What is Market Research?
What is Market Research?
Hello there my name is Martin Henley this is the WTF series and in this, episode number seven, we are answering the interesting question what is market research?
In addressing the question what is market research? there are six things we’ll be sharing with you. We are going to Wikipedia for a definition of market research; we’re looking at a definition of a market; we’re going to look at the issue that I have with target markets; we’re looking at why you need to do market research, when you need to do market research and how to do market research.
Let’s go Ricky.
Did we find a definition of Market Research?
In answering this question what is market research we went to Wikipedia for a definition and what they tell us is that “market research is an organised effort to gather information about target markets or customers including qualitative and quantitative techniques.”
So this sounds quite straightforward until they start talking about qualitative and quantitative techniques but don’t worry, we’re going to cover that later in this video. The other issue I have with this market research definition, well there are two issues. The first is that I think that target markets are problematic, we’re going to talk about that in point three. The second is that I think customers if you are doing research on your customers that’s customer analysis and we’re definitely going to put together a video about that. However if market research is an organised effort to gather information about a market then I am perfectly happy with Wikipedia’s definition.
What is a market?
If we are going to fully understand market research perhaps we need to understand a little bit better this word market. So we went to netMBA for a definition and what they tell us is that “a market refers to the group of consumers or organisations that is interested in the product, has the resources to buy the product and is permitted by the law to buy the product.”
I have a couple of little issues with this definition of market. Firstly it’s too complicated. I I think of a market simply as a group of people with needs or wants that they are happy to satisfy by spending money, which is essentially what they’re saying. The bigger issue I have here is this word interesting or interested. I can’t imagine anything more frustrating than marketing to a market who are interested and have the resources to buy … but don’t buy. The market I want, and you should want is one that actually spends the money, one that actually spends.
The other thing that’s interesting to me here is this “permitted by the law” when we know that there is a market for illegal drugs, illegal weapons, illegal sexual services – we know these markets exist but I think it’s really nice that netMBA are taking the time to remind us that we should perhaps stay within the law.
What is the issue with target markets?
That brings us then to point number three which is a personal bugbear of mine. The thing about target markets is the suggestion that you can target a market and you can sell them whatever you want to sell them irrespective of whether they want or need it. That for me is a particularly dangerous attitude. There has been lip service paid to customer focused marketing for a long time, for decades, but it seems to me that now ALL of the power is with the consumer, the buyer. What’s much easier than trying to convince people that they need something or they want something is just to find people who already know that they need something and want something and are prepared to invest in buying it.
You need a market that wants or needs your products or services, you need to understand the market and know exactly where they go if they are buying those products or services. What you need to do is find those people with those problems, with those desires, and find a way to satisfy those problems or desires and serve your market rather than imagine that you can just come up with an amazing product that you can push on people without their needing or wanting it.
Why do you need to do Market Research?
So now you might be asking the question, why do I need to do market research? Well there’s one very good reason and lots of great reasons for doing market research.
The first is an existential question, a question about whether your business can actually exist. Put most simply if you don’t have a market your business cannot exist. For everything else that you do in marketing, if you get your offers wrong, your message wrong, your brand wrong, you get your targeting slightly wrong, if you get your offers and your pricing slightly wrong – those things can all be fixed. If you haven’t got a market if your market does not exist you essentially do not have a business, your business cannot exist. So that’s the really good reason, the best reason for doing your market research. The sooner you understand whether your market exists or not the happier you will be, the more successful you will be.
Beyond that there are lots and lots of important questions that market research will answer for you. For example who your market are, where they are, where they spend their time, where they spend their time online, what they buy, when they buy, how they buy and why they buy. If you can answer that question – why do they buy? all you need to do is formulate that answer into sales and marketing messages that you land on the rest of your market and you will consistently generate leads and sales. So marketing essentially is a process of understanding your market better and better. The better the market research you do the better you will be from the start.
When should you do market research?
I’m hoping that you’re hearing me and you’re getting excited, you’re thinking if I can answer these questions, if I can know my market better then I will be a better marketer and I will have a more successful business. Now the question becomes when to do your market research. The very best time to do your market research is before you even start your business. Your business should be about generating sales, generating profits, generating income and if that is your objective then you really want to know where the people are and who the people are who have money and time and energy to spend on the products and services that you are offering.
If you have yet to start your business now is the time to do your market research. Market research is 80% of your marketing, if you know that you have a market or you identify a market and you know that they want and need the things that you are offering, have the money and a willingness to spend on those things then you are 80% of your way to having a successful business.
But now you’re saying I didn’t do my market research before I started my business, when should I do it? The answer is now, do your market research now. If you have customers already then they are your market, they are people with the willingness to spend money on the things they need and want. The best time to do your market research is before you even start, before you do anything else, before the business plan, before the idea, before the products. Do your market research, find the people with money, and desire, and need. If you haven’t done your market research or even if you have you need to know market research is a continuous process, you continually want to be learning more and more about your market.
How do you do market research?
Now you’re thinking “I am ready to do my market research but I don’t know.”
There are two recognised approaches to market research that is qualitative and quantitative approaches. This goes to the evolution of marketing, historically if you wanted to do market research the only option you had was qualitative market research. What that means is you bring together groups of people into focus groups and you feed them tea and biscuits and you ask them about the products you’re developing, you ask them about the brand, you ask them about the message and they give you feedback and you use that feedback to shape your products your offerings – your products and services. The issue with a qualitative approach to market research is that people really like tea and biscuits, and people really like people who give them tea and biscuits. The issue is that your focus group are probably going to say nice things because they want more tea and biscuits.
The other way that you do qualitative research is by surveys. You could conduct an online survey or telephone surveys, you can stop people and ask them in the street. The issue again is that you’re relying on these people giving you the right answers or more precisely the true answers. The truth is that unless people are at the point of purchase, unless they’re buying something right now, they don’t particularly care and people are nice so they will tell you what you want to hear.
So qualitative market research was always kind of problematic. The good news is now we have the Internet we don’t have to rely so much on qualitative research any longer because now platforms like Google, Facebook, YouTube, Instagram, LinkedIn and Twitter will all give us the numbers, the quantitative market research.
If we go to Google Keyword planner they will show us the number of searches that happen for a particular phrase in a month, if we go to Google Trends it will show us exactly when those people are searching. If you know who your market are by demographic then Facebook will identify your market by their gender, age, location, marital status, travel status. YouTube is interesting because we can see the number of views that a specific video gets and we can see when those videos get those views. Instagram will show you what people are liking. LinkedIn will show you again, if you know your demographic in a business-to-business sense, their titles, locations and seniority. Twitter will tell you what’s hot right now, what people are speaking about right now. The quantitative research that you need to do is available for zero pounds and zero pence – it’s essentially free. I’m not telling you spend money on these services, we’re going to think about that when we think about how we position our business and how we put get proactive with our business; right now I’m telling you that these services are a mine of information. The quantitative market research you need to do your market research is more available than it’s ever been in history and it doesn’t take a huge amount of time, it takes zero money and you could get started on this right now.
If you are still with us well done you now know what market research is; you know what a market is; you know about the dangers of a target market; you know why you need to do market research; when you need to do market research and you’re getting a sense already of how to do market research.
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We’re done here Ricky.
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