Market Research: Functions, Methods and Preparation Steps
To market a product, the first thing you have to do is find out the target market for the product. You can find out a product in the eyes of consumers, whether it is accepted or not by conducting marketing research.
By carrying out this process, it will be known what product or service is being offered, where the product or service is needed, and what kind of product quality is needed by consumers.
In addition, you can also find out how much demand and potential demand, when demand peaks and when demand decreases.
But what is market research? seen from its meaning, types, and tips on how to do good and correct research. Check out the following article!
What is Market Research?
In general, market research is the activity of problem formulation, data collection, analysis, and reporting that is arranged systematically as a guide in determining product marketing strategies.
Based on a study, market research is a function that connects consumers and the public with marketers through information in identifying marketing opportunities and problems.
Market research aims to understand the marketing conditions for related products or services and see opportunities in the field. That way, companies can find out what needs to be improved and what marketing strategies are suitable for the type of business they are running.
This market research has various purposes, such as:
- Verify or predict the projected success of new products.
- Help the team understand existing product issues.
- Understand the target market's perception of the brand.
The scope of market research is in the form of:
- Selling price, to determine consumer purchasing power
- Products, research activities carried out starting from the function, value, appearance of the product.
- Marketing tools, to assess the effectiveness of the tools used in marketing.
- Distribution, namely to see an efficient product distribution strategy to reach consumers.
- Consumers, analyzing consumer behavior and needs.
Market research function
Basically, market research process is important in company development. The main functions of market research include:
One of the functions and objectives of market research is evaluation. Yup, this activity is actually useful for evaluating programs or marketing strategies that have been carried out before.
This function also includes when the company wants to conduct an evaluation related to brand positioning with competitors' products. Thus, marketing researchers can solve problems and make better decisions.
Market research also serves as an understanding. As explained above, one of the scopes of market research is identifying consumers. In this case, the company focuses on understanding or studying the specific preferences of customers.
This is because consumer behavior and needs are important indicators for business continuity. Thus, companies need to adjust the type of product or service based on demand in the market.
The next function of the market research process is predicting. Considering that the field conditions are very dynamic and uncertain, the company needs a forecast to prepare for various possibilities. Well, marketing research is usually the main basic ingredient in developing business strategy and planning.
The final function of the market research process is controlling or monitoring. By carrying out a marketing evaluation, the company can see and review every procedure of ongoing business implementation. This also includes monitoring of operations, trends, demographics, to the effectiveness of using marketing tools.
Types of market research
The purpose of market research is to help companies draw conclusions based on data and information obtained from consumers. However, in order to obtain these benefits, of course there are separate ways based on research methods. The types of market research are as follows.
1. Primary market research
Primary market research is an analysis process using end consumers (research objects) or third parties as data sources. That is, direct information comes from product consumers. The data collected is in the form of a combination of qualitative (non-numerical) and also quantitative (statistical or numerical) data.
Several data collection methods commonly used in primary market research, namely:
- Focus Group. Focus Group is one of the qualitative research methods. Typically, focus groups consist of a small group of people (6-10) who respond to online surveys that are sent to them.
- Interview. Primary research can also be done personally by interviewing respondents one by one. In this case, there are a series of questions asked to the informant to obtain data or information.
- Ethnographic research. This is an analytical method that requires the researcher to dive directly into the respondent's natural environment and adapt. Generally, ethnographic research takes place over a period of days or even years.
- Questionnaire. Questionnaires are the primary research method most companies use to obtain structured data from customers. This method has also developed into an online survey. This method makes it easier for companies to obtain data or information in a practical and systematic way.
2. Secondary market research
Meanwhile, secondary market research uses data or information that has been managed by other parties, whether it's the media, educational institutions, the government, or others. Data in secondary research includes magazines, books, articles, newspapers, company websites, and so on.
Stage of Conducting Market Research
After knowing the definition and benefits, now is the time to learn the big picture about the market research process.
The stages of conducting market research include the following.
1. Do the formulation of the problem
The first step is to formulate the problem at hand. For example, if you want to determine the exact cost of production, you can do market research first.
The results obtained are the ideal range of promotional costs. Market research results tend to be accurate if the process is also carried out carefully.
Well, in this case, formulating the problem at hand must also be observant and in accordance with the reality that is happening.
2. Determine the market research design
The second step that needs to be done is to determine the research design used.
The research design includes how to collect data, how to test hypotheses, and the model of the questionnaire that will be carried out.
To determine the right research design, you first need to know the parameters to be taken. This research design is different for each need.
So, if it doesn't match, it's possible that the market research results won't be optimal because there are things that go undetected. In fact, this small mistake can cause research results to be less accurate.
3. Designing data collection methods
In addition to research design, you also need to design data collection methods. The data needed are primary data and secondary data.
Primary data is usually taken directly from the field, while secondary data can be taken from books or other references. This method needs to be confirmed before you do market research.
4. Take samples and data as needed
The next stage is to take samples as well as collect data. At this stage, you can use the probability or non-probability sampling method.
These results will be analyzed to produce conclusions that can be used. Research objects include prices, products, marketing tools, distribution, and consumers.
Price research is conducted to measure consumers' purchasing power. Product research to determine product use, value, and level of use.
Meanwhile, consumer research is to find out the needs of consumers themselves.
5. Perform analysis of the data
After all the data has been collected, the next step in market research is to analyze the data.
The results of the analysis or conclusions on the analysis are expected to be taken into consideration by decision makers. The goal is that the decisions taken are more on target.
A simple example, the conclusion of the right selling price is based on an analysis of the price of basic materials as well as purchasing power. The right price will make sales more smooth and stable.
6. Compile research reports
Do not forget, after completion, there needs to be a report containing the results, conclusions, and research recommendations.
This report is submitted to management for review and use as necessary. Based on the results of this market research, decision makers have weapons to determine a policy.
Market research reports must be well understood. There are at least four things that can be obtained from careful research, namely the evaluation function, the understanding function, the predicting function, and the controlling function.
Evaluation is to ensure the marketing program is still relevant or not. Understanding is to understand consumer needs.
Predicting is to determine the target market. Meanwhile, controlling is to monitor ongoing business processes.
Tips for doing market research
Here are easy tips that you can do when doing market research, see the explanation!
1. Identify your buyer persona
A buyer persona is a typical customer that a business targets through in-depth research. The buyer persona that is created must reflect real customer profiles, starting from demographic data, personality, to how they behave when buying a product.
2. Perform customer segmentation
Customer segmentation before conducting market research is no less important. You just need to group customers in categories. These categories can be location, time, price, demographic, or socio-cultural. In this case, consumers are the main indicator that determines the direction of a company's marketing strategy.
3. Prepare questions according to the research objectives
Preparing the right questions is one of the most efficient steps to ensure successful market research. The questions to be asked can be in the form of complete sentences or main points that can be developed. Therefore, the flow of market research interviews must be systematic.
4. Learn from competitors
In conducting market research, recognizing and learning from competitors is the main key. This allows you to have new views and find out many other useful things for the company. That way, you can make evaluations and improvements that you can use in determining business strategies.
5. Get feedback from consumers
Apart from learning from competitors, another thing that can add to your views regarding the business you are running is by getting feedback from consumers. Consumers are the most valuable thing in market research.
The feedback you get from consumers is very useful as a consideration for evaluating your business operations in the future. For this reason, you can offer a number of attractive coupons to consumers who are willing to fill out surveys or provide feedback.
Market research is one of the most effective ways to gain insight into your customer base, competitors and the market as a whole.
The goal of conducting market research is to equip your company with the information you need to make an informed decision.
This is especially important when a small business is trying to determine if a new business idea is viable, looking to move into a new market, or launching a new product or service.