How to Do Market Research for a Business Plan or New Product
No Olympic diver jumps into the water without preparing beforehand. For best results, they need to approach it with a plan of action. And the only way that can happen is if they familiarize themselves with the water. They need to know how they’re going to interact with it first.
This simple sports analogy explains why companies need market research before any major product launch or business plan. The water below is the market. The practice sessions are research.
You might have the perfect move to test out in your next diving attempt, but if you don’t put enough practice, you’ll end up hitting the water flat on your face. Likewise, your great product or business idea could have merit on its own. But if you don’t know how it’ll interact with your target market, it could die unnoticed at best or cause a backlash at worst.
Why do market research?
Conducting market research can save you from that fate by identifying your strengths and weaknesses. It can give you room to tweak and optimize before jumping straight into the unknown.
You can use it to answer specific questions or gather data about a single topic. Here’s an example of the types of market research:
- Competitor analysis: Researching how competitive your product or service is compared to others in the market or market analysis in general as it relates to your competitors.
- Consumer insights: Studying consumer behavior in your target market, such as purchasing habits, barriers in the buyer’s journey, etc.
- Product testing and development: Finding out how certain product features perform in the market and what value users gain from them.
- Customer satisfaction: Researching satisfaction levels among your customers regarding your company or others in the market and identifying needs.
Based on the area you want to investigate, there are different methods that may be more appropriate. Some of these methods are:
- Focus groups
- Phone interviews
- Email surveys
- 1-on-1 sessions
- Collecting data from secondary sources
You can use a combination of methods or focus on a select few. For instance, if you’re looking into your product’s usability, it makes sense to interview your users to get in-depth feedback. It also helps to look at existing market research on the topic to inform you further.
Primary vs Secondary research
Generally, there are two stages of market research: primary and secondary. Categorizing your objectives into either one can help speed up the process by identifying the best tools and methods you’ll need for each type of research.
- Firsthand research that can employ methods like focus groups, surveys, and interviews.
- The goal is to uncover direct information and feedback from sources that might not be readily available elsewhere to apply to your product or service.
- Secondhand research that includes collecting and studying previously conducted research via scholarly articles, whitepapers, publicly available statistics, as well as internal marketing, sales, or research data.
- The goal is to get an overall view of market trends and consumer behavior that could be useful for your product or service.
Depending on what type of research you’re performing, there may be different tools you can use to make the process as efficient as possible.
What is your goal for conducting market research?
You know market research can help you test the waters. But if you go into it with only a vague notion of what you want to achieve, it won’t be very effective. Why? Because with very few exceptions, most products, marketing plans, and business strategies target a select audience rather than anyone and their aunt.
As basic as it sounds, the first step you need to take before doing market research is to define a set of objectives. This could mean anything from learning more about a key demographic’s buying habits to finding out what consumers like most about your product.
While market research is broadly about gathering information, knowing precisely which information you need to improve your business plan or product will help you conduct the research more efficiently.
Some examples of market research objectives
- Finding out what your competitors are doing successfully that you’re not to find specific areas of improvement
- Collecting market data related to your industry, product, or target demographics to make sure you’re in line with current and future trends
- Gathering information on consumer behavior to hone in on features, price points, or marketing strategies that work best
What is the best way to find your target market?
Finding your ideal target market is crucial for the next step of the market research –– reaching out to current and potential customers.
Identifying your target market requires a thorough understanding of your product or service offerings and their uses. If your research is about an existing line of products, you probably already have customer data that can lead you to uncover trends and patterns.
Here are some questions to ask that can narrow down your target market:
- Which age demographic makes the most frequent and/or highest-value purchases?
- Does your repeat/most loyal customer base consist of single or multi-family households? Is there a certain income level that’s the most prevalent?
- Which job titles seem to appear most often among your customers? Is there a connection to your product/service and the job/industry?
If you don’t have previous customer data, you can reverse-engineer based on your product or service to determine who might benefit most from your offering.
Demographics vs Personas
Once you’ve nailed down the basic demographic data, you can move onto creating a detailed customer persona. Without this step, you might be stuck with a very large demographic that will only give you a very generalized understanding of their perception or relationship with your product.
The target market for your research should be neither too broad nor too narrow. To find out which of your current or potential customers you could get useful feedback from, start with the key demographic data, then specify further using surveys to get more detailed information about their wants/needs and interests.
- Biographical data such as age, gender, income, location, job title, and family size
- Detailed information about specific interests, hobbies, needs, and challenges that your product or service can solve
For example, a target demographic might be young women between the ages of 18-35 who live in bigger cities with an income between $40,000 – $60,000. A customer persona expands further, e.g. those in the above demographic who need reliable public transportation; they prefer ride-sharing services despite higher costs if it means getting somewhere faster. Having a detailed buyer persona is not only effective for conducting market research but for reaching key benchmarks and driving revenue. A 2016 Cintell study on the topic revealed that companies who reach or exceed their revenue goals are twice as likely to work with customer personas, while 70% of those who missed these marks did not conduct qualitative persona interviews.
What’s the most effective method for data analysis?
Whether you collect data from focus groups, email surveys, phone or in-person interviews, or secondary sources available online, data collection and analysis can often be a very time-consuming process.
First, you’ll need to go through numerous sources and peruse through copious amounts of interviews and documents, then extract the most relevant bits to present a solid report. There’s an invariable amount of paperwork that can result in a very tedious process.
To save yourself this headache, the best way to streamline this process is by using the right market research tools like scheduling software, voice recording apps, and transcription services.
How to save time and achieve higher data accuracy
There’s one tool we think is indispensable for market research––transcription services. While many tools can ease administrative processes, transcriptions are invaluable when it comes to data analysis.
Think about it. Once you’ve gathered all the information you need through focus groups, user interviews, and phone surveys, distilling that data is critical to generate your market research report. Even a large volume of data is useless if you can’t analyze the information properly.
Unfortunately, a lot of things can get lost in translation if you’re not prepared. Jotting down scribbled notes while trying to focus on what the interviewee is telling you, or trying to decipher what’s being said over an unstable phone connection can result in misinformation or misinterpretation. What’s more, poring through audios and notes can be an extremely time-consuming process.
This is why transcription is a necessary tool to ensure the highest accuracy and speed. It also saves a lot of headaches during the interview process because you can rest easy knowing you’ll have an accurate transcription to work from later. This lets you to focus on the interview at hand rather than trying to make clean notes.
How to do qualitative analysis with transcriptions
Unlike statistical data that you can easily quantify, interview transcripts are trickier to interpret. The data points may not be immediately apparent because you’re working with a large volume of subjective opinions and feedback.
The process of going through this data is called qualitative analysis.
Here’s a step-by-step guide (you can read more about it here):
- Read the transcripts: It’s important to look out for bias and eliminate those pieces during this stage.
- Annotate the transcripts: This is a useful way to organize the data. Make annotations on the transcripts for keywords or ideas so it’s easy to refer back later.
- Conceptualize the data: By this point, you’ll have identified some running themes in the data. Categorize the information according to these themes to compile into a final report.
- Segment the data: Make connections between your categories to form a cohesive report.
- Analyze the segments: Now review these segments thoroughly in order to summarize the results.
- Write the results: Using all the data segments, write a final interpretation of the results in an objective tone, backed by both qualitative and quantitative research data.
Transcription is essential to market research analysis
Rev’s transcription services allow you to do your work without worrying about lost or inaccurate information. Whether you’re conducting a focus group or a phone survey, contact us today to get started on your market research.