Why read this? : We share quick, easy and free ways to do informal market research. Learn how to put your observation and listening skills
Market research process
Why read this? : We outline the 5 key steps of the market research process. Learn how each step helps towards better understanding your customers. We share what’s needed at each step and how you use the outcomes to make better marketing decisions. Read this to learn how to use the market research process to improve the impact of your marketing.
Table of Contents
Why market research?
Not all customers are the same. Among everyone who could choose your brand, some customers will spend more, be easier to influence and stay more loyal. Others will spend less, be harder to influence and they’ll jump to a competitor before you’ve finished saying sales promotion.
Customers differ in their needs, their decision-making process and how they think about brands.
It’s the job of market research to help you understand these differences and recommend what you do about them.
Before you carry out market research, “customers” are one big group of anonymous faces. You can only guess at what they actually need or want.
But after you carry out market research, you know who your customers are.
You can identify shared needs which helps you work out which marketing activities to use with them.
And you can identify attitudes, motivations, beliefs and perceptions which shape how you influence customers to choose your brand.
Market research helps you identify the highest potential customers for your brand. But, it also helps you identify the lowest potential customers.
This is important, because you can’t appeal to everyone. You have to consciously choose to NOT go after some groups of customers. It’s a fundamental principle of marketing that it’s better to focus on the needs of specific groups of customers, than try to appeal to all customers.
The market research process helps you do that. In fact, it’s so important, it’s why the first article we ever wrote was on the importance of market research.
How market research shapes marketing activity
But you also need to be able to convert that customer understanding into action. Market research helps you be more specific and relevant with your marketing activity. You appeal to more high potential customers and drive more sales. You reduce wasted efforts on low potential customers.
Imagine your marketing plan without market research. It would be “sell your products”. Simple, but with no direction on how to do it. But, build your marketing plan based on market research, and suddenly you have clearer picture of who the customer is. And importantly, who it isn’t. You have direction on how to influence them to buy your products and services.
So, in this example, your market research directs you to focus on working women aged 30-45.
So, no men. Or children. No younger or older women.
That’s 4 big groups of people you can happily spend no money on.
You know this customer group likes to be informed and in control. So, when you create advertising or packaging or build your website, you can use this insight to decide what type of information to share. You can decide how much to share, and how to communicate it.
If you know customer behaviours like media consumption or shopping habits, then you know where and when to find them. This type of insight makes your marketing more efficient and effective because it’s specific and relevant.
If you can tap into insights from behavioural science, you can also better understand why customers make the decisions they do. Understanding why helps you understand how to better influence customers.
3 key questions to answer
So, clearly, we’re agreed market research is an important part of marketing, right?
Customer understanding drives marketing success. And market research is how you understand customers.
There are 3 key questions you need market research to answer about your customers.
First, it has to help you identify who your customers are. Then, it has to help you understand what they need and want. And finally, it has to help you understand how to influence them. The better you can answer these questions, the better your marketing will be.
Why the market research process?
The market research process turns market research from an abstract concept into an action plan. You get a clear set of steps to deliver actionable recommendations to improve your marketing.
It starts with the definition of the business problem.
This is important.
You want market research to give you answers to a specific customer problem your business has. Market research answers have to tell you how to make your marketing better and win more customers.
You then write a research brief that specifies why you need the research. The brief outlines any additional customer questions you have.
This is then managed by a market research professional. Someone in your business or at your market research company writes a research plan.
They then lead the next step to actually do the research. It’s important they do this in an objective and ethical way, which answers the questions in your brief.
But most important in the market research process, is its final step. If you’ve followed the steps correctly, the research answers will give you clear direction on what to do. An action plan to improve your marketing and win more customers. And that’s what we all want out of marketing, right?
The 5 steps of the market research process
Let’s go through each step of the market research process in more detail.
Step 1 – Define the business problem
The market research process starts with the business problem. This where you identify a question about customers that’s holding you back. It’s something about them you don’t know, so you can’t decide what to do.
For example, this could be as simple as who your customers are. What age are they? Where do they live? What types of jobs do they do?
It could be about how they make buying decisions. For example, how much does advertising influence them? What type of advertising works best? What about pricing and sales promotion? If your brand has multiple features and benefits, your research questions can find out which matter the most. If you’re launching an innovation, you can find out what would make customers more likely to buy it. In fact, you can ask questions about almost every part of your marketing mix.
And finally, your business problem might be a competitive one. For example, you can use market research to understand why customers buy your competitor’s products, and reject yours. You can use research to find your competitive advantage.
But how do you articulate the business problem? Well, the easiest way is to think about what it is you want to know, and what you’d do, if you knew it. Something like this :-
If only I knew (your research question), then I could decide on (marketing activity).
So, if only I knew why customers buy Brand A, rather than Brand B, then I could decide what to improve or change to increase sales.
Or, if only I knew if customers prefer the red or the blue one, then I could decide which to feature in my advertising.
Or even, if only I knew if customers are unhappy with the current service, then I could decide how to improve what we offer.
The business problem is the ultimate question you want the market research to answer. But as you’ll see from some of these examples, the problem might be quite broad. It may well provoke more questions.
With most market research, you then have a series of specific sub-questions that help you get to the final answer. This next level of detail comes out in the research brief.
Step 2 - The research brief
The research brief is a summary document, usually a single page. (That’s why it’s called a “brief”).
You use the research brief to give more detail on what you need the market research to do.
You share this document with market research professionals so everyone understands what you need from market research. It provides clarity and consistent direction for everyone involved in the research.
There’s 2 types of market research professional.
First, there are the market researchers who manage research projects.
They’ll organise the resources, be the main point of contact and make sure all required actions and commitments get done. This project manager role could be someone already inside the business with the right expertise. Or you can hire a freelancer to do it.
Then there are the market researchers who do the research. Normally, this is when you hire a market research company. They help you with specialist areas like questionnaire design, interviewee recruitment and data analysis. They have experience and expertise in the detail of conducting market research.
Check out our market research companies guide to learn how to find, appoint and work with these specialists.
This brief template helps you give enough background so anyone can understand the need for the research. And it outlines what you plan to do with the answers when you have them.
It sets the direction for the research itself in a succinct and consistent way.
It becomes a reference document for all future steps in the market research process.
The actual format and contents of the research brief can vary depending on the context of your business problem and research questions.
But in general, there are a core set of contents that you would expect to find in most market research briefs.
These are the background, the research purpose, the objectives, the research methods, the constraints, the deliverables, the action standards, the budget and timelines, and the stakeholders. You can download an example template of a brief here. This document also includes commentary on how to complete the brief.
To complete this brief, you fill in what knowledge you have about the research problem. You define what your expectations are and what you’ll do with the research. This document gives guidance and direction to the team who need to plan and do the research.
The research brief contents
The best way to learn how to fill in a research brief is to start doing it. See what type of questions market research companies ask when they see a brief. You quickly learn what’s helpful and what’s not.
But to help you start, here’s some prompts you can use for each section.
Give any context that helps the researchers understand the challenge better. Be concise and relevant. For example, what caused the need for research to take place? Which markets are included? What do you already know about the market?
What is the #1 priority question you need the research to answer? You will likely have MANY questions, but identifying the key single question helps the research team prioritise. Consider whether this question is closed (should we launch Product x – Yes or No?) or more open (what’s the best advertising message to drive sales of Product X?)
Business objectives : What is your end goal and how will it be achieved? e.g. how to grow sales by attracting new consumers.
Market research objectives : Summarise the research aims, information needs and list questions you need the research to answer. What decisions will you make with the research? This can go into more detail than you cover in the overall research purpose.
Is your market research objective to understand an opportunity or challenge? (which leans to qualitative research methods). Or to measure and validate a hypothesis (which leans to quantitative research methods). Or both? If you have expectations on the sample size, survey length and have any stimulus material already prepared, refer to these in this section. If you don’t have these things, make that clear for the researchers too.
Are there any mandatory considerations or things to avoid? e.g. If there are any legal or regulatory requirements in the industry, if a particular group should or should not be included. Are there any geographic considerations the researchers should include?
What specifically must the project deliver and how will you define it as a success? Is there a specific reporting format you want for the results?
For any decisions that will be made on the basis of the research, list out the measures that will be used to evaluate the decision e.g. we will only launch Product X if (80%) of respondents say they will purchase.
Budgets and timelines
Budgets will need to cover the market researchers time, any costs incurred with conducting interviews (e.g. hiring a venue) and production of any stimulus materials. It’s not unreasonable to ask for details of costs. Also, be reasonable on timelines. It takes time to organise questionnaires, set up interviews and compile reports so build this in to your timeline.
Step 3 - The research plan
The research plan is the response from the market research company which details how they’ll carry out the research to answer the brief. It’s usually a more complex document than the brief. It’ll detail the specific actions which need to happen to answer the research questions.
The plan should firstly, identify a research approach (also called the research methodology). There are 3 main types of research approach – secondary, qualitative and quantitative. The approaches are not mutually exclusive. You can choose to use 1, 2 or even all of these approaches depending on the business problem.
Secondary research is where the answer might already be available in existing research or data. The “research” then is to search through this to find the answers.
With secondary research, you don’t talk directly to your customers. You interpret what the answers might be from their answers to another piece of research.
The key advantage of this type of research is you can do it relatively quickly and for little or no cost.
But, the key disadvantage, is you can only passively work with existing research answers. You don’t actively ask questions, and have no direct contact with customers.
Qualitative research is where you speak to small groups of customers. Your goal is to develop a “deep” understanding of their needs and wants.
It’s the quality of the answers that’s important.
You use this approach when your research questions start with “why”. So, why do you think like that for example? Or, why do you make those decisions?
Qualitative research takes an exploratory approach to asking questions. Most questions are open questions, where the customer can answer in any way they’d like.
Think about it almost like a planned meaningful conversation with customers. As if you were putting them on the psychiatrist’s couch to ask lots of questions.
You usually carry out this research with individual customers (sometimes called a depth interview) or with small groups of around 6 to 8 customers at a time. These small group interviews are commonly known as focus groups.
The advantage of qualitative research is it gives you ideas and hypotheses about what motivates people and how you might persuade them. It’s most useful when you don’t know much about your customers’ perceptions, beliefs or attitudes. It lets you explore and get under the skin of how customers think and feel.
However, it has a major disadvantage, in that you can only do it with small groups of customers. And that group might not be representative of the larger group of customers. Qualitative research also comes with a high cost per customer you speak to. So, it’s normally too expensive to speak to enough customers for the answers to be statistically robust.
So, while it can give you more confidence, you can’t be certain the answers apply to the whole market.
Finally, quantitative research is where you ask questions to a large statistically representative group of customers.
You can be more confident these answers represent the total potential group.
But to do this research with a large number of customers, there are some logistical limits. You have to limit how many question you ask, for example. And, you generally have to use more closed questions.
This is where customers pick from a range of pre-determined answers rather than give their own answer.
There’s usually a lot more structure and less flexibility in quantitative research than in qualitative research. You usually use this type of research approach when you need to quantify past, present or future behaviours. These days, most quantitative research is conducted online, though it can also occur over the phone and face-to-face in shopping centres and high streets.
Think about quantitative research a process where you count how many customers agree or disagree with answers you already have.
While quantitative research gives you the most certainty, it’s also the most expensive and time-consuming. It also needs you to have determined the questions you need before you run the interviews.
For this reason, it’s common to carry out market research in two phases. Start with a qualitative stage to identify potential answers. And then finish with a quantitative stage to quantify and prioritise those answers.
Other actions in the research plan
The research plan should also cover the key actions needed to conduct the research.
For example, it should include details on how interviewees will be recruited. How many interviews will take place, where and when they’ll happen, and how long they’ll last.
The research plan should also detail who’ll carry out the research, and when the results will be available.
Depending on the research approach, the research plan should also outline key areas like how the market research company will structure the interviews (for qualitative) or how the questionnaire design will work (for quantitative).
How detailed you need the research plan is really down to you and the market research company.
Step 4 - Do the research
Once you agreed on the research plan, the research company then goes away and does the research.
If the research is qualitative, there’s a good chance you’ll be able to observe some or all the interviews. They’re normally held at specialist research centres with viewing facilities.
This focus group viewing is a great way to see and hear your customers talk about your products and services.
There are 3 key areas to keep an eye on during this stage of the market research process.
First, you have to make sure the research is done in an objective way.
You conduct the research because you don’t know the answers about your customers. So, you need to be open-minded about the answers. Market research is not there to validate your pre-conceived ideas. It’s there to you ideas of what actual customers think, feel and do.
This means you need to watch out for biased or leading questions, for example. These types of questions try to “force” an interviewee to respond a certain way, rather than getting their “true” answer.
For example, “do you believe Brand X deserves its reputation for high quality?” is a biased and leading question.
It associates Brand X as having a “reputation for high quality” even if the interviewee might not agree. A better way to understand this would be to ask the respondent to rate Brand X on quality on a scale of 1 to 5.
Next, you also want to make sure you do the research in an ethical manner. Market research companies should follow the rules of the industry association code of conduct.
This includes areas like respecting people’s privacy, the sharing of individual responses and treating people with respect and due care during the interview.
Finally, and most importantly from a business point of view, you want to make sure as the research progresses, that it answers the questions in the brief. With qualitative research in particular, it’s easy to go off at a tangent.
While these tangents might be interesting, if they don’t answer the brief, then they’re wasting time and money. You clearly don’t want that.
Step 5 - Analyse the results and put into action
After the final interviews, the market research company collate the data and findings into a presentation. This should refer back to the key questions in the research brief and plan. It should answer both the business problem, and any specific research questions you had.
These answers should tell a compelling market research story you use to make key decisions about your brand activation. For example, you use them to build your marketing plan. To brief in new advertising or media. You use them to come up with innovation ideas. Almost all marketing activities need some input from the market research process.
As a final point, it’s also worth noting there are also more informal ways to do market research. These are usually about generating questions and observations you then test by putting them into the more formal market research process.
For example, there’s your observation and listening skills. Go to places where people buy or use your brand. Watch and listen to what they do. Go online and look at trends and do keyword research. See what people are looking for. And don’t forget to keep an eye on your competitors. Check out their websites and social posts. Remember, they’re going after the same customers as you. You should be looking for ideas and ways to get closer to customers than they are.
Conclusion - The market research process
We can’t say it often enough, if you don’t do market research, you won’t win in marketing.
The market research process gives you 5 steps to you get to the answers you need. The better you understand your customers, the better you will meet their needs.
While you don’t need to be an expert on the detailed technical side of the market research process – that’s what market research companies are for – it’s important to know how to write a research brief.
Three-Brains and market research skills
We coach and consult to help businesses improve their market research skills. We can help you set up and optimise the market research process, so that you ask the right questions and get the best answers to drive your marketing activity. Check out our other market research skill guides to learn more. Or get in touch, so we can help you raise your market research game.
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.
Powerpoint and Keynote versions of this document available on request.
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