True marketing and brand strategy experts understand and embrace the need for market research. But even for these professionals, the growing volume of data available and channels to obtain research has become increasingly complex. And for the non-experts, benefits of research are not always as clear. I am frequently engaged in conversations with people across both for profit and not-for-profit sectors related to the benefits and scope of research required in a marketing and brand strategy. So I thought it would it helpful to provide some guidance on four key questions I am most frequently asked.
Why Use Market Research?
Intuitively we all have a gut sense of the direction we want to take and the audience we want to reach, but our intuition also comes with natural biases and limitations. They can hinder our ability to fully think through the most effective solutions to a variety of strategic business and marketing challenges. Market research enables us to uncover truly powerful information that can help provide objective data to formulate successful marketing and branding strategies and keeps us from falling prey to errors our natural biases cause.
While the benefits of market research are limitless and contingent upon your ultimate goal, there are four major benefits you can expect to gain from market research:
- ROI: Marketing is all about ROI (return on investment). Without market research to back your strategy, you could be heading down the wrong path and literally throwing money away. Market research allows you to make decisions based on facts that can later be tested. This will maximize the benefit of each dollar invested.
- Innovation: A major contributor in terms of both revenue generation and brand reputation is innovation. By conducting research into the needs and opinions of your market, you can identify unfulfilled demand and develop new products and solutions.
- Brand Perception: Market research provides objective ways to assess your brand’s characteristics from an outside point of view. By identifying problems with your marketing strategy or brand, you have the opportunity to fix issues or shift direction before it becomes critical.
- Brand Extension: Not all brands are developed from scratch through new innovation – some are created as extensions of existing brands into new segments or applications. Through market research you can find new uses for existing products and services or new market segments. Then you can confirm your marketing is reaching the right audience.
The outcome of market research should be used to develop a proper brand or marketing strategy and the metrics to test performance. This will become the foundation for future business growth efforts.
What Type of Market Research?
Market research can take on a variety of forms and formats. However, you can categorize most methods into one of two categories:
- Quantitative Research: These methods most often relate to numbers and trends. Possible sources include surveys, polls, social media and existing research data. From a brand perspective quantitative research provides numbers and benchmarks for charting and analyzing success to determine such things as basic interest in your brand to the efficiency of your campaigns. From a broader marketing perspective, quantitative research provides data on such factors as demographic composition, market size and potential as well as pricing – all important considerations in evaluating market opportunity and determining strategic approach.
- Qualitative Research: These methods typically work to obtain insight into various questions. Focus groups, face-to-face interviews, observational studies and other tools help to uncover the motivations and reasoning behind market behaviors. Instead of raw facts, qualitative research can help discover the why and how of various market trends and brand concerns.
Depending upon the specific insights that you are seeking to gather, a combination of both quantitative and qualitative research may be required. This provides a broad overview of your intended market, brand opinion, strengths, weaknesses and potential ways to improve marketing efforts.
When to Use Market Research?
Though market research has a specific role when creating a business plan, designing market strategies or expanding your brand, it is also a tool that can be used continuously. By alternating qualitative and quantitative methods, you can create routines that will guarantee that your brand is always in the optimal position for success. Often one research cycle will uncover additional questions that fuel another cycle. If you are constantly exploring your marketing practices and the state of your market, you are always primed for action and growth.
How Much Market Research is Enough?
There is no one size fits all answer when it comes to determining market research requirements. There are a number of considerations to take into account when determining the scope of research to undertake. What is most important at the beginning is answering key questions that determine the viability of your brand and marketing strategy.
The place to start is the end. Determine the business case you are trying to make or hypothesis you are trying to test. For example – in a company contemplating launching an existing product into a new market the hypothesis could be, “Our offering will be more competitive than local producers due to the superior value our product delivers.” Once the hypothesis is clear, it is a matter of working backwards through what data must be collected on current customers, market, competitors, and brands to be able to provide the objective information needed to either prove or disprove the hypothesis. In our example, the most likely data needed will be (1) who are the key consumers to capture (2) who are the competitors and (3) what value is the consumer currently receiving vs. what they could receive from my company’s products.
Making this process both richer, but also more complex is the advent of Big Data. Big data is starting to gain mainstream acceptance among enterprises large and small as companies seek to make more data-driven strategic decisions.
The why, what, when and how of market research and brand strategy must be determined in order to build a strong foundation for business growth. It is always possible to add more data over time, but it is unreliable to just listen to your gut. Market research will give you real world data on which to base sound marketing and branding practices.