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.

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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.

If you ever meet someone who works in marketing who isn’t passionate about the need for market research, then the chances are they aren’t great marketers.

When we started this site, the first article we ever wrote was on the importance of market research.

How market research shapes marketing activity

But customer understanding is only the first step. It’s important you convert that understanding into action. Market research helps you be much more specific and relevant in what you do.

When your marketing activity is more specific and relevant to high potential customers, it will be more likely to drive sales. You reduce the amount of 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 made up example, your market research directs you to focus on working women aged between 30 and 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 all agreed market research is an important part of marketing, right?

Customer understanding is fundamental to 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 needs to help you identify who your customers are. Then, it needs to help you understand their needs and wants. And finally, it needs to help you understand how to influence them to choose your brand.

The better you understand these things, the better your marketing will be.

Why should you care about the market research process?

The market research process turns market research from an abstract concept into market research as an action plan to better understand your customers. The process gives you a clear set of steps to follow that will make sure you come out with 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.

From the brief, you appoint a market research professional, either internally or through a market research company to create a research plan.

They lead the next step when they 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. How to improve your marketing better. How to win more customers.

And that’s what we all want out of marketing, right?

The 5 steps of the market research process

Let’s now 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. And, not knowing is stopping you knowing what to do to win them over.

So, this could be as simple as who your customers are, for example. What age group are they, where do they live, what types of jobs do they do?

It could be about how your customers make buying decisions.

Does advertising influence them, for example? If so, what type of advertising? What about pricing and sales promotion? If your product or service has multiple features and benefits, your research questions can ask which matter the most. If you’re launching an innovation, your questions could relate to what would make customers more likely to buy it.

In fact, you can work pretty work though the whole marketing mix and ask questions to customers about every element.

And finally, your business problem might be a competitive one. So, for example, you can use market research to understand why customers buy your competitor’s products, and reject yours.

(the relatively new field of behavioural science can give you ideas about why customers do the things they do).

But how do you articulate the business problem? Well, the easiest way we know is to think about what it is you want to know. And then what you would do, if you knew it.

So, you’d end up with a sentence 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.

So, with most market research, you will have a series of specific sub-questions that will help you get to the final answer.

This next level of detail in questions is where you move on to 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.

Market research professionals normally fall into two groups.

First, there are the market researchers who manage research projects.

They will 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 if they have the right expertise. Or you can hire in a freelancer to do it.

But then, there are the market researchers who do the research. And normally, this is when you hire a market research company. They can 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.

Background

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?

Research purpose

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?)

Objectives

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.

Research methods

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.

Constraints

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?

Deliverables

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?

Action Standards

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.

Stakeholders

Who will see the report and who will make decisions on it?

From this brief, the next stage is for the market research company to review it, and respond with a research plan.

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.

Research approach

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

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

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 that it gives you lots of 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 does come with a major disadvantage, in that you can only do it with a small group of customers. And that group might not be representative of the larger group of customers.

Qualitative research comes with a relatively high cost per customer you speak to. So, it is normally too expensive to speak to enough customers for the answers to be statistically robust.

So, while it can give you more confidence, it can’t give you certainty that the answers apply to the whole market.

Quantitative research

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 there is 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 is also the most expensive and time-consuming to set up. 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.

We cover more on biased and leading questions in both our qualitative and quantitative research guides.

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 will normally collate the data and findings into a presentation. This presentation 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.

You then take these answers and work out how they’ll impact decisions about your marketing activity.

So, you use them with your marketing plan, for example. You use them when you brief in new advertising or media. You use them when looking for new innovation ideas. In fact, there’s not many marketing activities which don’t need some sort of input and direction from the market research process.

Check out our market research storytelling article for ideas on how to best craft a story from your research results.

How to start building your market research skills

Following this market research process is part of building your market research skills.

But, there are other things you can do that help build customer understanding. To conclude this guide, we’ll cover three relatively easy things you can do right away. These are observation and listening skills, looking at online trends, and competitor analysis.

Observation and listening skills

While the market research process gives you a specific view on customers and the opportunity to ask them questions, it doesn’t have to be your only interaction with customers.

It really depends on the business you are in, but if you have sales calls with customers, you work in a service industry, or you know where people buy your products, you can learn a lot just by watching and listening to customers.

Try to get into the habit of looking and listening more at what’s going on around you.

Are there opportunities to learn more about your customers? Maybe it’s what they do in the supermarket, or at the cafe? Maybe it’s what they do on trains or planes?

What about what they do online? Are there forums or social groups where people and post about topics relevant to your products and category? You can often listen out for specific questions or problems that people have. And you can often learn how they express those problems in their own words. (this is great for writing and advertising purposes by the way)

Now, obviously, there’s a fine line between observing people and spying on people. You don’t want to be creepy or intrusive. Just keep your eyes and ears open, and see what you find out about your customers.

Online Trends

Google Trends is a free service that lets you compare search topics and terms from all over the world going back to 2004. You can compare up to five terms at a time. These can be filtered by date and by geography.

It gives you an index of how different search terms compare to each other over a period of time.

This helps you understand how many people are comparatively searching on a topic or subject.

While you can’t get the absolute number of searches from Google Trends (though you can from Google Ads), it is still a helpful tool for customer understanding. You can identity search terms that consumers use, and which terms are more popular than others.

We cover the use of Google Trends in more detail in our guide to secondary research. But really, it’s such an easy and simple tool to use. And, it’s based on real, actual data, so it’s a great way to start being more customer-focussed.

You can quickly and freely get an idea of what’s going on with customers by looking at what they search for.

As an example, when Covid-19 first hit, we looked at Google Trends and wrote a whole article on where people had concerns or wanted more information.

Competitor activity analysis

Looking at your competitors’ marketing activities is also another great way to build customer understanding. Their marketing activity will be based on market research, so you can try and interpret the impact it’s trying to have on customers. This can give you insights into what might work (or not) for you.

So, easy places to look are any comments section on their websites or social media feeds. If they launch a big new TV campaign, or launch a new product, check out forums and social media to see what customers think.

Every time one of your competitors carries out an activity for their audience, that’s an opportunity for you to understand the market more. You should get into a regular habit of checking out your competitors.

If they have premises open to the public (a retail store or cafe for example), go for a visit. Put yourself in the shoes of a potential customer. What do they do well? What inspiration can you take? Is there anything that doesn’t work so well for them?

Go online. Google competitors and see what comes up. Do they have high search rankings or are they difficult to find?

Check out their product pages on websites and what they post on social media platforms. What are their key messages? Who is their audience? Do they have reviews online? What are people saying about them?

Look at forums or review sites like Trust Pilot or Product Review. See what consumers are saying about other brands in your category. Is there something they complain about that might be an opportunity for you?

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 five key steps that will help 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.

It’s important to know the 3 main research approaches – secondary, qualitative and quantitative research.

And it’s important to know how to carry out market research objectively, ethically and be able to generate results that will drive your marketing plans and brand activation.

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 contact us directly, so we can help you raise your game in 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.