Market research in the marketing plan

Why read this? : We look at how market research fits in the marketing plan. Learn which research topics help you make better marketing decisions. Learn how market research supports key areas like innovation and communications. And learn how to turn your insights into actions to deliver better marketing results. Read this learn how to apply market research in your marketing plan.

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Market analysis

Market analysis starts when you gather and review your existing marketing data and research. You identify what you already know. And you define research questions for what you don’t know.

Then you carry out secondary, qualitative and quantitative research to fill in the knowledge gaps. You ask questions to find out what’s going on with customers.

For example, who’s winning and losing with customers? What are customers talking about the most? What new trends are there? Which events and influencers are having the most impact on customers?

Summarise key insights and learnings

Your next goal is to organise and summarise all these insights and learnings you’ve gathered. And for each one you ask yourself “so what?”. The bigger the so what, the bigger its priority in your plan.

You want a succinct summary where the business is right now. And what’s important in the market.

There’s no single best format for this summary. But in most cases it’s one or two Powerpoint pages, usually as a two column table.

Insight and learning in the left column. And implication / “so what?” in the right column.

What most marketers find difficult here is being concise. It’s tempting to include all the market research you have. Everything which is “interesting”. But, you risk making your story less clear by having too much detail. So you should focus on the insights which best drive decisions and actions.

Keep the “interesting, but don’t know what to do with it” stuff for the appendices, if you really feel the need.

The 3 key areas you need to review here are :-

competitors and the category.
how customers perceive your brand (your brand identity).
the impact of your previous marketing activity.

Competitors and the category

A competitor and category review summarises what’s going on with competitors and in the wider category.

You list key changes and the impact they’re likely to have on customers and your brand.

Competitor examples would include : –

new entrants into the market.
new product launches.
new advertising campaigns.
price changes
brand identity updates.

Category examples would cover changes in retail and distribution channels. New retailers in the market or new channels like e-Commerce, for example. Category would also cover new legal requirements, and changes in social and cultural factors. These can all impact customers, and your brand. This review is also a good place to check your positioning, competitive strategy and competitive advantage are all still relevant to customers.

Brand perception

Brand perception is how you track the quality of your interactions with customers.

You track measures from the brand choice funnel like awareness and consideration, for example.

Plus, you track features, benefits and other attributes you want customers to associate with your brand.

For example :-

is good value.
is high quality.
is the most innovative brand.
is the most exciting brand.
is the most reliable brand.

You use these measures to evaluate the health of your brand. A decline in a measure is a sign or symptom something’s not working. You then need to investigate what’s causing the decline.

Diagnose results of previous marketing activity

Your previous marketing activity will have changed brand perception in some way. You use the data you have about these activities to diagnose which activities drove which changes in perception.

So let’s say you’re evaluating advertising performance. For that, you analyse media data like the spend, the share of voice (how you spent versus competitors) and the reach and frequency numbers.

For a product launch review, you look at marketing data like the number of trialists and repeat buyers. You look at distribution data. How many retailers stocked your product for example? And how did it perform in-store?

You compare the actual performance vs the objective for each activity you review. You’re looking for changes and correlations, to rationalise why things happened the way they did. These point you towards what you should do next.

The summary of all this data and analysis sets you up for the next stage of the brand development process. That’s when you define the brand goal. You can also use this summary elsewhere in the planning process. As a summary at the front of your marketing plan, for example. It sets the context and brings everyone up to speed with what’s going on in the market.

Segmentation, targeting and positioning

We won’t go into depth on brand goal setting here, as it’s covered in our brand development process guide. We do, however, want to look at segmentation, targeting and positioning as market research plays an important role there.

You start this process by defining the total number of potential customers in the market.

You then break this down into smaller distinct segments. These are groups of customers who are similar in some relevant way.

Next you review each segment’s attractiveness. From that, you decide which segment or segments to target your marketing activity on.

You finish the process, by deciding how to position your brand with your target audience. That covers key areas like your benefit and your reason to believe.

Market research plays a role at each stage of the process.

For example, segmentation research identifies which variables are most relevant to define segments. These are usually based on demographics, occasions and / or attitudes. Each has its own pros and cons towards helping you understand the segments better.

Demographics, occasion and attitudes

Demographics such as age, gender and location make it easy to identify targets for media buying, for example. But, they’re not great for helping you understand what drives customer decision-making.

Occasion-based information such as time of day, day of week, and location of purchase also help with media planning. They also help with key marketing decisions like where to focus sales promotions and when to carry out digital marketing activities. But they’re not helpful in understanding differences in brand perception, or underlying motivations.

Attitudinal information is the best for getting under the skin of customers. It helps you understand what drives their decisions and actions. (For more on this, see our behavioural science article). That helps when creating advertising messages and refining your brand identity. But, it doesn’t help you with where to find these types of people. It’s hard to place your media against “optimists” or “high-energy”, for example.

So, in an ideal world, you use a mix of all 3. Your :-

demographic variables help you identify the people in the segments.
occasion variables help you work out where and when to connect with them.
attitudinal variables help you work out the best way to influence them.

Sounds easy when we put it like that, right?

But anyone who’s gone through a big segmentation project knows it’s not. You need good analytics skills to work out which variables are the most relevant. This is usually based on strong correlations between the variables and sales numbers.

Targeting and positioning

Next, you move on to targeting and positioning. The main focus here is deciding where and how your brand will play in the market.

Targeting uses a lot of marketing data. That data comes mostly from your market research. For example, you use quantitative research to evaluate the size and potential of your target audience.

From there, you build out your positioning. A statement which covers how you’ll compete in the market. You also research the choices you make here. Getting the facts about the customers leads you to make better decisions about how to win them over.

Customer persona

A helpful output from the segmentation, targeting and positioning process is a picture of the target customer, which summarises your key insights. This is done with a template called a customer persona. (sometimes also called a customer profile)

It’s a single page summary which describes who the target customer is, what they think and feel, and what is most likely to influence them.

You use it in briefs with your marketing agencies for example, when working on new advertising and media campaigns. You share it with your sales and customer service teams, so they know what makes the target customer tick. And it’s built into your marketing plan to makes sure there’s a clear focus on the target customer.

Brand identity

The second last stage of the brand development process is creating your brand identity.

Here you create a set of intangible and tangle assets which define who your brand is, and what it stands for.

Your brand identity drives how your brand works, and how you want to come across to customers.

You can use market research to support many decisions when you create your brand identity.

For example, your essence, values and personality should fit with what your target customers like and look for in brands. You also use market research to identify which features and benefits should be part of your brand identity.

Brand perception then is how customers view your brand identity. You can use continuous quantitative research to track this as we covered earlier. Do customers perceive your brand in the way you want it to come across? That’s important to know. Because if they don’t, then you’ve got problems.

You can also use market research to refine more tangible assets like your choice of logo, colours and typography. When you develop these from scratch, qualitative research can identity what’s most likely to work. And, then quantitative research can validate which design decisions will have the biggest impact.

It’s clear market research plays a key role at almost every stage of the brand development process. But once you’re clear on the market and your brand, you still need to pull that all together in your marketing plan.

Where market research fits into the marketing plan

The marketing plan comes towards the end of the brand development process. It covers a defined period of time, usually 12 months. However, some may focus on the next 6 months, while others plan to 18 months+. Before the end of that defined period, you’ll need to be working on the plan for the next time period. You’ll need to review and update it with details of any market changes.

Marketing plans vary greatly in the level of detail they cover. However, all marketing plans should answer the same 3 key questions. First, where your business is now. Then, where it wants to be in 6-18 months time. And lastly, how you’re going to get there. Market research helps you answer these questions.

Where the business is now

Market research helps you gather the data to create an up-to-date situation analysis for your brand.

It’s an updated summary of what you did in the earlier market analysis stage.

You include information on any new events. You take out anything no longer relevant.

The role of market research in the marketing plan here is to build a shared understanding of the category dynamics. Anyone who reads your situation analysis should quickly be able to grasp what’s going on with your brand and with your customers.

Your situation analysis should summarise key lessons and their implications. This usually cover a wide range of topics. So you need to organise the information into something like a SWOT analysis to make it easy to understand.

SWOT analysis

A SWOT analysis captures key strengths, weakness, opportunities and threats on a single page.

Quantitative research is the source for most of the inputs and facts you include in your SWOT.

You analyse the results and decide which are most important to include.

In this example, quantitative research generated most of the key insights.

“Brand X is x% ahead of Brand Y on “it’s staff provide the highest quality service”, for example. And “Those exposed 5X more likely to consider than those who have not seen any media”.

Where does your business want to be?

From the lessons and implications of your situation analysis, you next move on to where you want your brand to be. What are your objectives for the next 6-18 months?

You normally start with your customer experience strategy. This summarises the work you did in the segmentation, targeting and positioning process.

It’ll include the customer profile you already created. It’ll also map out your ideal customer journey.

Then you identify what you need to do about the key opportunities and challenges from the SWOT. That shapes your marketing mix and brand activation.

For example, it might be obvious you need marketing innovation to take on a competitor. Or you need to spend more on media to drive awareness. Or change your advertising message to improve consideration. Whatever’s the best thing to grow the business over the next 6-18 months.

These lead you to setting objectives, and then action plans to deliver each objective. Market research plays a major role in the marketing plan again.

Demand measurement and forecasting

You also use market research to help set and track SMART objectives for your marketing activities. SMART objectives are specific, measurable, actionable, relevant and timely.

Market research results can give you competitor benchmarks. They can also give you benchmarks against previous activities you did. These help you set your new objectives.

So, for each marketing activity, you can identify a ‘size of prize’. How much demand / sales will the activity generate? You then divide this forecast by the cost to work out return on investment target for each activity.

This helps you decide if activities are worth doing. This helps with the business case and profit and loss calculations you may need to secure the budget for them. Basing your marketing plan on direct customer feedback means your activities are more likely to drive sales. It helps build confidence in your plans.

This is why demand measurement and forecasting is such a common way to use market research in the marketing plan.

How will your brand get there - marketing mix and activities

The final step of the marketing plan is to decide on the marketing mix. And this mix leads you to then create specific action plans.

See our marketing plan guide for more on the marketing mix. Or check out this example of a marketing mix in action.

But, when it comes to market research in the marketing plan, it’s used to :-

prioritise which areas of the mix to focus on
provide evidence for recommendations
establish measures to track.

Let’s look at some examples of key elements in the marketing plan where you need to use market research.

Marketing innovation

With marketing innovation, market research helps you identify how to best take advantage of opportunities.

This could be completely new products or services. Or updates to your existing offer. New packaging, for example. Or new customer experience improvements.

The ideas for these innovations can come from many sources. From R&D teams, supply chain teams and sales teams, for example.

But these ideas will only work if customers like them enough to buy them. So, you need market research with customers to validate the ideas.

Marketing innovation normally applies to changes in the product of service. But the same concepts apply to changes in other parts of your marketing mix.

For example, market research can help you forecast the impact of price changes. Or changes in your place strategy – where and how you sell your products. Whatever your planned innovation, you’ll need market research to understand how customers will respond to your changes.

Marketing Communications

Communication activities like advertising and media have the biggest reach of any of your marketing activities. They’re usually your biggest area of marketing spend. You can use market research in the marketing plan to help you make sure you spend this money wisely.

For example, you can use qualitative market research to help refine your advertising ideas. You can test adverts with quantitative research before you launch them, to check for impact and relevance.

Market research helps you improve your communications because it gives you direct feedback from customers.

Does your message work for the target audience? Does it stand out from competitors? Do they understand it? Will it motivate them to buy your brand?

You can also use it to quantify the likely sales impact of these activities. This helps you work out how much you need to spend, and what the (sales) return on that spend will be. So, how many customers will like the advertising? How many will find it relevant? And how many will be motivated enough by it to buy your product?

Once your comms activity goes live, you can then use continuous quantitative market research to track its impact over time. You can work out the advertising impact on your sales and profits.

For longer-running campaigns, market research helps tell you when advertising starts to wear out. This is when customers have seen an advert so often, it starts to have less impact.

Marketing performance measurement

For almost all marketing activities, market research helps you set objectives and track progress in how you’re performing against those objectives.

Market research can give you richer levels of data, to diagnose what’s driving changes in brand perception and the impact of marketing activities.

So, for example, digital marketing data like website visitors and social media responses can help you understand how online factors impact on your performance.

Customer satisfaction surveys, and feedback systems such as Net Promoter Score can help you track how you’re going with customers. (check out our Customer Experience guide for more on these).

Many businesses set up an on-going performance dashboard with the key measures you want to track. Continuous market research is usually the main source of the data which goes into this.

How to present market research in the marketing plan

The final challenge is how you pull all this information and insights together into a compelling story.

We’ve covered a lot of “what” you need to cover so far. But to drive actions you also need to play out “how” you’ll persuade the people in your business to follow your plans.

As per our market research storytelling article, it’s helpful to plan out a clear story structure and story type.

It’s also helpful to think of your internal audience and the context in which you need to land the plan. Generally, you need 3 different versions of the market research story for your marketing plan.

3 versions of your market research story for your marketing plan

First, there’s the short elevator pitch version. A 30 second version of the story which has anyone who hears it wanting to find out more. It’s like the film trailer version of your story.

Then the edited, “just enough” version of your story. This strikes a balance. It has to be clear and easy to understand. But also share enough detail to drive actions. As per our market research storytelling guide, we’re big fans of using the Business Model Canvas as a start point for this.

Lastly, the full, unedited version. This covers everything. It’s like the DVD extras when you buy the movie. Most people won’t even look at this. But some detail driven people will. It makes sure you don’t miss or lose anything.

Tell the right story to the right audience and you’ll have them hooked. That’s what gets you from market research insights to marketing plan actions.

Conclusion - Market research in the marketing plan

Ideally, customer understanding drives all your marketing activity. That understanding comes from your market research. No market research, no marketing.

This is why you need market research in the marketing plan.

It improves the quality of the decisions you make about how to win customers. You make informed decision based on what customers actually want and need.

This guide covered where market research fits into the brand development process and the marketing plan. How you gather data and insights to analyse the market. How you organise that data to help you make decisions.

Then, we looked at how you use market research to inform where you are now, where you want to be in 6 to 18 months and how you’ll get there. We picked out key areas like marketing innovation, marketing communications and performance measurement where market research is vital.

And then finally, we shared tips on how to talk about market research in the marketing plan. How to present the results in different contexts, so you tell a clear and memorable story.

Because after all, a clear and memorable market research story is more likely to have a happy ending for your brand.

Three-Brains and market research skills

We coach and consult to help businesses improve their market research skills. We can help you identify your research needs, manage the research process, and convert the results into stronger marketing actions.

Check out our other market research guides to learn more. Or contact us, if you need help to raise your game in getting the most out of market research.

Downloadable market research brief template

Use this market research brief template when working with your market research agency to brief them on market research related tasks.

3 pages including a blank template, a guide to completing each section and an example brief from the vegan ice cream case study in our secondary research skill guide.

Download it here or from our resources section.

Powerpoint and Keynote versions of this document available on request.