MARKET RESEARCH AND CONSUMER BEHAVIOR

Intended Learning Outcomes:

· Define market research and consumer behavior.
· Harness ideas in the market research process.
· Recognize the factors affecting consumer behavior in the market.
MARKET RESEARCH
Market research is the process of gathering, analyzing, and interpreting information to help a
company or individual assess the viability of a product or service and make sound business
decisions. It is of immense importance to entrepreneurs and startup companies to evaluate the
feasibility of a business before committing further resources to the venture.
MARKET RESEARCH
Market research consists of systematically gathering data about people or companies—a
market—and then analyzing it to better understand what that group needs. The results of market
research are then used to help business owners make informed decisions about the company’s
strategies, operations, and potential customer base.
Market research can help businesses run more efficiently and market more effectively. Ahead,
you’ll learn how to do market research for your business, whether you’re breaking into a new
market or developing a product.
There are two main types of market research: primary and secondary.
Primary market research
Primary data is first-hand information you gather yourself, or with the help of a market research
firm. You control it. Common ways to do primary market research include surveys, interviews,
focus groups, and observations.
Doing your own research has its benefits. You’ll learn exactly what customers want because
you’ve asked them directly. Information is fresh, and you can understand the nuances of your
customers, like taste preferences or pricing.
Secondary market research
Secondary data is pre-existing public information, such as data shared in magazines and
newspapers or government or industry reports.
Say you’re a fashion brand expanding its product line to sustainable options, you’d use
secondary research to understand market potential. You’d read market reports from Mintel or
Nielsen Company to understand consumer demands for sustainable products.
Why is market research important?
Reduce risks for entering new markets.
Misjudging market demand for a new product lead to big financial losses. Market research lowers
that risk by providing insights to inform your go-to-market plan, such as:
 Market size
 Income range
 Employment rate
 Location
 Pricing
 Market saturation
Understand the competition.
A competitive analysis helps you understand the business landscape of a new market and
uncovers gaps your business can fill. By analyzing your competitors’ offerings, marketing
strategies, and customer feedback, you can create a plan to differentiate yourself in a
crowded market.
Make your business customer-centric
Market research reveals the needs, preferences, and behaviors of potential customers in a
new market. For example, if you were expanding into South Korea, you’d want to take into
account that shoppers value fast delivery times, readily available products, and the best price
possible.
How to conduct market research:
1. Choose your focus
 Start by defining what you want to achieve from your research. You might want to:
 Understand a target audience.
 Develop new product features.
 Create a brand identity.
 Improve customer experience.
2. Determine your research methods
Choose how you’ll capture the data based on your objectives and budget. Combine
qualitative research (like interviews and focus groups) with quantitative data (like surveys) to
understand attitudes and perceptions.
*Maybe you’ll decide to conduct a focus group with environmentally conscious consumers to
explore their feelings about packaging materials.
3. Collect the data
Depending on your research methods, you might need to prepare questionnaires, conduct
interviews, or analyze data courses. You can conduct the process in-house or outsource it to a
third party to help speed things along.
4. Analyze the data
Now it’s time to turn that raw data into insights. Identify any patterns or trends that answer
your objectives. For example, you may analyze and identify the percentage of customers who
prefer sustainable packaging over traditional options.
5. Report your findings
Prepare a report that includes key insights, data, and recommendations based on your
findings. Go beyond stating the findings and explain what they mean for your business. What
can you conclude about your market, audience, or product?
For example, if your research finds high demand for eco-friendly packaging amongst the 25-
to-34 demographic, you can conclude a targeted marketing campaign to this group could
increase sales.
The following tasks require the use of market research:
 Gathering data on consumer behavior
 Determining how well a product or service meets market demands.
 Evaluating the market size for a particular product or service
 Facilitating with the business planning process
 Creating a marketing plan for the business
 Addressing the business marketing challenges.
 Identifying major competitors
 Establishing a unique value proposition that distinguishes a business from
competitors
 Identifying opportunities for business growth
The starting point for any market research endeavor is to gather data on the
relevant market sector. This involves two types of data:
1. Primary information. This is information you gather yourself to obtain for you. Primary
research can be of an exploratory or specific nature.
 Exploratory research helps to build up a broad picture of your market and identify any
specific opportunities for market growth.
 Specific research is more focused and usually used to assess the market potential of an
opportunity that exploratory research has uncovered.
Primary research can be conducted via email, social media or personal interviews.
2.Secondary information. This is information that has already been compiled and can often
be accessed through online research. Research conducted via internet browsers or public
sources is free and is a good place to start; however, you may have to access studies done by
commercial associations and educational institutions to get the right information, which may
involve a cost.
Market research may seem like a lot of work, it is necessary to have a realistic picture of your
market.
Competitor Analysis
No business can operate in a vacuum. To reap success, a business has to deal and interact
with all sorts of people, including customers, suppliers, and competitors within its market
sector.
Competitors are defined as companies that meet at least one of the following criteria:
 Offer the same product or service.
 Offer a similar product or service.
 Have the potential to offer the same or similar product or service in the future.
 Have the potential to develop a product or service that poses a considerable threat to the
survival of your offering.
Analyzing the competitors' strengths and weaknesses will help determine their weaknesses,
counteract their advantages, and anticipate competitor's moves. In analyzing each
competitor, the following information is needed to be gathered:
 The needs and preferences of customers the business is competing to meet.
 The similarities between the competitor’s products and services to the business.
 The strengths and weaknesses of each of the competitor’s products and services.
 How the competitor’s prices compare with the business.
 The competitor’s market performance.
 The level of customer satisfaction with the competitor’s products and services.
Having gathered this information, the business need to formulate a plan that outlines the
intention to compete with each competitor. Do you offer:
 Lower prices?
 Better support?
 Better service quality?
 Easier access to services
Interviews
• Interviews are classified as a qualitative method of market research involving a one-on-
one interaction between an interviewer and a participant. Interviews are used for
exploratory research, and there are wide ranges of interviewing formats that can be used,
depending on what you want to achieve. Interviews are a form of primary research to
learn more about
• customer needs and opinions.
Interviews are particularly useful for the following tasks:
• · Developing a new product
• · Getting feedback after a product launch
• · Evaluating a new market segment
• · Updating customer needs and opinions
• · Finding out the reason for the loss in market share