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The Types of Market Research [+10 Market Research Methods]

• Market research

Jaclyn Robinson, Senior Manager of Content Marketing at Crunchbase

Market research can help startups understand where they should be placing their resources and time. It can tell you everything from how people are perceiving your company, as well as which features to drop or continue developing. And while there are plenty of ways to conduct market research, not every market research method is right for every situation.

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Market research can help play a major role in developing your product, marketing, and overall business strategy. Understanding the different market research methods can be the difference between wasting months of engineering time or exceeding your ambitious revenue targets.

We review the types of market research as well as the market research methods you can pursue based on your primary objectives and business goals.

The 2 types of market research

All market research falls under two distinct categories: primary research and secondary research.

Primary research looks at any data you collect yourself (or someone you pay). It encompasses analyzing current sales, metrics, and customers. It also takes into account the effectiveness of current practices, while taking competitors into account.

Secondary research looks at data that has already been published by others. It includes reports and studies from other companies, government organizations, and others in your industry.

10 market research methods

The type of data you need will decide which market research technique to use. Here are the most commonly used market research methods:

Primary research methods

These primary research methods will help you identify both qualitative and quantitative data. Qualitative data is information that cannot be measured while qualitative data is taken from a large sample size and is a statistically significant mathematical analysis.

1. Interviews

Great for: expert advice

Consisting of one-on-one discussions, interviews are a great source of qualitative data. You can either perform interviews by telephone, video conference, or face-to-face. Interviews are great for an in-depth look for target audience insights.

In-depth interviews are great when expert advice is needed or when discussing highly complex or sensitive topics. Interviews are usually 10 to 30 minutes long with 25 to 75 respondents.

Great for: understanding brand awareness, satisfaction and loyalty analysis, pricing research, and market segmentation .

One of the most commonly used market research methods, Surveys are an easy way to understand your target audience and allow you to test a large sample size to determine if findings are true across a larger segment of your customers.

3. Questionnaires

Great for: Customer feedback and satisfaction surveys (NPS surveys), and when you want more detail on your target audience and customer base.

Do not confuse questionnaires for surveys !  While surveys are aggregated for statistical analysis, questionnaires are a set of written questions used for collecting information.

Questionnaires are used to collect information rather than draw a conclusion.  Surveys can include a questionnaire, but a survey must aggregate and analyze the responses to the questions.

When writing questionnaires for market research, keep the number of questions in mind.

In one study, SurveyMonkey found that questionnaires with 40 questions have about a 10% lower response rate than questionnaires with 10 questions . The more questions, the less likely people will finish your questionnaire.

4. Focus groups

Great for: Price testing, advertising concepts, product/messaging testing

Even with the rise of big data, focus groups have remained an integral part of how companies build their products, strategy, and messaging. Focus groups are intentionally compromised by a group of purposefully selected individuals. Above all, the collaborative setting ensures that members of the group are able to interact and influence each other.

Typically these open and interactive groups are composed of around five to 12 screened individuals . Make sure that your participants are diverse so you can get a range of opinions and you have enough representation from several segments of your market.

Many smaller startups will conduct DIY focus groups and will use video conferencing technology, which is one of the most cost-effective and time-efficient market research methods.

This is a great resource to see some good questions to ask your focus groups as well as what topics focus groups should touch on.

5. User groups

Great for: Feature testing, UX and web design feedback

User groups are used to gather UX data and provide insight for website design. User groups usually meet regularly to discuss their experience with a product, while researchers capture their comments.

Here’s a great guide on how to format questions for user groups .

6. Test markets

Great for: Testing new marketing campaigns

Test markets represent a larger market. Using a test group as well as a control group can show you the success of a new landing page, messaging copy, or CTA button. We particularly like the free version of Google Optimize to get quantitative data on how your experiment is performing based on a specific goal.

Secondary research methods

Secondary research can help establish a starting point prior to diving into more expensive primary research techniques. While there is a lot of data on the web regarding basic statistics, you may have to purchase a distinct data provider for a more in-depth look at your market.

Crunchbase Pro and Marketplace partners are a great and inexpensive way to start your secondary research directly on Crunchbase.com.

7. Competitor benchmarks

Great for: Understanding your revenue, churn, operating costs, sales, profit margin, and burn rate.

Competitor benchmarks are the most valuable and widely used of the secondary research methods. Moreover, competitor benchmarks measure specific growth metrics or key performance indicators in comparison to business within the same industry and of a similar size.

You can use Crunchbase Pro to find how much companies in a certain industry are raising and who are the leading players with our global coverage on companies ranging from pre-seed to late-stage. So, as one of the most informative of the market research methods, competitive benchmarks are a great way to inform your business strategy. 

Free Crunchbase registered users have access to revenue estimates as well as web traffic data.

8. Sales data

Great for: Understanding your audience and where to place marketing efforts.

Taking a look at internal sales data not only reveals profitability but also helps market researchers segment customer trends.

However, taking a look at competitive sales data is a great way to make sure that you’re meeting the numbers you should be targeting as well as capturing the full potential of the market

9. Government publications and statistics

Great for: General demographic information and larger trends

The U.S. Census Bureau is a great resource of national demographic data. You can also review patents as a preview of industry trends and future innovation.

Also, you can find additional data and research from Data.gov , The World Bank , as well as the Pew Research Center to help inform your market research decisions.

10. Commercial data

Great for: Greater insight into industry trends and reports

If you’re interested in purchasing secondary market research, commercial data is available. For comprehensive reports, Mintel and IBISWorld are both traditional market research companies that provide commercial data.

Additionally, to choose which type of market research method is best for your goal, follow this graph from Relevant Insights. Begin with the metric you’re trying to move and then backtrack into a targeted market research method.

How can Crunchbase help with my market research?

Crunchbase gives market researchers flexible access to Crunchbase’s complete company data. Innovative teams and leaders in market research rely on Crunchbase’s live company data to build powerful internal databases and research insights in respective industries. Learn more about how Crunchbase can help you with your market research .

• Originally published March 14, 2019, updated April 26, 2023

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Brandwatch Consumer Research

Formerly the Falcon suite

Formerly Paladin

Published October 17 th 2023

10 Essential Methods for Effective Consumer and Market Research

When it comes to understanding the world around you, market research is an essential step.

We live in a world that’s overflowing with information. Sifting through all the noise to extract the most relevant insights on a certain market or audience can be tough.

That’s where market research comes in – it’s a way for brands and researchers to collect information from target markets and audiences.

Once reliant on traditional methods like focus groups or surveys, market research is now at a crossroads. Newer tools for extracting insights, like social listening tools, have joined the array of market research techniques available.

Here, we break down what market research is and the different methods you can choose from to make the most of it.

What is market research, and why is it critical for you as a marketer?

Market research involves collecting and analyzing data about a specific industry, market, or audience to inform strategic decision-making. It offers marketers valuable insights into the industry, market trends, consumer preferences, competition, and opportunities, enabling businesses to refine their strategies effectively.

By conducting market research, organizations can identify unmet needs, assess product demands, enhance value propositions, and create marketing campaigns that resonate with their target audience. 

This practice serves as a compass, guiding businesses in making data-driven decisions for successful product launches, improved customer relationships, and a stronger positioning in the business landscape. 

For marketers and insights professionals, market research is an indispensable tool. It helps them make smarter decisions and achieve growth and success in the market.

These 10 market research methods form the backbone of effective market research strategies. 

Continue reading or jump directly to each method by tapping the link below.

• Focus groups
• Consumer research with social media listening
• Experiments and field trials
• Observation
• Competitive analysis
• Public domain data
• Buy research
• Analyze sales data

Use of primary vs secondary market research

Market research can be split into two distinct sections: primary and secondary. These are the two main types of market research.

They can also be known as field and desk, respectively (although this terminology feels out of date, as plenty of primary research can be carried out from your desk).

Primary (field) research

Primary market research is research you carry out yourself. Examples of primary market research methods include running your own focus groups or conducting surveys. These are some of the key methods of consumer research. The ‘field’ part refers to going out into the field to get data.

Secondary (desk) research

Secondary market research is research carried out by other people that you want to use. Examples of secondary market research methods include studies carried out by researchers or financial data released by companies.

10 effective methods to do market research

The methods in this list cover both areas. Which ones you want to use will depend on your goals. Have a browse through and see what fits.

1. Focus groups

It’s a simple concept but one that can be hard to put into practice.

You bring together a group of individuals into a room, record their discussions, and ask them questions about various topics you are researching. For some, it’ll be new product ideas. For others, it might be views on a political candidate.

From these discussions, the organizer will try to pull out some insights or use them to judge the wider society’s view on something. The participants will generally be chosen based on certain criteria, such as demographics, interests, or occupations.

A focus group’s strength is in the natural conversation and discussion that can take place between participants (if they’re done right).

Compared to a questionnaire or survey with a rigid set of questions, a focus group can go off on tangents the organizer could not have predicted (and therefore not planned questions for). This can be good in that unexpected topics can arise; or bad if the aims of the research are to answer a very particular set of questions.

The nature of the discussion is important to recognize as a potential factor that skews the resulting data. Focus groups can encourage participants to talk about things they might not have otherwise, and others might impact the group. This can also affect unstructured one-on-one interviews.

In survey research, survey questions are given to respondents (in person, over the phone, by email, or via an online form). Questions can be close-ended or open-ended. As far as close-ended questions go, there are many different types:

• Dichotomous (two choices, such as ‘yes’ or ‘no’)
• Multiple choice
• Rating scale
• Likert scale (common version is five options between ‘strongly agree’ and ‘strongly disagree’)
• Matrix (options presented on a grid)
• Demographic (asking for information such as gender, age, or occupation)

Surveys are massively versatile because of the range of question formats. Knowing how to mix and match them to get what you need takes consideration and thought. Different questions need the right setup.

It’s also about how you ask. Good questions lead to good analysis. Writing clear, concise questions that abstain from vague expressions and don’t lead respondents down a certain path can help your results reflect the true colors of respondents.

There are a ton of different ways to conduct surveys as well, from creating your own from scratch or using tools that do lots of the heavy lifting for you.

3. Consumer research with social media listening

Social media has reached a point where it is seamlessly integrated into our lives. And because it is a digital extension of ourselves, people freely express their opinions, thoughts, and hot takes on social media.

Because people share so much content on social media and the sharing is so instant, social media is a treasure trove for market research. There is plenty of data to monitor , tap into, and dissect.

By using a social listening tool, like Consumer Research , researchers can identify topics of interest and then analyze relevant social posts. For example, they can track brand mentions and what consumers are saying about the products owned by that brand. These are real-world consumer research examples.

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Social media listening democratizes insights, and is especially useful for market research because of the vast amount of unfiltered information available. Because it’s unprompted, you can be fairly sure that what’s shared is an accurate account of what the person really cares about and thinks (as opposed to them being given a subject to dwell on in the presence of a researcher).

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Learn how to get started with social listening

4. Interviews

In interviews, the interviewer speaks directly with the respondent. This type of market research method is more personal, allowing for communication and clarification, making it good for open-ended questions. Furthermore, interviews enable the interviewer to go beyond surface-level responses and investigate deeper.

However, the drawback is that interviews can be time-intensive and costly. Those who opt for this method will need to figure out how to allocate their resources effectively. You also need to be careful with leading or poor questions that lead to useless results. Here’s a good introduction to leading questions .

5. Experiments and field trials

Field experiments are conducted in the participants’ environment. They rely on the independent variable and the dependent variable – the researcher controls the independent variable in order to test its impact on the dependent variable. The key here is to establish whether there’s causality.

For example, take Hofling’s experiment that tested obedience, conducted in a hospital setting. The point was to test if nurses followed authority figures (doctors) and if the authority figures’ rules violated standards (The dependent variable being the nurses, the independent variable being a fake doctor calling up and ordering the nurses to administer treatment.)

According to Simply Psychology , there are key strengths and limitations to this method.

The assessment reads:

• Strength: Behavior in a field experiment is more likely to reflect real life because of its natural setting, i.e., higher ecological validity than a lab experiment.
• Strength: There is less likelihood of demand characteristics affecting the results, as participants may not know they are being studied. This occurs when the study is covert.
• Limitation: There is less control over extraneous variables that might bias the results. This makes it difficult for another researcher to replicate the study in exactly the same way.

There are also massive ethical implications for these kinds of experiments and experiments in general (especially if people are unaware of their involvement). Don’t take this lightly, and be sure to read up on all the guidelines that apply to the region where you’re based.

6. Observation

Observational market research is a qualitative research method where the researcher observes their subjects in a natural or controlled environment. This method is much like being a fly on the wall, but the fly takes notes and analyzes them later. In observational market research, subjects are likely to behave naturally, which reveals their true selves. 

They are not under much pressure. However, if they’re aware of the observation, they can act differently.

This type of research applies well to retail, where the researcher can observe shoppers’ behavior by day of the week, by season, when discounts are offered, and more. However, observational research can be time-consuming, and researchers have no control over the environments they research.

7. Competitive analysis

Competitive analysis is a highly strategic and specific form of market research in which the researchers analyze their company’s competitors. It is critical to see how your brand stacks up to rivals. 

Competitive analysis starts by defining the product, service, brand, and market segment. There are different topics to compare your firm with your competitors. It could be from a marketing perspective: content produced, SEO structure, PR coverage, and social media presence and engagement. It can also be from a product perspective: types of offerings, pricing structure. SWOT analysis is key in assessing strengths, weaknesses, opportunities, and threats.

We’ve written a whole blog post on this tactic, which you can read here .

8. Public domain data

The internet is a wondrous place. Public data exists for those strapped for resources or simply seeking to support their research with more data.  With more and more data produced every year, the question about access and curation becomes increasingly prominent – that’s why researchers and librarians are keen on open data.

Plenty of different types of open data are useful for market research: government databases, polling data, “fact tanks” like Pew Research Center, and more. 

Furthermore, APIs grant developers programmatic access to applications. A lot of this data is free, which is a real bonus.

9. Buy research

Money can’t buy everything, but it can buy research. Subscriptions exist for those who want to buy relevant industry and research reports. Sites like Euromonitor, Statista, Mintel, and BCC Research host a litany of reports for purchase, oftentimes with the option of a single-user license or a subscription.

This can be a massive time saver, and you’ll have a better idea of what you’re getting from the very beginning. You’ll also get all your data in a format that makes sense, saving you effort in cleaning and organizing.

10. Analyze sales data

Sales data is like a puzzle piece that can help reveal the full picture of market research insights. Essentially, it indicates the results. Paired with other market research data, sales data helps researchers better understand actions and consequences. Understanding your customers, their buying habits, and how they change over time is important.

This research will be limited to customers, and it’s important to keep that in mind. Nevertheless, the value of this data should not be underestimated. If you’re not already tracking customer data, there’s no time like the present.

Choosing the right market research method for your strategy

Not all methods will be right for your situation or your business. Once you’ve looked through the list and seen some that take your fancy, spend more time researching each option.You’ll want to consider what you want to achieve, what data you’ll need, the pros and cons of each method, the costs of conducting the research, and the cost of analyzing the results.

Get it right, and it’ll be worth all the effort.

Former Brandwatch Employee

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How to do market research in 4 steps: a lean approach to marketing research

From pinpointing your target audience and assessing your competitive advantage, to ongoing product development and customer satisfaction efforts, market research is a practice your business can only benefit from.

Learn how to conduct quick and effective market research using a lean approach in this article full of strategies and practical examples. 

Last updated

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A comprehensive (and successful) business strategy is not complete without some form of market research—you can’t make informed and profitable business decisions without truly understanding your customer base and the current market trends that drive your business.

In this article, you’ll learn how to conduct quick, effective market research  using an approach called 'lean market research'. It’s easier than you might think, and it can be done at any stage in a product’s lifecycle.

How to conduct lean market research in 4 steps

What is market research, why is market research so valuable, advantages of lean market research, 4 common market research methods, 5 common market research questions, market research faqs.

We’ll jump right into our 4-step approach to lean market research. To show you how it’s done in the real world, each step includes a practical example from Smallpdf , a Swiss company that used lean market research to reduce their tool’s error rate by 75% and boost their Net Promoter Score® (NPS) by 1%.

Research your market the lean way...

From on-page surveys to user interviews, Hotjar has the tools to help you scope out your market and get to know your customers—without breaking the bank.

The following four steps and practical examples will give you a solid market research plan for understanding who your users are and what they want from a company like yours.

1. Create simple user personas

A user persona is a semi-fictional character based on psychographic and demographic data from people who use websites and products similar to your own. Start by defining broad user categories, then elaborate on them later to further segment your customer base and determine your ideal customer profile .

How to get the data: use on-page or emailed surveys and interviews to understand your users and what drives them to your business.

How to do it right: whatever survey or interview questions you ask, they should answer the following questions about the customer:

Who are they?

What is their main goal?

What is their main barrier to achieving this goal?

Pitfalls to avoid:

Don’t ask too many questions! Keep it to five or less, otherwise you’ll inundate them and they’ll stop answering thoughtfully.

Don’t worry too much about typical demographic questions like age or background. Instead, focus on the role these people play (as it relates to your product) and their goals.

How Smallpdf did it: Smallpdf ran an on-page survey for a couple of weeks and received 1,000 replies. They learned that many of their users were administrative assistants, students, and teachers.

Next, they used the survey results to create simple user personas like this one for admins:

Who are they? Administrative Assistants.

What is their main goal? Creating Word documents from a scanned, hard-copy document or a PDF where the source file was lost.

What is their main barrier to achieving it? Converting a scanned PDF doc to a Word file.

💡Pro tip: Smallpdf used Hotjar Surveys to run their user persona survey. Our survey tool helped them avoid the pitfalls of guesswork and find out who their users really are, in their own words. 

You can design a survey and start running it in minutes with our easy-to-use drag and drop builder. Customize your survey to fit your needs, from a sleek one-question pop-up survey to a fully branded questionnaire sent via email. 

We've also created 40+ free survey templates that you can start collecting data with, including a user persona survey like the one Smallpdf used.

2. Conduct observational research

Observational research involves taking notes while watching someone use your product (or a similar product).

Overt vs. covert observation

Overt observation involves asking customers if they’ll let you watch them use your product. This method is often used for user testing and it provides a great opportunity for collecting live product or customer feedback .

Covert observation means studying users ‘in the wild’ without them knowing. This method works well if you sell a type of product that people use regularly, and it offers the purest observational data because people often behave differently when they know they’re being watched. 

Tips to do it right:

Record an entry in your field notes, along with a timestamp, each time an action or event occurs.

Make note of the users' workflow, capturing the ‘what,’ ‘why,’ and ‘for whom’ of each action.

Don’t record identifiable video or audio data without consent. If recording people using your product is helpful for achieving your research goal, make sure all participants are informed and agree to the terms.

Don’t forget to explain why you’d like to observe them (for overt observation). People are more likely to cooperate if you tell them you want to improve the product.

💡Pro tip: while conducting field research out in the wild can wield rewarding results, you can also conduct observational research remotely. Hotjar Recordings is a tool that lets you capture anonymized user sessions of real people interacting with your website. 

Observe how customers navigate your pages and products to gain an inside look into their user behavior . This method is great for conducting exploratory research with the purpose of identifying more specific issues to investigate further, like pain points along the customer journey and opportunities for optimizing conversion .

With Hotjar Recordings you can observe real people using your site without capturing their sensitive information

How Smallpdf did it: here’s how Smallpdf observed two different user personas both covertly and overtly.

Observing students (covert): Kristina Wagner, Principle Product Manager at Smallpdf, went to cafes and libraries at two local universities and waited until she saw students doing PDF-related activities. Then she watched and took notes from a distance. One thing that struck her was the difference between how students self-reported their activities vs. how they behaved (i.e, the self-reporting bias). Students, she found, spent hours talking, listening to music, or simply staring at a blank screen rather than working. When she did find students who were working, she recorded the task they were performing and the software they were using (if she recognized it).

Observing administrative assistants (overt): Kristina sent emails to admins explaining that she’d like to observe them at work, and she asked those who agreed to try to batch their PDF work for her observation day. While watching admins work, she learned that they frequently needed to scan documents into PDF-format and then convert those PDFs into Word docs. By observing the challenges admins faced, Smallpdf knew which products to target for improvement.

“Data is really good for discovery and validation, but there is a bit in the middle where you have to go and find the human.”

3. Conduct individual interviews

Interviews are one-on-one conversations with members of your target market. They allow you to dig deep and explore their concerns, which can lead to all sorts of revelations.

Listen more, talk less. Be curious.

Act like a journalist, not a salesperson. Rather than trying to talk your company up, ask people about their lives, their needs, their frustrations, and how a product like yours could help.

Ask "why?" so you can dig deeper. Get into the specifics and learn about their past behavior.

Record the conversation. Focus on the conversation and avoid relying solely on notes by recording the interview. There are plenty of services that will transcribe recorded conversations for a good price (including Hotjar!).

Avoid asking leading questions , which reveal bias on your part and pushes respondents to answer in a certain direction (e.g. “Have you taken advantage of the amazing new features we just released?).

Don't ask loaded questions , which sneak in an assumption which, if untrue, would make it impossible to answer honestly. For example, we can’t ask you, “What did you find most useful about this article?” without asking whether you found the article useful in the first place.

Be cautious when asking opinions about the future (or predictions of future behavior). Studies suggest that people aren’t very good at predicting their future behavior. This is due to several cognitive biases, from the misguided exceptionalism bias (we’re good at guessing what others will do, but we somehow think we’re different), to the optimism bias (which makes us see things with rose-colored glasses), to the ‘illusion of control’ (which makes us forget the role of randomness in future events).

How Smallpdf did it: Kristina explored her teacher user persona by speaking with university professors at a local graduate school. She learned that the school was mostly paperless and rarely used PDFs, so for the sake of time, she moved on to the admins.

A bit of a letdown? Sure. But this story highlights an important lesson: sometimes you follow a lead and come up short, so you have to make adjustments on the fly. Lean market research is about getting solid, actionable insights quickly so you can tweak things and see what works.

💡Pro tip: to save even more time, conduct remote interviews using an online user research service like Hotjar Engage , which automates the entire interview process, from recruitment and scheduling to hosting and recording.

You can interview your own customers or connect with people from our diverse pool of 200,000+ participants from 130+ countries and 25 industries. And no need to fret about taking meticulous notes—Engage will automatically transcribe the interview for you.

4. Analyze the data (without drowning in it)

The following techniques will help you wrap your head around the market data you collect without losing yourself in it. Remember, the point of lean market research is to find quick, actionable insights.

A flow model is a diagram that tracks the flow of information within a system. By creating a simple visual representation of how users interact with your product and each other, you can better assess their needs.

You’ll notice that admins are at the center of Smallpdf’s flow model, which represents the flow of PDF-related documents throughout a school. This flow model shows the challenges that admins face as they work to satisfy their own internal and external customers.

Affinity diagram

An affinity diagram is a way of sorting large amounts of data into groups to better understand the big picture. For example, if you ask your users about their profession, you’ll notice some general themes start to form, even though the individual responses differ. Depending on your needs, you could group them by profession, or more generally by industry.

We wrote a guide about how to analyze open-ended questions to help you sort through and categorize large volumes of response data. You can also do this by hand by clipping up survey responses or interview notes and grouping them (which is what Kristina does).

“For an interview, you will have somewhere between 30 and 60 notes, and those notes are usually direct phrases. And when you literally cut them up into separate pieces of paper and group them, they should make sense by themselves.”

Pro tip: if you’re conducting an online survey with Hotjar, keep your team in the loop by sharing survey responses automatically via our Slack and Microsoft Team integrations. Reading answers as they come in lets you digest the data in pieces and can help prepare you for identifying common themes when it comes time for analysis.

Hotjar lets you easily share survey responses with your team

Customer journey map

A customer journey map is a diagram that shows the way a typical prospect becomes a paying customer. It outlines their first interaction with your brand and every step in the sales cycle, from awareness to repurchase (and hopefully advocacy).

The above  customer journey map , created by our team at Hotjar, shows many ways a customer might engage with our tool. Your map will be based on your own data and business model.

📚 Read more: if you’re new to customer journey maps, we wrote this step-by-step guide to creating your first customer journey map in 2 and 1/2 days with free templates you can download and start using immediately.

Next steps: from research to results

So, how do you turn market research insights into tangible business results? Let’s look at the actions Smallpdf took after conducting their lean market research: first they implemented changes, then measured the impact.

Implement changes

Based on what Smallpdf learned about the challenges that one key user segment (admins) face when trying to convert PDFs into Word files, they improved their ‘PDF to Word’ conversion tool.

We won’t go into the details here because it involves a lot of technical jargon, but they made the entire process simpler and more straightforward for users. Plus, they made it so that their system recognized when you drop a PDF file into their ‘Word to PDF’ converter instead of the ‘PDF to Word’ converter, so users wouldn’t have to redo the task when they made that mistake. 

In other words: simple market segmentation for admins showed a business need that had to be accounted for, and customers are happier overall after Smallpdf implemented an informed change to their product.

Measure results

According to the Lean UX model, product and UX changes aren’t retained unless they achieve results.

Smallpdf’s changes produced:

A 75% reduction in error rate for the ‘PDF to Word’ converter

A 1% increase in NPS

Greater confidence in the team’s marketing efforts

"With all the changes said and done, we've cut our original error rate in four, which is huge. We increased our NPS by +1%, which isn't huge, but it means that of the users who received a file, they were still slightly happier than before, even if they didn't notice that anything special happened at all.”

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Market research (or marketing research) is any set of techniques used to gather information and better understand a company’s target market. This might include primary research on brand awareness and customer satisfaction or secondary market research on market size and competitive analysis. Businesses use this information to design better products, improve user experience, and craft a marketing strategy that attracts quality leads and improves conversion rates.

David Darmanin, one of Hotjar’s founders, launched two startups before Hotjar took off—but both companies crashed and burned. Each time, he and his team spent months trying to design an amazing new product and user experience, but they failed because they didn’t have a clear understanding of what the market demanded.

With Hotjar, they did things differently . Long story short, they conducted market research in the early stages to figure out what consumers really wanted, and the team made (and continues to make) constant improvements based on market and user research.

Without market research, it’s impossible to understand your users. Sure, you might have a general idea of who they are and what they need, but you have to dig deep if you want to win their loyalty.

Here’s why research matters:

Obsessing over your users is the only way to win. If you don’t care deeply about them, you’ll lose potential customers to someone who does.

Analytics gives you the ‘what’, while research gives you the ‘why’. Big data, user analytics , and dashboards can tell you what people do at scale, but only research can tell you what they’re thinking and why they do what they do. For example, analytics can tell you that customers leave when they reach your pricing page, but only research can explain why.

Research beats assumptions, trends, and so-called best practices. Have you ever watched your colleagues rally behind a terrible decision? Bad ideas are often the result of guesswork, emotional reasoning, death by best practices , and defaulting to the Highest Paid Person’s Opinion (HiPPO). By listening to your users and focusing on their customer experience , you’re less likely to get pulled in the wrong direction.

Research keeps you from planning in a vacuum. Your team might be amazing, but you and your colleagues simply can’t experience your product the way your customers do. Customers might use your product in a way that surprises you, and product features that seem obvious to you might confuse them. Over-planning and refusing to test your assumptions is a waste of time, money, and effort because you’ll likely need to make changes once your untested business plan gets put into practice.

Lean User Experience (UX) design is a model for continuous improvement that relies on quick, efficient research to understand customer needs and test new product features.

Lean market research can help you become more...

Efficient: it gets you closer to your customers, faster.

Cost-effective: no need to hire an expensive marketing firm to get things started.

Competitive: quick, powerful insights can place your products on the cutting edge.

As a small business or sole proprietor, conducting lean market research is an attractive option when investing in a full-blown research project might seem out of scope or budget.

There are lots of different ways you could conduct market research and collect customer data, but you don’t have to limit yourself to just one research method. Four common types of market research techniques include surveys, interviews, focus groups, and customer observation.

Which method you use may vary based on your business type: ecommerce business owners have different goals from SaaS businesses, so it’s typically prudent to mix and match these methods based on your particular goals and what you need to know.

1. Surveys: the most commonly used

Surveys are a form of qualitative research that ask respondents a short series of open- or closed-ended questions, which can be delivered as an on-screen questionnaire or via email. When we asked 2,000 Customer Experience (CX) professionals about their company’s approach to research , surveys proved to be the most commonly used market research technique.

What makes online surveys so popular?  

They’re easy and inexpensive to conduct, and you can do a lot of data collection quickly. Plus, the data is pretty straightforward to analyze, even when you have to analyze open-ended questions whose answers might initially appear difficult to categorize.

We've built a number of survey templates ready and waiting for you. Grab a template and share with your customers in just a few clicks.

💡 Pro tip: you can also get started with Hotjar AI for Surveys to create a survey in mere seconds . Just enter your market research goal and watch as the AI generates a survey and populates it with relevant questions. 

Once you’re ready for data analysis, the AI will prepare an automated research report that succinctly summarizes key findings, quotes, and suggested next steps.

An example research report generated by Hotjar AI for Surveys

2. Interviews: the most insightful

Interviews are one-on-one conversations with members of your target market. Nothing beats a face-to-face interview for diving deep (and reading non-verbal cues), but if an in-person meeting isn’t possible, video conferencing is a solid second choice.

Regardless of how you conduct it, any type of in-depth interview will produce big benefits in understanding your target customers.

What makes interviews so insightful?

By speaking directly with an ideal customer, you’ll gain greater empathy for their experience , and you can follow insightful threads that can produce plenty of 'Aha!' moments.

3. Focus groups: the most unreliable

Focus groups bring together a carefully selected group of people who fit a company’s target market. A trained moderator leads a conversation surrounding the product, user experience, or marketing message to gain deeper insights.

What makes focus groups so unreliable?

If you’re new to market research, we wouldn’t recommend starting with focus groups. Doing it right is expensive , and if you cut corners, your research could fall victim to all kinds of errors. Dominance bias (when a forceful participant influences the group) and moderator style bias (when different moderator personalities bring about different results in the same study) are two of the many ways your focus group data could get skewed.

4. Observation: the most powerful

During a customer observation session, someone from the company takes notes while they watch an ideal user engage with their product (or a similar product from a competitor).

What makes observation so clever and powerful?

‘Fly-on-the-wall’ observation is a great alternative to focus groups. It’s not only less expensive, but you’ll see people interact with your product in a natural setting without influencing each other. The only downside is that you can’t get inside their heads, so observation still isn't a recommended replacement for customer surveys and interviews.

The following questions will help you get to know your users on a deeper level when you interview them. They’re general questions, of course, so don’t be afraid to make them your own.

1. Who are you and what do you do?

How you ask this question, and what you want to know, will vary depending on your business model (e.g. business-to-business marketing is usually more focused on someone’s profession than business-to-consumer marketing).

It’s a great question to start with, and it’ll help you understand what’s relevant about your user demographics (age, race, gender, profession, education, etc.), but it’s not the be-all-end-all of market research. The more specific questions come later.

2. What does your day look like?

This question helps you understand your users’ day-to-day life and the challenges they face. It will help you gain empathy for them, and you may stumble across something relevant to their buying habits.

3. Do you ever purchase [product/service type]?

This is a ‘yes or no’ question. A ‘yes’ will lead you to the next question.

4. What problem were you trying to solve or what goal were you trying to achieve?

This question strikes to the core of what someone’s trying to accomplish and why they might be willing to pay for your solution.

5. Take me back to the day when you first decided you needed to solve this kind of problem or achieve this goal.

This is the golden question, and it comes from Adele Revella, Founder and CEO of Buyer Persona Institute . It helps you get in the heads of your users and figure out what they were thinking the day they decided to spend money to solve a problem.

If you take your time with this question, digging deeper where it makes sense, you should be able to answer all the relevant information you need to understand their perspective.

“The only scripted question I want you to ask them is this one: take me back to the day when you first decided that you needed to solve this kind of problem or achieve this kind of a goal. Not to buy my product, that’s not the day. We want to go back to the day that when you thought it was urgent and compelling to go spend money to solve a particular problem or achieve a goal. Just tell me what happened.”

— Adele Revella , Founder/CEO at Buyer Persona Institute

Bonus question: is there anything else you’d like to tell me?

This question isn’t just a nice way to wrap it up—it might just give participants the opportunity they need to tell you something you really need to know.

That’s why Sarah Doody, author of UX Notebook , adds it to the end of her written surveys.

“I always have a last question, which is just open-ended: “Is there anything else you would like to tell me?” And sometimes, that’s where you get four paragraphs of amazing content that you would never have gotten if it was just a Net Promoter Score [survey] or something like that.”

What is the difference between qualitative and quantitative research?

Qualitative research asks questions that can’t be reduced to a number, such as, “What is your job title?” or “What did you like most about your customer service experience?” 

Quantitative research asks questions that can be answered with a numeric value, such as, “What is your annual salary?” or “How was your customer service experience on a scale of 1-5?”

 → Read more about the differences between qualitative and quantitative user research .

How do I do my own market research?

You can do your own quick and effective market research by 

Surveying your customers

Building user personas

Studying your users through interviews and observation

Wrapping your head around your data with tools like flow models, affinity diagrams, and customer journey maps

What is the difference between market research and user research?

Market research takes a broad look at potential customers—what problems they’re trying to solve, their buying experience, and overall demand. User research, on the other hand, is more narrowly focused on the use (and usability ) of specific products.

What are the main criticisms of market research?

Many marketing professionals are critical of market research because it can be expensive and time-consuming. It’s often easier to convince your CEO or CMO to let you do lean market research rather than something more extensive because you can do it yourself. It also gives you quick answers so you can stay ahead of the competition.

Do I need a market research firm to get reliable data?

Absolutely not! In fact, we recommend that you start small and do it yourself in the beginning. By following a lean market research strategy, you can uncover some solid insights about your clients. Then you can make changes, test them out, and see whether the results are positive. This is an excellent strategy for making quick changes and remaining competitive.

Net Promoter, Net Promoter System, Net Promoter Score, NPS, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld, and Satmetrix Systems, Inc.

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Market research is a cornerstone of all successful, strategic businesses. It can also be daunting for entrepreneurs looking to launch a startup or start a side hustle . What is market research, anyway? And how do you…do it?

We’ll walk you through absolutely everything you need to know about the market research process so that by the end of this guide, you’ll be an expert in market research too. And what’s more important: you’ll have actionable steps you can take to start collecting your own market research.

What Is Market Research?

Market research is the organized process of gathering information about your target customers and market. Market research can help you better understand customer behavior and competitor strengths and weaknesses, as well as provide insight for the best strategies in launching new businesses and products. There are different ways to approach market research, including primary and secondary research and qualitative and quantitative research. The strongest approaches will include a combination of all four.

“Virtually every business can benefit from conducting some market research,” says Niles Koenigsberg of Real FiG Advertising + Marketing . “Market research can help you piece together your [business’s] strengths and weaknesses, along with your prospective opportunities, so that you can understand where your unique differentiators may lie.” Well-honed market research will help your brand stand out from the competition and help you see what you need to do to lead the market. It can also do so much more.

The Purposes of Market Research

Why do market research? It can help you…

• Pinpoint your target market, create buyer personas, and develop a more holistic understanding of your customer base and market.
• Understand current market conditions to evaluate risks and anticipate how your product or service will perform.
• Validate a concept prior to launch.
• Identify gaps in the market that your competitors have created or overlooked.
• Solve problems that have been left unresolved by the existing product/brand offerings.
• Identify opportunities and solutions for new products or services.
• Develop killer marketing strategies .

What Are the Benefits of Market Research?

Strong market research can help your business in many ways. It can…

• Strengthen your market position.
• Help you identify your strengths and weaknesses.
• Help you identify your competitors’ strengths and weaknesses.
• Minimize risk.
• Center your customers’ experience from the get-go.
• Help you create a dynamic strategy based on market conditions and customer needs/demands.

What Are the Basic Methods of Market Research?

The basic methods of market research include surveys, personal interviews, customer observation, and the review of secondary research. In addition to these basic methods, a forward-thinking market research approach incorporates data from the digital landscape like social media analysis, SEO research, gathering feedback via forums, and more. Throughout this guide, we will cover each of the methods commonly used in market research to give you a comprehensive overview.

Primary vs. Secondary Market Research

Primary and secondary are the two main types of market research you can do. The latter relies on research conducted by others. Primary research, on the other hand, refers to the fact-finding efforts you conduct on your own.

This approach is limited, however. It’s likely that the research objectives of these secondary data points differ from your own, and it can be difficult to confirm the veracity of their findings.

Primary Market Research

Primary research is more labor intensive, but it generally yields data that is exponentially more actionable. It can be conducted through interviews, surveys, online research, and your own data collection. Every new business should engage in primary market research prior to launch. It will help you validate that your idea has traction, and it will give you the information you need to help minimize financial risk.

You can hire an agency to conduct this research on your behalf. This brings the benefit of expertise, as you’ll likely work with a market research analyst. The downside is that hiring an agency can be expensive—too expensive for many burgeoning entrepreneurs. That brings us to the second approach. You can also do the market research yourself, which substantially reduces the financial burden of starting a new business .

Secondary Market Research

Secondary research includes resources like government databases and industry-specific data and publications. It can be beneficial to start your market research with secondary sources because it’s widely available and often free-to-access. This information will help you gain a broad overview of the market conditions for your new business.

Identify Your Goals and Your Audience

Before you begin conducting interviews or sending out surveys, you need to set your market research goals. At the end of your market research process, you want to have a clear idea of who your target market is—including demographic information like age, gender, and where they live—but you also want to start with a rough idea of who your audience might be and what you’re trying to achieve with market research.

You can pinpoint your objectives by asking yourself a series of guiding questions:

• What are you hoping to discover through your research?
• Who are you hoping to serve better because of your findings?
• What do you think your market is?
• Who are your competitors?
• Are you testing the reception of a new product category or do you want to see if your product or service solves the problem left by a current gap in the market?
• Are you just…testing the waters to get a sense of how people would react to a new brand?

Once you’ve narrowed down the “what” of your market research goals, you’re ready to move onto how you can best achieve them. Think of it like algebra. Many math problems start with “solve for x.” Once you know what you’re looking for, you can get to work trying to find it. It’s a heck of a lot easier to solve a problem when you know you’re looking for “x” than if you were to say “I’m gonna throw some numbers out there and see if I find a variable.”

How to Do Market Research

This guide outlines every component of a comprehensive market research effort. Take into consideration the goals you have established for your market research, as they will influence which of these elements you’ll want to include in your market research strategy.

Secondary Data

Secondary data allows you to utilize pre-existing data to garner a sense of market conditions and opportunities. You can rely on published market studies, white papers, and public competitive information to start your market research journey.

Secondary data, while useful, is limited and cannot substitute your own primary data. It’s best used for quantitative data that can provide background to your more specific inquiries.

Find Your Customers Online

Once you’ve identified your target market, you can use online gathering spaces and forums to gain insights and give yourself a competitive advantage. Rebecca McCusker of The Creative Content Shop recommends internet recon as a vital tool for gaining a sense of customer needs and sentiment. “Read their posts and comments on forums, YouTube video comments, Facebook group [comments], and even Amazon/Goodreads book comments to get in their heads and see what people are saying.”

If you’re interested in engaging with your target demographic online, there are some general rules you should follow. First, secure the consent of any group moderators to ensure that you are acting within the group guidelines. Failure to do so could result in your eviction from the group.

Not all comments have the same research value. “Focus on the comments and posts with the most comments and highest engagement,” says McCusker. These high-engagement posts can give you a sense of what is already connecting and gaining traction within the group.

Social media can also be a great avenue for finding interview subjects. “LinkedIn is very useful if your [target customer] has a very specific job or works in a very specific industry or sector. It’s amazing the amount of people that will be willing to help,” explains Miguel González, a marketing executive at Dealers League . “My advice here is BE BRAVE, go to LinkedIn, or even to people you know and ask them, do quick interviews and ask real people that belong to that market and segment and get your buyer persona information first hand.”

Market research interviews can provide direct feedback on your brand, product, or service and give you a better understanding of consumer pain points and interests.

When organizing your market research interviews, you want to pay special attention to the sample group you’re selecting, as it will directly impact the information you receive. According to Tanya Zhang, the co-founder of Nimble Made , you want to first determine whether you want to choose a representative sample—for example, interviewing people who match each of the buyer persona/customer profiles you’ve developed—or a random sample.

“A sampling of your usual persona styles, for example, can validate details that you’ve already established about your product, while a random sampling may [help you] discover a new way people may use your product,” Zhang says.

Market Surveys

Market surveys solicit customer inclinations regarding your potential product or service through a series of open-ended questions. This direct outreach to your target audience can provide information on your customers’ preferences, attitudes, buying potential, and more.

Every expert we asked voiced unanimous support for market surveys as a powerful tool for market research. With the advent of various survey tools with accessible pricing—or free use—it’s never been easier to assemble, disseminate, and gather market surveys. While it should also be noted that surveys shouldn’t replace customer interviews , they can be used to supplement customer interviews to give you feedback from a broader audience.

Who to Include in Market Surveys

• Current customers
• Past customers
• Your existing audience (such as social media/newsletter audiences)

Example Questions to Include in Market Surveys

While the exact questions will vary for each business, here are some common, helpful questions that you may want to consider for your market survey. Demographic Questions: the questions that help you understand, demographically, who your target customers are:

• “What is your age?”
• “Where do you live?”
• “What is your gender identity?”
• “What is your household income?”
• “What is your household size?”
• “What do you do for a living?”
• “What is your highest level of education?”

Product-Based Questions: Whether you’re seeking feedback for an existing brand or an entirely new one, these questions will help you get a sense of how people feel about your business, product, or service:

• “How well does/would our product/service meet your needs?”
• “How does our product/service compare to similar products/services that you use?”
• “How long have you been a customer?” or “What is the likelihood that you would be a customer of our brand?

Personal/Informative Questions: the deeper questions that help you understand how your audience thinks and what they care about.

• “What are your biggest challenges?”
• “What’s most important to you?”
• “What do you do for fun (hobbies, interests, activities)?”
• “Where do you seek new information when researching a new product?”
• “How do you like to make purchases?”
• “What is your preferred method for interacting with a brand?”

Survey Tools

Online survey tools make it easy to distribute surveys and collect responses. The best part is that there are many free tools available. If you’re making your own online survey, you may want to consider SurveyMonkey, Typeform, Google Forms, or Zoho Survey.

Competitive Analysis

A competitive analysis is a breakdown of how your business stacks up against the competition. There are many different ways to conduct this analysis. One of the most popular methods is a SWOT analysis, which stands for “strengths, weaknesses, opportunities, and threats.” This type of analysis is helpful because it gives you a more robust understanding of why a customer might choose a competitor over your business. Seeing how you stack up against the competition can give you the direction you need to carve out your place as a market leader.

Social Media Analysis

Social media has fundamentally changed the market research landscape, making it easier than ever to engage with a wide swath of consumers. Follow your current or potential competitors on social media to see what they’re posting and how their audience is engaging with it. Social media can also give you a lower cost opportunity for testing different messaging and brand positioning.

SEO Analysis and Opportunities

SEO analysis can help you identify the digital competition for getting the word out about your brand, product, or service. You won’t want to overlook this valuable information. Search listening tools offer a novel approach to understanding the market and generating the content strategy that will drive business. Tools like Google Trends and Awario can streamline this process.

Ready to Kick Your Business Into High Gear?

Now that you’ve completed the guide to market research you know you’re ready to put on your researcher hat to give your business the best start. Still not sure how actually… launch the thing? Our free mini-course can run you through the essentials for starting your side hustle .

About Mary Kate Miller

Mary Kate Miller writes about small business, real estate, and finance. In addition to writing for Foundr, her work has been published by The Washington Post, Teen Vogue, Bustle, and more. She lives in Chicago.

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How To Do Market Research: Definition, Types, Methods

Jan 2, 2024

11 min. read

Market research isn’t just collecting data. It’s a strategic tool that allows businesses to gain a competitive advantage while making the best use of their resources. Research reveals valuable insights into your target audience about their preferences, buying habits, and emerging demands — all of which help you unlock new opportunities to grow your business.

When done correctly, market research can minimize risks and losses, spur growth, and position you as a leader in your industry. 

Let’s explore the basic building blocks of market research and how to collect and use data to move your company forward:

Table of Contents

What Is Market Research?

Why is market research important, market analysis example, 5 types of market research, what are common market research questions, what are the limitations of market research, how to do market research, improving your market research with radarly.

Market Research Definition: The process of gathering, analyzing, and interpreting information about a market or audience.

Market research studies consumer behavior to better understand how they perceive products or services. These insights help businesses identify ways to grow their current offering, create new products or services, and improve brand trust and brand recognition .

You might also hear market research referred to as market analysis or consumer research .

Traditionally, market research has taken the form of focus groups, surveys, interviews, and even competitor analysis . But with modern analytics and research tools, businesses can now capture deeper insights from a wider variety of sources, including social media, online reviews, and customer interactions. These extra layers of intel can help companies gain a more comprehensive understanding of their audience.

With consumer preferences and markets evolving at breakneck speeds, businesses need a way to stay in touch with what people need and want. That’s why the importance of market research cannot be overstated.

Market research offers a proactive way to identify these trends and make adjustments to product development, marketing strategies , and overall operations. This proactive approach can help businesses stay ahead of the curve and remain agile as markets shift.

Market research examples abound — given the number of ways companies can get inside the minds of their customers, simply skimming through your business’s social media comments can be a form of market research.

A restaurant chain might use market research methods to learn more about consumers’ evolving dining habits. These insights might be used to offer new menu items, re-examine their pricing strategies, or even open new locations in different markets, for example.

A consumer electronics company might use market research for similar purposes. For instance, market research may reveal how consumers are using their smart devices so they can develop innovative features.

Market research can be applied to a wide range of use cases, including:

• Testing new product ideas
• Improve existing products
• Entering new markets
• Right-sizing their physical footprints
• Improving brand image and awareness
• Gaining insights into competitors via competitive intelligence

Ultimately, companies can lean on market research techniques to stay ahead of trends and competitors while improving the lives of their customers.

Market research methods take different forms, and you don’t have to limit yourself to just one. Let’s review the most common market research techniques and the insights they deliver.

1. Interviews

3. Focus Groups

4. Observations

5. AI-Driven Market Research

One-on-one interviews are one of the most common market research techniques. Beyond asking direct questions, skilled interviewers can uncover deeper motivations and emotions that drive purchasing decisions. Researchers can elicit more detailed and nuanced responses they might not receive via other methods, such as self-guided surveys.

Interviews also create the opportunity to build rapport with customers and prospects. Establishing a connection with interviewees can encourage them to open up and share their candid thoughts, which can enrich your findings. Researchers also have the opportunity to ask clarifying questions and dig deeper based on individual responses.

Market research surveys provide an easy entry into the consumer psyche. They’re cost-effective to produce and allow researchers to reach lots of people in a short time. They’re also user-friendly for consumers, which allows companies to capture more responses from more people.

Big data and data analytics are making traditional surveys more valuable. Researchers can apply these tools to elicit a deeper understanding from responses and uncover hidden patterns and correlations within survey data that were previously undetectable.

The ways in which surveys are conducted are also changing. With the rise of social media and other online channels, brands and consumers alike have more ways to engage with each other, lending to a continuous approach to market research surveys.

3. Focus groups

Focus groups are “group interviews” designed to gain collective insights. This interactive setting allows participants to express their thoughts and feelings openly, giving researchers richer insights beyond yes-or-no responses.

One of the key benefits of using focus groups is the opportunity for participants to interact with one another. They spark discussions while sharing diverse viewpoints. These sessions can uncover underlying motivations and attitudes that may not be easily expressed through other research methods.

Observing your customers “in the wild” might feel informal, but it can be one of the most revealing market research techniques of all. That’s because you might not always know the right questions to ask. By simply observing, you can surface insights you might not have known to look for otherwise.

This method also delivers raw, authentic, unfiltered data. There’s no room for bias and no potential for participants to accidentally skew the data. Researchers can also pick up on non-verbal cues and gestures that other research methods may fail to capture.

5. AI-driven market research

One of the newer methods of market research is the use of AI-driven market research tools to collect and analyze insights on your behalf. AI customer intelligence tools and consumer insights software like Meltwater Radarly take an always-on approach by going wherever your audience is and continuously predicting behaviors based on current behaviors.

By leveraging advanced algorithms, machine learning, and big data analysis , AI enables companies to uncover deep-seated patterns and correlations within large datasets that would be near impossible for human researchers to identify. This not only leads to more accurate and reliable findings but also allows businesses to make informed decisions with greater confidence.

Tip: Learn how to use Meltwater as a research tool , how Meltwater uses AI , and learn more about consumer insights and about consumer insights in the fashion industry .

No matter the market research methods you use, market research’s effectiveness lies in the questions you ask. These questions should be designed to elicit honest responses that will help you reach your goals.

Examples of common market research questions include:

Demographic market research questions

• What is your age range?
• What is your occupation?
• What is your household income level?
• What is your educational background?
• What is your gender?

Product or service usage market research questions

• How long have you been using [product/service]?
• How frequently do you use [product/service]?
• What do you like most about [product/service]?
• Have you experienced any problems using [product/service]?
• How could we improve [product/service]?
• Why did you choose [product/service] over a competitor’s [product/service]?

Brand perception market research questions

• How familiar are you with our brand?
• What words do you associate with our brand?
• How do you feel about our brand?
• What makes you trust our brand?
• What sets our brand apart from competitors?
• What would make you recommend our brand to others?

Buying behavior market research questions

• What do you look for in a [product/service]?
• What features in a [product/service] are important to you?
• How much time do you need to choose a [product/service]?
• How do you discover new products like [product/service]?
• Do you prefer to purchase [product/service] online or in-store?
• How do you research [product/service] before making a purchase?
• How often do you buy [product/service]?
• How important is pricing when buying [product/service]?
• What would make you switch to another brand of [product/service]?

Customer satisfaction market research questions

• How happy have you been with [product/service]?
• What would make you more satisfied with [product/service]?
• How likely are you to continue using [product/service]?

Bonus Tip: Compiling these questions into a market research template can streamline your efforts.

Market research can offer powerful insights, but it also has some limitations. One key limitation is the potential for bias. Researchers may unconsciously skew results based on their own preconceptions or desires, which can make your findings inaccurate.

• Depending on your market research methods, your findings may be outdated by the time you sit down to analyze and act on them. Some methods struggle to account for rapidly changing consumer preferences and behaviors.
• There’s also the risk of self-reported data (common in online surveys). Consumers might not always accurately convey their true feelings or intentions. They might provide answers they think researchers are looking for or misunderstand the question altogether.
• There’s also the potential to miss emerging or untapped markets . Researchers are digging deeper into what (or who) they already know. This means you might be leaving out a key part of the story without realizing it.

Still, the benefits of market research cannot be understated, especially when you supplement traditional market research methods with modern tools and technology.

Let’s put it all together and explore how to do market research step-by-step to help you leverage all its benefits.

Step 1: Define your objectives

You’ll get more from your market research when you hone in on a specific goal : What do you want to know, and how will this knowledge help your business?

This step will also help you define your target audience. You’ll need to ask the right people the right questions to collect the information you want. Understand the characteristics of the audience and what gives them authority to answer your questions.

Step 2: Select your market research methods

Choose one or more of the market research methods (interviews, surveys, focus groups, observations, and/or AI-driven tools) to fuel your research strategy.

Certain methods might work better than others for specific goals . For example, if you want basic feedback from customers about a product, a simple survey might suffice. If you want to hone in on serious pain points to develop a new product, a focus group or interview might work best.

You can also source secondary research ( complementary research ) via secondary research companies , such as industry reports or analyses from large market research firms. These can help you gather preliminary information and inform your approach.

Step 3: Develop your research tools

Prior to working with participants, you’ll need to craft your survey or interview questions, interview guides, and other tools. These tools will help you capture the right information , weed out non-qualifying participants, and keep your information organized.

You should also have a system for recording responses to ensure data accuracy and privacy. Test your processes before speaking with participants so you can spot and fix inefficiencies or errors.

Step 4: Conduct the market research

With a system in place, you can start looking for candidates to contribute to your market research. This might include distributing surveys to current customers or recruiting participants who fit a specific profile, for example.

Set a time frame for conducting your research. You might collect responses over the course of a few days, weeks, or even months. If you’re using AI tools to gather data, choose a data range for your data to focus on the most relevant information.

Step 5: Analyze and apply your findings

Review your findings while looking for trends and patterns. AI tools can come in handy in this phase by analyzing large amounts of data on your behalf.

Compile your findings into an easy-to-read report and highlight key takeaways and next steps. Reports aren’t useful unless the reader can understand and act on them.

Tip: Learn more about trend forecasting , trend detection , and trendspotting .

Meltwater’s Radarly consumer intelligence suite helps you reap the benefits of market research on an ongoing basis. Using a combination of AI, data science, and market research expertise, Radarly scans multiple global data sources to learn what people are talking about, the actions they’re taking, and how they’re feeling about specific brands.

Our tools are created by market research experts and designed to help researchers uncover what they want to know (and what they don’t know they want to know). Get data-driven insights at scale with information that’s always relevant, always accurate, and always tailored to your organization’s needs.

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What Are Consumer Insights? Meaning, Examples, Strategy

How Coca-Cola Collects Consumer Insights

Market Intelligence 101: What It Is & How To Use It

9 Top Consumer Insights Tools & Companies

Types of Market Research Explained and How to Use Them

6 min. read

Updated October 29, 2023

As a small business, you must understand your market, target customers, and brand. 

This knowledge significantly affects your decision-making, marketing effectiveness, and potential for business growth.

And while the steps to do market research are relatively simple—your research options are far more complex.

Let’s explore the different types of market research and how to apply them to your business.

• 1. Primary research

Primary market research is first-hand information you collect from customers within your market.

For business owners:

Use this method when validating your business idea . Break it down into two result categories — exploratory and specific.

Exploratory is non-quantifiable customer feedback. You’re not looking to measure results but gauge interest or an emotional response.

Now, follow up with very specific questions that can be quantified. Use this to evaluate the value of a product or service, your market direction, and product/market fit. 

Your goal is to come back with numerical (purchases, revenue, estimated sales, etc.) insights to drive and support your decisions.

Research methods:

• 1:1 Interviews
• Focus groups
• Observations

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• 2. Secondary research

Secondary research covers every other piece of data you have available. This includes resources such as:

• Public sources: Typically free and highly accessible information gathered through government-sponsored research projects. 
• Commercial sources: Research studies conducted by private organizations regarding the state of specific markets, industries, or innovations. 
• Internal sources: Data you have collected through everyday business operations.

For business owners: 

Secondary research is a cost-effective way to gather existing information on the industry, market trends, and competitors. It helps you benchmark against industry standards and identify potential market opportunities.

Use this research as a starting point. It can inform the direction of more costly primary research methods. 

• Industry reports
• Market statistics
• Academic publications
• News articles
• In-house data
• 3. Qualitative research

Qualitative research is the collection of information that is not reliant on numbers making it difficult to measure. It adds depth or context to quantitative research by measuring sentiment or collecting responses to open-ended questions.

Qualitative research delves deep into customer psychologies, helping you understand the reasons behind their choices. This can guide product development, branding, and marketing strategies to better resonate with your audience.

• In-depth interviews
• Case studies
• 4. Quantitative research

The collection of numerical data can be easily collected and analyzed. It should be seen as exploratory. Your goal is to uncover evidence or trends that can be explored further through qualitative research. 

Quantitative research provides measurable data that you can then analyze. 

Short-term, it helps you make data-driven decisions, forecast trends, and understand the market size and segmentation. Long-term, it’s your baseline for performance that can be referenced in additional market research efforts. 

• Financial data
• 5. Observational research

Researchers observe and record the actions of participants. This can be done in a formal or informal setting. 

For example, you want to open a coffee shop and need to understand the total foot traffic in a specific area. You could stake out the location and count the number of people that pass by over a set period.

Observational research offers genuine real-time insights into how customers interact with products or services. 

You can identify potential pain points, understand if features meet expectations, and even improve  

• Direct observation
• Participant observation
• Time-lapse videos
• Eye-tracking studies
• 6. Competitive analysis

Research competitors in the market to understand their strategies, strengths, and weaknesses.

A competitive analysis helps position your business. 

You’ll identify your unique selling points, opportunities to improve, and potential threats to your business. 

• SWOT analysis
• Competitor benchmarking
• Mystery shopping
• Online monitoring
• 7. Branding research

This focuses on how a brand is perceived in the market. It relates to your company’s tone, imagery, design, and overall values.

Branding research can help in creating, managing, or maintaining your brand. 

You can research brand awareness, loyalty, perception, value, and positioning. For this research to be effective, you must have a distinct purpose. 

Typically, you’re attempting to gauge overall performance, identify opportunities to enhance your brand or diminish areas that do not reflect it.   

• Brand awareness surveys
• Brand loyalty assessments
• Social listening (brand mentions, interactions, etc.)
• 8. Customer research

This involves gathering insights directly from current or potential customers to understand their needs, preferences, and experiences.

Customer research is pivotal in ensuring your business meets customer needs and expectations. It can guide customer service improvements, enhance loyalty, and increase customer lifetime value.

• Customer satisfaction surveys
• Net Promoter Score (NPS) surveys
• Customer feedback forms
• Customer interviews
• 9. Product research

This focuses on evaluating a product’s performance, acceptance, and potential improvements in the market.

Product research helps refine product features, understand its market fit, and identifying areas for innovation. It ensures that the product meets customer needs and stays competitive.

You can test hypothetical solutions, product features, branding, and marketing collateral. Ideally, you’d test each of these elements in specific phases. And let the results inform the direction of each step.

• Product usage surveys
• Product testing and trials
• Feature preference studies
• Concept testing
• 10. Experimental research

Involves manipulating one variable to determine if it causes a change in another.

Experimental research can help test hypotheses about market behaviors, allowing for optimization of product features, pricing strategies, or marketing campaigns based on actual results.

• Controlled experiments
• Field experiments
• A/B testing
• Lab experiments
• 11. Field trials

Testing products, services, or promotions in a real-world setting before a full-scale launch.

Field trials use a real-world testing ground to gauge the effectiveness of a new product or campaign and make necessary adjustments before a broader rollout.

For physical products, this could be done geographically. Where only a select number of locations receive and sell a given product.

For software or services, you can beta test with a selection of users. Ideally, these are dedicated customers deep in your solution and can provide pointed feedback.

• Product sampling
• Test marketing
• Beta testing
• Store audits
• How to choose the best research method(s) for your business

You’ll end up using several types of market research. You may have even noticed how many of the market research methods overlapped. 

What you start with depends on several factors:

Why you’re doing this research and the desired results will influence your chosen methods. 

For those starting a business, focus on getting market data and direct customer insight. You want a broad understanding of the market you’re entering, your competitors, and where you fit. 

You also need to know your target market. Quantitative data is a great starting point, but you won’t have a clear picture without direct conversation.

Research requires monetary investment. Whether it’s purchasing reports, hiring a research firm, or compensating a tester. You should account for the payroll cost if it’s you or an employee doing the research. 

Research doesn’t have to be expensive. Many online tools offer free or affordable options for surveys and feedback collection. But if you need to go deeper, you’ll likely need to pay more.

Time investment

Research requires time. Time to run, analyze, and report. You need to understand how long a specific method will take and the return you expect.

Remember, it may take time now, but it will ideally save you time (and money) in the future.

• Explore more on marketing research

Choosing how you’ll conduct market research is just part of the process. Check out our curated selection of resources to learn more about: 

• Finding your customer
• Get to know your competitors
• Market research tools

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.

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A Complete Guide to Market Research: Methods, Templates, How to do it and a lot more

Johnny Tong

Jan 19, 2021

Table of Contents

What is Market Research?

Why is market research so important, market research methods, focus groups, observation, types of market research, market segmentation, brand awareness and reach, pricing research, how to do market research, market research report & analysis templates, swot analysis template, market survey template, 15 common and effective market survey questions, demographic questions, psychographic questions, questions about your product/service., 10 best market research software.

• 1. Surveybot
• 2. Google analytics
• 3. Question Pro
• 4. Make My Persona
• 5. SurveyMonkey

Dos and Don’ts of Market Research

Do focus on your purpose, do use multiple tools, do make necessary changes according to the reports, do use user-friendly survey, do define a budget, don’t stop doing it again, don’t rely on internet information alone, don’t go for professional respondents, market research faqs.

• What is market research?
• Why is market research so important?
• Types of market research
• How to do market research?
• 5 best market research software
• Dos and don’ts of market research
• Market research FAQs

• Keep a definite purpose
• Identify the target audience
• Relationship status
• Education level
• Study your industry
• Prepare survey questions
• Record and analyze your findings

• How old are you?
• What is your gender?
• What is your employment status?
• What do you do?
• What are your hobbies, interests, attitudes?
• What are your challenges, goals?
• How satisfied are you with our product?
• Would you recommend our product to a friend?
• How appealing is our website/store?
• Do you think our prices are high?
• How satisfied are you with our customer service?
• Was it easy to find the right product from our store/website?
• How did you know about our product?
• What attracted you to our brand?
• How often do you come across our advertisements online?

1.  Surveybot

2.  google analytics, 3.  question pro, 4.  make my persona, 5.  surveymonkey.

• How long will it take to carry out market research?
• How to choose the best market research software for my business?
• How many questions should be there in my survey?
• Can I trust the research results to make business decisions?

Chief Human @ Surveybot

• Search Search Please fill out this field.

What Is Market Research?

• How It Works
• Primary vs. Secondary
• How to Conduct Research

The Bottom Line

• Marketing Essentials

How to Do Market Research, Types, and Example

Joules Garcia / Investopedia

Market research examines consumer behavior and trends in the economy to help a business develop and fine-tune its business idea and strategy. It helps a business understand its target market by gathering and analyzing data.

Market research is the process of evaluating the viability of a new service or product through research conducted directly with potential customers. It allows a company to define its target market and get opinions and other feedback from consumers about their interest in a product or service.

Research may be conducted in-house or by a third party that specializes in market research. It can be done through surveys and focus groups, among other ways. Test subjects are usually compensated with product samples or a small stipend for their time.

Key Takeaways

• Companies conduct market research before introducing new products to determine their appeal to potential customers.
• Tools include focus groups, telephone interviews, and questionnaires.
• The results of market research inform the final design of the product and determine how it will be positioned in the marketplace.
• Market research usually combines primary information, gathered directly from consumers, and secondary information, which is data available from external sources.

Market Research

How market research works.

Market research is used to determine the viability of a new product or service. The results may be used to revise the product design and fine-tune the strategy for introducing it to the public. This can include information gathered for the purpose of determining market segmentation . It also informs product differentiation , which is used to tailor advertising.

A business engages in various tasks to complete the market research process. It gathers information based on the market sector being targeted by the product. This information is then analyzed and relevant data points are interpreted to draw conclusions about how the product may be optimally designed and marketed to the market segment for which it is intended.

It is a critical component in the research and development (R&D) phase of a new product or service introduction. Market research can be conducted in many different ways, including surveys, product testing, interviews, and focus groups.

Market research is a critical tool that companies use to understand what consumers want, develop products that those consumers will use, and maintain a competitive advantage over other companies in their industry.

Primary Market Research vs. Secondary Market Research

Market research usually consists of a combination of:

• Primary research, gathered by the company or by an outside company that it hires
• Secondary research, which draws on external sources of data

Primary Market Research

Primary research generally falls into two categories: exploratory and specific research.

• Exploratory research is less structured and functions via open-ended questions. The questions may be posed in a focus group setting, telephone interviews, or questionnaires. It results in questions or issues that the company needs to address about a product that it has under development.
• Specific research delves more deeply into the problems or issues identified in exploratory research.

Secondary Market Research

All market research is informed by the findings of other researchers about the needs and wants of consumers. Today, much of this research can be found online.

Secondary research can include population information from government census data , trade association research reports , polling results, and research from other businesses operating in the same market sector.

History of Market Research

Formal market research began in Germany during the 1920s. In the United States, it soon took off with the advent of the Golden Age of Radio.

Companies that created advertisements for this new entertainment medium began to look at the demographics of the audiences who listened to each of the radio plays, music programs, and comedy skits that were presented.

They had once tried to reach the widest possible audience by placing their messages on billboards or in the most popular magazines. With radio programming, they had the chance to target rural or urban consumers, teenagers or families, and judge the results by the sales numbers that followed.

Types of Market Research

Face-to-face interviews.

From their earliest days, market research companies would interview people on the street about the newspapers and magazines that they read regularly and ask whether they recalled any of the ads or brands that were published in them. Data collected from these interviews were compared to the circulation of the publication to determine the effectiveness of those ads.

Market research and surveys were adapted from these early techniques.

To get a strong understanding of your market, it’s essential to understand demand, market size, economic indicators, location, market saturation, and pricing.

Focus Groups

A focus group is a small number of representative consumers chosen to try a product or watch an advertisement.

Afterward, the group is asked for feedback on their perceptions of the product, the company’s brand, or competing products. The company then takes that information and makes decisions about what to do with the product or service, whether that's releasing it, making changes, or abandoning it altogether.

Phone Research

The man-on-the-street interview technique soon gave way to the telephone interview. A telephone interviewer could collect information in a more efficient and cost-effective fashion.

Telephone research was a preferred tactic of market researchers for many years. It has become much more difficult in recent years as landline phone service dwindles and is replaced by less accessible mobile phones.

Survey Research

As an alternative to focus groups, surveys represent a cost-effective way to determine consumer attitudes without having to interview anyone in person. Consumers are sent surveys in the mail, usually with a coupon or voucher to incentivize participation. These surveys help determine how consumers feel about the product, brand, and price point.

Online Market Research

With people spending more time online, market research activities have shifted online as well. Data collection still uses a survey-style form. But instead of companies actively seeking participants by finding them on the street or cold calling them on the phone, people can choose to sign up, take surveys, and offer opinions when they have time.

This makes the process far less intrusive and less rushed, since people can participate on their own time and of their own volition.

How to Conduct Market Research

The first step to effective market research is to determine the goals of the study. Each study should seek to answer a clear, well-defined problem. For example, a company might seek to identify consumer preferences, brand recognition, or the comparative effectiveness of different types of ad campaigns.

After that, the next step is to determine who will be included in the research. Market research is an expensive process, and a company cannot waste resources collecting unnecessary data. The firm should decide in advance which types of consumers will be included in the research, and how the data will be collected. They should also account for the probability of statistical errors or sampling bias .

The next step is to collect the data and analyze the results. If the two previous steps have been completed accurately, this should be straightforward. The researchers will collect the results of their study, keeping track of the ages, gender, and other relevant data of each respondent. This is then analyzed in a marketing report that explains the results of their research.

The last step is for company executives to use their market research to make business decisions. Depending on the results of their research, they may choose to target a different group of consumers, or they may change their price point or some product features.

The results of these changes may eventually be measured in further market research, and the process will begin all over again.

Benefits of Market Research

Market research is essential for developing brand loyalty and customer satisfaction. Since it is unlikely for a product to appeal equally to every consumer, a strong market research program can help identify the key demographics and market segments that are most likely to use a given product.

Market research is also important for developing a company’s advertising efforts. For example, if a company’s market research determines that its consumers are more likely to use Facebook than X (formerly Twitter), it can then target its advertisements to one platform instead of another. Or, if they determine that their target market is value-sensitive rather than price-sensitive, they can work on improving the product rather than reducing their prices.

Market research only works when subjects are honest and open to participating.

Example of Market Research

Many companies use market research to test new products or get information from consumers about what kinds of products or services they need and don’t currently have.

For example, a company that’s considering starting a business might conduct market research to test the viability of its product or service. If the market research confirms consumer interest, the business can proceed confidently with its business plan . If not, the company can use the results of the market research to make adjustments to the product to bring it in line with customer desires.

What Are the Main Types of Market Research?

The main types of market research are primary research and secondary research. Primary research includes focus groups, polls, and surveys. Secondary research includes academic articles, infographics, and white papers.

Qualitative research gives insights into how customers feel and think. Quantitative research uses data and statistics such as website views, social media engagement, and subscriber numbers.

What Is Online Market Research?

Online market research uses the same strategies and techniques as traditional primary and secondary market research, but it is conducted on the Internet. Potential customers may be asked to participate in a survey or give feedback on a product. The responses may help the researchers create a profile of the likely customer for a new product.

What Are Paid Market Research Surveys?

Paid market research involves rewarding individuals who agree to participate in a study. They may be offered a small payment for their time or a discount coupon in return for filling out a questionnaire or participating in a focus group.

What Is a Market Study?

A market study is an analysis of consumer demand for a product or service. It looks at all of the factors that influence demand for a product or service. These include the product’s price, location, competition, and substitutes as well as general economic factors that could influence the new product’s adoption, for better or worse.

Market research is a key component of a company’s research and development (R&D) stage. It helps companies understand in advance the viability of a new product that they have in development and to see how it might perform in the real world.

Britannica Money. “ Market Research .”

U.S. Small Business Administration. “ Market Research and Competitive Analysis .”

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Understanding Market Research: Everything You Need to Know

Appinio Research · 13.12.2022 · 19min read

Conducting market research is the best way to ensure the success of your business idea, but it can seem daunting at times. Appinio got your back and came up with your ultimate guide for all the things market research, from the most common market research methodologies to how to identify the right method for your business case, everything you need to know is down below, keep reading.

What is market research?

Market research is the process of gathering information about consumers or markets. This information can be used to help businesses discover  more about their customers, determine what products or services to offer, and gauge customer interest in new products or services. There are different ways to do market research. Some common types of market research include primary research , secondary market research , market intelligence, market segmentation, market sizing or  market forecasting.Regardless of the method you use, market research helps you develop your products or services, and ensures that you are meeting the needs of your customers. 

If you are looking to conduct market research on your own, there are a variety of tools and resources available to help you get started. For example, online market research platforms can make it easy to gather information from large groups of people, while market data and analysis tools can help you to understand trends, market size, and competitor activity. Whether you choose to do market research on your own or work with a market research firm, the key to success is understanding the needs of your customers and adapting your products or services accordingly. With the right market research, tools and strategies, you can gain  valuable insights into your market and customers, helping you to achieve success with your business ideas. 

How is market research used?

Market research is used by businesses of all sizes to gain actionable insights into their target markets and customers. This information can be used to inform product development, help to identify new market opportunities, understand customer needs and preferences, and track competitor activity. Usually companies use market research to make well informed decisions, improve their products and services, uncover trends and opportunities, and understand consumer behavior.

Who can benefit from market research?

Any business can benefit from market research, whether they are a small startup or a large multinational corporation. Market research helps businesses to better understand their target customers, identify interesting opportunities, and gain insights into consumer behavior.Any company would benefit from knowing what their customers want, how they rank against their competitors or validate their business decisions.

How can companies profit from market research?

Conducting market research process means helping businesses to better understand their customers and trends, identifying new product or service ideas, determining the demand for existing products or services, optimizing marketing campaigns and messaging, understanding consumer behavior and preferences, tracking competitor activity and market share, and ultimately improving sales, customers’ loyalty and brand image overall.

How to conduct market research

So how does the market research process work? There are a variety of tools and techniques that you can leverage, including customer surveys, focus groups , market analysis, and online platforms. Whatever approach you choose, it is important to stay organized and ensure that your data is accurate and reliable. With the right market research strategy in place, you can gain actionable insights into your market and customers, helping to ensure that your business or business idea is positioned for success. Here are our tips for conducting your own market research project successfully including setting clear goals and objectives, choosing the right methodologies based on your market and budget constraints, leveraging online market research tools to gather information from large numbers of people quickly and easily, and analyzing and interpreting your market data to make well informed decisions for your business. With the right market research strategy and tools, you can gain valuable insights into your market and customers, helping you to build a strong foundation for your business decisions and future growth. 

Step one: define your research objectives

The first step in the market research process is to clearly define your goals and objectives. What do you want to know? Are you planning to launch a new product on the market or are you planning to launch your hero product in new unexplored markets? Depending on what you want to uncover you would need to include identifying market trends, market size, customer demographics and psychographics, competitor activity, and more.

Step two: choose the market research methods 

Once you define your research objectives, you need to pick the tools that are best suited to your needs. Are you testing a new logo or a new name? Then you may need quite a few people and the best way to reach them could be a survey. Do you want to know consumers attitudes around your existing products? Then face-to-face interviews could be the way to go.

Step three: collect and analyze 

Finally, you need to organize all the precious data into digestible data to provide actionable insights into your market and customers, usually in the form of a report and then you and your team will be able to use this information to make informed decisions, improve your business strategy and ultimately grow.

Looking forward to starting your first market research project already? Sign up for Appinio today!

Types of market research

There are quite a few types of market research but the first differentiation to make is between primary and secondary market research. Primary research is when a company collects information directly from its customers or market, while the latter involves gathering data that has already been collected by other companies or organizations. 

Primary research

Primary market research can include surveys, focus groups, market analysis tools such as SWOT or PESTLE analysis, and online platforms like Google Trends. The advantages of primary research can include a more direct understanding of customer needs and preferences, gaining market insights that are not available through secondary market research, and being able to collect specific data about the market that is most relevant to your business. The disadvantages entail time and resources spent on this type of research. Depending on the research method you may need quite some time to complete all data collection and it could also turn out to be quite costly in terms of money, as you need to invest in recruiting the people that will reply to your questions.

Secondary research

Secondary research methods, such as analyzing industry data that has already been collected by other companies or organizations, can be an efficient way to gain a broad overview of the market and identify trends, gaps in knowledge, and more. This is often easier and less expensive to conduct than primary market research. It also allows businesses to access a wealth of market data that has already been collected by other organizations and companies, which can be useful for benchmarking, identifying trends, and gaining key insights into market conditions and customer needs. However, since this information may not be relevant to your specific business needs, it is important to always triangulate your data by combining results from multiple sources.

Qualitative market research

Another important distinction is between qualitative and quantitative market research.Qualitative research is a qualitative approach to quantitatively analyzing your market and customers. It can give you great insights into customer needs and preferences, helping you to craft better products and services that meet the needs of your market. One of the main advantages of qualitative research is understanding deeply how consumers think and even being able to understand how they talk about your service and product on an everyday basis, being able to connect with your consumers on a deeper level by , quite literally, “speaking their language”.Examples of qualitative market research tools include interviews and focus groups, which can help you understand your customers' behaviors, preferences, and needs. Ethnographic studies, in-depth interviews and in general, explorative research can also be a useful tool for gaining a deeper understanding of your market and customers. 

Quantitative market research

Quantitative research is a systematic empirical investigation of quantifiable phenomena through the use of statistical, mathematical or computational techniques. In other words, quantitative research uses numbers and mathematical formulas to analyze data collected in order to understand a given problem or question. It is often used in the social sciences, business, and marketing research. This type of research has several advantages over other types of market research, including its ability to provide statistically significant results. This approach can involve gathering quantifiable data through techniques such as surveys, tracking customer activity with analytics tools, analyzing sales numbers and revenue trends, or testing new product ideas with pilot programs. Quantitative data can be used to measure customer satisfaction and loyalty. One very common example of quantitative research in marketing is the use of surveys to measure customer satisfaction. Surveys can be used to ask customers about a variety of topics, such as how satisfied they are with a product or service, how likely they are to recommend it to others, and what changes they would like to see. Quantitative market research can be an effective way to gain valuable insights into your market, customers, and competitive landscape.No matter what type of market research you choose to conduct, it is important to always stay focused on your goals and business strategies. By understanding the current state of your market, you can make well informed decisions about how to grow and expand your business in the future.It is important to keep in mind that market research is a tool, not an endpoint. Always be sure to review your market research findings carefully and critically, and use them as a guide rather than as a definitive answer to your business questions. With the right approach, market research can be an incredibly powerful tool for success providing a competitive advantage in today's marketplace.

What different methodologies can be used? 

There are many different market research methodologies that can be used, depending on the specific business needs and goals. As we mentioned above, some of the most common market research techniques include surveys, focus groups, interviews, questionnaires, field experiments, ethnographic research, explorative research, market testing, market intelligence reports, and industry analysis. Each of these methods has its own advantages and benefits, so the market research approach that is most appropriate for your business will depend on a variety of factors, including the type of market you are targeting, your budget and timeline, and the specific information you hope to glean from market research. Ultimately, choosing the most effective market research methodology is an important decision that should be made carefully and strategically, in order to get the most value from your market research investment.

Most common market research methodologies

The field of market research is wide and the methodologies vary depending on your research objectives. Once you define what you want to find out, how you'll find it out is the next step, here is a rundown of the most common market research methods. 

Market research surveys

Surveys are a popular market research method, and can be used to gather information from both consumers' attitudes and businesses. Surveys typically involve sending out questionnaires or online surveys to large groups of people, often through email or social media platforms. They are an effective way to quickly gather large amounts of data in a relatively low-cost way. Market research surveys are a common way to gather information from customers. A survey can be administered in person, over the phone, or online. It typically includes a series of questions about the customer's needs, preferences, and buying habits.Surveys can be effective for understanding customer needs and preferences, determining market size and segmentation, and gauging customer interest in new products or services.

However, care should be taken to ensure that the questions are relevant and interesting to respondents, or they may not complete the survey. 

Interviews are a one-on-one meeting with potential customers or market segments. The interviewer asks questions about the customer's needs and preferences, as well as their purchasing habits and intentions. Interviews can be conducted in person, online or over the phone, and they offer a more personal interaction with customers than other market research methods as the interviewer (a.k.a.market researcher) and the interviewee can naturally discuss the topic of interest. You can choose to go for structured, semi-structured or unstructured interviews depending on the research objective, but the main advantage of interviews is the serendipity factor, even in the most structured of interviews, the interaction between interviewer and interviewee can take unexpected turns (in a good and a bad way!).Interviews can provide actionable insights into why customers make certain purchasing decisions, their needs and wants, what might persuade them to buy a particular product or service and uncover the unexpected. However, interviews are also more expensive and time consuming than other methods and they cannot provide statistically significant results.

Focus groups

A focus group involves a small group of people (typically 8-10) who are brought together to discuss a product or service. The focus group is usually moderated by market researchers, who ask questions and encourage discussion among the participants. The aim is to get feedback on what people like and don't like about the product or service, as well as their suggestions for improvement.A focus group can provide insights into how people feel about a product or service, what features they like and don't like, and what potential improvements they would like to see. However, it is important to note that focus groups cannot provide statistically significant results, so they should be used in conjunction with other market research methods. Other common market research practices include intercept interviews, mystery shopping, market scans, social listening, and online panels.

Most common use cases in market research

Segmentation, target group analysis.

One of the most common uses of market research is to segment customers or identify a specific market segment.

Market segmentation allows you to understand your target audience more deeply and identify specific groups who may be interested in your product or service. Examples of target group analysis might include identifying geographic, demographic, or psychographic profiles for different market segments.

Utility analysis / Feature Prioritization

Another common use of market research is utility analysis or feature prioritization. This method can be used to understand which features are most important to potential customers, and how different products or services stack up against each other in terms of their functionality and usability.

MaxDiff analysis

A popular method to identify features or services to prioritize is the MaxDiff analysis (Maximum Difference Scaling, also known as "Best Worst Scaling), which involves asking participants to rate different features or options, from which they are to select the best and worst alternative for them.

Based on the results, you can identify concrete preference or importance rankings. This information can then be used to inform product development decisions and prioritize features for your customer base.

TURF Analysis

The abbreviation TURF stands for Total Unduplicated Reach & Frequency. To be precise, the TURF method is not a survey method per se, but can be applied to a variety of different question types — even after the survey is already done. The aim of the method is to determine which product portfolio, marketing mix or even product variants appeal to the highest number of customers and hence, expand the potential target group.

Conjoint Analysis 

Conjoint analysis is used to understand consumer preferences and purchasing behavior.

By quantifying the relative importance of different product features, the conjoint analysis provides insights into which features are most important to potential customers and how they compare different options against each other.

This information can then be used to inform product development and marketing decisions, as well as understand customer needs and preferences in more detail.One common approach to conducting a conjoint analysis is to create multiple "choice tasks" or versions of the product, each with different features and attributes. Participants are then asked to rate each version based on their preferences, which can be quantified using statistical techniques such as regression analysis. 

Kano analysis 

The Kano analysis helps businesses understand the factors that drive customer satisfaction. By quantifying different product features and their impact on your customers, the Kano analysis will help you identify which aspects of your product or service are most important to them, as well as features that consumers see as irrelevant, or unexpected sources of value that can help set you apart from your competitors. 

Driver Analysis

A driver analysis is a market research method that helps businesses identify the key factors driving customer behavior and purchasing decisions. By quantifying different product features and their impact on customers, the driver analysis can help businesses better understand which aspects of their products or services are most important to consumers, as well as any "drivers" or key variables that drive demand for their products.

Price analysis 

Price analysis is a market research tool that helps businesses understand customer preferences and purchasing behavior around different price points. By quantifying the relative importance of different price levels, price analysis can help businesses identify the optimal pricing strategy for their products or services, as well as better understand customer demand at different price tiers.Some of the benefits of conducting price analysis include better understanding of customer preferences, more effective pricing strategies, and enhanced market insights.There are a variety of approaches to conducting price analysis.

Gabor-Granger Price Analysis

The Gabor-Granger price analysis is a market research method that uses statistical data & techniques to understand how customers respond to different pricing strategies. By quantifying the impact of different price points on customer demand. The Gabor-Granger price analysis can help businesses better understand consumer preferences and optimize their pricing strategy for maximum profitability.Some of the key advantages of Gabor-Granger price analysis include enhanced market insights, improved pricing accuracy, and more effective marketing campaigns. By understanding how customers respond to different price points, businesses can develop more targeted marketing strategies that appeal to their specific needs and preferences. Additionally, the Gabor-Granger price analysis can help businesses better understand areas where they may be missing opportunities or overcharging customers, allowing them to make more informed pricing decisions that maximize profitability. 

Van Westendorp Pricing Analysis

The Van Westendorp pricing analysis is another market research methodology that helps companies and brands understand customer preferences around different price points. By quantifying the relative importance of different price levels, Van Westendorp pricing analysis can help businesses identify the optimal pricing strategy for their products or services and gain insights into customer behavior and purchasing decisions. 

Perception and Evaluation

Implicit testing.

Implicit testing is another method for quantifying customer preferences and association. This technique involves asking participants to rate a set of products or services on various dimensions, such as quality, value, and desirability. The responses from these evaluations can then be quantified using statistical methods such as conjoint analysis and utility theory.

Best Online tools to conduct your market research project

Some of the best online tools to conduct your market research project and collect quantitative data include platforms like SurveyMonkey, Google Analytics, Qualtrics and Appinio. These tools make it easy to create an online survey, analyze data, and generate reports that can help you gain insights into your market segments.Disadvantages of market research online platforms include the potential for data bias and lower response rates from survey participants, which can impact the accuracy and reliability of your research results. Additionally, many market research platforms are subscription-based, so you will likely need to invest in a paid plan in order to take full advantage of their features and functionality. However, despite these disadvantages, online platforms offer a number of advantages that can make them a valuable tool for your market research project. First, they are often more affordable than traditional market research methods, such as focus groups and surveys. Additionally, they are quick and easy to use, and can help you generate results quickly. Finally, online platforms provide a wealth of data that you can use to analyze your target market and understand their needs and preferences.

Interested in how Appinio can help your business idea? Talk to us.

Recruitment panel partners

To conduct effective market research, you may need to work with a recruitment panel partner. Recruitment panels are groups of qualified individuals who have been selected based on specific criteria and can provide actionable insights into your target. Some of the key benefits of working with a recruitment panel partner include better understanding of your target market, more effective data collection strategies, and increased accuracy in quantifying customer preferences and behaviors as usually these partners have access to very big pools of consumers, and can often reach even very niche targets.Of course, there are also disadvantages when working with recruitment panels. One is the cost of contracting these partners, another is the potential sampling bias and other limitations that may impact the quality and reliability of your market research data, as you’re basically using a middle man to select your desired consumers.

Appinio, the all in one survey tool

If you're looking for a market research tool that can help you quickly and easily create online surveys, analyze and gather data, and generate reports, then Appinio is the perfect solution for you.Appinio is an all-in-one survey tool that makes it easy to collect data and generate beautiful charts and graphs. With Appinio, you can create surveys in minutes, and quickly analyze the results to get insights into your target market. Appinio also offers a number of handy features such as drag-and-drop question creation, automatic result analysis, and interactive graphs and charts.  One of the advantages of Appinio is that it has a large proprietary panel in more than 90 countries. This means that you can reach a large number of survey participants quickly and easily. Additionally, Appinio's panel is carefully recruited and includes only qualified individuals who can provide valuable insights into your specific market. Despite being an all-in-one platform that you can use on your own, Appinio also offers consulting services. Appinio research consultants will help you design your research, selecting the best method for your specific research needs and will guide you through the entire process.Whether you are looking to gain a better understanding of your customers' purchasing behaviors or need market sizing estimates for product positioning, Appinio has the tools and functionality you need to succeed.

So if you're ready to take your market research efforts to the next level, sign up for Appinio today!

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Business research methods: A comprehensive overview

Last updated

3 April 2024

Reviewed by

Cathy Heath

Business research is the process of gathering and analyzing different types of information to make informed business decisions. 

If you undertake business research correctly, it has multiple benefits, such as:

Improving organizational operations

Identifying trends

Forecasting potential outcomes

This research can include studying competitor performance, examining consumer preferences, analyzing market trends, and identifying industry gaps.  

Let’s learn more about business research methods and the steps for a successful research process.

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• The importance of business research

In today's fast-paced, data-driven world, we need to rely on more than just intuition and guesswork. Companies need a well-planned business research strategy to uncover invaluable insights into consumer preferences, market trends , and emerging opportunities.

Business research allows companies to:

Identify market opportunities

Researching industry trends and market segments enables businesses to discover untapped markets and new opportunities to expand sales.

Analyze customer behavior

Understanding customers’ motivations, perceptions, and behaviors is essential. Companies can create targeted marketing strategies and products that meet consumer needs while improving customer satisfaction .

Stay ahead of competitors

Competitive analysis can reveal what your competitors are doing well and where they are struggling. With this information, businesses can adjust their strategies to remain competitive.

Optimize operations

Business research can help companies optimize their operations and improve efficiency. Analyzing data on processes and workflows lets businesses identify areas of improvement, streamline operations, and reduce costs.

Overall, investing in business research is essential for companies wanting to remain competitive and relevant. The right research strategy helps businesses uncover insights to drive growth and improve their bottom line.

• Qualitative research methods vs. quantitative research methods

Business research has two main methods: Qualitative research and quantitative research.

Qualitative research methods

Qualitative research involves exploring and understanding a topic through non-numerical data. 

This research type is particularly useful for exploring complex, multifaceted issues that may be difficult to quantify. 

It can provide insights into customer needs and preferences and identify trends and patterns. 

Researchers often use qualitative research in the early stages of a project to explore the problem and develop a deeper understanding. 

It provides a foundation for quantitative research and can determine what researchers need to ask to answer the research question.

Qualitative research methods include: 

Focus groups

Case studies

Ethnographic research

Website visitor profiling

They focus on understanding people’s attitudes, behaviors, and motivations.

Quantitative research methods

Quantitative research uses numerical data to test a hypothesis or solve a research question . 

Researchers can capture quantitative data from: 

Face-to-face interviews

Telephone interviews

Online polls

People often view quantitative data as more objective since it’s statistical and less subjective than qualitative data .

Quantitative research uses collections of data and measures, manipulates, and compares the information to get insight. 

Which type of business research is best?

While quantitative and qualitative research methods both have their benefits, they also come with a few drawbacks:

Qualitative research cons include:

Typically small sample size , making it harder to generalize

Time-consuming

Quantitative research disadvantages include:

Not capturing the depth or nuance of the topic

Minimal understanding of beliefs, opinions, or behavior behind consumer decisions

Researchers must interpret the data correctly for accurate observations

Businesses need to consider which method suits their research goals and resources best. Carefully selecting a method ensures valuable insights for more informed decisions to meet your business goals.

• Five research techniques for your business

As you start planning your business research strategy, it's important to consider which research methods you want to use. 

Let’s look at five research techniques, including when you should use them:

Surveys are a common method in business research. They effectively collect data from a large group by asking them to complete a questionnaire . 

Surveys are best for gathering information about a specific population's: 

Preferences

Experiences

You can conduct specific types of surveys, each with varying purposes and methodologies. 

Types of surveys:

Customer satisfaction surveys

These surveys measure customer satisfaction with a product or service. 

The questions may focus on the customer's product experience or the overall customer experience . 

Market research surveys

These surveys gather information on a specific market, including: 

Consumer preferences

Consumer behavior

Competitor analysis

Market trends

Employee satisfaction surveys

These surveys gauge the level of satisfaction and engagement of employees within an organization. 

They may include questions on: 

Compensation

Work-life balance

Job security

Career development

Brand awareness surveys

These surveys determine the level of awareness and recognition of a brand within a specific market. This type of survey can also measure brand loyalty and reputation.

Researchers conduct surveys in different ways, including online, by phone, or in person. 

Online surveys are becoming increasingly popular due to their convenience and the ability to gather data quickly.

2. Interviews

Interviews are another valuable method in business research. 

Unlike surveys, interviews involve talking to people one-on-one to gather in-depth information. Interviews are best to understand someone's perspectives, motivations, or experiences. 

For example, if a company wants to understand why its customers prefer a certain product or service, it can use interviews to ask follow-up questions to gain more insights. 

Interviews can be structured or unstructured depending on the researcher's objectives. 

In a structured interview , the interviewer has a predetermined set of questions to ask all respondents. This method ensures that everyone answers the same questions, making it easier to compare and analyze their responses. 

An unstructured interview is where the interviewer does not have a set of predetermined questions but lets the conversation flow naturally. This type of interview is more flexible and allows for unexpected insights to arise. 

Whether a researcher wants to understand consumer behavior or develop new business strategies, interviews can provide valuable data to inform decisions.

3. Observation

Observation is an excellent method to see how people interact with products, services, or physical spaces.

It allows researchers to observe real-life scenarios and collect accurate data about: 

Business processes

Employee behavior

Customer interactions

Overall business operations

It's particularly useful in situations where traditional survey or interview methods may not be effective. 

Researchers can use several types of observation for business research, including: 

Naturalistic observation

Controlled observation

Participant observation

Non-participant observation

Naturalistic observation involves observing behavior in a natural setting without manipulating the situation. This can gain insight into customer interactions and the decision-making process.

Controlled observation consists of manipulating a scenario and observing how people react. This can be useful for testing new products, services, or processes in a controlled environment.

Participant observation involves the researcher participating in the situation they are observing. This can help the researcher better understand the motivations and behaviors of those they’re observing.

Non-participant observation occurs while the researcher remains outside the situation and simply observes the actions. This approach can be helpful when it’s not possible or ethical for the researcher to participate directly.

Observation understands the human aspect of consumer behavior and how it influences decision-making.

Testing involves conducting experiments to gather quantitative data about a specific product or service. It's best to measure the impact of changes or improvements to a product or service. 

Testing can involve different techniques like: 

A/B testing: Evaluating two versions of a product or service

Usability testing : Seeing how users interact with a product to evaluate its ease of use

Performance testing: Checking the performance of a product under various conditions

Each type of testing is for a specific reason and with a specific goal in mind. 

For example, usability testing ensures a product or service is user-friendly, while A/B testing identifies which version is more effective or preferred. Performance testing ensures a product can handle the demands of heavy use.

5. Focus groups

Focus groups are a popular method of business research to gain in-depth insights into consumer behavior, attitudes, and perceptions toward products and services. 

A focus group typically consists of people that share similar characteristics. They come together to discuss and provide feedback on a specific topic. 

Focus groups are best suited for situations where businesses want to understand their target audience’s needs and wants. This can be useful when:

Launching a new product

Testing a new advertising campaign

Evaluating the effectiveness of an existing marketing strategy

Focus groups provide a unique opportunity to get real-time feedback on ideas and products, allowing businesses to fine-tune their offerings to meet customer demands.  

Understanding each research technique helps you design a strategy to collect the most relevant data for your business needs.

Steps of a business research process

Now you know the types of business research and its purpose, let’s look at the seven steps to successfully undertake it:

1. Identify the research problem 

The first step in conducting research is to define the problem or issue to address. This may involve surveying customers, analyzing market data, or interviewing key stakeholders . 

For example, if you own a fashion brand and your sales have dropped significantly, you may want to know why.

2. Conduct a review

Before starting research, check what researchers have already discovered in your organization, industry, or field. 

Conducting a review can involve reading relevant articles or research papers and gathering secondary or desk research data. 

This review process helps you better understand your research topic and may provide some insights into your research problem and fine-tune the next stage of your research.

3. Develop research questions and objectives

At this stage, you will develop specific research questions to achieve your objectives. 

Research objectives are the goals you aim to achieve by conducting the research. 

In our fashion brand example, one research question might be: "How do current fashion trends affect our sales?"

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Business research: definition, types & methods.

10 min read What is business research and why does it matter? Here are some of the ways business research can be helpful to your company, whichever method you choose to carry it out.

What is business research?

Business research helps companies make better business decisions by gathering information. The scope of the term business research is quite broad – it acts as an umbrella that covers every aspect of business, from finances to advertising creative. It can include research methods which help a company better understand its target market. It could focus on customer experience and assess customer satisfaction levels. Or it could involve sizing up the competition through competitor research.

Often when carrying out business research, companies are looking at their own data, sourced from their employees, their customers and their business records. However, business researchers can go beyond their own company in order to collect relevant information and understand patterns that may help leaders make informed decisions. For example, a business may carry out ethnographic research where the participants are studied in the context of their everyday lives, rather than just in their role as consumer, or look at secondary data sources such as open access public records and empirical research carried out in academic studies.

There is also a body of knowledge about business in general that can be mined for business research purposes. For example organizational theory and general studies on consumer behavior.

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Why is business research important?

We live in a time of high speed technological progress and hyper-connectedness. Customers have an entire market at their fingertips and can easily switch brands if a competitor is offering something better than you are. At the same time, the world of business has evolved to the point of near-saturation. It’s hard to think of a need that hasn’t been addressed by someone’s innovative product or service.

The combination of ease of switching, high consumer awareness and a super-evolved marketplace crowded with companies and their offerings means that businesses must do whatever they can to find and maintain an edge. Business research is one of the most useful weapons in the fight against business obscurity, since it allows companies to gain a deep understanding of buyer behavior and stay up to date at all times with detailed information on their market.

Thanks to the standard of modern business research tools and methods, it’s now possible for business analysts to track the intricate relationships between competitors, financial markets, social trends, geopolitical changes, world events, and more.

Find out how to conduct your own market research and make use of existing market research data with our Ultimate guide to market research

Types of business research

Business research methods vary widely, but they can be grouped into two broad categories – qualitative research and quantitative research .

Qualitative research methods

Qualitative business research deals with non-numerical data such as people’s thoughts, feelings and opinions. It relies heavily on the observations of researchers, who collect data from a relatively small number of participants – often through direct interactions.

Qualitative research interviews take place one-on-one between a researcher and participant. In a business context, the participant might be a customer, a supplier, an employee or other stakeholder. Using open-ended questions , the researcher conducts the interview in either a structured or unstructured format. Structured interviews stick closely to a question list and scripted phrases, while unstructured interviews are more conversational and exploratory. As well as listening to the participant’s responses, the interviewer will observe non-verbal information such as posture, tone of voice and facial expression.

Focus groups

Like the qualitative interview, a focus group is a form of business research that uses direct interaction between the researcher and participants to collect data. In focus groups , a small number of participants (usually around 10) take part in a group discussion led by a researcher who acts as moderator. The researcher asks questions and takes note of the responses, as in a qualitative research interview. Sampling for focus groups is usually purposive rather than random, so that the group members represent varied points of view.

Observational studies

In an observational study, the researcher may not directly interact with participants at all, but will pay attention to practical situations, such as a busy sales floor full of potential customers, or a conference for some relevant business activity. They will hear people speak and watch their interactions , then record relevant data such as behavior patterns that relate to the subject they are interested in. Observational studies can be classified as a type of ethnographic research. They can be used to gain insight about a company’s target audience in their everyday lives, or study employee behaviors in actual business situations.

Ethnographic Research

Ethnographic research is an immersive design of research where one observes peoples’ behavior in their natural environment. Ethnography was most commonly found in the anthropology field and is now practices across a wide range of social sciences.

Ehnography is used to support a designer’s deeper understanding of the design problem – including the relevant domain, audience(s), processes, goals and context(s) of use.

The ethnographic research process is a popular methodology used in the software development lifecycle. It helps create better UI/UX flow based on the real needs of the end-users.

If you truly want to understand your customers’ needs, wants, desires, pain-points “walking a mile” in their shoes enables this. Ethnographic research is this deeply rooted part of research where you truly learn your targe audiences’ problem to craft the perfect solution.

Case study research

A case study is a detailed piece of research that provides in depth knowledge about a specific person, place or organization. In the context of business research, case study research might focus on organizational dynamics or company culture in an actual business setting, and case studies have been used to develop new theories about how businesses operate. Proponents of case study research feel that it adds significant value in making theoretical and empirical advances. However its detractors point out that it can be time consuming and expensive, requiring highly skilled researchers to carry it out.

Quantitative research methods

Quantitative research focuses on countable data that is objective in nature. It relies on finding the patterns and relationships that emerge from mass data – for example by analyzing the material posted on social media platforms, or via surveys of the target audience. Data collected through quantitative methods is empirical in nature and can be analyzed using statistical techniques. Unlike qualitative approaches, a quantitative research method is usually reliant on finding the right sample size, as this will determine whether the results are representative. These are just a few methods – there are many more.

Surveys are one of the most effective ways to conduct business research. They use a highly structured questionnaire which is distributed to participants, typically online (although in the past, face to face and telephone surveys were widely used). The questions are predominantly closed-ended, limiting the range of responses so that they can be grouped and analyzed at scale using statistical tools. However surveys can also be used to get a better understanding of the pain points customers face by providing open field responses where they can express themselves in their own words. Both types of data can be captured on the same questionnaire, which offers efficiency of time and cost to the researcher.

Correlational research

Correlational research looks at the relationship between two entities, neither of which are manipulated by the researcher. For example, this might be the in-store sales of a certain product line and the proportion of female customers subscribed to a mailing list. Using statistical analysis methods, researchers can determine the strength of the correlation and even discover intricate relationships between the two variables. Compared with simple observation and intuition, correlation may identify further information about business activity and its impact, pointing the way towards potential improvements and more revenue.

Experimental research

It may sound like something that is strictly for scientists, but experimental research is used by both businesses and scholars alike. When conducted as part of the business intelligence process, experimental research is used to test different tactics to see which ones are most successful – for example one marketing approach versus another. In the simplest form of experimental research, the researcher identifies a dependent variable and an independent variable. The hypothesis is that the independent variable has no effect on the dependent variable, and the researcher will change the independent one to test this assumption. In a business context, the hypothesis might be that price has no relationship to customer satisfaction. The researcher manipulates the price and observes the C-Sat scores to see if there’s an effect.

The best tools for business research

You can make the business research process much quicker and more efficient by selecting the right tools. Business research methods like surveys and interviews demand tools and technologies that can store vast quantities of data while making them easy to access and navigate. If your system can also carry out statistical analysis, and provide predictive recommendations to help you with your business decisions, so much the better.

Related resources

Market intelligence 10 min read, marketing insights 11 min read, ethnographic research 11 min read, qualitative vs quantitative research 13 min read, qualitative research questions 11 min read, qualitative research design 12 min read, primary vs secondary research 14 min read, request demo.

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Business Research: Methods, Types & Examples

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Business research: Definition

Quantitative research methods, qualitative research methods, advantages of business research, disadvantages of business research, importance of business research.

Business research is a process of acquiring detailed information on all the areas of business and using such information to maximize the sales and profit of the business. Such a study helps companies determine which product/service is most profitable or in demand. In simple words, it can be stated as the acquisition of information or knowledge for professional or commercial purposes to determine opportunities and goals for a business.

Business research can be done for anything and everything. In general, when people speak about business research design , it means asking research questions to know where the money can be spent to increase sales, profits, or market share. Such research is critical to make wise and informed decisions.

LEARN ABOUT: Research Process Steps

For example: A mobile company wants to launch a new model in the market. But they are not aware of what are the dimensions of a mobile that are in most demand. Hence, the company conducts business research using various methods to gather information, and the same is then evaluated, and conclusions are drawn as to what dimensions are most in demand.

This will enable the researcher to make wise decisions to position his phone at the right price in the market and hence acquire a larger market share.

LEARN ABOUT:  Test Market Demand

Business research: Types and methodologies

Business research is a part of the business intelligence process. It is usually conducted to determine whether a company can succeed in a new region, to understand its competitors, or simply select a marketing approach for a product. This research can be carried out using steps in qualitative research methods or quantitative research methods.

Quantitative research methods are research methods that deal with numbers. It is a systematic empirical investigation using statistical, mathematical, or computational techniques . Such methods usually start with data collection and then proceed to statistical analysis using various methods. The following are some of the research methods used to carry out business research.

LEARN ABOUT: Data Management Framework

Survey research

Survey research is one of the most widely used methods to gather data, especially for conducting business research. Surveys involve asking various survey questions to a set of audiences through various types like online polls, online surveys, questionnaires, etc. Nowadays, most of the major corporations use this method to gather data and use it to understand the market and make appropriate business decisions.

Various types of surveys, like cross-sectional studies , which need to collect data from a set of audiences at a given point of time, or longitudinal surveys which are needed to collect data from a set of audiences across various time durations in order to understand changes in the respondents’ behavior are used to conduct survey research. With the advancement in technology, surveys can now be sent online through email or social media .

For example: A company wants to know the NPS score for their website i.e. how satisfied are people who are visiting their website. An increase in traffic to their website or the audience spending more time on a website can result in higher rankings on search engines which will enable the company to get more leads as well as increase its visibility.

Hence, the company can ask people who visit their website a few questions through an online survey to understand their opinions or gain feedback and hence make appropriate changes to the website to increase satisfaction.

Learn More:  Business Survey Template

Correlational research

Correlational research is conducted to understand the relationship between two entities and what impact each one of them has on the other. Using mathematical analysis methods, correlational research enables the researcher to correlate two or more variables .

Such research can help understand patterns, relationships, trends, etc. Manipulation of one variable is possible to get the desired results as well. Generally, a conclusion cannot be drawn only on the basis of correlational research.

For example: Research can be conducted to understand the relationship between colors and gender-based audiences. Using such research and identifying the target audience, a company can choose the production of particular color products to be released in the market. This can enable the company to understand the supply and demand requirements of its products.

Causal-Comparative research

Causal-comparative research is a method based on the comparison. It is used to deduce the cause-effect relationship between variables. Sometimes also known as quasi-experimental research, it involves establishing an independent variable and analyzing the effects on the dependent variable.

In such research, data manipulation is not done; however, changes are observed in the variables or groups under the influence of the same changes. Drawing conclusions through such research is a little tricky as independent and dependent variables will always exist in a group. Hence all other parameters have to be taken into consideration before drawing any inferences from the research.

LEARN ABOUT: Causal Research

For example: Research can be conducted to analyze the effect of good educational facilities in rural areas. Such a study can be done to analyze the changes in the group of people from rural areas when they are provided with good educational facilities and before that.

Another example can be to analyze the effect of having dams and how it will affect the farmers or the production of crops in that area.

LEARN ABOUT: Market research trends

Experimental research

Experimental research is based on trying to prove a theory. Such research may be useful in business research as it can let the product company know some behavioral traits of its consumers, which can lead to more revenue. In this method, an experiment is carried out on a set of audiences to observe and later analyze their behavior when impacted by certain parameters.

LEARN ABOUT: Behavioral Targeting

For example: Experimental research was conducted recently to understand if particular colors have an effect on consumers’ hunger. A set of the audience was then exposed to those particular colors while they were eating, and the subjects were observed. It was seen that certain colors like red or yellow increase hunger.

Hence, such research was a boon to the hospitality industry. You can see many food chains like Mcdonalds, KFC, etc., using such colors in their interiors, brands, as well as packaging.

Another example of inferences drawn from experimental research, which is used widely by most bars/pubs across the world, is that loud music in the workplace or anywhere makes a person drink more in less time. This was proven through experimental research and was a key finding for many business owners across the globe.

Online research / Literature research

Literature research is one of the oldest methods available. It is very economical, and a lot of information can be gathered using such research. Online research or literature research involves gathering information from existing documents and studies, which can be available at Libraries, annual reports, etc.

Nowadays, with the advancement in technology, such research has become even more simple and accessible to everyone. An individual can directly research online for any information that is needed, which will give him in-depth information about the topic or the organization.

Such research is used mostly by marketing and salespeople in the business sector to understand the market or their customers. Such research is carried out using existing information that is available from various sources. However, care has to be taken to validate the sources from where the information is going to be collected.

For example , a salesperson has heard a particular firm is looking for some solution that their company provides. Hence, the salesperson will first search for a decision maker from the company, investigate what department he is from, and understand what the target company is looking for and what they are into.

Using this research, he can cater his solution to be spot on when he pitches it to this client. He can also reach out to the customer directly by finding a means to communicate with him by researching online.’

LEARN ABOUT: 12 Best Tools for Researchers

Qualitative research is a method that has a high importance in business research. Qualitative research involves obtaining data through open-ended conversational means of communication. Such research enables the researcher to not only understand what the audience thinks but also why he thinks it.

In such research, in-depth information can be gathered from the subjects depending on their responses. There are various types of qualitative research methods, such as interviews, focus groups, ethnographic research, content analysis, and case study research, that are widely used.

Such methods are of very high importance in business research as they enable the researcher to understand the consumer. What motivates the consumer to buy and what does not is what will lead to higher sales, and that is the prime objective for any business.

Following are a few methods that are widely used in today’s world by most businesses.

Interviews are somewhat similar to surveys, like sometimes they may have the same types of questions used. The difference is that the respondent can answer these open-ended questions at length, and the direction of the conversation or the questions being asked can be changed depending on the response of the subject.

Such a method usually gives the researcher detailed information about the perspective or opinions of its subject. Carrying out interviews with subject matter experts can also give important information critical to some businesses.

For example: An interview was conducted by a telecom manufacturer with a group of women to understand why they have less number of female customers. After interviewing them, the researcher understood that there were fewer feminine colors in some of the models, and females preferred not to purchase them.

Such information can be critical to a business such as a  telecom manufacturer and hence it can be used to increase its market share by targeting women customers by launching some feminine colors in the market.

Another example would be to interview a subject matter expert in social media marketing. Such an interview can enable a researcher to understand why certain types of social media advertising strategies work for a company and why some of them don’t.

LEARN ABOUT: Qualitative Interview

Focus groups

Focus groups are a set of individuals selected specifically to understand their opinions and behaviors. It is usually a small set of a group that is selected keeping in mind the parameters for their target market audience to discuss a particular product or service. Such a method enables a researcher with a larger sample than the interview or a case study while taking advantage of conversational communication.

Focus group is also one of the best examples of qualitative data in education . Nowadays, focus groups can be sent online surveys as well to collect data and answer why, what, and how questions. Such a method is very crucial to test new concepts or products before they are launched in the market.

For example: Research is conducted with a focus group to understand what dimension of screen size is preferred most by the current target market. Such a method can enable a researcher to dig deeper if the target market focuses more on the screen size, features, or colors of the phone. Using this data, a company can make wise decisions about its product line and secure a higher market share.

Ethnographic research

Ethnographic research is one of the most challenging research but can give extremely precise results. Such research is used quite rarely, as it is time-consuming and can be expensive as well. It involves the researcher adapting to the natural environment and observing its target audience to collect data. Such a method is generally used to understand cultures, challenges, or other things that can occur in that particular setting.

For example: The world-renowned show “Undercover Boss” would be an apt example of how ethnographic research can be used in businesses. In this show, the senior management of a large organization works in his own company as a regular employee to understand what improvements can be made, what is the culture in the organization, and to identify hard-working employees and reward them.

It can be seen that the researcher had to spend a good amount of time in the natural setting of the employees and adapt to their ways and processes. While observing in this setting, the researcher could find out the information he needed firsthand without losing any information or any bias and improve certain things that would impact his business.

LEARN ABOUT:   Workforce Planning Model

Case study research

Case study research is one of the most important in business research. It is also used as marketing collateral by most businesses to land up more clients. Case study research is conducted to assess customer satisfaction and document the challenges that were faced and the solutions that the firm gave them.

These inferences are made to point out the benefits that the customer enjoyed for choosing their specific firm. Such research is widely used in other fields like education, social sciences, and similar. Case studies are provided by businesses to new clients to showcase their capabilities, and hence such research plays a crucial role in the business sector.

For example: A services company has provided a testing solution to one of its clients. A case study research is conducted to find out what were the challenges faced during the project, what was the scope of their work, what objective was to be achieved, and what solutions were given to tackle the challenges.

The study can end with the benefits that the company provided through its solutions, like reduced time to test batches, easy implementation or integration of the system, or even cost reduction. Such a study showcases the capability of the company, and hence it can be stated as empirical evidence of the new prospect.

Website visitor profiling/research

Website intercept surveys or website visitor profiling/research is something new that has come up and is quite helpful in the business sector. It is an innovative approach to collect direct feedback from your website visitors using surveys. In recent times a lot of business generation happens online, and hence it is important to understand the visitors of your website as they are your potential customers.

Collecting feedback is critical to any business, as without understanding a customer, no business can be successful. A company has to keep its customers satisfied and try to make them loyal customers in order to stay on top.

A website intercept survey is an online survey that allows you to target visitors to understand their intent and collect feedback to evaluate the customers’ online experience. Information like visitor intention, behavior path, and satisfaction with the overall website can be collected using this.

Depending on what information a company is looking for, multiple forms of website intercept surveys can be used to gather responses. Some of the popular ones are Pop-ups, also called Modal boxes, and on-page surveys.

For example: A prospective customer is looking for a particular product that a company is selling. Once he is directed to the website, an intercept survey will start noting his intent and path. Once the transaction has been made, a pop-up or an on-page survey is provided to the customer to rate the website.

Such research enables the researcher to put this data to good use and hence understand the customers’ intent and path and improve any parts of the website depending on the responses, which in turn would lead to satisfied customers and hence, higher revenues and market share.

LEARN ABOUT: Qualitative Research Questions and Questionnaires

• Business research helps to identify opportunities and threats.
• It helps identify research problems , and using this information, wise decisions can be made to tackle the issue appropriately.
• It helps to understand customers better and hence can be useful to communicate better with the customers or stakeholders.
• Risks and uncertainties can be minimized by conducting business research in advance.
• Financial outcomes and investments that will be needed can be planned effectively using business research.
• Such research can help track competition in the business sector.
• Business research can enable a company to make wise decisions as to where to spend and how much.
• Business research can enable a company to stay up-to-date with the market and its trends, and appropriate innovations can be made to stay ahead in the game.
• Business research helps to measure reputation management
• Business research can be a high-cost affair
• Most of the time, business research is based on assumptions
• Business research can be time-consuming
• Business research can sometimes give you inaccurate information because of a biased population or a small focus group.
• Business research results can quickly become obsolete because of the fast-changing markets

Business research is one of the most effective ways to understand customers, the market, and competitors. Such research helps companies to understand the demand and supply of the market. Using such research will help businesses reduce costs and create solutions or products that are targeted to the demand in the market and the correct audience.

In-house business research can enable senior management to build an effective team or train or mentor when needed. Business research enables the company to track its competitors and hence can give you the upper hand to stay ahead of them.

Failures can be avoided by conducting such research as it can give the researcher an idea if the time is right to launch its product/solution and also if the audience is right. It will help understand the brand value and measure customer satisfaction which is essential to continuously innovate and meet customer demands.

This will help the company grow its revenue and market share. Business research also helps recruit ideal candidates for various roles in the company. By conducting such research, a company can carry out a SWOT analysis , i.e. understand the strengths, weaknesses, opportunities, and threats. With the help of this information, wise decisions can be made to ensure business success.

LEARN ABOUT:  Market research industry

Business research is the first step that any business owner needs to set up his business to survive or to excel in the market. The main reason why such research is of utmost importance is that it helps businesses to grow in terms of revenue, market share, and brand value.

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6 essential market research methods you have to understand.

Sam Makad / 5 Mins Read

Updated: April 30, 2024

Before crafting any strategy or plan, you need solid market research. Here are some essential market research methods and tricks to try yourself.

Embarking on market research is a complex endeavor, far more intricate than it may initially seem. It's not just a matter of finding a few individuals who match your customer profile and posing a handful of questions. Nor is it as simple as conducting a quick Google search to uncover relevant statistics and results.

However, the real challenge lies in the potential for your research to go astray without the right approach (methodology). You could end up with misleading or incomplete information, which can be detrimental to your business decisions.

Worse yet, you may get data that looks conclusive, making you overconfident about using these findings while crafting a strategy. Needless to say, each of these can be quite problematic and in order to avoid them, you need some essential market research methods and tricks on your side. Here are six such techniques. 

1. Your search is already tainted

The first thing you have to understand is that you’re already carrying the baggage of your previous searches. You’re either a marketing professional, which means that your search has gone all over the place, or a project manager, which means that you’ve already gone into the topic in-depth.

This means that the usual Search Engine Optimization (SEO) techniques might not work for you, and your search engine results page (SERP) may give you slightly different results.

Second, you might not share the location with your target audience. You may work for the international market or a global market (like most online businesses nowadays). This is why your location might give you SERPs that are different from what you would normally expect to get.

Fortunately, both of these problems can easily be solved with the right VPN for Chrome, Firefox, or whichever browser you prefer to use. There are many such extensions , and all you have to do is find the right one. According to Aleksandar Stevanovic, software reviews expert, these extensions are a much easier and quicker way to secure your online activities than typical VPNs. So, with one of these, you can hide some of these factors and get more unbiased (for example, not influenced by your previous searches) and more relevant (for example, specific to your target audience) results. 

2. Understand the mindset of your customer

The next thing you need to understand is the attitude of your audience toward your product. You see, while they may want your product, they might not be willing to pay for it as much as you’re charging. It may even be something they really desire but not something that’s too high on their shopping priority list.

Another thing you need to keep in mind is that not everyone wants to advertise that they’re using your products. This is one of the reasons why more and more people are turning toward crypto casinos. Traditional casinos may ask for your credit card number, and a deposit to your online casino account might appear on your bank statement. With crypto wallets, this definitely won’t be the case. 

Failure to see this might lead you in the wrong direction when it comes to branding. Sure, you want everyone to wear your logo, but are they comfortable with that, and is your branding affecting the integrity of the product package?

The best solution to this problem is to look for an outsider for aid. 

3. Social proof is not always a reliable source of information

If you want to check the reputation of your competitors, you can’t just rely on reading testimonials . While this sounds like a common-sense argument, it’s essential that you hear it out once again.

First, you need to understand that testimonials are hand-picked and used as social proof by the marketers themselves. This means that they cherrypick the best of the best, even then tweaking it a bit in order to give you a sample.

So, if you included this (highly orchestrated) UGC in your research, the results that you would find would be dubious (to say the least).

Instead, you need to resort to a method like social media listening. This way, you can see what the general audience is saying about the brand when they don’t think anyone’s listening. This way, you’ll get closer to the truth, but even then, the information you receive won’t be 100% reliable. 

4. Research your indirect competition

This is a piece of advice that you don’t hear very often but there are a lot of industries where your indirect competitors are just as relevant as direct competitors.

For instance, if you’re opening a pizza place, your guests won’t just have to decide what pizzeria they’re going to order from. First, they need to settle for getting a pizza, and this isn’t a given. 

This is especially the case in the food industry, where people have one place in mind for each food type. This means that if they do decide to go for a pizza, they’ll come to your place, but there are other ideas that they might consider, as well.

In this scenario, you’re actually competing with other businesses that they have some loyalty for and need to come out on top (more often than not). Just keep in mind that in some industries, loyalty works differently. Sure, iPhone users buy iPhones exclusively, but no one eats at just one place or wears just one brand. 

5. Pinpoint what you need to learn

It’s so easy to get sidetracked if you don’t have the main objective of your research. Yes, as ridiculous as it may sound, there’s such a thing as learning too much. Excess information will cloud your judgment, sometimes even sidetrack you.

To avoid this, it's crucial to have a clear research objective. By formulating specific questions you want answered, you're steering your research towards actionable insights, giving you a sense of control and direction.

• How much are my customers willing to pay for my product?
• Will they come back for more, and when?
• What are my upselling and cross-selling opportunities?

By having these specific questions, you’re directing your research toward actionable information. For instance, knowing how much your customers are willing to pay for your product can help you set a competitive price point. 

Also, this allows you to filter KPIs (key performance indicators) and differentiate them from vanity metrics. Vanity metrics are superficial data points that may sound relevant, but are not directly tied to your business goals. For example, the number of likes and shares is not the same thing as the shopping cart abandonment rate or click-through rate (CTR).

6. Use as many methods as possible

One of the major fallacies that researchers do is make an assumption that they can use just one method to learn all they need. This may sound right; however, you need to keep in mind that every method has its downsides. For example, surveys may not always capture the true feelings of respondents, while focus groups may be influenced by dominant personalities.

Surveys, for instance, are great at getting you the numbers, but without proper segmentation, they won’t give you an idea of what’s really going on in the field.

Interviews give you a more personalized and immersive story around which to craft your strategy. However, they’re tainted by bias, which means that what you learn from one customer might not apply to anyone else. This means that you need more of these interviews, but how many (real, long-form interviews) can you make?

This is why you need to combine both of these methods and seek the truth somewhere down the middle.

Better yet, add more methods to the mix. The more angles you approach this situation, the more conclusive your data will be. 

Asking the wrong questions will give you all the wrong answers

The moment you realize that getting the wrong answer is worse than having no answers at all is the moment you’ll start understanding market research a lot better. The above-listed tips are there to help you start asking better questions and doubting everything you thought you knew about market research. This way, you’ll understand your market much better in no time. 

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Sam Makad is a business consultant. He helps small & medium enterprises to grow their businesses and overall ROI. You can follow Sam on Twitter, Facebook, and Linkedin.

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BANGKOK--( BUSINESS WIRE )-- Boku , the global network for localised payment solutions, has released a global research report entitled ‘ 2024 Global Ecommerce Report: The Changing World of Payments ’ . The report reveals the increasing preference for local payment methods and the continued decline in the market share of traditional card payments.

Produced in collaboration with Juniper Research, the report surveyed 10,500 consumers and analysed data from 37 major markets across the globe to identify global, regional and country specific trends. The findings highlight significant and rapid consumer shifts in ecommerce payments away from the traditional card networks (and in emerging economies cash on delivery) towards local payment methods such as digital wallets. Account to Account (A2A) payments (instant payments and bank transfers) such as PromptPay in Thailand, PayNow in Singapore and PayTo in Australia are revealed as the fastest-growing payment method within ecommerce.

Key findings for Asia Pacific:

• Asia Pacific continues to lead the world in the adoption of local payment methods. By 2028, local payment methods within Asia Pacific will represent 69% of ecommerce transactions by value, from 64% in 2023.
• Non-card linked wallets are projected to dominate ecommerce transactions in Asia Pacific, reaching 57% by 2028 (up from 55% in 2023).
• By 2028, over 61% of all individuals within Asia Pacific will actively use local payment methods on a regular basis, reflecting their strong traction in the region.
• Account to Account (A2A) payments, such as PromptPay in Thailand and PayNow in Singapore, are flourishing and expected to rise from 4% of transaction value in 2023 to 8% in 2028.
• Market nuances play a significant role in consumer loyalty to payment methods, emphasising the need for tailored payment strategies.

Payment choice is key for consumers around the world. Today’s mobile-first generations - with whom access to and affinity with card networks is low - prioritise the convenience and seamless nature of paying with digital wallets, direct carrier billing and Instant A2A payments. As with the adoption of many new technologies, the adoption of localised payment solutions by younger generations and populations is paving the way for adoption by older consumers.

Stuart Neal, CEO of Boku said, “Our research shows Asia Pacific continues to lead the world in the adoption of local payment methods. While card-linked payments remain significant, local payment methods that offer consumers seamless payment experiences, such as digital wallets, direct carrier billing and Account to Account transfers, will continue to win market share. Merchants now realise that the key to their future global growth and success lies in their ability to offer consumers more payment choice to match these changing customer preferences. At Boku, we’re excited to provide the world’s largest merchants with access to our global network of localised payment solutions so their customers can more easily pay for the things they love, the way they want - no matter where they are in the world. ”

Download the full research report: http://www.boku.com/boku-knows/2024-boku-global-ecommerce-report

Notes to editors

About Boku Inc.:

Boku helps people pay the way they want to by building a global network of localised payment solutions including digital wallets, direct carrier billing, and account to account / real-time payments schemes. Boku’s global payments network now includes over 300 local payment methods worldwide, reaching over 7.5 billion consumer payment accounts in more than 90 countries. Boku works with the world’s largest merchants including Amazon, Google, Spotify, Meta, Microsoft, Netflix, Spotify, Tencent and Sky, helping them to grow their businesses in every corner of the globe.

Boku Inc. was incorporated in 2008 and is headquartered in London, UK, with offices in the US, India, Brazil, China, Estonia, France, Germany, Indonesia, Japan, Singapore, Spain, Taiwan and Vietnam.

To learn more about Boku, please visit our website at www.boku.com .

Press and research methodology enquiries: Cat Lenheim ThoughtLDR [email protected] +44 7511 117587

Release Summary

Boku research reveals that by 2028, 3 out of 5 of people will actively use local payment methods for ecommerce transactions within Asia Pacific.

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• #localpayments

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Today, the Federal Trade Commission issued a final rule to promote competition by banning noncompetes nationwide, protecting the fundamental freedom of workers to change jobs, increasing innovation, and fostering new business formation.

“Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned,” said FTC Chair Lina M. Khan. “The FTC’s final rule to ban noncompetes will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market.”

The FTC estimates that the final rule banning noncompetes will lead to new business formation growing by 2.7% per year, resulting in more than 8,500 additional new businesses created each year. The final rule is expected to result in higher earnings for workers, with estimated earnings increasing for the average worker by an additional $524 per year, and it is expected to lower health care costs by up to $194 billion over the next decade. In addition, the final rule is expected to help drive innovation, leading to an estimated average increase of 17,000 to 29,000 more patents each year for the next 10 years under the final rule.

Noncompetes are a widespread and often exploitative practice imposing contractual conditions that prevent workers from taking a new job or starting a new business. Noncompetes often force workers to either stay in a job they want to leave or bear other significant harms and costs, such as being forced to switch to a lower-paying field, being forced to relocate, being forced to leave the workforce altogether, or being forced to defend against expensive litigation. An estimated 30 million workers—nearly one in five Americans—are subject to a noncompete.

Under the FTC’s new rule, existing noncompetes for the vast majority of workers will no longer be enforceable after the rule’s effective date. Existing noncompetes for senior executives - who represent less than 0.75% of workers - can remain in force under the FTC’s final rule, but employers are banned from entering into or attempting to enforce any new noncompetes, even if they involve senior executives. Employers will be required to provide notice to workers other than senior executives who are bound by an existing noncompete that they will not be enforcing any noncompetes against them.

In January 2023, the FTC issued a  proposed rule which was subject to a 90-day public comment period. The FTC received more than 26,000 comments on the proposed rule, with over 25,000 comments in support of the FTC’s proposed ban on noncompetes. The comments informed the FTC’s final rulemaking process, with the FTC carefully reviewing each comment and making changes to the proposed rule in response to the public’s feedback.

In the final rule, the Commission has determined that it is an unfair method of competition, and therefore a violation of Section 5 of the FTC Act, for employers to enter into noncompetes with workers and to enforce certain noncompetes.

The Commission found that noncompetes tend to negatively affect competitive conditions in labor markets by inhibiting efficient matching between workers and employers. The Commission also found that noncompetes tend to negatively affect competitive conditions in product and service markets, inhibiting new business formation and innovation. There is also evidence that noncompetes lead to increased market concentration and higher prices for consumers.

Alternatives to Noncompetes

The Commission found that employers have several alternatives to noncompetes that still enable firms to protect their investments without having to enforce a noncompete.

Trade secret laws and non-disclosure agreements (NDAs) both provide employers with well-established means to protect proprietary and other sensitive information. Researchers estimate that over 95% of workers with a noncompete already have an NDA.

The Commission also finds that instead of using noncompetes to lock in workers, employers that wish to retain employees can compete on the merits for the worker’s labor services by improving wages and working conditions.

Changes from the NPRM

Under the final rule, existing noncompetes for senior executives can remain in force. Employers, however, are prohibited from entering into or enforcing new noncompetes with senior executives. The final rule defines senior executives as workers earning more than $151,164 annually and who are in policy-making positions.

Additionally, the Commission has eliminated a provision in the proposed rule that would have required employers to legally modify existing noncompetes by formally rescinding them. That change will help to streamline compliance.

Instead, under the final rule, employers will simply have to provide notice to workers bound to an existing noncompete that the noncompete agreement will not be enforced against them in the future. To aid employers’ compliance with this requirement, the Commission has included model language in the final rule that employers can use to communicate to workers. 

The Commission vote to approve the issuance of the final rule was 3-2 with Commissioners Melissa Holyoak and Andrew N. Ferguson voting no. Commissioners Rebecca Kelly Slaughter , Alvaro Bedoya , Melissa Holyoak and Andrew N. Ferguson each issued separate statements. Chair Lina M. Khan will issue a separate statement.

The final rule will become effective 120 days after publication in the Federal Register.

Once the rule is effective, market participants can report information about a suspected violation of the rule to the Bureau of Competition by emailing  [email protected] . 

The Federal Trade Commission develops policy initiatives on issues that affect competition, consumers, and the U.S. economy. The FTC will never demand money, make threats, tell you to transfer money, or promise you a prize. Follow the  FTC on social media , read  consumer alerts  and the  business blog , and  sign up to get the latest FTC news and alerts .

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Victoria Graham  Office of Public Affairs