’s my recommendation for how to structure your research efforts:

1. Start by identifying your target market

Imagine that someone walks into your business, reaches out online, or picks up the phone and calls you. 

It’s your perfect customer: someone who has the problem that you solve and is willing to spend money on your solution. 

Now imagine the details about this person. Who are they? Can you describe them?

Ideal customers and common traits

This “ideal customer” is your target market . Your business might have several target markets, but it will usually serve you best to keep your list of target customers to two or three.

Each of your target markets should share common traits . These might be demographic traits such as: 

  • Income levels
  • Locations 

They might be psychographic traits—groups of people that like the same things or have similar interests. Or, your target market might be a certain type of employee at another company, such as a Chief Technology Officer or head of marketing.

Most often, target markets are blends of demographic and psychographic groups. For example, you might develop a new type of shoe targeted at female triathletes. Or you might be opening a hair salon targeting urban, hipster men.

Further Reading: Why niche audiences are important and how to find yours

Market segmentation

Creating multiple target markets for your company is doing what’s called “ market segmentation .” 

This sounds complex, but all you’re doing is dividing your target markets into different groups you hope to sell to. Each market segment might have different characteristics and buy your product or service for different reasons.

You might create different marketing campaigns or customize your product or service for each segment.

Further Reading:

Target marketing explained

Your target market is your ideal customer who needs your solution. They share common traits like age, gender, income, interests, or job roles. To start, focus your efforts on one target customer.

Consider focusing on a younger audience

Younger consumers are often overlooked in favor of older customers who currently make purchasing decisions. However, if you can crack the interests of a younger audience, it may lead to long-term loyalty.

2. Find out if your market is big enough

Are there enough potential customers to sustain you and your competitors? If the answer is no, then you need to consider changing your product or service offering.

Use the attributes you defined in the target market step and determine how many people meet your demographic, psychographic, or location criteria. I’ve got some links to resources to help you figure this out at the end of this article.

For example: If your target market only has a few thousand potential customers, you must either sell to them frequently or at a fairly high price to create a sustainable, profitable business.

Further Reading: How to use TAM, SAM, SOM to determine market size

If you are targeting an existing market with established competitors, you do what’s called industry research . 

For example, perhaps you are building a new company in the market for sports drinks or the market for cell phones. In cases like this, understanding how much people buy of existing offerings will give you the best sense of your potential market size. 

In this case, you want to look for industry reports and read trade publications for your industry. These publications often summarize the market size.

Further Reading: Differences between industry and market research explained

3. Talk to your potential customers

Once you have identified your target market, or at least made a good guess at who your target market is, you need to take the most important step in this entire market research process. 

You need to get up from your desk, leave behind your computer, and go outside. That’s right, you need to go and talk to people in your potential target markets. 

Yes, you can do online surveys and other research, but that’s no substitute for actually talking to potential customers. 

You’ll gain more insight into your customers through first-hand accounts than any survey will ever tell you.

Do this one thing, and you’ll be miles ahead of your competition. Why? Because most people skip this step. It’s intimidating to talk to strangers. What if they don’t want to buy what you plan on making?

So, don’t be like most entrepreneurs (including me!) and skip this critical step. 

It can mean the difference between success and failure. Getting this step done early will help you refine your business model and make a clear impact on your future success.

Further Reading: How to Create a Market Penetration Strategy  

4. Identify and analyze your competitors

Part of understanding your customers is knowing what solutions they already use. 

These are your competitors, and they may directly compete with you or provide a reasonable substitution customers settle for. 

You’ll understand how to position your business to take advantage of potential opportunities and mitigate risks by analyzing who they are, what they do, and how customers respond.  

Document your known competitors

To keep things simple, start by listing your known competitors . Account for businesses that offer a similar product/service, and those that indirectly compete with their solution or industry expertise. 

Example:   You operate an outdoor goods retail store. Your mission is to provide hands-on direction for customers to find camping, hiking, and survival gear that they will love. You offer a wide selection of well-known brands, local options, and in-house creations.

Your direct competitors are the large brands themselves, less niche retail stores, and online sellers. You must also account for other businesses that provide expert-level information on outdoor activities. 

They likely don’t sell the products, but may provide guided tours, reviews, or other insights that overlap with your business. 

Analyze your competitors

Once you have your list, it’s time to get to know the competition. Check out their websites, social media, customer reviews, and news stories from the last year. 

Sign up for their email lists, visit their stores (if they have them), and track down any industry reports that give you an idea of their size, performance, and strategic direction.

You don’t have to do everything I just listed. But you must go deep enough to clearly understand your competitors and why potential customers may choose them over you. 

It may even be useful to use the SWOT analysis framework to provide additional structure for your research. 

Further Reading: 10 ways to determine what your competitors are doing

5. Document your findings

The final (and easiest) step is to document your findings. How formal your documentation is will depend on how you plan on using it.

If you only need to share your findings with business partners and others in your business, then you can probably communicate fairly informally. 

However, if you’re looking for investors for your business, you may need to write a more formal market analysis and do a market forecast.

Presenting your market research

The single piece of documentation that every business should create is a buyer persona . 

A persona is a description of a person that hits on all of the key aspects of your target market. And, just like you might have several target markets for your business, you might have several different buyer personas.

Creating a buyer persona converts your target marketing information from dry research into a living, breathing person. 

For LivePlan , we’ve created a persona named Garrett, who drives much of our product development. Garrett embodies the attributes of our ideal customer.

When we think about creating a new marketing campaign or developing a new feature for our products, we ask, “Would Garrett like this?” You can read about the process we used to create Garrett in this article.

How to create a detailed user or buyer persona

Visualizing your customers when reviewing a sea of data can be tricky. So, create a customer persona and turn that data into the living, breathing person you imagine your customer to be.

LivePlan customer persona example

Check out this real-world customer persona used by the business planning and management software LivePlan.

When should you conduct market research?

Market research is vital when starting a business. It will improve your product or service and help you avoid starting a business without customers.

However, market research shouldn’t be exclusive to new businesses. Conditions are bound to change, and you must stay up-to-date on your industry , competitors, and emerging trends. 

Here are a few other business events where market research can make a difference:

  • Launching a new product/service or updating current features.
  • Expanding into a new market.
  • Consistent dips in financial performance. 
  • Widespread market changes.
  • New competitors enter the market.

Primary vs secondary market research explained

No matter how you decide to gather information, the methods can be boiled down to primary and secondary research. As a business owner, it’s worth understanding the basics of each type of research and how they work together.

What is primary research?

Primary research is the first-hand information collected (by you or someone you’ve hired) from customers within your market. Primary research cuts out the middleman and ensures that the results you are gathering are straight from the source. 

That’s why you should conduct primary research when validating your business idea. 

Furthermore, it can be broken down into two result categories — exploratory and specific.

Exploratory primary research

Exploratory primary research involves non-quantifiable customer feedback. This means you’re not trying to measure results but to record interest or an emotional response. You’ll accomplish this by asking open-ended questions in formats like focus groups or 1:1 interviews.

Asking for open-ended feedback ensures that the results are unfiltered and honest. You aren’t unintentionally leading or hindering their responses. 

Specific primary research

Specific research allows you to dig deeper into issues or opportunities you identified through your exploratory research. 

You may target a smaller segment of customers from the larger group you’ve spoken to, conduct additional interviews, or shift to more quantifiable research such as beta-testing or surveys.

What is secondary research?

Secondary research covers every other piece of data you have available. This includes resources such as:

  • Public sources: Typically free and highly accessible information gathered through government-sponsored research projects. 
  • Commercial sources: Research studies conducted by private organizations regarding the state of specific markets, industries, or innovations. 
  • Internal sources: Data you have collected through everyday business operations. Everything from financial statements to Analytics reports can qualify.

Which is better: primary or secondary research?

Neither primary nor secondary research is better than the other. They simply have different use cases. So, aim for a healthy mix.

When starting, focus on conducting primary research to ensure you get the necessary information to validate your business. 

Compare those findings to secondary resources such as industry benchmarks , market reports, and internal data you’ve collected. 

You’ll likely leverage secondary research more consistently as you grow—but it’s wise to run primary research initiatives occasionally, especially when approaching a strategic decision. Only with both types of research will you fully understand the story of your place in the market. 

Further Reading: Types of market research explained and how to use them

Types of market research to try

1. face-to-face, remote, or phone interviews.

I mentioned this before, but the best thing you can do is get out and talk to your potential or current customers, virtually or in person. 

Be sure you have a refined set of closed and open-ended questions ready, and consider the interviewee’s tone, body language, and interest alongside their answers.

2. Focus groups

Similar to interviews, focus groups can provide direct feedback from your customer mix. Rather than receiving answers or reactions in a bubble, you get to see how customers may act when influenced by others in the market. You can simply ask questions, run product tests, or have them watch a demo.

3. Observational research

Observational research is about watching how potential customers engage with your product or service. You’re attempting to understand what roadblocks or frustrations they may be hitting, what functionality seems to resonate, what they want from your business, etc.

To conduct observational research, you can set up an official testing environment that you control. Or you can just go out and observe your potential customers and see how they shop, make purchases, and what factors encourage or deter them from purchasing.

4. Pricing research

You may include questions about pricing when conducting interviews or focus groups, but you can also specifically develop research around pricing. 

This can be anything from testing different pricing options on your website ( A/B testing ), offering discounts to exclusive segments, or running ad campaigns with different pricing positions. The goal is to understand what your customers are willing to pay and what they consider a fair price .

5. Brand awareness research

This type of research is about understanding if your target market knows about your brand and how much they happen to know. What do they associate with your brand? What competitors come to mind first?

It’s a great way to understand your current market penetration and who your competitors are. You can integrate this type of questioning within your other tests or conduct surveys to get this data.

6. Customer interest

As part of your initial validation process, you should try to understand current customer interest. At its most basic, you’re asking: Are customers willing to buy your product or service? 

You can simply ask questions and look for yes or no answers, but it may be wise to run a limited-time sale or pre-sale to actually line up initial revenue for your business. 

You can offer the chance to purchase during your interviews or focus groups, as well as run pre-orders through a simple landing page or by measuring engagement with a paid ad campaign.

7. Customer satisfaction

This research will help you understand current customer loyalty and what it will take to get customers to come back. Again, you can do this research within focus groups or interviews. 

Still, you can also test loyalty programs, limited-time promotions, customer service initiatives, and other ways to improve customer loyalty. 

Market research tools and resources

Finding market research data depends on the market you are targeting and the industry you are in. 

Here are a few of my go-to sources for market research:

  • U.S. Census : If you’re opening a business in the U.S., the U.S. Census site is a goldmine of information. Check out the Census Business Builder to get population data and data on how much people spend in a given area on your type of business.
  • Bureau of Labor Statistics : Another U.S.-centric resource, but a fantastic site for information on specific industries: hiring and expense trends as well as industry sizes. If your target market is other businesses, this is a good place to look for data.
  • Consumer Expenditure Survey : If you want to know what people spend their money on, this is your source.
  • SBDCNet Business Snapshots : You’ll find a great collection of industry profiles that describe how industries are growing and changing, who their customers are, and what typical startup costs are. You should also check out their list of market research resources, sorted by industry .
  • ChatGPT : All data generated from AI models like ChatGPT must be verified. But it can still be an excellent market research assistant. With the right prompting, you can generate customer segments, understand their nuances, and prioritize them based on your needs.

Further Reading: 21 best market research resources for small businesses

Market research informs your startup decisions

Effective market research can help you avoid costly mistakes early on in the life of your business. 

However, it should remain a core practice that you regularly implement when approaching crucial business decisions, growth opportunities, or just to reaffirm your understanding of the market. 

Revisit this framework whenever you’re approaching a key strategic decision . Confirm that you still understand your customers, competitors, and where the market is headed.

Then use this information to inform your planning and adjust your strategy if necessary.

Content Author: Noah Parsons

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Check out LivePlan

Table of Contents

  • Before conducting market research
  • When to conduct market research
  • Primary vs secondary research
  • Types of market research
  • Tools and resources
  • Market research informs your decisions

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What Is Market Research?

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  • Primary vs. Secondary
  • How to Conduct Research

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How to Do Market Research, Types, and Example

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Market research examines consumer behavior and trends in the economy to help a business develop and fine-tune its business idea and strategy. It helps a business understand its target market by gathering and analyzing data.

Market research is the process of evaluating the viability of a new service or product through research conducted directly with potential customers. It allows a company to define its target market and get opinions and other feedback from consumers about their interest in a product or service.

Research may be conducted in-house or by a third party that specializes in market research. It can be done through surveys and focus groups, among other ways. Test subjects are usually compensated with product samples or a small stipend for their time.

Key Takeaways

  • Companies conduct market research before introducing new products to determine their appeal to potential customers.
  • Tools include focus groups, telephone interviews, and questionnaires.
  • The results of market research inform the final design of the product and determine how it will be positioned in the marketplace.
  • Market research usually combines primary information, gathered directly from consumers, and secondary information, which is data available from external sources.

Market Research

How market research works.

Market research is used to determine the viability of a new product or service. The results may be used to revise the product design and fine-tune the strategy for introducing it to the public. This can include information gathered for the purpose of determining market segmentation . It also informs product differentiation , which is used to tailor advertising.

A business engages in various tasks to complete the market research process. It gathers information based on the market sector being targeted by the product. This information is then analyzed and relevant data points are interpreted to draw conclusions about how the product may be optimally designed and marketed to the market segment for which it is intended.

It is a critical component in the research and development (R&D) phase of a new product or service introduction. Market research can be conducted in many different ways, including surveys, product testing, interviews, and focus groups.

Market research is a critical tool that companies use to understand what consumers want, develop products that those consumers will use, and maintain a competitive advantage over other companies in their industry.

Primary Market Research vs. Secondary Market Research

Market research usually consists of a combination of:

  • Primary research, gathered by the company or by an outside company that it hires
  • Secondary research, which draws on external sources of data

Primary Market Research

Primary research generally falls into two categories: exploratory and specific research.

  • Exploratory research is less structured and functions via open-ended questions. The questions may be posed in a focus group setting, telephone interviews, or questionnaires. It results in questions or issues that the company needs to address about a product that it has under development.
  • Specific research delves more deeply into the problems or issues identified in exploratory research.

Secondary Market Research

All market research is informed by the findings of other researchers about the needs and wants of consumers. Today, much of this research can be found online.

Secondary research can include population information from government census data , trade association research reports , polling results, and research from other businesses operating in the same market sector.

History of Market Research

Formal market research began in Germany during the 1920s. In the United States, it soon took off with the advent of the Golden Age of Radio.

Companies that created advertisements for this new entertainment medium began to look at the demographics of the audiences who listened to each of the radio plays, music programs, and comedy skits that were presented.

They had once tried to reach the widest possible audience by placing their messages on billboards or in the most popular magazines. With radio programming, they had the chance to target rural or urban consumers, teenagers or families, and judge the results by the sales numbers that followed.

Types of Market Research

Face-to-face interviews.

From their earliest days, market research companies would interview people on the street about the newspapers and magazines that they read regularly and ask whether they recalled any of the ads or brands that were published in them. Data collected from these interviews were compared to the circulation of the publication to determine the effectiveness of those ads.

Market research and surveys were adapted from these early techniques.

To get a strong understanding of your market, it’s essential to understand demand, market size, economic indicators, location, market saturation, and pricing.

Focus Groups

A focus group is a small number of representative consumers chosen to try a product or watch an advertisement.

Afterward, the group is asked for feedback on their perceptions of the product, the company’s brand, or competing products. The company then takes that information and makes decisions about what to do with the product or service, whether that's releasing it, making changes, or abandoning it altogether.

Phone Research

The man-on-the-street interview technique soon gave way to the telephone interview. A telephone interviewer could collect information in a more efficient and cost-effective fashion.

Telephone research was a preferred tactic of market researchers for many years. It has become much more difficult in recent years as landline phone service dwindles and is replaced by less accessible mobile phones.

Survey Research

As an alternative to focus groups, surveys represent a cost-effective way to determine consumer attitudes without having to interview anyone in person. Consumers are sent surveys in the mail, usually with a coupon or voucher to incentivize participation. These surveys help determine how consumers feel about the product, brand, and price point.

Online Market Research

With people spending more time online, market research activities have shifted online as well. Data collection still uses a survey-style form. But instead of companies actively seeking participants by finding them on the street or cold calling them on the phone, people can choose to sign up, take surveys, and offer opinions when they have time.

This makes the process far less intrusive and less rushed, since people can participate on their own time and of their own volition.

How to Conduct Market Research

The first step to effective market research is to determine the goals of the study. Each study should seek to answer a clear, well-defined problem. For example, a company might seek to identify consumer preferences, brand recognition, or the comparative effectiveness of different types of ad campaigns.

After that, the next step is to determine who will be included in the research. Market research is an expensive process, and a company cannot waste resources collecting unnecessary data. The firm should decide in advance which types of consumers will be included in the research, and how the data will be collected. They should also account for the probability of statistical errors or sampling bias .

The next step is to collect the data and analyze the results. If the two previous steps have been completed accurately, this should be straightforward. The researchers will collect the results of their study, keeping track of the ages, gender, and other relevant data of each respondent. This is then analyzed in a marketing report that explains the results of their research.

The last step is for company executives to use their market research to make business decisions. Depending on the results of their research, they may choose to target a different group of consumers, or they may change their price point or some product features.

The results of these changes may eventually be measured in further market research, and the process will begin all over again.

Benefits of Market Research

Market research is essential for developing brand loyalty and customer satisfaction. Since it is unlikely for a product to appeal equally to every consumer, a strong market research program can help identify the key demographics and market segments that are most likely to use a given product.

Market research is also important for developing a company’s advertising efforts. For example, if a company’s market research determines that its consumers are more likely to use Facebook than X (formerly Twitter), it can then target its advertisements to one platform instead of another. Or, if they determine that their target market is value-sensitive rather than price-sensitive, they can work on improving the product rather than reducing their prices.

Market research only works when subjects are honest and open to participating.

Example of Market Research

Many companies use market research to test new products or get information from consumers about what kinds of products or services they need and don’t currently have.

For example, a company that’s considering starting a business might conduct market research to test the viability of its product or service. If the market research confirms consumer interest, the business can proceed confidently with its business plan . If not, the company can use the results of the market research to make adjustments to the product to bring it in line with customer desires.

What Are the Main Types of Market Research?

The main types of market research are primary research and secondary research. Primary research includes focus groups, polls, and surveys. Secondary research includes academic articles, infographics, and white papers.

Qualitative research gives insights into how customers feel and think. Quantitative research uses data and statistics such as website views, social media engagement, and subscriber numbers.

What Is Online Market Research?

Online market research uses the same strategies and techniques as traditional primary and secondary market research, but it is conducted on the Internet. Potential customers may be asked to participate in a survey or give feedback on a product. The responses may help the researchers create a profile of the likely customer for a new product.

What Are Paid Market Research Surveys?

Paid market research involves rewarding individuals who agree to participate in a study. They may be offered a small payment for their time or a discount coupon in return for filling out a questionnaire or participating in a focus group.

What Is a Market Study?

A market study is an analysis of consumer demand for a product or service. It looks at all of the factors that influence demand for a product or service. These include the product’s price, location, competition, and substitutes as well as general economic factors that could influence the new product’s adoption, for better or worse.

Market research is a key component of a company’s research and development (R&D) stage. It helps companies understand in advance the viability of a new product that they have in development and to see how it might perform in the real world.

Britannica Money. “ Market Research .”

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Market Research: A Beginner’s Guide

  • Market Research

Knowing how to conduct market research enables marketers to create new products, features, and pricing that speak directly to the needs of their customers.

Sadly, most of us lack psychic powers. But we do have market research .

We mere mortals need a way to learn about what our audience wants, how we can earn their business, and how we can maintain or improve loyalty to our brand over time.

This is the domain of market research, a skill that can be intimidating to non-researchers, but one that needs to be part of every marketer’s toolkit.

There are just three phases to a market research project, and this guide will help you tackle all three with gusto. These phases are:

  • Collect Data
  • Analyze (and Act)

In this post, we break down each phase into multiple steps. Once you get these right, it will be almost as good as being psychic.

Phase 1: Planning for Market Research

To get the best results, start your market research project with a plan. A sk yourself these questions about your products and services:

Is there a need for this product in the market?

Make sure that you are in the right market for your business. If you live in Anchorage, it’s not likely that you would want to start a business selling outdoor swimming pools.

Do my products meet specific market needs?

Think about the general needs that you perceive in your target market, then ask yourself if and how you meet them. Think about what you are doing now and what you could do.

Culturally, healthy eating is popular, but there are multiple different types of diets. If you plan to open a restaurant, are you going to offer healthy options as well as options for those on restrictive diets?

Is my pricing fair and competitive?

Pricing is one of the largest factors in why consumers may leave you for the competition, so keep an eye on both your prices and that of your competitors.

While you want to maximize your profit per unit sold, to maintain regular business, you need to be aware of what your competitors are doing and stay competitive.

Decide What Data You’re Looking for in Your Market Research Study

By analyzing your answers to the above questions, you can come up with a good platform from which to start your research.

The goal is to have an idea of what you can change and make a plan of how to do so.

For example, a specific market need could be gluten-free dinner options. Currently, you have one, but wonder if you should expand your menu to include a wider variety.

Your plan is to survey people with Celiac’s disease and gluten intolerance to see what options they would be most interested in adding to your menu.

By establishing exactly what data you’re looking for, you’ll be able to keep your study on-target.

Form a Research Hypothesis 

Just like having a basic understanding of your market is beneficial to your research, so to is having a hypothesis to inform what you think the results will be.  But, be prepared to be surprised!

Before you begin the research phase, you should have dedicated some time to thinking about how you expect it to go. The true outcome may vary greatly but you will be a better position to analyze your data and make effective changes if you go into it with some plan of attack.

Phase 2: Collecting Market Research Data

Now, on to the meat of your market research project: going out and getting responses!

There are two ways that you will want to approach the data collection process:

Quantitative research is the mathematical approach and should be used heavily in your process. Quantitative question types like radio buttons, checkboxes, and Likert scales are easy to measure and compare.

While the data can be a bit general, quantitative research methods allow you to identify broad trends within the data that you can act on.

Google Analytics is another example of quantitative research that can support or inform your market research surveys. Here, you can look at where your leads are coming from, how long people are staying on your pages or maybe where they are leaving your page. This can give you an idea of what to fix to bring people through the sales funnel.

Qualitative research , on the other hand, asks for more detail. The most common examples are open text question types where respondents put their answers in their own words.

This type of research is usually used in conjunction with quantitative question types as this data is more difficult to analyze, but provides specific examples and deep insights.

For example, you can use Google Analytics as quantitative data showing how potential customers are reaching your page. To find out why  those referrals are more effective than others, use qualitative research.

Surveys, focus groups, user testing, and face-to-face interviews are prime examples of qualitative research and can provide you with answers that are actionable while opening a window  into behavior patterns.

The Two (Main) Types of Market Research

Once you have a plan and hypothesis, it’s time to determine the type of research you need. There are two broad types of market research that you will want to focus on.

Primary research involves conducting your own research about products and services that you plan to offer. Secondary research looks at published data and can be used to create benchmarks and understand the competition.

While there is no set order to gathering your data, I find that conducting secondary research first can help give you the background information that will allow you to create a more targeted primary research project that produces better data.

How to Conduct Secondary Market Research for Your Business

When conducting secondary research, keep your plan and project goals at the top of your mind. It’s easy to fall down a rabbit hole of data and become overwhelmed. Maintaining focus on your pre-established goals will keep you and your market research surveys on target.

Step one is to determine your questions.

Do you need to learn more about the market to help determine your target demographics? Are you hoping to learn more about the competition and how they operate? Do you understand consumer preferences and how they’ll play into your business model?

Next, you’ll need to figure out what kind of information you need to answer your questions. Definining what data you need will keep you on track during your research and help you sift through the mountains of data.

Ask yourself what would be most beneficial to you: statistical data such as annual reports and financial records, or location-specific data and consumer information.

  Once you know what questions you need answered have an idea of the information that will best answer them, you are ready to start the research.

We suggest the following resources for successful secondary research:

  • Public sources such as libraries and government departments
  • Banks and other financial institutions
  • Educational institutions such as universities and technical institutes
  • Online periodicals and industry studies (try searching in Google Scholar)

How to Conduct Primary Market Research

  Once you’ve completed your secondary research and have a solid understanding of your particular market, your target demographics, and the competition, you’ll want to get started on your primary research.

Your primary research will get more in-depth about the particulars of your business, products, and location. The questions you ask will be specific for your situation but often the questions include:

  • Which factors do consumers consider when making a purchase?
  • What do they like/dislike about our current products?
  • Where could this product improve?
  • What is a fair price for this product?

Collecting Responses for Primary Market Research Surveys

  There are a number of ways to get answers to these questions, however, when in the primary research stage, you want to make sure that you are collecting information from specific segments of people. Use qualifying questions to ensure that your sample meets your demographics are a great way to make sure that your data is practical and actionable. This can involve offering incentives to respondents.

Tapping into Focus Groups for Market Research

If you would like specific answers to how a product could be improved upon, a focus group is a great option.

Focus groups may require the largest incentive but are a great way to get direct feedback on a product. This involves bringing a small group of people together and having them sample your product. Afterwards you’ll ask them specific questions to gather feedback.

Using Surveys and Questionnaires for Market Research

For overarching questions, such as, “what factors do you consider when purchasing?” a survey or questionnaire is a great way to get the opinions of a larger group of people. These can be created online and require less of an incentive as the respondent can take them at their leisure.

If your business is more service oriented, you will still want to explore all of these options, but what may benefit you the most is direct interviews. These can be done face-to-face or over the phone and can focus primarily on getting feedback about the performance of the service.

Phase 3: Analyzing and Acting on Your Market Research Data

The most important aspect of market research is, of course, acting on it. All of the research and data in the world can’t help your business is you don’t put it into action!

In order to thrive, you must be agile and willing to address any faults that your research uncovers. While you may not be able to change everything immediately, you can make incremental improvements that will add up.

How to Accurately Analyze Market Research Survey Data

Throughout the steps taken during research, your quantitative studies should have pointed you in the direction of any areas of weakness. Now you’ll turn your eye on the qualitative research to learn how to fix the problem.

By studying Google Analytics, maybe you found the page where people are most often leaving your site. Having acknowledged the problem, you got direct feedback on where and why and are now ready to fix the issue.

Or while developing a menu, your team discussed the idea of introducing healthy options to please the more conscientious eaters. Using a survey, you polled your market and found that 40% of people said they are concerned about their health and would like to see a menu that reflects this growing trend.

Acting on Your Market Research Findings

Collecting all of this information without acting on it is time wasted, right? Take a look at the feedback you are given and come up with solutions.

If you’re not the sole proprietor, this could involve having your team get together to come up with ways to address any issues or weaknesses. During brainstorming sessions, write every single idea down. Slowly whittle them away until you are left with tangible solutions to established problems.

If you’ve discovered that there is a page where people seem to be falling off in masses. Your qualitative research should give you an idea of why they’re leaving that page and how to improve that experience.

For example, is there something distracting them and causing them to lose focus? Is the contact form a bit too invasive and scaring people away? Fortunately, in the online world, you can use split testing to try out multiple solutions at once to find a winner.

  For the restaurateur, data showed that a huge segment of your market is interested in eating healthy but that they are also economical when it comes to eating out. Through your secondary research, you found that the competition is making a killing by offering seasonal salads that are both healthy and cost effective. What do you do? Adapt accordingly.

The More You Conduct Market Research, The Easier It Gets

It’s easy to look at the market research process and think to yourself that it’s too much work. “How can I overwhelm myself with all of this research when my business is losing money?” you say with your head in your hands.

Sit down, drink a glass of water and remind yourself why you got into business in the first place. Now ask yourself if that business is worth the energy required to make it successful.

Hopefully the answer to that is yes.

And happily, it does get easier. Each time you conduct research, you’re becoming more and more familiar with the market. It won’t happen overnight but soon you’ll have a good enough understanding of your audience that you’ll be providing the studies that newer businesses are looking to during their secondary research.

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How to do Market Research: a Step-by-Step Guide

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How to do Market Research: a Step-by-Step Guide

Looking for the best way to do market research? From framing your initial question to extracting valuable customer insights, we’ll walk you through the lean market research process step-by-step. You will learn effective techniques for collecting and analyzing data , with practical tips on applying your findings to benefit your SaaS. Get ready to empower your decisions with real-world market intelligence.

  • Market research is vital for making informed business decisions, enabling companies to understand the market, target audience, and competitors, reducing risks, and optimizing marketing communications and product strategies .
  • Effective market research requires clear and measurable objectives, guiding decision-making and ensuring relevance to the project’s needs, and should be accompanied by appropriate methods , including both primary and secondary research .
  • Applying insights from market research to product development and marketing strategies can significantly enhance business growth. This allows businesses to tailor their offerings and engage more effectively with their target market.

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What is market research

market research where to start

Essentially, market research is the process of understanding one’s target audience’s needs and wants to validate a new product, feature, or service idea. It involves probing and extracting answers based on empirical evidence instead of relying on hunches or speculative judgment.

Why should you do market research?

Understanding your consumers’ behavior and needs well through methodical market research is vital for informed decision-making when it comes to your product roadmap. These choices can make or break your SaaS company. Without thorough market research, you’re navigating blindly, basing crucial judgments on antiquated notions of customer habits, imprecise economic gauges, or untested assumptions rather than solid competitive analysis.

The outcome? Sharper marketing messages, savvy product development strategies, and an intimate grasp of both prospective buyers and existing customers’ preferences and needs.

Identifying your market research goals

Before you do anything – you need to determine specific and actionable goals of your market research project. Setting SMART (specific, measurable, achievable, relevant and time-bound) goals will help you stay on track, come up with better market research questions and achieve more reliable results faster.

smart goals userpilot

For effective market research outcomes, your goals must be:

  • Quantifiable .
  • Attainable.
  • Directly aligned with project requirements.

Having established unambiguous goals prior to delving into data analysis sets up a solid foundation ensuring pivotal questions, hypotheses, and indicators are systematically tackled during effective market research.

Market research methods

generative research methods

Now that you understand the role of well-defined research objectives, let’s examine the different types of market research and research techniques for realizing these goals. These methods are essentially your toolkit for extracting valuable insights and they fall into two broad categories: primary research and secondary research . Choosing between them depends on many factors such as your budget, time availability, and whether you’re looking for more exploratory research data or concrete answers.

Engaging in primary research is comparable to unearthing precious metals—it requires gathering new information straight from sources through several approaches including:

Userpilot surveys

  • Focus groups.

free trial

This approach gives you first-hand insight into your target audience.

Conversely, secondary research uses already established datasets of primary data – which can add depth and reinforcement to your firsthand findings. For a 360 view of your market trends, combine both techniques – exploratory primary research and secondary channels of inquiry.

Let’s look a bit deeper into them now.

What is primary market research?

Market research uses primary market research as an essential tool. This involves collecting new data directly from your target audience using various methods, such as surveys , focus groups, and interviews.

market research where to start

Each method has its benefits. For example, observational studies allow you to see how consumers interact with your product.

market research where to start

There are many ways to conduct primary research.

Focus Groups : Hold discussions with small groups of 5 to 10 people from your target audience. These discussions can provide valuable feedback on products, perceptions of your company’s brand name, or opinions on competitors.

Interviews : Have one-on-one conversations to gather detailed information from individuals in your target audience.

market research where to start

Surveys : These are a common tool in primary market research and can be used instead of focus groups to understand consumer attitudes. Surveys use structured questions and can reach a broad audience efficiently.

market research where to start

Navigating secondary market research

While market research using primary methods is like discovering precious metals, secondary market research technique is like using a treasure map. This approach uses data collected by others from various sources, providing a broad industry view. These sources include market analyses from agencies like Statista, historical data such as census records, and academic studies.

Secondary research provides the basic knowledge necessary for conducting primary market research goals but may lack detail on specific business questions and could also be accessible to competitors.

To make the most of secondary market research, it’s important to analyze summarized data to identify trends, rely on reputable sources for accurate data, and remain unbiased in data collection methods.

The effectiveness of secondary research depends significantly on how well the data is interpreted, ensuring that this information complements the insights from primary research.

The role of qualitative and quantitative data in market research

Qualitative data analysis

In market research, there are two main types of data: qualitative and quantitative. Qualitative data explores the reasons behind consumer actions, collecting non-numeric information to understand consumer behaviors and motivations. For more on gathering and analyzing qualitative data, see How to Analyse Qualitative Data . On the other hand, quantitative data uses numeric data to measure consumer preferences, behaviors, and market sizes. To learn more about handling this type of data, check out User Analytics .

A thorough market analysis usually combines both qualitative and quantitative data. This approach provides a full view of the market by merging detailed qualitative insights with concrete quantitative statistics. For more on combining these approaches, refer to Generative vs. Evaluative Research .

Gathering qualitative insights

market research where to start

Qualitative research involves direct engagement with customers, like having detailed discussions. It includes observational studies that capture genuine consumer reactions. This type of research provides deep insights into consumer perceptions, brand comparisons, consumer behavior, and feedback on specific product features.

Studies on customer satisfaction and loyalty reveal effective strategies for keeping customers and what keeps them loyal, such as loyalty programs and quality customer service. The strength of qualitative research lies in its ability to dig deeper than just numbers, reaching insights that quantitative data might miss. By using qualitative data to customize experiences, businesses can increase customer satisfaction, interaction , and loyalty, leading to greater business growth.

Analyzing quantitative data

Quantitative research provides precision and the ability to measure findings using structured data collection methods like polls and surveys. Product analytics tools such as Userpilot , Amplitude , Heap , and Mixpanel are highly effective for collecting and organizing quantifiable data. This type of data is crucial for identifying trends and insights, which can help businesses track important performance indicators such as conversion rates or customer lifetime value , supporting their growth strategies.

Quantitative research data is divided into two types: discrete data, which includes countable numbers, and continuous data, which consists of numbers that can have fractions or decimals. These are vital for revealing important demographic information.

Segmenting your target market

Userpilot segmentation

Market research plays a key role in segmenting your target audience into manageable segments.

These market segments are typically grouped by similar needs or attributes, and display similar responses in marketing research surveys and initiatives. The full market segmentation process is vital for comprehensively grasping and satisfying the requirements of your targeted consumer base.

Accumulating demographic information forms the basis for executing effective market segmentation strategies. Businesses prioritize obtaining user data such as:

  • Job functions.
  • Organizational scale.
  • Customer demographics profiles.
  • Lifestyle choices.
  • Values systems.
  • Product usage patterns.

This information can be collected in the initial sign-up flow (through a signup flow survey; see the Asana example below) or by conducting comprehensive market research surveys .

signup flow

At its core, successful market segmentation enables businesses to communicate effectively in their target customers’ dialects while catering explicitly to their distinct demands.

Userpilot allows you to easily segment your users not only by demographic information, company size, plan, or role – but also by their in-app engagement ( behavioral segmentation ):

behavioral segmentation

In summary, the techniques used to create detailed analyses, like conducting specialized surveys and carefully collecting relevant participant information, are crucial for identifying groups within a larger target population. These groups are defined by usage patterns and broad demographic and economic indicators, enabling companies to not only reach but also deeply connect with each niche market they aim to capture.

Creating buyer personas based on your market research

user personas userpilot

Creating buyer personas is a strategic process that helps businesses better understand and cater to their target customers. Here’s how you can systematically approach creating effective buyer personas:

  • Gather Initial Data : Start by collecting basic demographic information such as age, gender, location, and education level. This can come from existing customer databases, market research, or industry reports.

market research where to start

  • Segment the Audience : Based on the collected data, segment your audience into distinct groups. Each segment should represent a type of customer with similar characteristics and behaviors. This segmentation helps in personalizing marketing and sales strategies effectively.
  • Build Detailed Personas : For each segment, create a detailed persona that includes not only demographic and behavioral traits but also psychographics like interests, values, and lifestyle. Each persona should tell the story of an ideal customer, making them relatable for your marketing team.
  • Refine Over Time : Buyer personas are not static. As you gather more data and the market evolves, revisit and refine your personas to keep them relevant and accurate.
  • Utilize Tools Like Userpilot : Tools such as Userpilot can enhance this process by providing analytics that reveal how users interact with your product. This can confirm hypotheses or uncover new insights about user preferences and behaviors, which can be integrated into existing personas to make them even more accurate.

By carefully crafting and continually updating buyer personas, businesses can achieve a deeper understanding of their customers. This enables them to tailor their offerings and communications effectively, thereby enhancing customer engagement and satisfaction.

Recruiting participants for primary research

Choosing the right participants for primary research is a crucial step in market research. It’s important to find individuals who can provide relevant and meaningful consumer feedback, on your product or service, as this feedback is key to developing accurate user personas.

Userpilot can be instrumental in this process. It collects data on how users interact with and use your products, helping you identify who might be the best candidates for more detailed studies, such as interviews.

To efficiently recruit participants for interviews, Userpilot’s in-app features, such as in-app modals with embedded surveys can be extremely useful. You can use these tools to engage directly with users who meet your specific criteria, right within your app.

market research where to start

This method not only simplifies the recruitment process but also ensures that you’re interacting with the most relevant users. By leveraging these features, you can gather deep insights that significantly enhance the development of your user personas, ensuring your research is both timely and informed.

Competitive analysis for strategic advantage

Competitive analysis helps businesses understand their rivals’ strategies. It involves identifying which industries or markets to target and listing key competitors to gain a clear view of the competitive environment. This includes evaluating competitors’ market share, strengths, weaknesses, and potential entry barriers, often using tools like SWOT analysis.

By understanding competitors’ operations and past marketing efforts, businesses can craft new strategies, pinpoint opportunities, and learn from competitors’ mistakes. Employing market research, brand perception surveys, and market statistics, alongside analytical frameworks like Porter’s Five Forces Model, helps businesses uncover new opportunities and maintain a competitive advantage.

Ultimately, competitive analysis uses the understanding of competition to fuel business growth.

Conducting effective market research surveys

Primary market research often uses surveys as a cost-effective way to gather data. These surveys reach wide audiences and provide quick feedback. It’s crucial to carefully plan the creation and distribution of these surveys to ensure they are effective. Given the high amount of web traffic from mobile devices, it’s particularly important to make surveys mobile-friendly.

To get the most comprehensive data, include both quantitative (closed-ended) and qualitative (open-ended) questions in your survey . Offering incentives like financial compensation or vouchers can encourage participation, but it’s important to manage these carefully to avoid biasing the responses.

market research where to start

Well-designed surveys are like direct interviews with your target audience and are key to obtaining valuable insights about their views and experiences.

Userpilot offers over 50 in-app survey templates along with a bespoke builder, which are important tools for collecting the right responses. These features allow you to tailor surveys precisely to your needs, ensuring you gather accurate and relevant data directly from your users. By leveraging these templates and customizing them with the bespoke builder, you can effectively engage your audience and enhance the quality of insights you receive. This setup is crucial for conducting efficient and effective market research.

market research where to start

Analyzing and interpreting market research data

Once you have collected data through surveys, market research data analysis is the next critical step. It involves identifying patterns, establishing connections, and extracting insights that inform business decisions.

Userpilot’s analytics suite offers deep and easily accessible insights into your market research data:

market research where to start

This process starts with preparing the data by cleaning and organizing it to ensure accuracy and ease of analysis. Depending on the study’s goals, various analytical methods can be used, from simple descriptive statistics to complex multivariate analyses, all chosen to provide meaningful insights.

The core of this analysis aims to uncover market trends and understand industry specifics, which can highlight key factors such as impactful customer experiences, profitable products or services, and effective marketing strategies. Communicating these findings effectively involves presenting them in clear reports and using visual aids while making practical recommendations and addressing any limitations in the research scope or methods. Ultimately, data analysis transforms raw data into compelling narratives that offer actionable business intelligence.

Applying market research to product or service development

Market research is much more than just collecting data and uncovering insights; it’s a vital tool for driving business growth and guiding product development at every stage. Here’s how market research supports business throughout the product lifecycle:

  • Concept Creation : Helps identify market needs and opportunities to inform the initial product idea.
  • Building a Business Case : Provides evidence and data to justify investment in the new product.
  • Product Development : Offers insights into customer preferences and feedback for refining product features.
  • Market Introduction : Aids in strategizing the launch, targeting the right audience, and setting the right price.
  • Lifecycle Management : Continuously gathers data on customer usage and satisfaction to enhance the product over time.

Consider a B2B SaaS company that develops project management software. By engaging in targeted market research activities like surveys and doing focus group call groups among its business clients, the company can:

  • Understand Business Needs : Gain insights into the specific project management challenges and needs of different industries.
  • Refine Product Features : Discover which software features are most valued by businesses, such as integration capabilities, user-friendliness, or specific tools for collaboration.
  • Tailor Marketing Strategies : Identify the most effective communication channels and messaging that resonate with business clients, such as emphasizing efficiency gains or return on investment.

Market research guides businesses from the initial idea through to launch and beyond, acting as a strategic tool that ensures all actions are aligned with market demands and customer needs , ultimately aiming for successful business outcomes.

Utilizing tools for efficient market research

Using tools like Userpilot, SurveyMonkey, Google Forms, and Typeform, market researchers can reach a wide audience and get fast responses. These platforms help to design, distribute, and analyze surveys efficiently.

Userpilot stands out by allowing businesses to create targeted in-app experiences that engage users directly where they are most active—within the app itself. This direct engagement method improves the quality of the feedback collected as it relates to specific features or user experiences.

market research where to start

Userpilot also offers features such as demographic filtering and behavioral-based segmentation, which speeds up the process of finding and recruiting the right participants for market research.

market research where to start

These tools are essential for performing detailed and effective market research. They break down geographic and cultural barriers, offer access to diverse user groups, and enable businesses to conduct deep, actionable analyses across different market segments.

Translating research findings into business growth

Market research does more than just gather and analyze data; it aims to transform these insights into tangible business improvements. This process is crucial in guiding product development and helping increase a company’s market share by informing targeted strategies. For instance, a B2B SaaS company could use market research to:

  • Tailor marketing strategies specifically for key user personas.
  • Identify the most valued features for your users.
  • Develop pricing strategies that appeal to companies of different sizes.
  • Gain insight into the specific needs and expectations of their customers.

By implementing effective market research techniques, companies can customize their products or services to better serve their target audience’s needs, fundamental for stimulating company growth . Conducting personalized market research adds value, while collaborating with specialized firms may yield additional profound insights.

Market research is not just about collecting data; it’s about deeply understanding your customers, spotting opportunities, and making informed decisions that drive your business forward. It provides essential insights into the market and business environment, influencing how potential clients perceive your company.

By conducting competitor analysis and market research, organizations can:

  • Connect with their target audience.
  • Understand their competitive position.
  • Plan strategically for future initiatives.
  • Gain insights into customer perceptions of their brand, uncovering new perspectives or opportunities for improvement.

Since competitors also use market research to their advantage, engaging in these analytical processes is crucial for a comprehensive marketing strategy, aimed at business growth.

Start your own market research and journey today to pave the way to success.

Frequently asked questions

What is market research and why is it important.

Understanding their target market through collected information and insights, businesses can make informed decisions, diminish risks, and enhance marketing strategies with the aid of market research. This ensures that choices are based on reliable data, which is crucial for business success.

What is the difference between primary and secondary research?

To summarize, primary research entails the gathering of original data directly from the source, whereas secondary research utilizes previously compiled data sources to add perspective and reinforce conclusions derived from primary research.

How does market research guide product development?

By offering critical data on consumer habits and preferences, market research steers the enhancement of product features, thereby influencing decisions across all stages of a product’s life cycle and aiding in the evolution of product development.

What tools can be used for efficient market research?

Platforms such as Userpilot, SurveyMonkey, Google Forms, and Typeform can be leveraged alongside technologies that are driven by data to simplify the process of crafting, disseminating, and examining online surveys which play a crucial role in conducting market research effectively.

How can market research translate into business growth?

By informing product development, marketing strategies, and identifying opportunities for growth through enlightened decision-making, market research results can propel business expansion.

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What are the Market Research Methods?

  • August 15, 2023
  • Topic: Brand Strategy , Corporate , Corporate Trends , Customer Experience , Market Analysis , Product Lifecycle
  • Resource type: Insights Blog

So, you have a question, but you are unsure of how to get your answer. Maybe you are wondering who your target audience is or why you lost out on a deal to your competition. Maybe you are looking to expand into a new market and want to know more about the customers and competitors in the industry. While these examples are similar in the way they help you understand your business better, they all require different market research methodologies to arrive at the answer.  

What are Market Research Methodologies?  

Research methodologies are various ways to perform research to understand your problem. The correct type to employ depends on the answers you are seeking, the information you have, and the information you need to gather. There are many different methods, but most fall into four categories: data analytics, survey, qualitative, and secondary.

In this post, we will provide an overview of the four main research methodologies along with the benefits and challenges of each.  

Custom or Syndicated Research  

In addition to the types of methodologies, there are two types of funded research: custom and syndicated.   

Custom research is funded by a single company and is focused on answering the key questions the business seeks to understand. Though more costly, the research design, implementation, and results are unique and targeted toward addressing the funding company’s needs.  

On the other hand, syndicated research is not curated or funded by a specific client; a market research company conducts it to offer data such as industry statistics, current best practices, or recent trends. Though not directly tied to a single company’s situation, businesses often buy syndicated research to gather perspective on their performance and identify areas where custom research can help provide more insight.   

The Four Types Of Market Research   

Data analytics  .

Data analytics research involves collecting and analyzing large sets of data to derive answers, uncover patterns, and predict future outcomes. This method helps you identify and understand things you are aware of but don’t yet understand.

Data can come from a variety of sources including CRM data, historical transactional data, survey data, a third-party publisher, and more to build a holistic map of the situation, identify gaps and discern trends. Data analytics is the most common research method with almost 70% of companies using it in at least one market research project in the past year.  

For example, you might have large sets of historical data and know there is a data-backed answer for how to segment your customers, but you have yet to compile all your information together to identify the answer.  

Benefits and Challenges

Benefits: Analyzing historical data provides a holistic view of a situation by combining different sets of data and modeling potential scenarios and outcomes. You can confirm hypotheses, break biases, and help build cases internally.

Challenges: This method requires a lot of data, and some of that data may be hard to access, hard to generate, or not easily analyzed. This method also requires a lot of time, money, and resources to acquire and parse the correct data.   

Survey research involves gathering opinions, preferences, and experiences by asking a set of questions to a targeted group of people. The focus of survey research is to test theories, assumptions, and hypotheses. The answers are collected from a representative sample of a targeted audience, allowing the researchers to quantify data and generalize the results to the wider population with a reasonable margin of error and strong confidence level.

Survey data can be collected from consumers, other business decision-makers, or your customer lists. Surveys are a very popular market research methodology with over 60% of companies performing at least one survey in the last year.  

For example, you may be wondering how satisfied your customers are, what factors drive satisfaction, and how you compare to key competitors in the market. By surveying your customers and those of key competitors you can understand the drivers of satisfaction and your relative strengths and opportunity areas in the market.  

Benefits and Challenges 

Benefits : Surveys provide an aggregate but statistically significant picture that companies can leverage to make decisions that align with their audiences’ preferences. Surveys also offer the ability to segment answers based on segments of the audience to analyze how different groups respond to the same questions.   

Challenges: Surveys are a fixed set of questions and cannot be adjusted once the survey has been deployed. Responses are limited to the questions posed by the researcher and don’t allow for open-ended qualitative responses. Surveys require many respondents, and depending on the target audience, it can be challenging to find a large enough sample size to provide statistically significant results. Lastly, surveys need to incentivize respondents, which could lead to a high price tag.  

Qualitative Methodologies   

Qualitative research focuses on targeted insights around concepts, opinions, and preferences. Unlike quantitative methods, these market research methodologies leverage a smaller set of data and respondents but allow for more in-depth answers. It also allows for companies to gather follow-up data that delves deeper into the reasoning behind responses  

This method is exploratory in nature to help you formulate hypothesis and establish directional themes or trends. Qualitative research also helps you understand the underlying motivations, attitudes, and perceptions of respondents.  

 The two most common qualitative research methodologies are in-depth interviews and focus groups.  

In-depth interviews  

This market research methodology involves one-on-one conversations between interviewers and those from the target audience. The interview follows a pre-determined set of questions to reveal sentiment, decision-making processes, and unmet needs. With only 40% of companies conducting them, interviews are the least used methodology, likely a result of the challenges mentioned below.  

Benefits : Interviews provide the ability to gather more in-depth answers on customer preferences by allowing researchers to ask follow-up questions to probe deeper and further clarify responses. It also allows respondents to answer in their own words rather than be bound by the available responses offered by a survey. 

Challenges: Interviews are responses from a small group of people and the results cannot be generalized to a wider audience. They are also very challenging to implement. Often, it is a struggle to identify and incentivize enough participants, and the price per respondent can be costly depending on their rarity and level of expertise. It is also critical to enlist an experienced interviewer to ensure that both the initial and follow-up questions are tailored to gather accurate information that fully addresses your target questions.   

  Focus groups   

These facilitator-led group discussions reveal perceptions of or reception to a concept or idea. While the facilitator guides the meeting, the direction of the conversation is determined by the participants creating organic responses that stem from participant perception. Just over half of companies have conducted a focus group in the last year.   

Benefits: F ocus groups allow for exploration of concepts and physical products beyond set responses like those available in through a survey. The social aspect of the focus group can also gather multiple points of view on a topic in one setting. This can add additional insight for both participants in their ongoing feedback and facilitators for their final analysis.

Challenges: Focus groups are kept small to gather meaningful insights from a group of people, something that would be difficult if the group was too large. As such, the sample size is very small, and the responses can‘t be extrapolated to a larger audience.  It is also challenging to find a group of qualified participants that are all available at the same time.

Traditionally, focus groups were conducted in person and there was a higher cost to host the group live. Now depending on the product or concept being reviewed, focus groups can be conducted over video calls, lessening the burden of cost and logistics, however the cost to incentivize members to take part remains. Similar to interviews, you will need to enlist an experienced moderator that can facilitate the conversation and help direct it as needed to ensure the target questions are addressed  

Secondary Research Methodologies     

Secondary research, a lso known as desk research, is leveraging data that already exists to answer your questions. This market research method is helpful for answering questions or deepening your understanding of things you are not directly familiar with but understand. It can be used to understand what others in your market are doing, identify potential markets for growth or expansion, or allow you to compare your organization to others on key performance indicators.  

For example, you might understand that customer preferences have affected your market, but you don’t know the exact changes. However, others have already done related research that can provide context or direct answers to your question. Secondary research is a very popular method with over half ( 55% ) of companies conducting secondary research to get insights they need for their strategies.   

Benefits: Secondary research is one of the quicker methodologies as it leverages existing data. The bulk of the time is spent identifying the problem, accessing existing data, and consolidating it for analysis and insights.   

Challenges: Some of the data you need might require payment, which would increase the cost of the overall project. There is also the risk that a data point needed for your analysis does not exist, requiring you to either speak to an expert or conduct your own research to fill in the gap.  

Picking the Right Research Methodology  

Though there are many options to choose from, the correct market research methodology to implement will be guided by the information you already have and the questions you are trying to answer.

Before you start your research, begin by listing what you know and what you are looking to learn. Some choices are very clear cut. For example, are you looking to learn more about your company’s operations in the hopes of identifying a better strategy? Since you have access to your own data and are looking to learn more, data analytics would be your best path forward.  

Sometimes choosing the right market research methodology might require more thought. For example, are you looking to launch a new product and want to learn more about customer preferences? You could interview customers or launch a focus group, but do you know what questions to ask? And as the sample pool is so small, the results from qualitative methods should not be used to make assumptions about a larger customer base.

The best place to start would be to conduct a survey to the target audience to get a basic understanding of the market and potential customer preferences. If it is a well-known customer base, you may be able to through secondary research by leveraging existing data to analyze the market.  

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  • Site Building
  • Quick Reads
  • About Academy
  • Perspectives
  • Introduction to Market Research: When and How to Start

market research where to start

  • Introduction to Market Research: What It Is and Why You Need It
  • Conducting a Situation Analysis: The SWOT Analysis
  • Using Your SWOT Analysis to Drive Your Market Research
  • Conducting Competitor Research 
  • Resource List for Secondary Market Research
  • Conducting Primary Market Research
  • Creating a Killer Market Research Survey
  • Using In-Depth Interviews and Focus Groups for Your Market Research
  • Best Practices for Moderating and Analyzing Interviews and Focus Groups
  • Conducting Observational Research for Your Business

Welcome back to our introduction to market research! As you probably remember, we first introduced the idea of market research by comparing it to solving a mystery. Though the end results are different (we imagine your market research won’t conclude with someone shouting “Mr. Green, in the Library, with the Candlestick!”), the basic processes are the same:

  • First, you’ll need to identify the question (or questions) you need answered
  • Then, methodically gather the clues you need
  • Finally, compile what you’ve learned to form the entire picture

In part one, we discussed what market research is, and why it’s so vital to steering a successful business, launching a new product, and staying a step ahead of your competition. Now, let’s talk about the importance of timing, and give you an overview of the process—the “when” and the “how.”

When should you start researching your market?

One way to answer this question is to simply say: “At every stage of your business journey.” However, the answer should be more complex than that, and it’s always useful to have examples. Maybe you’ll recognize your current stage of business and think, Now is my moment .

Before you open your business

It’s incredibly helpful to do market research before even launching your business. It will help you answer some fundamental questions, like, “is there even a market available for my product?” or “is this market big enough to sustain my business over the long haul?”

Doing market research in the early stages also helps you establish “the four Ps”:

  • Product: Gather clear data on customer pain points, needs, and buying habits. This consumer information will help you consider aspects of functionality, features, appearance, and more to produce the most valuable and desirable products or services for your target market.
  • Price: Carefully consider the price point of your product or service here. Through market research, you should gather data on factors like competitors’ prices, common profit margins, and knowledge of what your market is willing to pay. This way, you can make informed decisions not only on your product price, but also on things like shipping and handling fees, returns, and financing options.
  • Place: You’ll need to consider place in regards to many areas of business. After all, you’ll have to decide where your product will be manufactured, where it’ll be stored before it sells, where you’ll set up points of sale (online, retail, wholesale), where you’ll advertise, and even where the product will be placed in a merchandise or webpage display. Sounds exhausting, right? Don’t worry—market research will help you decide each of these things.
  • Promotion: Finally, market research will help you determine the most effective strategies for advertising, marketing, and sales to drive traffic to your business. It will clarify, for instance, whether you should invest in promoting your products on social media, or can rely on organic traffic. It will give you insight into which channels to utilize to reach your market segments, and what language and tone to use in your promotions.

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As your business grows

After you’ve launched your business, you’ll want to do market research as frequently as possible—or at least, as frequently as is valuable. Continual research will keep your finger on the pulse of your industry, so you can recognize shifts and changes before your competition does. Consumer demand isn’t static, and neither is our economy or your competitors’ marketing strategies, products, or financial numbers. Staying in the know will keep your business agile and ready for any changes.

Market research will also help you answer the questions that come up as your business matures:

  • What’s current the perception of our customer service right now, and how could it be improved?
  • How can we earn brand loyalty and repeat business from new customers?
  • What opportunities do I have to increase sales with existing customers?

Research before you pivot

Finally, it’s essential to conduct market research any time you’re considering making a change in your business. Whether you’re…

  • Considering introducing a new service or offering a new product
  • Opening an online store or a new brick-and-mortar location
  • Changing your prices
  • Launching a new ad campaign
  • Redesigning your logo and branding
  • Increasing production levels
  • Choosing new vendors for your shipping
  • …Or embarking on any number of other changes to your business or products

The bottom line is the same: Market research will help you anticipate whether the proposed change is truly a viable opportunity for your business.

The “how” of market research: phases and methods

Now that you know a bit about what market research is, why you should use it, and when it’s important, you’re ready for the real action: how you can actually do it. We’ll cover the basics here, and then really dig into the details in the rest of this guide.

As we see it, there are four steps to conducting market research:

  • Make a plan . To get an answer, you’ll need to start with a question. Formulate the questions you need answered so you know what you’re looking for.
  • Determine your data sources . Once you have your questions, you’ll know who to ask, or where to look, for the answers. Determine what sources and methods you can use to gather the information you need.
  • Collect the data . Whether you’re sending out surveys , interviewing top consumers, or studying a competitor, be methodical and be precise. Record everything you learn and organize your data to be sure you get the whole picture.
  • Analyze the data. Once you have the facts, analyze what you’ve learned and draw your conclusions. You have your answer now, so go ahead and act on it!

Of course, this is a cyclical process. The questions you formulate in your market research plan this month might be very different from the ones you formulate six months down the road to optimize a different aspect of your business.

Getting the data you need

Our third step here—data collection—will be the most time-consuming phase of your research. Your methods of data collection (and your data sources) are probably many. Don’t worry, because we’ve got more information and advice for you about data collection later on in this guide.

There are hundreds of types of market research out there, but the most common methods fall into these categories:

  • In-depth interviews
  • Focus groups
  • Observation
  • Secondary research (including competitor research )

The first four items on that list are all different forms of primary research . We’ll dive into more detail about each of them soon.

Where to start

The complexity and depth of your own research efforts will depend on many factors, including (but not limited to):

  • What questions you want answered
  • The type of business you run
  • The nature of your industry and market
  • Whether your business model is complex or straightforward
  • How much time, effort, and money you can spend on your research

If you own a restaurant, for example, you’d probably want to start researching the quality of your food, your customer service, and the special options you offer, all in comparison with your local competitors. On the other hand, a software company will have a very different focus in their research.

Our final recommendation before diving in is that you don’t just do market research because you think you have to. Research your market because it will help you refine your business strategies, maximize the potential of your current activities, and create a plausible, data-driven roadmap for future growth. But most of all, do it because you care about your audience and your customers, because you want to learn more about them, and because you want to serve them better.

If you do your research well, with both kinds of care (concern for your prospects and attention to the process), your ROI will far surpass the expenses of the research itself.

The most valuable thing you can do for your business before diving into market research is to take an honest look at where you are—where you’re succeeding and where you could improve. Then, set your goals based on this candid assessment. In our next section, we’ll show you how to conduct a situation analysis to prepare for the first phase of market research.

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Lydia Melby

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How to do market research for a startup (with examples)

Did you step out of the shower this morning with a business idea to beat them all? Did you read back through late-night notes, and they finally made sense?

If you’ve come up with an amazing idea for a product or service, congratulations! This could be the start of a great adventure, and every adventure needs to start somewhere.

To set a business set up for success, don’t create that website or launch that prototype just yet .

Take the time for proper market research . We know it might not seem as exciting as elevator pitches and guerilla marketing campaigns. Still, it’s just as important for your business strategy and will be a firm contributor to your startup’s success.

To discover if your big shower idea is viable, you need to conduct market research .

Before understanding which market research method is best for you, let’s get on the same page. 

How to do market research for a startup

What we’ll cover in this article:

What is market research.

  • What good market research looks like, and what it can deliver
  • Why market research for startups is so valuable 
  • How to conduct market research for startups in a way that’ll give you actionable data
  • Some examples of how market research changed the course for startups that went on to become successful businesses

Market research is about analysing the market you are in or are about to enter. It involves closely examining market trends, industry trends, market dynamics, your target audience, and other potential customers. Market research includes competitor analysis to see how similar businesses are selling and identify any indirect competitors you can learn from.

Market research findings will influence and guide your go-to-market strategies, and help you secure funding — they aren’t just for good-looking reports! Investors will want to see more than general market size figures. If you can show them proprietary data you’ve gathered from your target consumers (also known as zero-party data ), it will give them the deeper layer of insight they’re looking for.

Market research has been around for decades , and companies have tweaked and updated it over time, but the term has always been used rather loosely. It shouldn’t be conducted to simply confirm that your idea is good. 

When you conduct market research looking to affirm a hypothesis, you become susceptible to market research bias. You can end up walking away with specific data sets that affirm your theory, rather than actionable data that can dictate the direction your theory needs to take—which may be the opposite direction!

Why is market research important for entrepreneurs and startups?

It’s easy to be blinded by the potential of a big startup idea. Your product or service might seem great on paper—or even as a prototype—but without proper market research services , it could flop when you go to market.

Startup founders need to get as much detailed information on their potential market as soon as possible. Here are some reasons why:

Market research will help you test your ideas

There are several things you can and should find out about your product through research. The first question to answer: is there sufficient demand for your product?

It’s not true that if you make something and promote it hard enough, people will eventually start buying it. 

It could be that the product you have in mind is not for the target group you would expect or that the timing is off. For example, selling wired headphones now that most cell phones don’t even have a headphone jack would not be the perfect timing to secure demand. This works both ways; your product could be behind the times or ahead of them—as you’ll see later in our examples!

That doesn’t mean you can’t produce anything that hasn’t been done before – you simply have to do it differently and better. When Slack entered the market, there were communication tools for businesses already on the market. They just did it better. 

Aside from understanding what your core product and its features need to look like, you’ll also gather important information on pricing, payment plans, marketing strategies, product messaging, and more. There are tons of companies to help you with your research—here are the top market research companies in the US to get you started.

Startups need to test their ideas to make sure there’s a viable business opportunity there

Conducting market research is important for attracting investors

If you want to impress potential investors, you’ll need more than a spicy prototype to whet their appetite. The main thing that investors care about is how likely they are to make money out of this product in the long run. 

For that, they’ll need to see research that backs up your claims and proves there’s a viable market for you to enter and meet demand. 

 This research makes the decision-making process to invest that much easier. 

Investors will need to conduct a due diligence check before they part with their cash. You’ll have a large chunk of the data they need embedded in your market research—making this investment process run that much smoother for every stakeholder. 

Discover how market research can help your brand: from reaching the right customers to testing creative assets

It makes startups less likely to fail 

Let’s look at why startups fail.

The top answers for this underline the importance of market research once again. At number 1 on the list of reasons why startups fail: ‘ no market need. ’ In 42% of cases , there’s simply not sufficient demand for a shower thought—no matter how innovative it is.

Number 3 on that same list is being beaten by the competition. Ignoring your competitors accounts for 20% of startup failure !

Of course, market research can’t predict the future entirely. However, when done properly, it’ll give your small business the tools needed to get a head start in the sink-or-swim world of startups.

market research where to start

Choose the right tools for market research

Attest is here to give you all the market insights you need, with tailored demographic filters and ready-to-go survey templates, you can measure everything from brand awareness to product demand in hours, not days or weeks.

How to do market research for a startup: 6 steps

There are plenty of tools, resources, and best practices to conduct solid market research, but it can be difficult to pick the right direction to head in. Worry not! Here are six steps to get the most out of your market research.

1. Find the right market research methods for your needs

Before diving into your market, target audience, and competitors, it’s good to freshen up on the types of market research methods there are: primary research and secondary research.

Primary market research

The internet only knows so much. You’ll have to get some data straight from the source: your target audience. That’s where primary data enters the picture. This is research you do yourself, gathering information directly from the people you want to use your product or service.

A great way to do this is by using online surveys or working with focus groups to get a comprehensive understanding of what your future buyers and loyal customers need.

Secondary research

If you use existing research and data, you’re doing secondary market research and finding secondary data. This can be great for exploring market dynamics and spotting trends. You can find more tools to help you conduct this research method in our blog: 12 great market research tools .

Secondary data has its place, but because it’s external research that hasn’t been conducted with your business in mind, you’ll need to be aware of citation bias.

What’s citation bias? Citation bias occurs when your data uses the results of other research. The results of which may have been looking to prove something slightly different to what you’re looking to prove. Plus, if the research is not conducted by you, then the data may already have fallen victim to one or more other types of survey bias you haven’t been able to account for.

2. Find out what you need to focus on

You might have a general sense of what you want to learn from your market research: whether or not you should launch your startup idea. However, you’ll need to specify some research goals to get actionable data.

After your first exploratory primary research or secondary research, you’ll be able to identify where you have knowledge gaps. What isn’t clear about the market? What assumptions about your potential customers need to be verified?

You can split up your market research goals into different categories—helping you better assign the right team to the right tasks.

For example, let your best marketers and sales reps help you in researching buyer behaviours. Let your finance team guide payment habits and payment methods for your market research. 

This market research template can help you better guide your market research.

3. Identify your ideal market

In any market research, you’ll have to look at three important factors:

  • the target market as a whole
  • your competitors
  • your potential customers

We’ll start with the market as a whole because it’ll help you get more specific data along the way.

First, figuring out which market and industry niche you fall into is crucial. It may seem obvious, but if you put some thought into it, you might find you’d perform better in a different market.

Aim for a market where you fit in, where there’s a large enough product demand , and where you can make a difference.

Here’s how to find out what’s going on in a market:

market research where to start

Find your market, fast

Don’t leave the success of your startup to chance – our market research software is here to help you navigate the market and make the right decisions for your brand.

Talk to industry experts

Talk to experts who’ve been working in that target market for years and ask them about what they think the future will look like. These might just be speculations, but it’s better to hear them and address them than pretend they don’t exist.

You can also pay attention to what’s happening in online communities revolving around your product idea. For example, places like Facebook Groups, Reddit, Twitter, Twitch, ProductHunt, G2, Capterra, and other platforms can be a great eye opener about your potential future customers and market. 

Read the latest trend reports

Another great way to get a clear view of trends in your market is to keep track of relevant blogs and news. There are plenty of target market reports and public market data available to find out the latest trends and where the market is going, like G2, Deloitte, Gartner, McKinsey, and more—make the most of these datasets.

Use target market research tools

Google searches are a goldmine – use Google Trends to analyse what people are searching for

With Google Alerts and Trends, you always have comprehensive, up-to-date data on trends and can spot changes in popularity for certain brands and products by focusing on specific keywords. 

Find out what our favourite tools are for analysing your target market in our blog: eight smart market analysis tools .

4. Shake hands with your target audience

Get ready to talk to real people.

To understand your target market, you need to look at more than numbers. It’s great to see some people spending a lot on certain products, but you’ll need to learn why they do that. Get the powerful insights you need to create a strong positioning and ensure your marketing efforts hit the spot.

This is where primary research is most important. You can choose in-depth interviews, online surveys, focus groups, or a mix of those things, depending on what answers you’re looking for. 

Lost for words? We’ll give you some inspiration in this list of 20 essential questions you should ask your (future) customers .

Consumer profiling for startups

We recommend you go beyond the standard consumer profiling demographics and build buyer personas with layers. By adding behavioural and attitudinal data to the mix, you will create much more effective marketing campaigns and digital marketing strategies that land with the people most likely to use your product.

We’ve got a guide full of tips to get started with consumer profiling as a startup and a success story of one startup that discovered their most important potential customers weren’t who they thought they were .

Surveying your target market—through platforms like Attest—is the ideal way to understand their behaviours and buying potential

5. Analyse your key competitors—direct and indirect

Next up: your competition. You don’t need to infiltrate their business to get to know them inside-out, but it sure helps to look at their strategy, messaging, tactics, and, most  importantly, what your target audience thinks of them.

Your target market probably knows who your competitors are better than anyone else. Find out what products they consider as alternatives to yours, and you may find out you have significantly more competition than you initially thought.

Take things a step further and look beyond your obvious direct competitors; focus on other companies that could be catching up with you in a few years or are in your niche but currently offering something else. Chances are you’re not the only one working on a new business idea each morning in the shower!

Rest assured, this doesn’t have to be guesswork—here are our 14 favourite competitor tracking tools to help you get started.

6. Be prepared to make big, but well-informed decisions

Once your market research is done, and all questions answered, it’s time to create a plan of action. Hopefully, you found out that your product or service is a lucrative idea and that there’s a real market for it—even if you need to tweak your idea a bit.

Market research will be the guide for any future business decision you take. How you approach product development, branding, and marketing, will all depend on the results of this research. 

Planning your marketing strategies is made simpler when you have solid market research data to back it up

3 Examples of market research for startups

The success of any startup heavily depends on whether they’re willing to listen to their target market or not.

Let’s look at real-life examples that paved the way for tons of startups and set an example in market research best practices to transform a business in its earliest stages of growth.

Example 1: the board game maker that won big with market research

Before coming across Attest, Big Potato Games was cobbling together insights from social media and Google Analytics—not ideal when you want a comprehensive picture of your market.

The team needed to establish exactly who their customers were, and learn the behaviours and attitudes of their potential customers to more effectively target the right people in the right places with the right messaging.

Using market research to explore consumers’ attitudes towards board games and what motivates them to play helped them define key customer personas. The research uncovered seven key customer types, all the way from casual, occasional players to hardcore gamers.

An example of what they uncovered through market research was that mums view board games as a way of getting the family together, while young adults saw it more as a way to socialise with friends.

They also found out the size and importance of each customer segment. While the hardcore gamers are a super important and dedicated segment, it’s still quite a small buyer group. It turned out that the mums group was a much bigger purchase decision-maker and demographic to go for.

Market research allowed them to better understand the segments where they sought to build awareness, who was using their product, and who was actually buying it.

Example 2: admit when you can’t beat the competition

Ever heard of Odeo? It probably doesn’t ring a bell. It was created by Evan Williams and Biz Stone in 2005 as a platform for podcasts. They placed their bets on podcasts. However, as we now know, their timing was off.

Instead of sitting around and waiting for podcasts to hit, they re-examined the market. They looked at user adoption rates, technology, and customer acquisition costs. At the time, Apple was their main competitor, and they knew they wouldn’t win. So, based on their market research, they pivoted.

They looked at other popular platforms where content was shared, such as Facebook. Their market research looked at what people didn’t like about those platforms. What tools were they missing? What annoyed people?

Not long after, Twitter was born. The Facebook News Feed was too cluttered for many people, so they cleaned things up. As we know today, it was a huge success.

Twitter’s inception came at the price of the founders’ original startup idea

Example 3: The dating site that turned into a video platform

Over the years, a lot of dating sites and apps have come and gone. Tune In Hook Up is one of those that has gone rather quickly. Its creators saw that the website, which was a video dating site, didn’t get enough traffic to make the right matches.

They had this technology that made posting videos online easier than ever, but not enough people were jumping on it.

They did market research and found it was hard to find specific videos online, and websites that did offer them didn’t work very well. Sharing videos with others was a pain for users.

Based on their research, they broke up with the online dating market and focused on the video part of their business that already existed. They changed the name, the platform, and their lives. You might have heard of it. They called it: YouTube.

Market research made simple

The right market insights can make or break your business, which is why market research is one of the most important things you can invest in. Don’t leave your market research up to chance – choose the best tools that set your startup on the path to success and match it with talent that knows what to go for. Now get back in the shower; you’ve got ideas to create!

Make market research easy with Attest

With our cutting-edge tech and on-demand research expertise, your startup can rest easy. Measure brand awareness and gain vital insights from our built-in audience of 110+ million people.

Market Research FAQs

To do market research for a startup, you should follow these six steps: 1. Pick the right market research methods 2. Identify what you need to know 3. Find your ideal market 4. Get to know your target audience 5. Analyse your key competitors – direct and indirect 6. Be prepared to make big, but well-informed decisions Once you complete them, you’ll have all the information you need to create a business strategy that will lead to your startup’s success.

The best form of market research you can do for a new business is primary market research. This is gathering information directly from the people you want to use your product or service by using online surveys or working with focus groups.

The main focus of the market research for small startup businesses is to validate their business idea. It doesn’t matter how good your idea or prototype looks; if there isn’t a market for it, no marketing budget will suffice.  By researching what the market thinks about your idea and what needs they have, you’ll know if your product will have demand or not. 

market research where to start

Customer Research Lead 

Nick joined Attest in 2021, with more than 10 years' experience in market research and consumer insights on both agency and brand sides. As part of the Customer Research Team team, Nick takes a hands-on role supporting customers uncover insights and opportunities for growth.

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How to Conduct Market Research for Startups

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With 50% of new businesses failing within the first five years of operation, startups need to develop a deep understanding of their customer base quickly in order to thrive. Successful new business ventures strategically begin by gathering accurate and thorough information about their industry to identify the best path ahead. Conducting market research for startups is a key step toward meeting customer needs and strengthening marketing messaging.

Market research brings together important details about a business's customers, competition, and industry. The results serve as a tool in a startup’s business planning process as it evolves. Analyzing the findings can help determine the viability of a business concept and identify areas for adjustment to improve performance, profitability, and attract investors.

“Without market research, a startup is just making guesses. Listening to your prospective customers will help you align your product/service and marketing messaging to address their needs.” Dr. Elaine Young, Champlain College Online

As noted by Dr. Elaine Young , professor and program director of marketing communication at Champlain College Online, “Startups need market research so that they can gain insight into the behaviors and values of their target customers. Just because you think your startup idea is amazing, doesn't mean that consumers will. Without market research, a startup is just making guesses. Listening to your prospective customers will help you align your product/service and marketing messaging to address their needs.”

Table of Contents

What is market research?

Why is it valuable for startups, types of market research, methods of market research, how to do market research for startups, sample questions to ask customers.

Market research is defined as the process of collecting, analyzing, and interpreting a broad set of information about a specific market or industry. The research might focus on:

  • A potential product or service for that market
  • Existing and/or potential customers for the product or service
  • The needs, purchase habits, characteristics, and location of your target market
  • Competitors in your industry
  • Trends within your market or industry as a whole

As a business strategy, market research enables companies to make actionable decisions according to data-based findings. These measurable statistics can be gathered through a variety of methods, which we will explore below.

01-Benefits-of-market-research@2x

Startups benefit from market research in multiple ways. With so much time, energy, and funds invested in a startup, taking steps to strengthen the concept and connection to your target audience is critical to survival and the bottom line. 

The market research process delivers value to startups by:

  • Allowing you to test the ideas and concepts behind your product or service
  • Enticing investors with data showing the projected profitability of your venture 
  • Providing statistical evidence to potentially support your business concept or encourage you to adapt it to better meet the needs of your target market
  • Helping to clarify exactly who your customers are
  • Serving as evidence to investors of an entrepreneur’s commitment to improving a business based on current market conditions
  • Increasing the odds of   success of your startup

“Market research can help founders focus their energy, enthusiasm, and resources toward a specific segment and the real target audience.”

Adrienne Wallace, Grand Valley State University

The American Marketing Association confirms that market research can directly increase your bottom line. And trusted market research findings can also speed up the process of getting investors on board with your startup venture.

“Startups can't begin with just a hope and a prayer,” notes Adrienne Wallace , associate professor at Grand Valley State University. “Market research can help founders focus their energy, enthusiasm, and resources toward a specific segment and the real target audience instead of making the age-old error of ‘everyone is the target’ because it simply can't be that for efforts to be fruitful.”

02-Primary-vs-secondary-research@2x

There are two types of market research used most in the business world today: primary and secondary. They can be used individually but are often combined to create a broader understanding of your target market.

Primary research

Primary research involves collecting data directly from your target market. This is often achieved through the use of surveys, interviews, and focus groups. The findings can provide a comprehensive understanding of your customer base’s needs and preferences.

Secondary research

Secondary research requires examining existing data collected by third parties. Examples of potential data sources include news media, industry reports, proprietary data from other companies, academic journals, or public databases. Although targeted data is not always available for your particular industry, secondary research enables you to gain insight and understanding about an industry overall.

03-Quantitative-vs-qualitative-research@2x

Choosing a specific method of market research — either quantitative or qualitative — will determine the type of data collected in your research.

Quantitative research

Quantitative market research gathers large numerical datasets that can be used in statistical analysis. These results offer more accurate snapshots of industry trends and market challenges. Common methods of collecting quantitative research data are through surveys, questionnaires, and polls.

Qualitative research

Qualitative market research strives to identify the reasons behind customers’ buying habits, as well as their needs, wants, and overall customer satisfaction . These results can help clarify the “why” behind your target market’s behaviors and feelings. Focus groups, in-depth interviews, and online bulletin boards are typical methods for conducting qualitative market research.

Generally, quantitative market research is more commonly utilized than qualitative market research because it is more scientific, unbiased, and more easily plicated in future studies. In 2019, 61% of the money spent on market research in the United States went toward quantitative research, with only 12% spent on qualitative research.

04-7-steps-to-market-research@2x

Conducting market research is not a quick process, so it requires thoughtful planning. You may handle this research on your own or hire a third-party market research company to manage the process on your behalf. The steps below will guide you through developing a market research strategy that benefits your startup.

Step 1. Define your research purpose

The first step in market research for startups is to determine what questions you hope to answer through this research. From those questions, you can develop projected results that will help reveal the overall purpose of your research. Understanding the purpose from the beginning will be an asset in identifying the best approach to selecting subjects, composing questions, and testing product designs.

Examples of market research purpose include:

  • Confirming consumers’ biggest pain point and whether your product meets their needs
  • Tracking and predicting relevant industry trends
  • Determining consumer spending capacity for a product/service
  • Gauging the market infiltration of your competitors

Step 2. Study your target market and competitors closely

It’s important to take time to study existing information about your target market, your competitors, and your target demographic. Growing your knowledge base about all of these factors in advance will strengthen the relevancy of your research.

When working on demographics, a buyer persona template can be a useful tool to help segment the consumer audience into smaller groups for better targeting. Understanding each group’s behaviors and motivation can lead to research findings that resonate deeply with your customer base.

Step 3. Choose the right type and method for your needs

The best type of market research for your business will depend on the purpose you aim to achieve. If your goal is a broad-scope industry view, secondary research examining existing data may provide you with all the information you need. But if your strategy is to clarify specific details about your customer base, you will need to collect new data through primary research. 

The ideal method for data collection also depends on the end goal. Quantitative research methods such as surveys create data useful in making market predictions. Qualitative research methods like focus groups and in-depth interviews offer more personal and subjective responses from participants. Such responses are valuable when seeking direct consumer insight on your product or service and on brand awareness.

Step 4. Recruit appropriate research subjects

If you are pursuing primary research, the subjects involved in your study should be capable of providing insights that are directly relevant and valuable to your market research goals. Recruitment methods can vary from social media posts to hiring third-party market research firms and incentivizing participation.

Seek out existing customers, former customers, and potential customers to create a full spectrum view of your market and product. Other potential sources for research participants include:

  • Recent customers
  • Customers who did not complete their purchase
  • Word of mouth among both personal and professional networks 

Step 5. Conduct your research

Execute your market research plan based on the method you identified in Step 3. Appoint someone not deeply connected with the project planning as the point person for interviews or focus groups in an effort to reduce potential bias. When creating surveys, strive to incorporate neutral (non-leading) language as a way to craft unbiased research questions.

Christina Inge , an instructor and curriculum designer at Northeastern University, suggests an effective research technique called customer discovery. “It requires asking customers what their needs are,” she says, “rather than showing them your product or service and asking for their reactions. This can help you get to the heart of what your customers need, leading to better product market fit, faster.”

Step 6. Analyze your results

Once you’ve collected and organized all of your data, analyze it for relevant trends and patterns. Any qualitative data, such as feedback from focus groups or interviews, can be interpreted quantitatively by noting response ratios amongst the participants. Examine your findings for insights that offer actionable next steps.

One famous example of a startup that pivoted toward success as a result of closely analyzing the market research on their target market is Tune In Hook Up. As an online video dating site that wasn’t seeing much traffic, their research revealed that users struggled to share videos easily with one another. Based on their findings, they decided to shift away from romance and focus on the videos, renaming themselves YouTube.

Step 7. Create an actionable report from your findings

Gather your findings into a report that outlines the recommended actions necessary to address the market research results. Whether the data provides positive or negative insights, you should always come away with actionable steps and suggestions for the next stage of your startup.

Find additional tips and a free report template in HubSpot’s’ How To Do Market Research: A Guide and Template .

market-research-question-box

Drafting market research questions for startups is not an exact science because cookie-cutter surveys and interview questions will not work. Every product, service, and industry has unique features that require tailored language in each research question. 

Below is a sampling of the type of questions you may want to consider: 

  • What do you like most about our new product or service?
  • What do you wish our product or service did that it does not currently do?
  • What do you lose sleep over at night?
  • What price would you consider so low that you’d question this product’s overall quality?
  • Which of these companies have you purchased this product from in the past six months? (list of competitors)

Market research is a booming industry around the globe, but nowhere more so than in the United States. The U.S. is the leading country for market research services , with the industry bringing in $18.75 billion in 2020, more than six times the industry-related revenue of any other country in the world. It’s no surprise, considering how quality market research can directly impact a company’s bottom line and growth. Free kits for growth marketing can help you get moving on the road to success through market research for startups.

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What is Market Research: Definition, Types and Process

Market Research

Before starting off a project, business or study, one of the most important things to do is research. Every business has its own set of target users. It’s impossible to understand your users, their habits, expectations, and behaviours without detailed market research. This article will help you understand everything about efficient market research.

Table of Contents

What is Market Research?

Market research is a process of gathering information about your target audience, consumers, and competitors. This process typically involves several steps, such as identifying the research objectives, determining the research method, developing the research instrument, collecting data and reporting the findings. The data gathered in market research includes demographics, psychographics, behavioural data, market trends, competitor data, and customer feedback.

The information helps businesses to develop their marketing and business strategies. Additionally, market research will help in the development of products or services to enhance the user experience.

Key Objectives of Market Research

Market research helps companies identify the people interested in their products or services. 

Beyond existing customers, market research helps discover potential buyers who have yet to be targeted.

Companies use research to evaluate the impact of their promotional efforts. By assessing engagement levels across different platforms, they can fine-tune their strategies.

Keeping an eye on market trends allows businesses to adapt and stay competitive.

Research helps identify risks and validate concepts before launching new products or services.

Types of Market Research

1. primary research.

It involves collecting original data directly from sources or through first-hand experiences. It is tailored to answer specific research questions.

The following are the methods to do primary market research:

  • Interviews: One-on-one discussions providing in-depth insights.
  • Surveys: Broad data collection through questionnaires
  • Focus Groups: Group discussions to gauge consumer opinions.
  • Observations: Behavioral assessments in natural settings
  • Experiments: Controlled studies to establish cause and effect

Each method offers unique benefits, such as detailed personal insights from interviews or large-scale survey data.

2. Secondary Research

It utilises existing data compiled by others, often for different purposes.

The following are the methods to do secondary market research:

  • Literature Reviews: Analysis of academic and industry publications.
  • Statistical Analysis: Examination of existing datasets.
  • Meta-analysis: Combining results from multiple studies.

These methods help identify trends and benchmarks without the time and cost of primary data collection.

3. Qualitative Research

This approach seeks to understand underlying reasons and motivations through non-numerical data.

The following are the methods to do qualitative market research:

  • Interviews: Deep dives into personal experiences.
  • Focus Groups: Collective views on a topic.
  • Ethnographic Studies: Cultural immersion for context understanding.

Qualitative methods provide rich, narrative data that reveal the ‘why’ behind behaviours.

4. Quantitative Research

This research quantifies data to analyse variables and patterns statistically.

The following are the methods to do quantitative market research:

  • Surveys: Structured questionnaires for numerical data.
  • Experiments: Testing hypotheses in controlled settings.
  • Observational Studies: Systematic tracking and recording of behaviours.

Quantitative methods are ideal for confirming hypotheses and generalising findings to larger populations.

5. Branding Research

This approach assesses how a brand is perceived and positioned in the market.

The following are the methods to do branding market research:

  • Brand Audits: Evaluating brand elements and performance.
  • Customer Surveys: Gathering perceptions and experiences.
  • Competitive Analysis: Comparing brand positioning against competitors.

Branding research informs strategic decisions to enhance brand equity and market presence.

6. Customer Research

Customer research explores customer needs, behaviours, and satisfaction levels.

The following are the methods to do customer market research:

  • Surveys: Direct feedback on customer experience.
  • Interviews: In-depth discussions on customer journeys.
  • Segmentation Analysis: Grouping customers based on characteristics.

Customer research guides product development and marketing strategies to meet customer expectations better.

7. Competitor Research

This approach analyses rivals to understand their strategies and market standing.

The following are the methods to do competitor market research:

  • SWOT Analysis: Identifying competitors’ strengths, weaknesses, opportunities, and threats.
  • Market Positioning: Assessing competitors’ market share and brand perception.
  • Product Comparisons: Evaluating competing products or services.

Competitor research helps businesses identify market gaps and opportunities for differentiation.

8. Product Research

This research informs the development and improvement of products.

The following are the methods to do product market research:

  • User Testing: Real-world product usage to gather feedback.
  • Market Analysis: Studying market demand and trends.
  • Concept Testing: Evaluating product ideas before full development.

Product research ensures that new products meet market needs and have a competitive edge.

How Does Market Research Work?

Market research is essential in business. Its primary purpose is to evaluate the viability of a new product or service before they are made available to the general public.

The research aids in the systematic gathering and analysis of data. This helps businesses gain valuable insights that directly influence product design, marketing strategies, and even the company’s overall direction.

Market research process is divided into several stages:

  • Research starts with data collection. Information is gathered from various sources such as market trends, consumer behaviour, and competitor analysis.
  • Next comes analysis. It is conducted to make sense of the data using statistical tools to identify patterns and correlations.
  • The final stage involves drawing conclusions and making informed decisions based on the insights gained, particularly concerning the target market’s preferences and needs.

The marketing research process is not just a preliminary step. It is a crucial research and development (R&D) phase component. It helps businesses avoid costly mistakes by ensuring that the product or service is aligned with market demands.

Surveys and questionnaires are common for gauging consumer opinion when conducting market research. Conversely, product testing allows for direct feedback on the user experience. The process also involves interviews and focus groups.

5 Steps to Conduct Market Research Process

Now that you know what market research is, its importance, and the ways to conduct it,

let’s discuss the six quick market research steps.

1. Define your target audience

Before you start understanding how your customers operate, you need to quickly understand who your customers are. Create a buyer persona and keep it handy.

Please note: It’s absolutely okay to have a number of buyer personas! 

2. Understand their behaviour 

After knowing well who your target audience is, find out what are the best ways to get in touch with them to get true answers. Evaluate their active hours, tonality, preferences, and so on.

3. Choose a method to get insights

Now is the time to take one of the most important decisions: to choose how to conduct the research. After following step #2, this should get easy. For example, if you find that your target audience opens their emails regularly and responds to them, you can choose to run a survey. However, if you find that the internet penetration to your target audience is very low and they understand their local dialect, then choosing ethnographic research comes in handy.

4. Collate the responses

This is where all your efforts come down to. It can be an Excel sheet, a Google document, or a particular software, documenting every fact is a must. Make sure to protect your data and share it only with the relevant people.

5. Form hypothesis & take actions

After you have a heap of information, it’s time to study the data and build a hypothesis. There might be instances where you will realise that you need to change the entire sign-up flow or change the language or take a different approach. How well you follow this step reflects the success of your business to a large extent. 

What Information is Gathered for Market Research?

Market research can involve gathering various types of information, depending on the objectives of the project.

These are the common types of information gathered in market research:

  • Demographic data: Age, gender, income, education, and occupation 
  • Psychographic data: Attitudes, values, and lifestyles of the target audience 
  • Behavioral data: Buying behavior such as purchase frequency, purchase history, and brand loyalty 
  • Market trends: Information on emerging technologies, new competitors, and shifts in consumer behavior 
  • Competitor data: Strengths and weaknesses of competitors, like pricing strategy, marketing tactics, and products.
  • Customer feedback: Customer satisfaction, customer pain points, areas for improvement, etc.

A Market Research Example

The importance of market research cannot be overstated. As mentioned, it allows companies to test new products and gather consumer feedback.

For instance, consider a startup aiming to launch an innovative fitness app. Before investing heavily, the company conducts market research by releasing a prototype to a select group of users. The feedback collected reveals a strong interest in personalised workout plans, suggesting a positive market response.

If the market research yields positive results, indicating consumer interest, the company can confidently move forward, knowing their product meets a market need. Conversely, if the feedback is less favourable, the company can refine its offering, ensuring it resonates with potential customers’ needs and desires.

Importance of Market Research

1. understanding customer needs.

Market research helps you understand your target customers’ specific needs and preferences. By analysing consumer behaviour and feedback, you can modify your products and services to satisfy customer demands better.

2. Identifying Market Opportunities

Market research pinpoints gaps and opportunities in the market. By studying trends, customer pain points, and emerging technologies, you can discover new niches or untapped segments.

3. Mitigating Risks

Market research allows you to assess potential risks and challenges. By understanding market dynamics, competitive threats, and regulatory changes, you can develop strategies to mitigate risks and protect your investments.

4. Optimising Marketing Strategies

Effective marketing relies on accurate data. Market research provides insights into consumer preferences, channel effectiveness, and messaging strategies. This information helps you optimise marketing efforts for better results.

5. Improving Product Development

Market research informs product development by identifying gaps in existing offerings and uncovering unmet needs. By listening to customer feedback and analysing market trends, you can devise products that resonate with your audience.

6. Enhancing Customer Satisfaction

Understanding customer satisfaction is crucial for retention and loyalty. Market research helps you measure customer satisfaction and identify problems consumers may face, like using the product or the payment gateway of your platform. You can then make the required modifications to enhance the overall customer experience.

7. Monitoring Competitor Activities

Staying informed about competitors is essential. Market research tracks competitor strategies, pricing, product launches, and customer sentiment. This knowledge enables you to remain competitive and adapt to changing market dynamics.

8. Supporting Decision-Making

Data-driven decisions are more reliable. Market research provides relevant data for strategic decision-making, whether entering a new market, launching a product, or adjusting pricing.

9. Forecasting and Planning

Market research helps anticipate future trends and demand. By analysing historical data and market indicators, you can make informed forecasts and develop effective business plans.

10. Measuring Performance

Evaluating performance is critical for growth. Market research provides benchmarks and KPIs to measure success. Regular assessments help track progress and make necessary adjustments.

History of Market Research

Market research traces its origins to Germany in the 1920s, where systematic data collection began to guide advertising decisions. As the Golden Age of Radio dawned in the United States, companies producing radio advertisements started to analyse audience demographics, recognising the value of targeting specific consumer segments.

This marked a pivotal shift from the broad-reach approach of billboards and magazines to the precision of radio programming, aligning ads with listeners’ profiles. Today, market research remains indispensable. It guides businesses in crafting informed marketing plans and gauging their impact, ensuring resources are invested wisely for maximum effectiveness.

Conducting market research can prove to be an eye-opener and a fact-checker to a number of individuals and organisations. Even if you think you understand your target audience in and out, a detailed study will likely uncover new channels and opportunities for you. It is always the best choice to conduct market research in the initial phase of starting or building anything as it leaves a lot of room for improvement.

Frequently Asked Questions (FAQs)

1. what is a market study.

A market study is a comprehensive analysis that examines various aspects of a specific market within an industry. It involves collecting and interpreting data on competitors, consumers, and market trends to make informed business decisions.

2. Why Should You Do Market Research?

Market research is crucial for understanding consumer behaviour. It helps identify market opportunities and mitigate risks. It informs strategic decisions, helping businesses tailor their products and services to effectively meet customer needs.

3. When Should You Conduct Market Research?

Market research should be conducted when launching new products, entering new markets, or experiencing a decline in performance. It is also essential for setting goals, problem-solving, and staying ahead of competition.

4. What are the 4 types of marketing research?

The four main types of marketing research are primary research, secondary research, qualitative research, and quantitative research. Each type has its methods and tools for collecting and analysing data.

5. How can market research help with product development and innovation?  

Market research identifies consumer needs and preferences. It helps develop products that align with market demands and stay competitive.

6. What is the role of market research in pricing strategies? 

Market research helps determine the optimal price point for products or services. It assesses customer willingness to pay and competitor pricing, ensuring a balance between profitability and customer value.

7. What are the challenges of market research, and how can they be overcome?  

Common challenges associated with market research include dealing with market uncertainty, data quality, and managing overwhelming data. These can be overcome by investing in specialised research technology and adopting agile research methods.

8. Can I conduct market research on a limited budget? 

Yes, market research is possible on a limited budget by defining clear objectives, leveraging online tools, and focusing on cost-effective methods like surveys and social media listening.

9. Why is it important to identify the primary audience for the research report?  

Identifying the primary audience ensures the research report is tailored to the needs and interests of those most likely to benefit from it. It guides the language, tone, and content of the report.

10. What is the difference between primary and secondary research?

Primary research involves collecting original data directly, while secondary research analyses existing data from other sources. The former is specific to the researcher’s needs, whereas secondary research may not be.

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How to Start a Business in 8 Steps: A Comprehensive Guide from Concept to Launch

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Starting a business can be extremely exciting. But figuring out how to start a business can also feel overwhelming—particularly if you don’t have a clear sense of how to get from where you are now (an aspiring entrepreneur) to where you want to be (a successful, established one).

The good news is that there are clear steps to follow. Once you know these steps, you can create a road map that will take you from asking, “What do I need to begin a business?” to questions like “How did I get so successful?” or “Why was I ever worried?”

Here, we outline everything you need to know—whether it’s about how to start a business online, at home, with no money, or any other situation.

1. Finding your business idea

So, how do you start a business? The first step is coming up with an idea. You can’t start a business without a great one. You don’t want to throw spaghetti at the wall and see what sticks; instead, you should aim to take “a structured approach to ideation,” says business coach Yael Tamar .

What are your strengths? What kind of business do you want to build? What kind of customers do you want to work with, and which of their needs can you fulfill? It’s important to answer these questions because the key to a successful business idea is finding the intersection of what you want to do and what your ideal customers need .

“It's crucial to align your venture with both your passions and market demand,” says Jeff Mains, CEO of business growth consultancy Champion Leadership Group .

“Start by identifying problems you're passionate about solving,” Mains says. “This approach ensures that you have a genuine interest in your business, which is essential for long-term success.

“Also look for gaps in the market by analyzing current trends and customer needs,” he says. “Combining your passion with market opportunities increases the likelihood of finding a viable and fulfilling business idea.”

2. Conduct market research

Once you have a business idea you want to pursue, it’s time to do some research—more specifically, market research.

“It involves gathering data on customer demographics, conducting competitor analysis, and studying industry trends,” Tamar says. “This research helps validate business concepts and informs strategic decision-making.”

It can also help in the long-term, giving you the insights you need to lay the foundation for a successful business. “Effective market research also minimizes risks and ensures your business is well-positioned to meet market demands,” Mains says.

So, how do you perform the kind of market research you need to set your business up for success?

“Begin by identifying your target audience and understanding their pain points, preferences, and behaviors,” Mains says. “Use a mix of primary research, such as surveys and interviews, and secondary research, including industry reports and competitor analysis.”

In addition to audience research, you’ll also want to check out your competitors to see what they’re doing, what’s working (and what isn't), and how you can differentiate your company from others in the space—and grab your target audience’s attention in the process.

3. Create a business plan

Once you’ve come up with a business idea—and you’ve done the market research necessary to ensure it’s viable—it’s time to create your business plan.

There are a few different elements to a business plan. “Start with a clear executive summary that outlines your business idea, mission, and vision,” Mains says. “Follow this with a detailed market analysis, showcasing your understanding of the industry and target market.”

Plus, you’ll want to outline your business structure, product or service offerings, marketing strategies, and financial projections. Why? Because “a strong business plan not only guides your strategic decisions but also serves as a crucial tool when seeking funding from investors or financial institutions,” says Mains

Bottom line? “It integrates findings from market research into actionable steps aligned with long-term business objectives,” Tamar says—making it a must for starting, launching, and sustaining a successful business.

4. Take care of logistics

Next step on the list? Taking care of the logistical side of starting a business, which include:

  • Choosing a business structure
  • Registering your business
  • Obtaining necessary licenses/permits
  • Getting necessary insurance
  • Opening a business bank account

From a logistical perspective, there are no universal solutions when starting a business. Much will depend on the type of business you’re trying to start.

For example, if you’re focusing on how to start a small business at home and you’ll be the only employee, you may not need physical liability insurance (since there won’t be any other employees working in your home). But if you’re figuring out how to start an online business—and intend to operate from a commercial space with other employees—physical liability insurance is generally a must.

Same thing goes for business structure (for example, being a sole proprietor or registering an LLC), business registration, permitting…pretty much all of it. Make sure to do your research and ensure you take all of the logistical steps needed to legally establish your business.

5. Find your funding

Funding is often where budding entrepreneurs get stuck. If you're wondering how to start a business without money , in full transparency, the answer is…you can’t. Whatever kind of business you’re starting, you’re going to need some money to get things off the ground.

But how much money you need to start a business—and where you ultimately get that money from—can vary widely.

In general, there are a few different funding options for starting a business, including:

  • Self-funding . If you have money—and you’re willing to spend it on your entrepreneurial dreams—self-funding is a great option. (Particularly since you won’t have to pay any interest or give up equity in your company).
  • Business loans . Loans are another option for getting the capital you need to start a business. The process of how to get a loan to start a business can be challenging; often, traditional lenders are wary of lending to brand new businesses. But there are loan programs out there that cater to start-ups—so doing research to see if you qualify is definitely worth it.
  • Credit cards . If you can’t get a loan, credit cards (personal or business) can help to cover expenses as you build your business.
  • Business grants. There are also a variety of grants out there that provide capital to qualifying applicants. For example, there are grants for women-owned businesses and minority-owned businesses. Grant competitions can also be great if you have a particularly interesting or innovative business idea. So, if you fit into any relevant grant categories, you’ll definitely want to explore how to get a grant to start a business.
  • Friends and family . Asking friends and family to invest in your business is also an option. Just keep in mind that introducing money into personal relationships can be challenging—so if you do take money from loved ones, make sure the terms and expectations of the investment are extremely clear on both sides.
  • Outside investors. Depending on your business model and industry, you may also be able to pitch outside investors, like venture capital firms or angel investors—which is more common in certain industries, like tech.

Build your dream business with the help of a high-paying job—browse open jobs on The Muse »

6. Get your systems in place

You’ve got your funding. You’ve got your business plan. But before you move forward in bringing your business to life, it’s important to lay the foundation for success by putting the right systems and processes in place.

Establishing systems and processes from the get-go can help make your business launch and growth significantly more smooth—and also can save time, energy, hassle, and money.

For example, before you start selling products, you’ll want to set up a secure online payment system. Before you start billing clients, you’ll need an invoicing procedure—and the software to implement those procedures. Before you start marketing, you’ll want to have a strategy and system in place to ensure you reach the right customers at the right time.

Systems and processes help you get organized—and if you want your business to be successful, you’ll want to take the steps to get organized before you launch.

7. Build your brand

Once you’ve got the backend of your business in place, it’s time to start thinking about the front-facing elements—the elements that make up your brand.

In order to launch a business, you’ll want to have certain branding assets in place, including:

  • Brand color palette
  • Brand fonts
  • Brand voice
  • Social media profiles

Building a brand helps to create a consistent experience for your customers and tell the story of your business to your target audience. “This is important for gaining recognition,” says Keith Donovan, a startup advisor and Founder of Startup Stumbles .

8. Launch and market your business

You’ve figured out how to begin a business. You’ve got all the pieces in place. Now it’s time to actually launch your business—and market that business to connect with your ideal audience.

“Making sure people know about your company is crucial,” Donovan says.

How you market your business is up to you. For example, “actions like creating social media pages, running advertisements and cultivating helpful content introduce potential buyers to the business and what it offers,” he adds.

You could also market your business in other ways, like:

  • Local events
  • Influencer partnership
  • Print advertisements
  • Cross-marketing with other businesses
  • Email marketing

It’s not so much about how you market your business; it’s about how effectively you do so that will determine whether your company thrives or falters. Whatever methods you decide to go for, just make sure you’re invested in creating and implementing a marketing strategy that allows you to connect with your target audience and convert them into paying customers.

market research where to start

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Embrace the fear and start your business today.

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Embrace The Fear And Start Your Business

Starting a business can be one of the most thrilling and challenging experiences of your life. The thought of diving into the unknown, risking financial stability, and facing potential failure can feel overwhelming. However, feeling the fear and doing it anyway can lead to tremendous personal and professional growth.

Don’t let fear hold you back. Here’s how you can embrace the fear, start small, and take the first steps toward entrepreneurial success .

Understanding the Fear

It’s important to recognize that fear is a natural part of the entrepreneurial journey. Everyone experiences it, from the most seasoned business mogul to the first-time startup founder.

Fear can stem from various sources:

Financial Risk : Investing your savings or taking on debt can be intimidating.

Uncertainty : The unpredictable nature of the market and consumer behavior.

Failure : The possibility that your business might not succeed.

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Biden loses train of thought and corrects himself repeatedly in debate with trump, biden’s debate performance torched—even by trump foes—over weak voice and verbal stumbles: ‘hard to watch’.

Accepting that these fears are normal is the first step toward overcoming them.

Start Small

You don't need to jump in headfirst with a massive investment or a fully fleshed-out business plan. Starting small allows you to test the waters and gradually build your confidence and skills. Many choose to start a side hustle while keeping full time employment to reduce the financial risk of depending on your new business for steady income.

Here are some tips to help you get started:

1. Begin with a Side Hustle

Starting a business doesn't have to be an all-or-nothing endeavor. One effective strategy is to begin with a side hustle while maintaining your current day job. This approach allows you to test and refine your business idea without the immediate pressure of financial dependency. By doing so, you can gather valuable feedback and make necessary adjustments to your product or service, ensuring that it's well-received by your target market. Additionally, this method minimizes financial risk, providing a safety net while you transition into full-time entrepreneurship.

2. Market Research

Conducting thorough market research is essential to understand your target audience's needs and preferences. This crucial step allows you to tailor your offerings specifically to what your customers want, significantly reducing the risk of launching a product that fails to resonate with them. By gaining insights into customer behavior, preferences, and pain points, you can develop a product or service that meets their expectations and stands out in the market, ensuring a higher likelihood of success.

3. Bootstrap

Using your own resources to fund the initial stages of your business is a smart strategy. By relying on your personal finances, you can grow your business at a sustainable pace, making decisions that align with your long-term vision without the pressure to deliver quick returns. This self-reliance fosters a strong foundation, enabling you to refine your business model and scale effectively over time.

Practical Tips to Overcome Fear

  • Set Small Goals : Break down your big vision into small, manageable goals. Celebrate each milestone to build momentum and confidence.

  • Seek Support : Being an entrepreneur can feel lonely, so be sure to build relationships with others in business so that you have others to talk about the joys and hardship of business. Join local business groups or online communities for advice and encouragement.

  • Educate Yourself : Equip yourself with knowledge. The best investment you can make is in yourself so be sure to stay abreast of changing landscapes and technology by taking courses, reading books, and attending events.
  • Plan for Failure : Understand that failure is a possibility, but it’s also a learning opportunity. Expect not everything to go as planned but have a contingency plan and be prepared to pivot if necessary.

  • Practice Self-Care : Entrepreneurship can be stressful. Make sure to take care of your physical and mental well-being. Exercise, eat healthily, and take breaks to avoid burnout.


The bottom line is that starting a business is undoubtedly scary, but it's also an incredibly rewarding journey. By acknowledging your fears, starting small, and taking calculated steps, you can turn your entrepreneurial dreams into reality. Remember, every successful entrepreneur started somewhere, and you can too. Embrace the fear, take the plunge, and watch your business grow.

Melissa Houston, CPA is the author of Cash Confident: An Entrepreneur’s Guide to Creating a Profitable Business and the founder of She Means Profit . As a Business Strategist for small business owners, Melissa helps women making mid-career shifts, to launch their dream businesses, and I also guide established business owners to grow their businesses to more profitably.

The opinions expressed in this article are not intended to replace any professional or expert accounting and/or tax advice whatsoever.

Melissa Houston

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Construction slows and absorption accelerates to start 2024 in the St. Louis multifamily market

Market fundamentals of the St. Louis 2024 multifamily market report for the first quarter.

Multifamily completions in St. Louis slowed during the first quarter, but the supply overhang that has resulted from elevated construction totals in recent years resulted in another vacancy increase. The rate rose above 5% for the first time in nearly three years, after holding mostly steady throughout much of 2022 and 2023. Although vacancy conditions softened, renter demand improved in recent months, fueled by continued gains in the local labor market. Net absorption totaled more than 250 units in the first quarter, up 18% from the same period last year. The rebound in renter demand drove asking rents higher in the last three months, following declines in the second half of last year.

Properties continued to trade in the St. Louis multifamily investment market during the first quarter, although transaction counts at the outset of this year lagged the pace that was achieved throughout 2023. Total sales during the first quarter were down about 40% compared to velocity during the same period of last year. While a few newer properties have sold in recent months, the bulk of the activity has occurred in properties built before 2000. This has resulted in a lower overall per-unit price; in transactions where pricing was available, the median price thus far in 2024 is $111,800 per unit. Cap rates averaged approximately 6.5% to start the year, but higher-quality properties generally trade at lower cap rates than the average.

Looking ahead

Property fundamentals in the St. Louis multifamily market are expected to stabilize in the coming quarters, as market metrics are forecast to return closer to the region’s long-term averages. Annual deliveries are forecast to be modest in 2024 following two consecutive years of heightened completions. With inventory growth expected to more closely track long-term growth patterns and renter demand projected to remain strong, supply-side pressures that have persisted in recent years will likely ease. The vacancy rate is forecast to end the year close to the current figure and continued renter demand should support additional rent increases. Rent growth has averaged 3.5% per year since 2010.

The investment outlook in St. Louis is expected to remain favorable in the coming quarters. While many markets are recording sharp increases in deliveries that will result in greater competitive pressures on operators, the surge in deliveries has already occurred in St. Louis, meaning the market is further ahead in the recovery cycle than most, and operational stability should support investment demand. Middle-tier and lower-tier assets should continue to account for the majority of the transaction mix, but Class A sales may pick up in the second half of 2024, closely tracking trends posted last year.

Read the report or contact our St. Louis office to learn more. 

Pete O'Neil

Pete O'Neil

Research to help you make knowledgeable investment decisions

Northmarq research featured in GlobeSt.: Single-family own vs. rent gap widens

October economic commentary: continued stability in the labor market may elongate timeline for interest rate cuts, northmarq in globest.: triple net lease listings are up.

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How to Start a Business in Ohio: Your Guide to Being a Buckeye Entrepreneur

By Homebase Team

market research where to start

If you’re dreaming of starting a new business, Ohio might be the perfect place for you to make that dream come true. Ranked by Finfare as the best place to start a business, Ohio is only one of six states with a 0% corporate tax rate (however, you still need to pay payroll taxes ). That’s one reason why the state boasts a 78% first year survival rate and a 53% five year survival rate for new businesses. Business insurance is crucial in protecting a company’s assets and ensuring financial stability.

Ranked seventh among US states in terms of size of economy, Ohio has the third largest manufacturing sector in the nation and nearly $1 billion in state investments in small businesses .

Given its business-friendly policies, diverse workforce, and strong economy, Ohio is a prime location to start a small business. As a business owner, it is essential to ensure compliance with Ohio’s business regulations, including name uniqueness, registered agent designation, and fictitious name registration.

But what goes into starting a business in Ohio? If you’ve got questions, we’ve got answers! Here’s our guide to starting a business in the Buckeye State!

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6 steps for starting a small business in Ohio

If you’ve got a burning desire to start a new business, but you’re not sure where to start, then follow these six steps for starting a small business in Ohio. As a business owner, it is crucial to ensure the uniqueness of your business name, designate a registered agent, and file necessary registrations with the state authorities. Additionally, understanding and complying with business taxes in Ohio is essential for choosing the right legal business structure and staying on top of filing requirements and tax obligations.

Step 1: Solidify your business idea.

If you’re unsure about the kind of small business you want to start, think about the type of activities you find enjoyable, what you excel at, and what you enjoy doing. Consider what your business will do and who you’ll serve. Ideally, your business idea will resonate with your own interests, fulfill a market demand, and have the potential to be profitable.

For example, if you’re an avid home cook but lack the skills to do it professionally, a restaurant might not be the best fit for you. Instead, you could consider establishing a cookware store that caters to other home cooks.

Step 2:  Do your research!

Conducting market research is an essential step when starting any business. Market research will give you valuable insights into the feasibility and profitability of your business.

There are two types of research you can do: primary and secondary. Primary research is collected directly from prospective customers using focus groups, surveys, and/or interviews. Secondary research, on the other hand, gathers key data from external sources such as government census, research reports, and studies conducted by other businesses in your field.

While market research might seem time-consuming and potentially costly, the information it turns up will likely justify the time and expense. Research can validate your business idea in terms of demand and profitability, and it can help you understand your potential customers. 

A rmed with the right insights, you’ll be able to market your business and close sales faster and easier when you understand your customers and how your business can meet their needs.

When starting a business in Ohio, it’s a good idea to focus your market research on your target audience. If you’re targeting a specific city, focus your research on that location. If you’re looking at the state level, compare and contrast research results across the state.

Ultimately, market research will provide a solid foundation for developing your business and help you make smarter business decisions.

Step 3:  Write a business plan.

Once you’ve validated your business idea with market research, the next step is to develop a business plan.

A good business plan outlines your business model, goals, and the steps needed to accomplish them. Despite what many people think, a business plan isn’t only for those seeking funding; refining the business concept, identifying obstacles, and developing a clear understanding of how to attract and convert customers is beneficial to any business at any stage.

A comprehensive business plan will include:

  • An executive summary of the business strategy.  
  • A company overview that addresses key questions about your business.  
  • A market analysis summarizing your market research.  
  • A section describing your company mission, goals, and objectives.  
  • A description of your products or services.  
  • A go-to market strategy detailing your unique selling proposition and promotional tactics.  
  • A financial strategy that includes a proposed budget and projected financial statements for five years, as well as any prospective funding needs. 

Step 4:  Finance your business

With a business plan written, it’s time to put it into action. And that likely means finding a way to finance it.

Initial start-up costs can vary from a few thousand to several hundred thousand dollars, with the average cost to launch and operate a small business for the first year being around $40,000.

However, don’t let the costs discourage you! Small businesses have many financing options available to them, some of which are low- or no-cost to obtain. Self-financing or bootstrapping, which involves using personal funds, is certainly one approach. However, this puts all the financial risk on you, which can be challenging if your business needs a lot of capital to get started.

Although competitive, small business grants also offer funding that doesn’t need to be repaid, allowing you to progress further with fewer dollars. However, they can be difficult to obtain. Consider taking small business loans or lines of credit, but keep in mind that you’ll need a thoroughly documented business strategy and personal financial statements when applying.

Be sure to explore Small Business Administration (SBA) loan programs, which provide lower interest rates and extended terms compared to traditional loans.

Step 5:  Conduct an Ohio business entity search.

Your business name is a crucial part of your business, serving as the initial impression of your business. However, before you settle on the name, you’ll need to perform a business entity search for different types of business entities such as LLCs, corporations, and partnerships.  This will determine if a business exists already with an identical name. Visit the Ohio government website to obtain licensing requirements and access checklists for different industry categories. Remember, it’s best to choose a business name that adheres to state regulations to guarantee legal protection and public transparency.

You may also think about using a trade name, which acts as a pseudonym for your business. For instance, you might register your business under the name XYZ Parties, Inc., but your trade name is simply XYZ Parties. To make a positive first impression, you’ll want your business to have a name that’s brief and memorable—and a trade name allows you to do that.

Step 6:  Register your business.

Once you find a name, you’re almost ready to make your dream a reality. Now it’s time to choose a business structure that accurately reflects your preferred tax responsibilities, daily operations, personal risk, and legal obligations.

Here’s a list of common business structures to kickstart your exploration:

Sole Proprietorship: A sole proprietorship combines the identity of the owner and the business. This makes the owner personally liable for business debts, so exercise caution. Partnerships: Ideal for businesses with multiple owners, these require a partnership agreement and offer limited liability for business debts of the LLP.

LLCs: Owned by one or more entities, these limit personal liability for business debts and are relatively straightforward to start. A limited liability company also allows you to elect how to be taxed, potentially minimizing double taxation of income.

C ooperatives: Cooperatives function to benefit their users and span various industries such as healthcare, retail, restaurants, and agriculture.

Corporations: More common in larger companies due to their legal and tax complexities, some small businesses can also benefit from this tax structure.

S Corporations: These operate like a corporation, but the flow-through of income and losses is sent through to shareholders to help you avoid double taxation on corporate income.

Be sure to research each type of business so that you choose the one that best fits for your small business. Consider the taxes you may pay on a federal level (remember, no corporate income tax in Ohio!) and the legal risks you may want to avoid.

Keep in mind that, regardless of the structure, some businesses in Ohio may be required to collect sales tax, with the sales tax rate and oversight of sales and use taxes managed by the Ohio Department of Taxation.

For businesses with employees or specific business structures, you will need to apply for a Federal Tax ID (EIN) through the Internal Revenue Service.

Lastly, always remember to consult a lawyer or accountant to ensure your chosen business structure is optimal for your business.

How to incorporate in Ohio

Owning your own business in Ohio can be a rewarding endeavor, but it requires careful planning and adherence to state regulations. Business registration and licensing requirements can vary across states, and Ohio involves several unique steps. You might need to apply for a trade name and file Articles of Incorporation with the state, depending on your business structure.

Here are the main steps for incorporating a business in Ohio:

  • Verify Business License Requirements: Check all registration and licensing requirements with the Ohio Secretary of State to ensure you are complying with all regulations. Consult with relevant local government bodies and industry associations for more specific information and guidance.
  • Register Your Business: Register your business with the Ohio Secretary of State, making sure to complete the necessary paperwork and pay any fees associated with your business registration. For detailed checklists and information on different industry categories, visit the Ohio government website.
  • Obtain an Employer Identification Number (EIN): Get an EIN from the IRS. This number is crucial for federal tax purposes and is typically required to open a business bank account. Additionally, you’ll need to register your business with the Ohio Department of Taxation to obtain any necessary state tax IDs.
  • Acquire Relevant Licenses and Permits: Depending on your business type, you may need to obtain specific licenses and permits from both state and local governments.
  • Obtain the Appropriate Insurance: Ohio law requires the purchase of workers’ compensation insurance if you plan to hire employees. Other types of insurance, such as general liability insurance, should also be considered. If you’re unsure about your insurance needs, it’s advisable to consult with a legal expert.

How Homebase can help you start a small business in Ohio

Starting a new small business is no easy feat. If you want to start your business off on the right foot, you need the best small business tools available.

That’s why Homebase provides a comprehensive suite of tools designed to support your business at every phase. As your team grows, enjoy the convenience of effortless scheduling and time tracking. When it’s time to compensate your team, Homebase manages your payroll with just a few clicks, calculating PTO and ensuring you stay compliant and up-to-date with Ohio’s requirements.

Best of all, Homebase integrates with many of the most popular business software, streamlining business operations. Homebase delivers everything a new small business needs and will scale up as your business grows. Give Homebase a try for free!

Remember:  This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.

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