importance of marketing research in marketing

Why Market Research Is Important

2022-06-02 Market Research

A consumer sees an ad for a product that seems perfect for them and rejoices over their luck, but this scenario likely didn’t (and shouldn’t) come down to luck. Companies make these scenarios possible through strategic market research. Equipped with valuable information about its target market, a company can develop products and create marketing campaigns that appeal directly to consumers. And the benefits don’t stop there. You can leverage the data procured through market research to propel your company to success in a variety of ways.

We’ll break down the basics of market research below to show how companies use it and explore some of the key benefits. If you’re not taking full advantage of market research to make data-driven decisions, you should start considering the ways it could help your company grow.

What Is Market Research in Business?

Market research involves gathering data to learn more about target demographics and consumers so a business can market itself more effectively and, ultimately, succeed in the market. Market research is a vital part of any business strategy, whether that business is B2B or B2C, big or small, new or old. It provides the answers companies need to make decisions that will move them forward instead of back by empowering them to base decisions on data.

Most companies know what market research is and acknowledge its importance in a general sense, but they may not realize just how crucial market research is to the success of their business. When you need to identify market trends, understand your core customer better, or achieve a long list of other important goals, market research is the answer.

Types of Market Research

Market research is a broad category. In fact, there are many varieties of market research that you can use to meet the specific goals of your business. Below, we’ll explore the different benefits of each type of market research.

• Brand research:  Brand research is focused on creating or refining your company brand to make a bold and favorable impression on your target market. You could look into the level of brand awareness among your target audience, how loyal customers are to your brand, what sorts of qualities people associate with your brand, and other aspects of customers’ relationship with your brand.
• Marketing campaign evaluation:  Some market research focuses specifically on  marketing campaign effectiveness . You can evaluate how many people have seen your online ads and what the click-through rate has been, for example. This type of information can help you make adjustments if needed and inform future campaigns so you reach consumers effectively and keep customer-acquisition costs down.
• Competitor research:  Competitor research focuses on the competition to help you gain insights into how your company can pull ahead. Looking into a competitor’s marketing campaigns, brand reputation, revenue or sales volume, and other important data points can help you learn from their strengths and weaknesses.
• Customer segmentation research:  An important type of market research, especially for new businesses, is customer segmentation. These studies divide your larger consumer base into different groups or personas. Understanding the different types of consumers you want to connect with can help you create individualized campaigns tailored for each group.
• Consumer research:  Nearly all market research involves the consumer in some fashion, but some research is focused specifically on understanding consumers within a certain segment better. You may want to learn about their purchasing habits, interests, motivations, and more. The better you understand your consumers, the more effectively you can appeal to them.
• Product development:  Developing products calls for market research first to ensure the concept has value and then to refine the product over time. For example, you may see sales dipping on a flagship product and discover that customers’ needs have shifted and this product should offer a new feature to be more useful or convenient.
• Usability testing:  Similar to product development research, usability testing is focused on products. However, the focus here is on how consumers use your product. You may release a beta version of your mobile app, for example, and get feedback from users to find out if there are any bugs or other problems you need to work out.

The Benefits of Market Research

Market research can deliver valuable benefits to companies like yours. Let’s look at some of the most impactful ways market research can empower your company to succeed.

1. Maintain a Customer-Centric Approach

Market research is all about understanding your consumer base better, and that is an essential step to creating a customer-centric business. Customer-centric companies keep the customer experience at the forefront of all they do. Research has shown that customer-centric  businesses are 60% more profitable . It’s easy to see why prioritizing the customer’s needs and desires is a recipe for success.

Market research is how you come to understand those needs and desires in the first place, along with other important aspects of your target customers. You can’t effectively build a customer-centric business unless you understand your customers. Conducting market research allows you to appeal more specifically to your customers’ pain points and preferences. It’s a win-win for your customers and your business.

One of the most effective ways to be customer-centric in your market research is by using a segmentation-targeting-positioning (STP) model. This marketing model involves:

• Segmentation:  Brainstorm the possible segments your product or service may appeal to. These segments can be defined geographically, demographically, or otherwise.
• Targeting:  Determine which segment or segments offer the most profitable opportunities for your company so you can focus on marketing to these segments.
• Positioning:  Develop a strategy for addressing your target segment’s needs and do it better than your competitors. You can also consider the best way to promote your solution to the target segment.

2. Connect With Your Audience More Effectively

When you understand your target customers better, that means you’ll be able to more effectively reach them. When it comes to your marketing campaign, you don’t want to waste time and money on trial and error — you want to have an informed marketing strategy. There are two main elements of effectively connecting with your audience: the marketing channels you use and the content you share.

Using a one-size-fits-all approach, regardless of your audience, can be a costly mistake when it comes to marketing channels. The print publications your audience reads, the television shows they watch, and the websites they spend time on can dramatically differ from those of the target audience for your last product.

For instance, you can reach  close to half of the urban population  by advertising or marketing on Instagram, but you’ll only reach approximately a fifth of the rural population this way. So advertising your farm equipment on Instagram is likely a poor choice.

Choosing the right marketing channels is an important first step to reach your audience, but to truly connect with them, you also need to tailor the content of your marketing materials. Everything from the features of your product you advertise to the tone and visuals you use should be crafted to speak to your target audience. When customers feel you’re “speaking their language,” they’re more likely to pay attention to what you have to say.

3. Identify Opportunities for Growth

Market research isn’t just an important step for new companies or companies launching new products. Conducting market research periodically can help you discover new opportunities to improve and grow. For example, you may discover:

• Unreached segments:  You may come across unreached segments that, like your current customers, could benefit from your products or services. Perhaps they just don’t know about your brand yet, or they think your products are intended for someone else. This segment could be consumers of a different age, gender, income level, or geographical region, for example. A simple modification in your product or marketing strategy may be all it takes to unlock a whole new customer base.
• Business partnerships:  Through market research, you may also discover opportunities to partner with other businesses that already have an established connection with your target audience. Joint promotions can be mutually beneficial for you and the partner company. Essentially, you can combine the power of both your brands to expand and strengthen your reach.
• Product improvements:  Market research can reveal possible shortcomings in your product or services that, if remedied, would allow you to appeal to more customers and improve customer satisfaction. You may also discover opportunities for add-ons, product bundles, or other upsells that appeal to customers’ preferences and help you increase profits.

4. Reduce Risks by Testing Concepts

Risk is a necessary part of any business venture. If businesses didn’t take on risks, they would also limit the potential for reward. However, successful businesses tend to mitigate their risks in strategic ways. The way to avoid risk is not to avoid doing anything. Instead, businesses should use market research to minimize risks and maximize rewards.

A major way you can minimize risks is by ensuring there’s demand for a product. The reality is that many products fail. Some experts place the  failure rate as high as 95% . While that estimate is likely too high, it remains true that many new products fail to connect with consumers and end up in clearance bins. One study found that, of the 9,000 new products that were broadly distributed at a national retailer,  60% were no longer sold  within three years.

Because of the high risk involved, you should never create a product based on a mere hunch. Use thorough market research to predict whether a product concept has real potential for success. Will your product meet a need or desire your customers have, and will it do so more effectively than your competitors are doing? When you have proof of concept, you can be more confident in your efforts and more effectively attract investors.

After you’ve created your product, whether it’s a prototype or a limited run, you can employ market research again to help you refine your strategy before an official product launch. For example, you could give samples of a new food product to passersby in exchange for their feedback. You can also use market research to test reactions to a new logo, new packaging, or any number of other business decisions.

5. Make More Informed Decisions

Market research empowers companies to make more informed decisions that are backed by data. Gut feelings are not reliable means of making decisions. For instance, you may think releasing a luxury version of your product at a higher price point is a great business idea, but consumers willing to pay that price may associate your brand with budget-friendly products and opt for luxury products from luxury brands instead. The only way to know for sure is to conduct market research.

Market research data can serve as a compass, steering each choice a company makes to take them one step closer to their goal of successfully converting and retaining their target customers.

Here are some examples of decisions you can make more accurately with the help of market research:

• Choosing a different consumer base to target through a new marketing campaign
• Determining which channels to include in your advertising campaign
• Selecting design and personality elements to form a brand persona that will connect with your audience
• Choosing whether to open a new retail location
• Deciding whether a product should be discontinued or modified
• Pricing products in a way that maintains margins and appeals to customers

Through market research, you can make these and other decisions based on data rather than guesses and, as a result, boost your chances of getting it right the first time.

6. Compete More Effectively

Solid market research can be the difference that gives you a competitive edge in the marketplace. For one, by understanding your customers better, you may be able to engage them more effectively than your competitor is doing. Additionally, competitor research can give you direct insight into your competitors so you can understand how you fit into the marketplace.

If you’re a newcomer and want to know the best ways to draw customers away from legacy brands, market research can help you find out where consumers are dissatisfied with these brands and their offerings. By pinpointing these gaps, you can appeal directly to consumers’ desires and market yourself as a disruptive company with a superior solution.

You can also use market research to help you discover underserved segments of the market. By targeting these underserved consumers, you can carve out a place in the market for yourself where you’ll excel. For example,  the founder of War Paint, a cosmetic company  marketed to men, said, “Growing up, I never felt there was a brand for me, that spoke to me.” War Paint and some other emerging cosmetic brands target male consumers who were previously not part of the equation in the makeup market.

7. Stay on Top of Trends

Market research isn’t just important for new businesses. As consumers evolve, companies must also evolve to optimize the way they connect with customers. Market research is a valuable means of staying up on relevant trends. Researching trends can often be done through secondary research. Industry reports or research from your competitors, for example, can reveal what new product features consumers are interested in.

Today’s culture changes rapidly, and market research is essential if you want to keep up. You need to stay aware of trends regarding your consumers’ purchasing behavior, the most popular advertising channels, packaging preferences, product features, relevant messaging, and much more. Mimicking what your competitor did last year isn’t a good strategy.

Trends are especially important and cycle more frequently in some industries, such as fashion and design. If your company sells light fixtures, for example, you need to conduct research frequently to see what styles appeal to modern interior designers and homeowners. You also need to be aware of any new technology you can incorporate into your product to help you stay at the cutting edge and deliver the latest and greatest products to your consumers.

How to Conduct Market Research

Companies can conduct market research through various means. First, it’s helpful to understand the difference between two main categories of sourcing market research data — primary and secondary research:

• Primary research  is the data a company collects or an expert collects on the company’s behalf for their market research purposes. In other words, it’s field research. Some primary research is exploratory, meaning it’s more open-ended, and other forms of primary research aim to provide insight into specific questions or issues.
• Secondary research  involves using data that already exists and is at your disposal for market research purposes. For example, you could consult government census data, industry data reports or statistics on market trends. This type of research can provide a good starting point for understanding the market more broadly and learning about the competition.

Secondary research tends to be a starting point before conducting primary research.

There are several methods of primary research companies use to learn from consumers. Some of the most popular methods include:

• Surveys:  Surveys involve asking consumers questions they can quickly answer. Survey questions can be multiple choice or more open-ended. Surveys can be conducted in-person, over the phone, through the mail or  online . They provide a fast and simple way of reaching a large audience and getting their feedback.
• Focus groups:  Focus groups tend not to involve as many participants as a survey. Instead, a market researcher leads a small group of consumers in a discussion to get a window into consumers’ thoughts. Because the groups are small, most companies will assemble multiple focus groups and take all the results into account. They may observe through a one-way mirror or watch a recording.
• Interviews:  Interviews are similar to focus groups but may involve even fewer people. A one-on-one interview can be a valuable way of gaining detailed insight from one customer. These insights can be helpful, but they don’t provide statistically reliable data as you can get with a large survey.
• Observation:  Market observation involves watching consumers to see how they behave under natural conditions, such as a retail store. These consumers may or may not know they are being observed. For example, researchers may watch security footage taken from a store to see which departments customers tend to go to first and whether they stop to look at point-of-purchase displays.
• Field trials:  Field trials involve making a business move but doing so on a smaller scale and observing the results. For example, a restaurant chain may try a new menu item at a handful of locations and see how popular it is. If it’s a success, the company can feel more confident about adding the item to their menus throughout the region.

Companies can conduct their own market research in-house, but many choose to share their goals with a third-party expert who can create a market research strategy and execute it. By outsourcing your market research, you can streamline the process, focus on your core competencies, and receive valuable data from the experts that you can then leverage to drive your business forward.

Does Market Research Work?

Market research takes time, effort, and finances to complete, so it makes sense to spend these resources only if you’re going to get a positive return. The reality is that market research remains a crucial part of running a successful business because it is indeed worth the investment. Of course, market research alone won’t cause your business to succeed — but it will give you the information you need to make strategic decisions that will steer your company to success.

We looked at several benefits of market research but consider the inverse reality. Without market research, you could fail to connect with customers, miss out on growth opportunities, be vulnerable to risks, make poor business decisions, and ultimately lose your customers to your competitors. Some businesses get lucky without doing their research, but these instances are rare. Market research can help you avoid common pitfalls and grow your business.

Learn More About Our Market Research Tools

Market research should be a key part of your company’s recipe for success. Surveys are one of the most popular and effective means of reaching consumers and gaining insight into their values, preferences, opinions, and more. At Cint, we help brands and agencies conduct online studies that can empower them with the market research data they need. We can connect your company with millions of consumers, deliver fast results, and ensure those results are accurate through robust quality checks. Cint can help you produce the primary data you need on a tight timetable so you can make informed decisions to help you connect with customers and grow your business. To learn more about our market research tools, contact our team today.

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Why Is Market Research Important: We Give You 7 Reasons

Planning and conducting market research is a critical component of any business. It provides decision-makers with important information to decide the course of the company, launch a new product, or to keep a tab on what competitors are doing.

Data indicates that market research is a growing industry of 47.36bn USD , globally – and rightly so. For a business to succeed, all its resources – financial and otherwise – must be invested in areas where they are needed the most. Conducting market research helps you identify those areas. It also helps you discover and understand your customers’ needs so you can innovate better, expand when the time is right, and work with more focus.

In this article below, we will share a few pointers with you about why market research is important for every business – big and small. But first, let’s talk about the types of market research.

Types Of Market Research

Depending on the purpose of your research, you can choose either of the two main types of market research. These are primary research and secondary research.

– Primary Research

Primary research is direct research that you conduct yourself or hire someone else to do it for you. It involves reaching out to your target market, asking them questions, collecting data, and analyzing the information gathered. Based on the data, strategies are devised, decisions are made, and policies are created.

Primary research helps you explore issues, dig deeper, and ask specific questions that are relevant to what you are looking for. Because it takes more time and effort, it may also cost a bit more than secondary research but it is more effective and helps you gain a solid picture of what’s going on.

– Secondary Research

Secondary research is using somebody else’s primary research for your business purposes. Research that is already conducted, organized, and published is often used by small businesses to gauge market trends, current economies, and to devise plans.

A lot of government agencies conduct market research for various purposes. If you’re on a budget, going to one of those agencies may help you out a lot as most of that research is freely available to the public. If you want to access a private market research company’s report, you may have to pay a fee to access the complete file.

However, there are private companies that publish their reports publicly. Additionally, you can also go online and conduct Google searches looking for specific phrases relevant to your research purpose to find valuable data.

Why Is It Important?

Now that we know what market research is and what different kinds it has, it’s time to learn why it is important, and why you should invest in it if you want to become a successful entrepreneur.

1. It Helps You Identify The Problem Areas As Well As Strong Areas

Knowing what you are good at and what you’re not, help you take profitable risks in life. It’s true in business too. Accurate market research helps you identify business areas that are performing well, those that need more attention, and also those that you should perhaps give up.

Back in 2010 , two young tech enthusiasts launched a location-based app – Burbn – that would allow consumers to check-in, make plans of hangouts with friends, share pictures, and more. Few weeks into the launch, they realized through internal discussions and reevaluation of the market, that Burbn is cluttered and their target market is more into Foursquare and they won’t be able to budge them.

They took a long, hard look at their app again – which had already been launched – and started working on it from scratch, removing all the features and only letting the photo-sharing, liking, and commenting options intact. And thus, Instagram was born.

It also helps you discover and understand your customers’ needs so you can innovate better, expand when the time is right, and work with more focus. For example, if you plan on starting a digital marketing agency , you’d know that there’s more need for social media in your area, than for PPC services. Thus, you’ll hire more social media experts.

2. It Helps You Understand Your Customers’ Needs

It is not enough that you know your business; you got to know what your customers are saying about you – and about your competitors. If you have got your pulse on what your customer is thinking, you’d create products that solve their issues, reach out to them when they are most ready to listen, and help them become your loyal ambassadors.

A huge part of business market research is always dedicated to gauging customer satisfaction rates, their reactions to a new product, and what they are looking for next.

In 2005, when YouTube initially launched, it was for a very different purpose : dating. Pretty soon into launch, however, and by investing in robust market research (a part of which they conducted themselves) the founders realized that their video dating app is not what their customers are looking for. Analyzing the data, they discovered that there is no app or platform in the market for video sharing. The websites that were offering this service were patchy at best and not intuitive at all.

Being attuned to their customers’ needs and spotting a wide space in the market, they tweaked their video platform and launched YouTube .

Following what your customers are talking about, listening to them, and then delivering on their needs is an important task that you can fulfill with timely customer-centered market research.

3. Helps You Conduct Your Marketing Based On Informed Decisions

Launching and running a business means making decisions every day – about products, services, expansions, HR, and so much more. Without solid market research backing your decisions, all you are doing is guess-work, hoping the results will be in your favor.

With research helping your business, you are better informed about areas to invest in, gauge the potential success of new products, test new markets to expand into, and to determine what kinds of products/services will be most favored by your customers.

This is certainly what Starbucks does. The company has a whole dedicated platform ‘My Starbucks Idea’ where employees and customers and anyone who wants can pitch in and share what they think the company should do next, the flavors it should try, the new products it should launch, bring back some old favorites, and more.

The platform helps them remain informed on all important aspects of business investment and propels them towards ventures and venues that hold the most potential.

If you aren’t a humungous company like Starbucks and cannot afford to host dedicated platforms to gain important information, invest in market research whenever you have a big decision coming up. It isn’t as expensive as you think and doesn’t take that much time. Plus the results can be relevant for a lot of related areas that you may want information on.

4. Helps You Keep An Eye On Your Competitors

As a startup founder, you may think being original is all about being focused on what you’re doing and not worry about what everyone else may be up to. This approach spells long-term disaster. While you should certainly keep your focus on your own efforts, it is critical – and smart – to keep tabs on your rivals and know what they are thinking or planning.

With sound market research on your side, you can better prepare for what your competitor may be about to do next and make sure they aren’t able to put a dent in your market share. With regular research, you can not only learn to anticipate their next move but be in a better position to avert any possible damage from their end.

In addition to conducting market research , you can pair it up with regularly monitoring their social media or to increase Instagram followers , blog posts, and seeing what is trending in your market. Here is a great resource on how you can go about it.

5. Helps You Expand And Innovate

Market research can help you identify markets and geographical areas where you can expand to. It can also help you to invest in ideas that have the most potential to succeed based on what customers are looking for and what the market is lacking.

For example, if you are a retail company, conducting market research can help you identify locations where your store can profit the most. If you are planning to buy a business to increase your market share, market research can help you point towards businesses that may be ripe for acquiring. Not only that, conducting market research before you launch your business can help you figure out ways to put your best foot forward.

It guides you towards opportunities where you have the most room to innovate and take risks with the highest return potential. For example, if your competition is employing cutting edge tech such as VoIP to get better results, you can also employ the same to improve your customer care and business goals.

6. Helps You Set Business Goals

Goal-setting is one of the major parts of running a business – big and small. Goals give you directions, help you remain in sight of the bigger picture, and set you on the path of continued success. Goals can be of different kinds: short-term, long-term, department-oriented, over-arching, and such.

To set all these kinds of goals and get ready to meet them, businesses need to have a thorough and complete knowledge of their strengths and weaknesses. They need to be aware of how the market is behaving and predict what may come next.

All of this is only possible after conducting market research. With the help of focused market research, you can set achievable business goals and not follow some vague notions of instant success. These often include how to improve productivity, customer satisfaction, and business’ financial health. You can also use market research to learn ways you can reduce expenses without hurting the business, find out how to amplify your digital marketing , generate copywriting tips for research paper writers , or introduce a new employee incentive program.

7. Helps You Know Which Risks To Take And Increases Earning Potential

Risk-taking is an important component of the business. Without it, you can become stagnant and a sitting-duck for a more ambitious rival. But risk-taking cannot be a shot in the dark. To know which risks to take and when to take the plunge are attributes of successful innovators. From Dropbox’s Drew Houston who refused Steve Jobs to Google’s buying of YouTube when it was a fledgling startup, the history of business success and innovating is packed full of stories of ambitious – but informed – risk-taking.

Using market research, you can also join the ranks of informed-decision makers who do not shy away from taking risks. It prevents you from making costly mistakes that could have been avoided and take steps that result in massive profits.

Take the example of Frito-Lay . When the potato chip maker wanted to introduce a new brand , it launched online market research conducted through Facebook to ask its customer-base which flavor they would like the best. The results showed that beer-battered onion-ring flavor is a hit in California and Ohio, while New Yorkers preferred the Churros flavor idea. This research also helped him increase Instagram followers as his posts became popular over the internet.

The research helped the company come up with different flavors and market them strategically to different states. If the research would not have been done, the company would have come up with a new flavor that could have been a hit – or a miss.

Popular Instruments Of Market Research

As technology keeps advancing, market research keeps evolving. Where before you had to rely on face-to-face interviews, telephone surveys, or lengthy online questionnaires, now it’s all about short online surveys, instant case studies aided by technologies, and focused groups that are already available on your social media channels.

Below we talk about 4 popular instruments of market research that are frequently used by companies worldwide with excellent results.

– Surveys

The survey is a quantitative method of research which means it gives you numerical scores. These scores pertain to specific answers and don’t leave much room for multiple interpretations. Because they are precise, provide specific answers, and immediate interpretation, quantitative methods are popular to conduct research when you are looking for exact information: to find out how to solve a particular problem, etc.

According to a study conducted by Statista.com , 26% of all market research is conducted through online quantitative methods, with online surveys accounting for a major share of 79%.

If you know how to create an easy survey online for your company, here is a great resource to get you started.

– Case Studies

Case studies are usually qualitative research methods; however, you can incorporate a mixed approach with a quantitative questionnaire thrown in for additional information. Using case studies, you focus on a single individual or single entity to research them thoroughly. The purpose of using case studies in business market research is usually to test theories of what went wrong in a particular situation or what went right.

Case studies are time-taking but provide extremely valuable information, detailed data, and in-depth analysis opportunities.

– Focus Groups

Focus groups are another popular instrument to conduct market research in business. A focus group consists of a small portion of your target audience that you can study in detail. It is a qualitative method of research and allows you to bring together a group of individuals that can take part in a guided form of discussion.

You can give them one or more focus questions that the group can talk about and share their views on. Focus groups are great to use when you’re creating a new product, researching a particular market segment, or want to know what your customers are thinking about you or your market.

Similar to case studies, focus groups give you a comprehensive view of a situation and allow you to conduct an in-depth analysis of different business elements.

The Future Of Market Research

The future of market research is bright. As a budding and burgeoning industry, it shows all the trends of continued growth. But as technology becomes more accessible and mobile devices more popular than desktops, market research is also evolving to fulfill the shifting customer needs.

The surveys are becoming shorter as nobody has got the time or interest to fill out a 10-page questionnaire. Artificial Intelligence is making the data collection process quicker and more intuitive. And as time passes, you’ll see more and more market surveys being optimized for mobile.

So use all that modern market research has to offer you and use it to propel your business for the success you’d always dreamed of.

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About The Author Kelvin Stiles

Kelvin Stiles is a tech enthusiast and works as a marketing consultant at SurveyCrest – FREE online survey software and publishing tools for academic and business use. He is also an avid blogger and a comic book fanatic.

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The Importance of Market and Marketing Research in Business

Learn the difference between market research and marketing research

Laura Lake is a marketing professional and author of "Consumer Behavior for Dummies."

When it comes to running a business, making assumptions about your customers, market, competitors, or systems can cause you to waste time, money , and effort.

To make effective decisions that will grow your business and use your resources wisely, you will need to put some of those resources toward conducting market and marketing research.

Market Research vs. Marketing Research

Market research involves identifying a specific "target," and focusing exclusively on that group. It is research into a narrow group of consumers to understand their behavior and motivation.

Marketing research has a broader scope that market research. It is used to examine the entire marketing process of a company, rather than only looking at the consumers that the company is targeting.

The Importance of Market Research

Successfully running and growing your business depends on understanding your target customers. Once you have a clear picture of their goals, needs, and values, you are more able to drive them towards purchasing your products or services.

Market research is one of the best tools you have for understanding your customers. It gives you hard data that you can use to drive your marketing strategy, making both marketing and selling easier and more effective. 

Market research helps you:

• Improve communication.  It drives your communication not only with your current customer base but with target prospects as well. Market research shows you where your customers can be reached, as well as what language will be most effective in attracting their attention and resonating with them on an emotional level.
• Identify opportunity.  Market research helps you identify both high-level and more accessible opportunities for reaching and converting new customers. It can be the best way to discover new platforms for advertising, consumer concerns you were unaware of, and gaps within your market that you can fill.
• Lower your risk.  Concrete data keeps you focused on the real opportunities and helps you avoid unproductive effort. When you understand your customers, you can use your resources to reach them more effectively, with less risk of wasting time, money, and effort on marketing initiatives that don't work. Market research also helps you identify low-risk, high-reward areas where your company can expand or offer new services,

The Importance of Marketing Research

Marketing research is important for evaluating what is and is not working in your business model. It includes research into your target market, as well as the systems in your business that make up your marketing conditions.

Marketing research looks at every aspect of the Four Ps of marketing: product, price, place, and promotion. This includes:

• Public Relations
• Modes of distribution
• Development of new products/services
• Promotions and advertising
• Market conditions

Marketing research helps you learn not just what your customers want, but how successful your business is at reaching and connecting with them. It helps you identify problems and opportunities, refine your systems, and evaluate your marketing strategy.

How to Conduct Research for Your Business

Though they look at different aspects of your business, both market research and marketing research should follow the same pattern of data collection and analysis.

• Define the problem.  Start by identifying the focus of your research. Knowing what question you are trying to answer will help you structure your research effectively.
• Determine your budget and timeframe.  How much can you afford to spend on the research process? How soon will you need to have data collection completed? Like all the strategies that you use to grow your business, research should be conducted within your available resources. However, depending on the urgency of the questions you are answering, it may be worth spending more money to get the most comprehensive results possible.
• Design your method and needs.  Identify what data needs to be collected and how you will gather it. Some options are observation, surveys, telephone calls, or focus groups. If you are unsure how to structure your data collection, consider working with a professional research firm.
• Choose a sampling method. How will you select the participants for your research? You may need a random sampling from the general population of consumers, a group that all have a single lifestyle factor in common, or responses only from people who are already your customers. Create a plan for identifying and contacting your participants.
• ​​ Plan for data analysis. Decide how you will analyze your data. Will you need quantitative data for statistical analysis or qualitative, observational data to give you a broad picture? Will you use software or do it by hand? Take time to learn about various methods of analysis to find the one that will best answer your research question.
• Data collection.  Once you know what question you want to answer and have designed a research method to answer it within the constraints of your available budget and time, it's time to collect data. Many businesses work with professional firms or consultants to conduct their actual research.
• Analysis of the data. No matter how straightforward your data seems at first glance, you'll want to use specific methods of analysis to ensure that you understand what it is telling you. The methods of analysis that you use will depend on the type of data you collected. This should also be when you check for errors, which can occur in your sampling method, data collection, and analysis.
• Create your report.  The final step of the research process is drafting a report on your findings. Your report should outline the entire research process, from developing your problem statement to the results of your data analysis.

No matter what type of research you are conducting, you will need to follow the full research method to arrive at a conclusion that will benefit your business. If your findings lead to a solution to your problem statement, you will be able to decide on the next steps for your business.

If you were unable to answer your research question, that doesn't mean your research was done incorrectly. You may discover that you need to ask different questions or that the situation was more complicated than you anticipated. When that happens, it's time to continue your research until you've arrived at a solution.

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How to do market research: The complete guide for your brand

Written by by Jacqueline Zote

Published on  April 13, 2023

Reading time  10 minutes

Blindly putting out content or products and hoping for the best is a thing of the past. Not only is it a waste of time and energy, but you’re wasting valuable marketing dollars in the process. Now you have a wealth of tools and data at your disposal, allowing you to develop data-driven marketing strategies . That’s where market research comes in, allowing you to uncover valuable insights to inform your business decisions.

Conducting market research not only helps you better understand how to sell to customers but also stand out from your competition. In this guide, we break down everything you need to know about market research and how doing your homework can help you grow your business.

Table of contents:

What is market research?

Why is market research important, types of market research, where to conduct market research.

• Steps for conducting market research
• Tools to use for market research

Market research is the process of gathering information surrounding your business opportunities. It identifies key information to better understand your audience. This includes insights related to customer personas and even trends shaping your industry.

Taking time out of your schedule to conduct research is crucial for your brand health. Here are some of the key benefits of market research:

Understand your customers’ motivations and pain points

Most marketers are out of touch with what their customers want. Moreover, these marketers are missing key information on what products their audience wants to buy.

Simply put, you can’t run a business if you don’t know what motivates your customers.

And spoiler alert: Your customers’ wants and needs change. Your customers’ behaviors today might be night and day from what they were a few years ago.

Market research holds the key to understanding your customers better. It helps you uncover their key pain points and motivations and understand how they shape their interests and behavior.

Figure out how to position your brand

Positioning is becoming increasingly important as more and more brands enter the marketplace. Market research enables you to spot opportunities to define yourself against your competitors.

Maybe you’re able to emphasize a lower price point. Perhaps your product has a feature that’s one of a kind. Finding those opportunities goes hand in hand with researching your market.

Maintain a strong pulse on your industry at large

Today’s marketing world evolves at a rate that’s difficult to keep up with.

Fresh products. Up-and-coming brands. New marketing tools. Consumers get bombarded with sales messages from all angles. This can be confusing and overwhelming.

By monitoring market trends, you can figure out the best tactics for reaching your target audience.

Not everyone conducts market research for the same reason. While some may want to understand their audience better, others may want to see how their competitors are doing. As such, there are different types of market research you can conduct depending on your goal.

Interview-based market research allows for one-on-one interactions. This helps the conversation to flow naturally, making it easier to add context. Whether this takes place in person or virtually, it enables you to gather more in-depth qualitative data.

Buyer persona research

Buyer persona research lets you take a closer look at the people who make up your target audience. You can discover the needs, challenges and pain points of each buyer persona to understand what they need from your business. This will then allow you to craft products or campaigns to resonate better with each persona.

Pricing research

In this type of research, brands compare similar products or services with a particular focus on pricing. They look at how much those products or services typically sell for so they can get more competitive with their pricing strategy.

Competitive analysis research

Competitor analysis gives you a realistic understanding of where you stand in the market and how your competitors are doing. You can use this analysis to find out what’s working in your industry and which competitors to watch out for. It even gives you an idea of how well those competitors are meeting consumer needs.

Depending on the competitor analysis tool you use, you can get as granular as you need with your research. For instance, Sprout Social lets you analyze your competitors’ social strategies. You can see what types of content they’re posting and even benchmark your growth against theirs.

Brand awareness research

Conducting brand awareness research allows you to assess your brand’s standing in the market. It tells you how well-known your brand is among your target audience and what they associate with it. This can help you gauge people’s sentiments toward your brand and whether you need to rebrand or reposition.

If you don’t know where to start with your research, you’re in the right place.

There’s no shortage of market research methods out there. In this section, we’ve highlighted research channels for small and big businesses alike.

Considering that Google sees a staggering 8.5 billion searches each day, there’s perhaps no better place to start.

A quick Google search is a potential goldmine for all sorts of questions to kick off your market research. Who’s ranking for keywords related to your industry? Which products and pieces of content are the hottest right now? Who’s running ads related to your business?

For example, Google Product Listing Ads can help highlight all of the above for B2C brands.

The same applies to B2B brands looking to keep tabs on who’s running industry-related ads and ranking for keyword terms too.

There’s no denying that email represents both an aggressive and effective marketing channel for marketers today. Case in point, 44% of online shoppers consider email as the most influential channel in their buying decisions.

Looking through industry and competitor emails is a brilliant way to learn more about your market. For example, what types of offers and deals are your competitors running? How often are they sending emails?

Email is also invaluable for gathering information directly from your customers. This survey message from Asana is a great example of how to pick your customers’ brains to figure out how you can improve your quality of service.

Industry journals, reports and blogs

Don’t neglect the importance of big-picture market research when it comes to tactics and marketing channels to explore. Look to marketing resources such as reports and blogs as well as industry journals

Keeping your ear to the ground on new trends and technologies is a smart move for any business. Sites such as Statista, Marketing Charts, AdWeek and Emarketer are treasure troves of up-to-date data and news for marketers.

And of course, there’s the  Sprout Insights blog . And invaluable resources like The Sprout Social Index™  can keep you updated on the latest social trends.

Social media

If you want to learn more about your target market, look no further than social media. Social offers a place to discover what your customers want to see in future products or which brands are killin’ it. In fact, social media is become more important for businesses than ever with the level of data available.

It represents a massive repository of real-time data and insights that are instantly accessible. Brand monitoring and social listening are effective ways to conduct social media research . You can even be more direct with your approach. Ask questions directly or even poll your audience to understand their needs and preferences.

The 5 steps for how to do market research

Now that we’ve covered the why and where, it’s time to get into the practical aspects of market research. Here are five essential steps on how to do market research effectively.

Step 1: Identify your research topic

First off, what are you researching about? What do you want to find out? Narrow down on a specific research topic so you can start with a clear idea of what to look for.

For example, you may want to learn more about how well your product features are satisfying the needs of existing users. This might potentially lead to feature updates and improvements. Or it might even result in new feature introductions.

Similarly, your research topic may be related to your product or service launch or customer experience. Or you may want to conduct research for an upcoming marketing campaign.

Step 2: Choose a buyer persona to engage

If you’re planning to focus your research on a specific type of audience, decide which buyer persona you want to engage. This persona group will serve as a representative sample of your target audience.

Engaging a specific group of audience lets you streamline your research efforts. As such, it can be a much more effective and organized approach than researching thousands (if not millions) of individuals.

You may be directing your research toward existing users of your product. To get even more granular, you may want to focus on users who have been familiar with the product for at least a year, for example.

Step 3: Start collecting data

The next step is one of the most critical as it involves collecting the data you need for your research. Before you begin, make sure you’ve chosen the right research methods that will uncover the type of data you need. This largely depends on your research topic and goals.

Remember that you don’t necessarily have to stick to one research method. You may use a combination of qualitative and quantitative approaches. So for example, you could use interviews to supplement the data from your surveys. Or you may stick to insights from your social listening efforts.

To keep things consistent, let’s look at this in the context of the example from earlier. Perhaps you can send out a survey to your existing users asking them a bunch of questions. This might include questions like which features they use the most and how often they use them. You can get them to choose an answer from one to five and collect quantitative data.

Plus, for qualitative insights, you could even include a few open-ended questions with the option to write their answers. For instance, you might ask them if there’s any improvement they wish to see in your product.

Step 4: Analyze results

Once you have all the data you need, it’s time to analyze it keeping your research topic in mind. This involves trying to interpret the data to look for a wider meaning, particularly in relation to your research goal.

So let’s say a large percentage of responses were four or five in the satisfaction rating. This means your existing users are mostly satisfied with your current product features. On the other hand, if the responses were mostly ones and twos, you may look for opportunities to improve. The responses to your open-ended questions can give you further context as to why people are disappointed.

Step 5: Make decisions for your business

Now it’s time to take your findings and turn them into actionable insights for your business. In this final step, you need to decide how you want to move forward with your new market insight.

What did you find in your research that would require action? How can you put those findings to good use?

The market research tools you should be using

To wrap things up, let’s talk about the various tools available to conduct speedy, in-depth market research. These tools are essential for conducting market research faster and more efficiently.

Social listening and analytics

Social analytics tools like Sprout can help you keep track of engagement across social media. This goes beyond your own engagement data but also includes that of your competitors. Considering how quickly social media moves, using a third-party analytics tool is ideal. It allows you to make sense of your social data at a glance and ensure that you’re never missing out on important trends.

Email marketing research tools

Keeping track of brand emails is a good idea for any brand looking to stand out in its audience’s inbox.

Tools such as MailCharts ,  Really Good Emails  and  Milled  can show you how different brands run their email campaigns.

Meanwhile, tools like  Owletter  allow you to monitor metrics such as frequency and send-timing. These metrics can help you understand email marketing strategies among competing brands.

Content marketing research

If you’re looking to conduct research on content marketing, tools such as  BuzzSumo  can be of great help. This tool shows you the top-performing industry content based on keywords. Here you can see relevant industry sites and influencers as well as which brands in your industry are scoring the most buzz. It shows you exactly which pieces of content are ranking well in terms of engagements and shares and on which social networks.

SEO and keyword tracking

Monitoring industry keywords is a great way to uncover competitors. It can also help you discover opportunities to advertise your products via organic search. Tools such as  Ahrefs  provide a comprehensive keyword report to help you see how your search efforts stack up against the competition.

Competitor comparison template

For the sake of organizing your market research, consider creating a competitive matrix. The idea is to highlight how you stack up side-by-side against others in your market. Use a  social media competitive analysis template  to track your competitors’ social presence. That way, you can easily compare tactics, messaging and performance. Once you understand your strengths and weaknesses next to your competitors, you’ll find opportunities as well.

Customer persona creator

Finally, customer personas represent a place where all of your market research comes together. You’d need to create a profile of your ideal customer that you can easily refer to. Tools like  Xtensio  can help in outlining your customer motivations and demographics as you zero in on your target market.

Build a solid market research strategy

Having a deeper understanding of the market gives you leverage in a sea of competitors. Use the steps and market research tools we shared above to build an effective market research strategy.

But keep in mind that the accuracy of your research findings depends on the quality of data collected. Turn to Sprout’s social media analytics tools to uncover heaps of high-quality data across social networks.

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Market Research: What It Is, Why It Matters, and How To Get It Right

What is market research?

What is market research used for? How important is it? And, how do you choose the right type of research for your business?

Sit back, take five, and I’ll explain the different types of research , what tools are best for the job, and how you can leverage them to grow your business and master your market .

Market research definition:

Market research means to systematically collect and analyze data about a target market or defined segment. It’s a multivariate process that uncovers key facts and insights to inform decisions.

Whether you’re launching a new product , looking for ways to expand a business, or seeking out efficiencies in an existing company, market research is a highly effective way to flesh-out ideas, innovate, and grow. 

Advantages of market research

Market research helps you identify your greatest strengths, threats, and opportunities. It can help you find your way when markets become tough to predict and find efficient ways to grow your business .

• Reduce costs
• Define detailed customer personas
• Make data-driven decisions
• Find new opportunities for growth
• Unpack competitor’s successes
• Develop an informed content marketing strategy
• Identify trends
• Inform market analysis
• Discover the best marketing channels to use
• Find the best ways to communicate with customers
• Benchmark performance against rivals

Online market research can help the whole business at any stage of its life. When practiced consistently and systematically, you can realize its many benefits.

Why is market research important?

Market research helps you identify your greatest threats. And it also gives you a clear picture of opportunities you can capitalize on for greater returns on your business investments, or ROI.

Understanding your specific market on different levels and from different perspectives helps you reach well-informed, data-informed decisions . The process can involve multiple phases. But, if you follow a systematic approach using a market research template , your efforts will pay off.

To skip ahead and start right now, download our free pack of market research templates.

Different types of market research

Market research is a questions and answers game. Once you’ve asked the important questions, you’ll need to choose the right type of research to get your answers. There are four core types of research, each of which can be applied to help you solve a problem or gather insights to inform key decisions.

Primary market research

Primary market research is the first-hand collection of data. It’s data that’s not available to others, and can be obtained in a number of ways. Here are the most common.

• Web Metrics Use analytics software that provides traffic and engagement metrics to understand how audiences behave.
• Observation To observe how users behave and navigate your site, you can install software that records visits and creates heatmaps. Such tools are useful for qualitative research regarding your UX/UI and at the same time, quantify the findings.
• Customer surveys Survey questionnaires and polls can be distributed to any number of customers through email, SMS, your site, or social media. They let you collect both qualitative and quantitative data from respondents using open-ended questions.
• Focus groups You select a small number of people for a group discussion. A moderator leads the session with questions and records the conclusions. This is also a form of qualitative research, and you would use it to get in-depth information.
• Face-to-face interviews Another qualitative assessment method is one-on-one interviews. Consumers representative of your target audience or a segment of it are selected to answer questions about a specific research topic.
• Phone calls To involve a larger number of people and get more answers, you can conduct surveys over the phone. These interviews would be less specific and include fewer questions.

Helpful: A complete guide to doing primary market research

Secondary market research

Secondary research is second-hand data that has already been produced. It’s available to all who wish to consume it. Using this type of data is preferred by those who wish to keep costs low, as it can be quicker and freely available.

• Government reports and census data Annual, quarterly, and other periodic industry reports are a rich data source to tap into. Government organizations publish statistics in areas of trade, ecommerce, and finance.
• Academic papers and educational resources University research is a source of high-quality information. This is useful for in-depth background information on a broad scale.
• Online articles and case studies, public and commercial sources Industry-specific publications can be a valuable source of information for market segmentation, providing you with data and insights on market trends or a specific market segment or niche.

Further reading: A complete guide to doing desk research

Qualitative market research

Qualitative market research is one of the best ways to understand how people think or feel about a brand, product, or service. It takes more time to plan and analyze the results than other market research types. However, with tools like market research surveys , there are quick and effective ways to do it.

As some of the methods are outlined in the primary and secondary research sections, I’ve included a short list of qualitative research methods below.

• Focus groups
• Case study or whitepaper 
• Online forums
• Biometrics 
• Ethnography

Helpful: Read the complete guide to qualitative research and 83 qualitative research questions & examples

Quantitative market research

Quantitative market research is all about numbers. It collects numerical data to help answer specific research questions . The information collected can be easily quantified and analyzed to establish trends, insights, and patterns.

With this type of research, you’ve got three core data collection methods. However, you’ve also got to consider the design of the research, which can impact which method is used.

What is market research used for?

The applications for market research are virtually limitless. Market research can help you unravel the most complex of business challenges to reach data-driven decisions , and when used consistently, it can help you navigate turbulent times, fuel growth, and support your success . Here are just a few examples of what market research is used for, with a few real-world examples thrown in for good measure.

1. Company research

Market research allows you to shine a spotlight on any business and unpack its wins and losses for your own gain. Let’s say you are doing market research for a business plan ; you’ll likely want to evaluate the successes of others in your industry. Doing systematic company research is a proven way to inform a SWOT analysis .

Doing industry analysis can show you who your industry leaders are , along with any emerging players showing exponential growth.

Let’s say I want to find out which companies to research, I would use Similarweb Digital Research Intelligence to analyze an industry. Here, I can see who my top companies to watch are instantly. It also shows me other companies showing rapid growth in my market.

Read More: How to Research a Company: The Ultimate Guide

2. Competitive benchmarking

Most of your relevant data will come from your competition. If you plan to offer something that’s new for you but already exists in the market, learn from other’s mistakes and successes. If your goal is to evaluate and optimize, collect competitors’ data, and compare it to yours. See what works for them, find their weak spots, and improve on them.

What market research gives you here, is the ability to systematically compare each of your rivals. And, it’s not as complex as it sounds either. Simply choose a type of competitive analysis frameworks to use, complete the template for each; then compare the results to uncover relevant insights.

Read More: The Why and How of Competitive Benchmarking

3. Trendspotting

Another objective for market researchers is to forecast upcoming trends. Data collection over time helps you understand the dynamics of the market. Some markets have strong seasonal fluctuations. Increased shopping during December is an obvious example, but often these shifts are not always evident unless you measure and analyze them specifically.

With the data from your historical market research, you can evaluate their impact and the likelihood you will keep seeing these trends. Based on that, you can make predictions about future developments.

4. Audience analysis

Who will find your product most useful and why? 

Examining the size of your audience and the existing demand for your product or services is crucial. Understanding  your target audience allows you to build your product offering and marketing strategy more efficiently. You also want to learn first-hand where people buy this type of product and how much they are willing to spend so that you can estimate your reachable market share .

Here’s a quick example of how we use Similarweb to do effective audience analysis . You can unpack key audience demographics for any site you choose. And get up-to-date stats about gender, age, location, interests, browsing habits, and more.

5. Market segmentation

There are lots of ways to segment a market. Doing this well can deliver higher conversions, reduce costs, redefine marketing strategies, and help you connect with customers on a more personal level. Market research can help you do most types of market segmentation, the most widely adopted of all is demographic segmentation. Here, you look for shared but specific characteristics of a target audience.

Using Similarweb, I can view audience demographics for a website, and compare it side-by-side with rival sites. In this example, I am looking at hotel booking sites to try and spot any difference between the respective audiences of each.

Helpful: Read our complete guide to market segmentation

6. Marketing strategy

Market research can also help you reach the right decision regarding where to advertise or market your business. After analyzing the data, you’ll know which marketing channels are most effective with your target audience. You can also use research to look at the specific keywords and ad creatives that are generating the best responses and ROI.

Similarweb Digital Research Intelligence makes this type of research effortless. Within the marketing channels tab, you can analyze an entire industry or hone in on a specific site of interest. View the various channels across social media, email, direct, organic search, paid search, and display ads to see which channels convert and where the highest channel traffic comes from.

7. Customer experience

Market research is your best way to get information that isn’t naturally visible but that may significantly affect your business. Just think, the fact that your users don’t complain doesn’t necessarily mean they are all delighted with what you offer.

While some customers tend to keep their criticism to themselves, others will be vocal and leave reviews online. Market research is a powerful tool to help inform improvements to services and products alike. Asking for feedback, listening to it, and looking at the feedback left for rivals in your market can uncover telling insights that can shape service offerings, marketing campaigns, and new feature development.

To see what people use market research for and view real-world instances of research in action, head over to our market research examples page.

Tools for market research

When we look at what market research is, the answer is always rooted in data . Over 100 years ago, vehicle manufacturers undertook extensive research to help them develop different models to suit various segments of society. Fast-forward 100 years, and we find similar applications still exist. However, what’s changed are the tools being used and, more importantly, the accessibility of those tools to a far broader audience .

There are more market intelligence tools in existence today than ever before. Here’s a quick summary of a few you can use to collect information for your market research.

• Google Trends Google Trends is a valuable resource for quantitative research data about market tendencies and user behavior.

• Similarweb Research Intelligence Get the freshest digital intelligence from a platform that shows the insights that count. With the ability to analyze an entire market in an instant and unpick competitors’ wins and losses online, you can count on it to help you perform quick and effective market research.
• Hotjar The digital tool lets you observe and record user behavior on your website. It also creates heatmaps of your pages so you can analyze how visitors navigate.
• SurveyMonkey Create your own online survey with this free tool. SurveyMonkey provides templates for questionnaires and lets you distribute them through your various channels, then collect and interpret results.
• YouGov This platform offers its users daily with thousands of data points and statistics on consumer attitudes, opinions, and behavior.
• Pew Research Center This non-profit organization conducts and publishes public opinion polling, demographic research, content analysis, and other data-driven social science research.
• Living Facts The site provides current statistics about the American population, including demographics, social and health issues, opinions, and more.

Read this post to see what market research tools are hot right now.

Wrapping up: what is market research

Market research is insight. It gives you information to fuel key decisions in your business. Without it, companies must navigate their market uncertainly and make key decisions based on instinct or outdated data.

Similarweb transforms the way companies do market research . There’s no expensive outlay for prolonged research reports that take an age to produce. The data is the freshest there is; it’s credible and shows traffic trends and comparable performance like no other.

Try using it to answer your next big market research question.

Stop Guessing, Start Analyzing

Get actionable insights for market research here

What are the benefits of market research?

Effective market research helps businesses understand and improve their position while also identifying potential threats and opportunities, while also spotting emerging trends .

What is the main purpose of market research?

The main benefit of market research is insight. It can give you access to the data you need to make decisions in your business. Before you invest money or time in any venture, use market research to inform your decision.  

What’s the difference between primary and secondary market research?

Primary research is research you conduct on your own that uses numbers and metrics, and secondary research is research that was done by someone else with a qualitative focus.

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Why Market Research Is Important: A Complete Guide

Did you know that 66% of customers expect companies to understand their needs, while customer-centric companies are 60% more profitable than companies that aren’t. Meanwhile, over half (53%) of business executives are concerned about competition from disruptive businesses.

If you aren’t on top of your market and meeting your ideal customers’ needs, you risk being left behind. Outmanoeuvred by better informed, faster-moving competitors.

This is why market research is important: it gives you valuable insights that protect your market position. In this article, we take a deeper look at the value it can bring to your business in a comprehensive guide.

Defining Market Research

Market research refers to the process of gathering and analysing data about customers, competitors, and market trends to gain insights and make informed business decisions. It helps businesses understand their target audience, identify opportunities, and develop effective marketing strategies.

By undertaking market research , businesses can make data-driven decisions that drive growth, innovation and competitive advantage.

The Core Components Of Market Research

Market research comprises several essential components and methods:

A) Qualitative research

This approach focuses on exploring the underlying motivations, attitudes and perceptions of individuals or groups. It often involves techniques such as interviews, focus groups and open-ended surveys. Qualitative research helps uncover insights that quantitative data alone cannot provide, offering a richer understanding of consumer behaviour.

B) Quantitative research

In contrast to qualitative research, quantitative research relies on numerical data and statistical analysis. It involves surveys, questionnaires, experiments, and structured observations to gather data from a large sample size. Quantitative research is valuable for measuring and quantifying trends, patterns, and correlations within a market.

C) Primary research

Primary research involves collecting firsthand data specifically for the research objectives at hand. This can be done through surveys, interviews, observations or experiments tailored to the research’s unique requirements. Primary research provides fresh and specific insights but can be time-consuming and costly.

D) Secondary research

Secondary research, also known as desk research, involves the analysis of existing data and information collected by others. Researchers access databases, reports, academic papers and publicly available data to gather insights. It’s a cost-effective way to obtain a broader perspective on a market but may lack the specificity of primary research.

E) Market segmentation

Market research often involves dividing a market into distinct segments based on various criteria such as demographics, psychographics, behaviour or geographic location. Segmenting a market helps businesses target their marketing efforts more effectively and tailor their products and services to meet specific customer needs.

F) Data collection methods

Market researchers employ various data collection methods, including surveys, interviews, focus groups, observations and online analytics. The choice of method depends on the research objectives, budget and the type of data required.

G) Data analysis

Once data is collected, it must be analysed to extract meaningful insights. Statistical tools, software and expertise are often used to process and interpret data accurately.

Market research is not a one-size-fits-all activity. The choice of components and methods depends on the specific research objectives, the target audience and the resources available. It’s a dynamic and iterative process that can uncover valuable insights, guide strategic decisions and ultimately contribute to business success.

The Importance of Market Research: An Overview

In an increasingly competitive and rapidly changing business landscape, market research is important because it helps organisations of all sizes and industries. It offers critical insights, reducing uncertainty and enabling data-driven decisions. 

In this section, we’ll delve into the overarching importance of market research in today’s business environment.

1) Navigating uncertainty

Businesses operate in an environment marked by uncertainty. Market conditions can shift unpredictably due to economic fluctuations, technological advancements and global events. Market research acts as a stabilising force, helping businesses navigate uncertainty by providing a solid foundation of knowledge.

2) Risk mitigation

One of the primary roles of market research is risk mitigation. Understanding the potential risks and challenges that lie ahead allows businesses to prepare effectively. By identifying market trends, consumer preferences and competitive landscapes, organisations can anticipate challenges and develop strategies to mitigate them. This proactive approach not only safeguards businesses but also positions them for resilience and growth.

3) Strategic decision-making

The strategic decisions made by a business are pivotal to its success. Market research informs these decisions by offering insights into market dynamics, customer behaviour and industry trends. Whether it’s expanding into a new market, launching a new product or fine-tuning marketing strategies, businesses can align their actions with market realities, increasing the likelihood of success.

4) Customer-centric approach

In the age of customer-centricity, understanding the needs, preferences and expectations of consumers is paramount. Market research places the customer at the heart of business operations. By collecting and analysing customer feedback, businesses can tailor their products, services and marketing efforts to resonate with their target audience. This customer-focused approach enhances customer satisfaction and loyalty.

5) Competitive advantage

In a crowded marketplace, gaining a competitive edge is a constant pursuit. Market research provides the tools to outmanoeuvre competitors by offering insights into their strategies, strengths and weaknesses. Armed with this knowledge, businesses can differentiate themselves, identify unexplored opportunities and stay ahead of the competition.

6) Financial planning & resource allocation

Efficient resource allocation is essential for a company’s financial health. Market research informs budgeting decisions by identifying areas where investments will yield the highest returns. Whether it’s allocating marketing budgets, research and development funds, or capital for expansion, businesses can optimise their resource allocation based on data-driven insights.

7) Adaptation to change

Change is the only constant in the business world. Market research equips businesses with the agility to adapt to shifting market dynamics. By staying attuned to emerging consumer trends, economic shifts, and unforeseen events, organisations can pivot their strategies effectively. This adaptability is crucial for survival and growth, particularly in fast-paced industries.

8) Measurable outcomes

A well-executed market research strategy comes with measurable outcomes. Businesses can track the impact of their decisions, assess the effectiveness of marketing campaigns, and adjust strategies in real-time based on data-driven insights. This leads to less waste, improved efficiency and better results.

9) A strategic asset

Market research is not an optional extra but a strategic asset. It is the compass, the risk mitigator and the foundation upon which successful businesses are built. It guides organisations through uncharted waters, helping them make informed choices, seize opportunities and navigate challenges.

How To Conduct Market Research

Market research is a process that involves gathering, analysing and interpreting data to gain insights into markets, consumers and competitors. 

Conducting effective market research requires careful planning and the use of various research methods and techniques. In this section, we will outline the steps and strategies involved in conducting market research.

Step 1: Define your research objectives

Before diving into research, it’s essential to clearly define your objectives. What specific information are you seeking to obtain through market research? Are you interested in understanding consumer preferences, evaluating market trends or assessing the competitive landscape? Clearly defined research objectives will guide your research efforts and help you stay focused.

Step 2: Choose your research methodology

Market research can be broadly categorised into two main types: primary research and secondary research .

Primary research : Involves collecting original data directly from sources via methods such as surveys, interviews and observations, offering specific and current insights aligned with research goals.

Secondary research : Entails analysing existing data from sources like market reports and academic studies, providing cost-effective access to valuable context and background information.

Select the research methodology that aligns with your research objectives, timeline and budget. Often, a combination of primary and secondary research is used to gain a comprehensive understanding of the market.

Step 3: Design your research instruments

If you choose to conduct primary research, you’ll need to design research instruments such as surveys, questionnaires or interview guides. Ensure that your research instruments are clear, unbiased and designed to collect relevant data. Pilot testing your instruments with a small group can help identify and address any issues before full-scale data collection.

Step 4: Collect data

Data collection is a critical phase of market research. For primary research, you’ll administer surveys, conduct interviews or organise focus groups to gather data from participants.

Ensure that data collection methods are consistent, and follow ethical guidelines when handling sensitive information. For secondary research, you’ll access and review existing data sources, extracting relevant information for your analysis.

Step 5: Analyse data

Once you’ve collected data, the next step is data analysis. This involves organising, cleaning and interpreting the data to extract meaningful insights. Data analysis may include statistical techniques, content analysis or qualitative coding, depending on the nature of the data.

6) Interpret findings

After analysing the data, it’s essential to interpret the findings in the context of your research objectives. What do the data and insights reveal about the market, consumers and competitors? Consider the implications of your findings and how they relate to your business goals.

7) Make informed decisions

The ultimate goal of market research is to inform decision-making. Based on your research findings, make informed decisions about product development, marketing strategies, target audiences, pricing and other aspects of your business. Use the insights gained from market research to enhance your competitive advantage.

8) Continuous monitoring

Market research is not a one-time activity. Markets evolve, consumer preferences change and competitors adapt. Therefore, it’s important to establish a system for continuous monitoring and updating your market research efforts. Regularly gather new data, track market trends and reassess your strategies to remain competitive.

Final Thoughts

To conclude, market research is vital in today’s business landscape. M arket research is a dynamic and iterative process that empowers businesses to make informed decisions, minimise risks and stay competitive . By understanding customer preferences, industry trends, and competitive landscapes, businesses can tailor their strategies for success.

Market research is the compass that guides product development, marketing campaigns and expansion efforts, ensuring resources are invested wisely. By following these steps and adopting a research-driven mindset, organisations can unlock valuable insights and position themselves for success in today’s ever-changing business landscape.

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Importance of Market Research + Types & How to Plan it.

Market research will help you develop a successful marketing strategy. It is one of the reasons why market research is so important for organizations that want to make informed decisions. This article will highlight the relevance of market research and importance of market research.

For your products and services to be well-accepted by customers, you must know the choices and preferences of your target audience . Market research provides you with essential information about your competitors and existing products. 

The results offer you insights into what it would take to succeed in the market. Hence, organizations base their business decisions on good market research, such as sales and marketing strategies.

LEARN ABOUT: Market research vs marketing research

Market research helps reduce risk by allowing you to determine product features, pricing, and promotions from the outset. It also helps you focus resources where they will be most effective.

LEARN ABOUT: Marketing Insight

This blog will discuss the importance of market research, its types, and how to plan it for your business.

Content Index

What is market research?

Types of market research, the importance of market research for your business, how to plan market research, how questionpro helps in market research.

Market research is a systematic process of gathering, evaluating, and interpreting data. It is the basis of any business that does well. The data could be about a target market, customers, competitors, or the industry as a whole. The research serves a variety of reasons, ranging from identifying a new market to launching a new business.

Market research assists entrepreneurs in making sound business decisions. It may remove the guesswork from innovation and direct resources to the most promising ideas and projects. Different companies conduct market research for different purposes.

Businesses use various types of market research to gather information about their target market, competitors, and market research industry trends . There are two main types of market research: 

• Quantitative research.
• Qualitative research.

Quantitative research

Quantitative research focuses on generating numbers, for example, what percentage of the population buys a specific product. It is conducted using surveys and questionnaires. You can do simple quantitative research yourself by talking to customers. 

More detailed quantitative research can be used to identify markets and understand customer profiles while launching a new product.

Qualitative research

Qualitative research relies on facts and figures to discover what people think and feel about products and what factors affect their purchasing decisions. Researchers use surveys and focus groups to gather this information while interpreting the results is a job that requires certain research skills .

To learn more about the differences and characteristics of these types of research, we recommend reading Qualitative vs. Quantitative Research .

LEARN ABOUT: Qualitative Interview

You can also conduct secondary research using existing surveys and business reports. Use free online information on market size, sales trends, customer profiles, and competitor activity.

Your customer records can give you a wealth of knowledge about purchasing patterns, the most popular services among various demographic groups, etc. 

Market research can help you analyze key trends and predict how the market will change. Here are some of the reasons why market research is important for your business:

Identifies new products and services

Market research can assist you in determining what new products or services the market requires and how you can provide them. Key issues with developing a specific product or service can be identified, allowing you to avoid costly development mistakes. 

It also assists you in determining which factors are most important to customers and how to implement them into what you want to bring to market.

Identifies potential customers

Demographic information such as gender, age, income, occupation, and lifestyle can help you better understand your customer base. If you know who your current customers are, you can target them in the future. Marketing to the wrong type of customer can lead to poor product performance.

Establishes product or service viability

If your company plans to launch a new product or service, you must first determine whether the market is ready for it. Will the product be well received? Is the product required by the customers you want to reach? Will it be workable, and what are the chances of success?

Keeps your company ahead of competitors

Comparative studies are excellent for tracking your competitors’ progress compared to your company’s. 

If they are far ahead of you, this is an excellent opportunity for you to learn what they are doing differently than you. Business strategies can be developed to help you stay ahead of your competitors.

Reduces risk and enhances profitability

Knowledge can help reduce your company’s risks and determine which risks are worth taking based on past and future market trends. 

Market research help in determining market viability , lowering the risk of failure. Understanding your customers’ needs is also important for risk reduction. At the end of the day, lowering risk helps to increase profitability.

Helps to understand existing customers

Your customers are complex, and what they require previously may not be what they require now. To be successful, you must constantly monitor the pulse of your customer base. Market research can help you better understand your current customers. 

The market research also helps to determine customer satisfaction levels. If you discover their low satisfaction levels, you can figure out why and fix it. If it is high, you can figure out why and learn how to keep it that way.

Helps set realistic goals

You can set realistic goals by using current data about your market and customer base. Establishing a growth pattern over time lets you know what to expect in the future and how to really develop that growth. 

Setting attainable goals will save resources, succeed before you start, and miss out on better long-term goals for your company.

Effective market research starts with knowing what you are trying to accomplish and what information you need. You can do it yourself. 

For example, if you are considering buying or renting a store, you can analyze traffic levels at different times. Or you can talk to your potential customers.

However, to make good business decisions , you will need a more comprehensive approach. 

For example, if you conduct a market survey , you will need survey software to design a survey, customize the look and feel and generate reports. You might also want to integrate the tool with other CRM and marketing automation software. 

Survey software can let you export results in standard formats or share the reports with others. You can also create online surveys in multiple languages and let your respondents select the language of their choice.

One of the most important aspects of planning market research is asking the right questions. Design the survey such that it collects meaningful and high-quality data.

If you want to know more about how to do this, we recommend our article: How to Write a Market Research Plan?

LEARN ABOUT:  Test Market Demand

QuestionPro is a market research software platform that assists businesses in conducting various types of market research. It has market research tools to create, distribute, and analyze surveys and other research methods. QuestionPro can assist organizations with their market research in a variety of ways, including:

Surveys: QuestionPro has a full survey builder that lets organizations make their own surveys, add questions, and choose from a variety of question types, like multiple choice, open-ended, and rating scales.

Data collection: QuestionPro enables organizations to collect data via online surveys, email, web pop-ups, and mobile devices. It also provides a variety of data collection methods, including panel sampling, random sampling, and targeted sampling.

Data analysis: To assist organizations in gaining insights from their data, QuestionPro offers a variety of data analysis tools such as cross-tabulation, descriptive statistics, and inferential statistics .

Real-time data reporting: QuestionPro provides real-time data reporting, allowing organizations to monitor the progress of their research in real-time and make changes to their survey design as needed.

Integration with other tools: QuestionPro integrates with a variety of other tools, including Google Analytics, Salesforce, and Zapier, to provide organizations with a comprehensive view of their market research data.

QuestionPro offers businesses a comprehensive platform for conducting market research and gaining valuable insights into their target audience, competitors, and industry trends. It enables businesses to make informed decisions based on data-driven insights.

LEARN ABOUT: market research trends

Market research should be well-structured, concise, and provide useful insights to help the organization make informed decisions. It should also serve as a starting point for future research and assist organizations in identifying areas for improvement in their business strategies.

Market research is an important component that summarizes the research findings and insights. It gives you a clear picture of the market and its trends, consumer behavior, and the overall competitive landscape.

If you are interested in conducting online survey research, QuestionPro can help you. Request a demo and learn how our survey software works and the advantages of using it in your next market research. Get started today!

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5 reasons why marketing research is important to your business

Marketing research is a critical tool that businesses and organisations use to gather valuable information about their target market and industry. By conducting research, companies can gain insights into customer needs, preferences, and behaviour, as well as market trends and the competitive landscape. In this article, we'll explore five reasons why marketing research is important for businesses and organisations.

5 reasons why marketing research is important

Is your company on the fence about investing in marketing research? If so, read on for five reasons why marketing research is important to the viability and longevity of your business.

1. Marketing research helps businesses understand their customers.

Knowing your customers is the first step in running a successful business. And while this may sound simple enough, it can be difficult to look inside the consumer psyche—one whose needs, preferences, and behaviours are ever-evolving.

Fortunately, marketing research can give you a peek behind the curtain, helping you understand what motivates current as well as potential customers. A marketing research survey , for example, can provide insight into pricing sensitivity among a segment of your target population. The data yielded may suggest that boomers are more likely to purchase a product based on price alone while millennials are more motivated by the values of the respective company. Based on this information, you can tailor your offerings to better meet these needs.

Let’s take a closer look at what else marketing research can tell you about your target audience.

a. Marketing research reveals demographic data.

Through conducting surveys, you can better understand characteristics of your buyers, like age, gender, race, and ethnicity. You can also collect socioeconomic information like education, income, and employment status. These variables can help you engage in audience segmentation, which essentially involves tweaking your brand messaging to appeal to various subgroups.

b. Marketing research illustrates purchasing behaviour.

Marketing research tools like surveys, transaction tracking, and social media tracking can also shed light on when, why, how, and what consumers are buying. A better understanding of purchasing behaviour can help your company develop brand messaging that strikes a chord with its target audience. If consumers tend to shop between the hours of 5 and 8 p.m., for instance, your company may send an email coupon at 4:45 p.m. to prime that behaviour.

c. Marketing research helps companies appeal to potential customers.

It’s important to learn as much as possible about your current customers. However, it’s equally important to learn about people who are at the beginning of the customer journey. A deeper understanding of what motivates these individuals can help your business turn clicks into conversions.

2. Marketing research helps businesses manage risk.

Risk is an intrinsic part of the business world. However, by understanding market trends and customer behaviour, businesses can anticipate changes in demand and adjust their strategies accordingly. Market research can also help businesses identify potential obstacles or challenges and develop contingency plans to mitigate those risks.

For example, let’s say a company hopes to introduce a new product to the market. Before investing significant time and financial resources into product development, market researchers may conduct a series of surveys to determine if consumers are even interested in the respective product. This mitigates the risk of introducing a good for which there is no demand.

Other examples in which marketing research can be used as a tool for mitigating risk include:

• Conducting ad testing to determine if brand messaging resonates with consumers
• Hosting product development focus groups to receive feedback before revealing a new product to the larger market
• Organising customer satisfaction surveys at various points of the customer journey to determine any issues affecting sales
• Administering price testing to determine the ideal price for a new product

3. Marketing research helps businesses stay competitive.

Marketing research gives companies a competitive edge in many ways, one being a greater awareness of the industry itself. By understanding what other businesses are doing, your company can develop strategies to differentiate itself and stay ahead of the curve. For example, if research indicates that laundry detergent manufacturers are increasing prices, a company can either decide to a) keep up with the times and increase costs, b) keep costs the same, or c) decrease pricing to appeal to a specific target market.

Marketing research also helps companies determine areas where they may be falling behind. If several healthcare conglomerates are expanding telehealth services, it would be wise for a hospital to also make moves to provide digital appointments. Otherwise, patients may take their business elsewhere.

How else can marketing research help your business stay competitive?

a. Marketing research aids in trendspotting.

It’s important for companies to keep up with industry patterns. However, it’s also important for companies to predict patterns before they even happen. The fashion industry provides a good example of this. Trend forecasters analyse decades—centuries even—of socio-cultural data in an attempt to be the first company to put out a ‘hot’ new product that appeals to modern sensibilities.

b. Marketing research allows businesses to identify gaps in the industry.

Similarly, marketing research can help companies realise a demand that has yet to be satisfied. Through marketing research surveys, for instance, an organic snack food company may see that consumers are craving more savoury gluten-free snack options. Using this data, the company can one-up competitors by introducing a new product.

4. Marketing research gives businesses the tools to measure success.

Net profit is an important indicator of a company’s success. However, if profits are plummeting, it can be difficult to know if this is because of your company’s performance or industry-wide factors like increased materials costs and decreased demand. Because of this, businesses must rely on a more holistic approach to evaluating success.

Fortunately, marketing research can be a helpful tool if you want to measure business health using more than dollar signs. Here’s how marketing research can help you gauge company success.

a. Marketing research provides insight into customer satisfaction.

Sure, your company could be making money. But if your customers aren’t satisfied, your financial gains are likely to be short-lived. To determine if customers are happy with your products or services, you can conduct a customer feedback survey questionnaire.

Alternatively, you may choose to conduct a longitudinal panel survey . Unlike an ad hoc survey, which takes a snapshot of consumer opinions and behaviours, longitudinal studies (like monthly or quarterly trackers) monitor how consumer attitudes change over time. This tool is especially helpful if you want to see how customer satisfaction changes after the introduction of new protocols or training methods.

b. Marketing research helps businesses assess employee satisfaction.

A financially profitable company isn’t necessarily successful if its employees aren’t satisfied. To assess this metric of success, you can conduct surveys, in-person interviews, or focus groups. The results from these marketing research assessments may also shed light on the efficiency of your staff.

c. Marketing research provides insight into the performance of competitors.

It can be constructive to compare your company’s performance to that of competitors. This can help you understand if dips or rises in profit are unique to your company or simply an industry trend.

5. Marketing research helps businesses make informed decisions.

For decades, companies have made key business decisions based on gut feelings alone. But the new age of marketing revolves around data-driven decision-making: a process in which business decisions are informed by metrics and analytics. This contemporary model helps companies make solid choices that reduce risk while improving performance.

Since marketing research lends itself to data generation, it’s an integral part of this equation. For example, data yielded from a brand awareness survey may illustrate that men aged 50 to 65 in a specific geographic area are the least familiar with the brand. Using this information, the company can invest marketing dollars in a way that will yield true results.

Other examples of using marketing research to support data-driven decision-making include:

• During a focus group, a company discovers that 60% of women are dissatisfied with the playback speed options of an audiobook app. In response, software developers dedicate time and financial resources to adjusting that feature.
• Survey data reveals that as the price of microwaves increases, so does customers’ perceived value of the product. With this in mind, a company chooses to increase prices by 30%.
• A popular food chain conducts a series of phone interviews to assess customer service at various locations. Afterward, the company mandates that employees at the restaurants with the lowest reviews take customer service training courses.

All this to say, marketing research has many different applications. By gathering data about customer preferences, market trends, and industry dynamics, businesses can make decisions based on facts rather than assumptions or intuition. This can help businesses avoid costly mistakes and increase their chances of success.

Conduct high-quality marketing research with Kantar

Marketing research is a critical tool that businesses and organisations can use to gather valuable information about their target market and industry. By conducting research, businesses can gain insights into customer needs and behaviour, stay competitive, make informed decisions, manage risk, and measure success.

And during VUCA times (volatile, uncertain, complex and ambiguous), keeping a consistent pulse on consumer sentiment and behaviour is essential to driving the right decisions for business growth.

However, in today's rapidly changing business landscape, marketing research can feel complicated and overwhelming. That’s where Kantar comes in. As an industry leader, we provide tips and tools to help you navigate each step of the marketing research process, from survey design to data visualisation.

Want to get started? Speak to our award-winning team  to learn how we can help you conduct marketing research.

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5 Reasons Why Marketing Research is Important: Benefits of Market Research

In today’s fiercely competitive business landscape, uncovering the power of marketing research is the key to achieving success. To thrive in an ever-evolving market, companies must make informed decisions and craft effective strategies. This article unveils the significance of marketing research and its role in shaping business outcomes.

Throughout this comprehensive guide, we will explore key sections that delve into essential aspects of marketing research. From gaining consumer insights to seizing market opportunities and optimizing strategies, we leave no stone unturned. By the end of this article, you will grasp how marketing research can ignite growth and give your business a competitive edge.

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Understanding the Basics of Marketing Research

Understanding the basics is crucial for conducting effective research that yields valuable insights and drives business success.

What Does Marketing Research Mean?

Marketing research can be defined as the systematic process of collecting, analyzing, and interpreting data to gain insights into market dynamics, consumer behavior, and competitive landscapes. Its primary purpose is to inform decision-making and assist businesses in understanding their target market, identifying opportunities, and mitigating risks.

Effective marketing research goes beyond gathering data; it involves turning that data into actionable insights. By employing various research methodologies and techniques, marketers can obtain a deeper understanding of consumer preferences, market trends, and competitors, enabling them to make informed strategic decisions.

Key Elements and Components of Marketing Research

To conduct meaningful marketing research, it is essential to consider the following key elements and components:

a. Data Collection Methods

Marketing research utilizes a range of data collection methods, including surveys, interviews, focus groups, observations, and online analytics. Each method offers unique advantages and is selected based on the research objectives, target audience, and available resources. By carefully choosing the appropriate data collection methods, researchers can gather accurate and reliable data to support their findings.

b. Data Analysis and Interpretation

Once data is collected, it needs to be analyzed and interpreted to derive meaningful insights. Data analysis involves organizing, cleaning, and transforming raw data into a usable format. Statistical techniques, such as regression analysis or factor analysis, can be employed to uncover relationships, patterns, and trends within the data. Interpreting the data requires a deep understanding of the research objectives and industry context to extract valuable insights.

c. Research Ethics

Ethics plays a crucial role in marketing research. It is essential to conduct research in an ethical manner, respecting the privacy and confidentiality of participants. Obtaining informed consent, protecting personal information, and ensuring the voluntary nature of participation are essential ethical considerations. Adhering to ethical guidelines not only upholds the integrity of the research but also builds trust with participants and stakeholders.

Why Marketing Research is Important?

Marketing research is a critical component of any successful business strategy. It involves collecting and analyzing relevant data to gain insights into the market, customers, competitors, and overall business environment. Here are some reasons why marketing research is important:

I. Gaining Consumer Insights

Understanding consumer behavior is a critical aspect of marketing research that provides valuable insights into the preferences, needs, and expectations of target audiences. By delving into consumer insights, businesses can develop effective marketing strategies that resonate with their customers. In this section, we will explore the importance of understanding consumer behavior, techniques for data collection, the role of market segmentation, and the significance of consumer insights in shaping marketing strategies.

Importance of understanding consumer behavior in marketing research

Understanding consumer behavior is essential for several reasons:

• Targeted marketing: Consumer behavior insights help businesses identify the specific needs, motivations, and preferences of their target audiences. By understanding consumer behavior, businesses can tailor their marketing efforts to effectively reach and engage their customers.
• Product development: Consumer behavior insights inform the development of products and services that align with customer expectations and preferences. By understanding what influences consumer purchasing decisions, businesses can design offerings that meet those needs.
• Competitive advantage: Understanding consumer behavior gives businesses a competitive edge by allowing them to differentiate their products or services based on customer preferences. It enables businesses to position their offerings effectively in the market and stand out from competitors.

Techniques used to collect data on consumer preferences, needs, and expectations

To gather data on consumer preferences, needs, and expectations, various techniques can be employed:

• Surveys and questionnaires: Surveys are a common method to collect quantitative data on consumer preferences and opinions. They involve structured questions that provide measurable responses and insights into consumer behavior.
• Interviews: Interviews, whether in-person, phone-based, or online, allow for more in-depth discussions and qualitative data collection. They provide insights into consumer motivations, emotions, and underlying factors that influence their choices.
• Focus groups: Focus groups involve small, carefully selected groups of individuals who discuss specific topics or products. They enable businesses to gather qualitative data through group interactions and uncover deeper insights into consumer behavior.
• Observation: Observation involves directly observing consumers in their natural environments, such as retail stores or online platforms. It provides insights into actual behaviors, preferences, and decision-making processes.
• Social media monitoring: Social media platforms offer a vast amount of publicly available data on consumer opinions, preferences, and trends. Analyzing social media conversations and trends can provide valuable insights into consumer behavior.

Role of market segmentation in identifying target audiences

Market segmentation is the process of dividing a broad target market into smaller, more specific segments based on shared characteristics, such as demographics, psychographics, behaviors, or needs. It plays a crucial role in identifying target audiences and tailoring marketing strategies. Key points to discuss include:

• Benefits of market segmentation: Market segmentation allows businesses to understand their customers better, target specific groups with relevant messages, and allocate resources effectively.
• Types of market segmentation: Discuss common segmentation variables such as demographics (age, gender, income), psychographics (lifestyle, values), behaviors (usage patterns, brand loyalty), and needs (benefits sought).
• Target audience identification: Explain how market segmentation helps in identifying the most profitable and receptive target audiences for a business. It allows businesses to tailor their marketing messages and offerings to specific segments.

The significance of consumer insights in developing effective marketing strategies

Consumer insights play a vital role in shaping effective marketing strategies. Discuss the following points:

• Understanding customer needs and preferences: Consumer insights provide businesses with a deep understanding of what drives consumer behavior, allowing them to design products, services, and marketing campaigns that resonate with their target audiences.
• Developing targeted messaging and positioning: By understanding consumer motivations, businesses can develop messaging that appeals to specific customer segments. Consumer insights also help in identifying unique selling points and differentiators to position products or services effectively.
• Innovating and adapting offerings: Consumer insights enable businesses to identify emerging trends, changing customer needs, and gaps in the market. This knowledge allows for innovation and adaptation of products or services to meet evolving customer demands.
• Enhancing customer experiences: Consumer insights provide valuable feedback on customer satisfaction, pain points, and expectations. By leveraging these insights, businesses can improve customer experiences and build long-term relationships.

By harnessing consumer insights, businesses can develop strategies that are customer-centric, relevant, and aligned with market demands, leading to increased customer satisfaction, brand loyalty, and business success.

II. Identifying Market Opportunities

Market analysis is a crucial component of marketing research as it helps businesses identify market trends, competition, and demand. By thoroughly analyzing the market, businesses can uncover untapped opportunities and make informed decisions about potential areas for growth. In this section, we will highlight the role of market analysis, discuss the process of analyzing market trends, competition, and demand, and explain how marketing research helps businesses identify untapped market opportunities. Additionally, we will provide examples of successful market opportunity identification through research.

The Role of market analysis in marketing research

Market analysis plays a vital role in marketing research for the following reasons:

• Understanding market trends: Market analysis helps businesses stay updated on the latest trends and shifts in the market. By monitoring and analyzing trends, businesses can identify emerging opportunities and adapt their strategies accordingly.
• Assessing competition: Market analysis allows businesses to evaluate the competitive landscape by identifying direct and indirect competitors, their offerings, and their market share. This knowledge helps businesses position themselves effectively and develop strategies to differentiate from competitors.
• Analyzing demand and customer behavior: Market analysis provides insights into customer preferences, behaviors, and purchasing patterns. By understanding customer needs and expectations, businesses can tailor their products, services, and marketing efforts to meet those demands.
• Identifying market gaps: Through market analysis, businesses can identify gaps or unmet needs in the market. These gaps represent potential opportunities for businesses to develop innovative solutions or fill existing gaps with improved offerings.

The process of analyzing market trends, competition, and demand

Analyzing market trends, competition, and demand involves the following steps:

• Gathering market data: Collect relevant data from primary and secondary sources. Primary sources include conducting surveys, interviews, or focus groups with customers, while secondary sources involve analyzing existing industry reports, market studies, and competitor analysis.
• Assessing market trends: Identify and analyze trends that impact the industry, such as technological advancements, changing consumer preferences, regulatory changes, or economic factors. Determine the direction in which the market is moving to anticipate future opportunities and challenges.
• Evaluating competition: Identify key competitors in the market and conduct a comprehensive analysis of their offerings, market share, pricing strategies, distribution channels, and marketing tactics. Understand their strengths, weaknesses, and market positioning to identify opportunities for differentiation.
• Analyzing customer demand: Collect and analyze data on customer preferences, behaviors, and buying patterns. Understand the factors that drive customer decision-making and identify unmet needs or areas where customer expectations are not being fulfilled.
• SWOT analysis: Conduct a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to evaluate the internal strengths and weaknesses of your own business, as well as external opportunities and threats in the market. This analysis helps identify areas where your business can leverage its strengths to capitalize on market opportunities.

How marketing research helps businesses identify untapped market opportunities

Marketing research provides businesses with valuable insights that enable them to identify untapped market opportunities:

• Target audience analysis: Through market research, businesses gain a deep understanding of their target audience’s demographics, psychographics, needs, and preferences. This knowledge helps identify niche markets or segments that are underserved or have unique demands.
• Competitive analysis: By conducting competitor research, businesses can identify gaps in the market where competitors are not effectively addressing customer needs. These gaps present opportunities for businesses to fill the void and gain a competitive advantage.
• Consumer behavior analysis: Marketing research helps uncover consumer behavior patterns, motivations, and pain points. By identifying unmet needs or areas where customers are dissatisfied with existing solutions, businesses can develop innovative products or services to address those gaps.
• Market trend analysis: Monitoring and analyzing market trends allows businesses to identify emerging opportunities that align with evolving customer demands. Businesses can capitalize on these trends by adapting their strategies, developing new offerings, or entering new markets.

Examples of successful market opportunity identification through research

Several successful companies have identified untapped market opportunities through effective market research:

• Airbnb: By conducting market research and understanding the demand for unique travel experiences, Airbnb identified a market opportunity for peer-to-peer accommodation rentals. They created a platform that connected travelers with homeowners willing to rent out their properties, disrupting the traditional hotel industry.
• Tesla: Tesla identified the growing demand for sustainable transportation and conducted extensive market research on consumer preferences and expectations. This research led to the development of electric vehicles with advanced features, meeting the needs of environmentally conscious consumers.
• Dollar Shave Club: Dollar Shave Club recognized the frustration among consumers regarding expensive razor blades and conducted market research to understand customer preferences. They identified an opportunity to provide affordable subscription-based razor blades directly to consumers, disrupting the razor industry dominated by established players.
• Beyond Meat: Beyond Meat identified the increasing demand for plant-based protein alternatives and conducted market research to understand consumer preferences and taste preferences. This research helped them develop plant-based meat substitutes that closely resembled the taste and texture of traditional meat, targeting health-conscious and environmentally aware consumers.

These examples highlight the power of market research in identifying market opportunities and creating successful businesses by meeting unmet needs, addressing consumer pain points, and capitalizing on emerging trends.

III. Assessing and Enhancing Brand Perception

Brand perception plays a critical role in the marketplace as it influences consumer behavior, purchase decisions, and brand loyalty. The way consumers perceive a brand impacts their trust, credibility, and willingness to engage with the brand. In this section, we will discuss the importance of brand perception in the marketplace, explain how marketing research helps assess brand awareness, image, and reputation, explore methods to measure and track brand perception and provide insights on using marketing research to enhance brand positioning and messaging.

Importance of brand perception in the marketplace

Brand perception refers to how consumers perceive and interpret a brand based on their interactions, experiences, and overall impression of the brand. It encompasses various dimensions such as brand awareness, image, reputation, trustworthiness, and emotional connection. Here are key reasons why brand perception is crucial in the marketplace:

• Differentiation and competitive advantage: In a competitive market, a positive brand perception helps differentiate a brand from its competitors. It creates a unique position and value proposition that sets the brand apart, making it more memorable and desirable to consumers.
• Consumer trust and loyalty: Positive brand perception builds trust and credibility with consumers. When consumers have confidence in a brand, they are more likely to choose it over alternatives and become loyal customers. Repeat purchases and brand advocacy can result from a strong brand perception.
• Purchase decisions: Brand perception significantly influences consumers’ purchase decisions. A positive perception can positively impact consumers’ attitudes and intentions toward a brand, leading to increased sales and market share.
• Premium pricing: A strong brand perception allows brands to command premium pricing. Consumers are often willing to pay more for brands they perceive as higher quality, more reliable, or having superior value compared to competitors.
• Brand extensions and expansion: Positive brand perception facilitates brand extensions and expansions into new markets or product categories. Consumers’ favorable perception of a brand can make them more receptive to new offerings from the brand, increasing the chances of successful expansion.

How marketing research helps assess brand awareness, image, and reputation

Marketing research plays a vital role in assessing brand awareness, image, and reputation by providing valuable insights into consumers’ perceptions and attitudes. Here’s how marketing research helps in this assessment:

• Brand awareness: Marketing research measures brand awareness by evaluating the extent to which consumers recognize and recall a brand. Surveys, interviews, or focus groups can assess aided and unaided brand awareness, determining the level of brand recognition among the target audience.
• Brand image: Marketing research helps understand how consumers perceive a brand’s image and associations. Qualitative research methods, such as in-depth interviews or focus groups, explore consumers’ beliefs, values, emotions, and experiences related to the brand. Quantitative surveys can be used to measure specific brand attributes and associations.
• Brand reputation: Marketing research assesses brand reputation by examining consumers’ perceptions of a brand’s credibility, trustworthiness, and reliability. Surveys or online sentiment analysis can gauge public sentiment, social media mentions, or online reviews to evaluate brand reputation.

By combining qualitative and quantitative research methods, marketing research provides a comprehensive understanding of brand perception and helps identify strengths, weaknesses, and opportunities for improvement.

Methods to Measure and track brand perception

To measure and track brand perception effectively, businesses can employ the following methods:

• Surveys and questionnaires: Designing surveys and questionnaires specifically tailored to measure brand perception can provide quantitative data on various dimensions such as brand awareness, image, reputation, and associations. Likert scale questions, ranking exercises, and semantic differential scales can be used to gather structured data.
• Focus groups and interviews: Qualitative research methods like focus groups and interviews allow researchers to delve deeper into consumers’ thoughts, feelings, and experiences related to a brand. These methods provide rich insights, uncovering nuances and capturing the language consumers use to describe their perceptions.
• Social media monitoring: Tracking social media conversations, mentions, and sentiment analysis can help gauge public sentiment toward a brand. It provides real-time insights into how consumers perceive and discuss the brand in online communities.
• Online reviews and customer feedback: Monitoring online reviews, customer feedback, and ratings can provide valuable insights into brand perception. Analyzing customer feedback and identifying common themes can help identify areas of strength and improvement.
• Brand tracking studies: Implementing longitudinal studies to track brand perception over time enables businesses to assess changes in brand awareness, image, reputation, and associations. These studies involve regular data collection and analysis, providing a comprehensive view of brand perception trends.

Using marketing research to enhance brand positioning and messaging

Marketing research offers valuable insights to enhance brand positioning and messaging strategies:

• Identifying target audience perceptions: Research helps businesses understand how the target audience perceives the brand, identifying gaps between the desired brand image and the current perception. This knowledge guides the development of targeted messaging and communication strategies to align with the desired brand positioning.
• Evaluating competitive positioning: Research enables businesses to assess how their brand is positioned relative to competitors. By understanding competitors’ brand perceptions and positioning strategies, businesses can identify unique differentiators and develop messaging that highlights their competitive advantages.
• Testing brand messages: Marketing research helps test different brand messages and positioning concepts with the target audience. By gathering feedback and measuring consumers’ responses, businesses can refine their messaging and ensure it resonates with the intended audience.
• Monitoring brand health: Regular brand tracking studies provide businesses with ongoing insights into brand perception trends, allowing them to identify shifts in consumer attitudes and perceptions. This information helps businesses proactively adapt their positioning and messaging strategies to maintain a positive brand image.

By leveraging marketing research, businesses can continuously assess, refine, and enhance their brand perception to maintain a competitive edge and foster strong connections with their target audience.

IV. Optimizing Marketing Strategies and Campaigns

Marketing research plays a vital role in developing effective marketing strategies by providing valuable insights into consumer behavior, market trends, and the competitive landscape. In this section, we will highlight the role of marketing research in developing effective marketing strategies, discuss the importance of customer insights in designing targeted campaigns, explore the use of marketing research to optimize pricing, promotion, and distribution strategies, and provide examples of successful marketing strategies powered by research.

Role of marketing research in developing effective marketing strategies

Marketing research serves as the foundation for developing effective marketing strategies by providing businesses with the necessary information to make informed decisions. Here’s how marketing research plays a crucial role:

• Understanding the target market: Marketing research helps businesses gain a deep understanding of their target market, including demographics, psychographics, buying behavior, and preferences. This knowledge enables businesses to tailor their marketing strategies to effectively reach and engage their target audience.
• Identifying market trends and opportunities: Through market research, businesses can identify emerging trends, market gaps, and untapped opportunities. This knowledge allows them to align their marketing strategies with market demands and capitalize on new and evolving customer needs.
• Analyzing competitors: Marketing research helps businesses gather insights into their competitors’ strategies, positioning, and market share. Understanding the competitive landscape enables businesses to differentiate themselves, identify areas of competitive advantage, and develop effective marketing tactics.
• Assessing customer satisfaction and loyalty: Research helps businesses measure customer satisfaction, identify pain points, and understand factors that drive customer loyalty. This information is crucial for developing strategies that enhance customer experience, foster loyalty, and drive repeat purchases.
• Evaluating marketing channels and touchpoints: Marketing research helps identify the most effective marketing channels and touchpoints to reach the target audience. By understanding how customers engage with various channels, businesses can allocate resources effectively and optimize their marketing mix.

Importance of customer insights in designing targeted campaigns

Customer insights derived from marketing research are instrumental in designing targeted campaigns that resonate with the target audience. Here’s why customer insights are important:

• Personalization and relevance: Customer insights allow businesses to understand customers’ needs, preferences, and motivations. This knowledge enables the creation of personalized and relevant marketing messages that speak directly to the target audience, increasing the chances of engagement and conversion.
• Segmenting and targeting: Customer insights help identify different customer segments based on demographics, behaviors, and preferences. By segmenting the market and targeting specific customer groups, businesses can tailor their campaigns to address the unique needs and desires of each segment, resulting in higher effectiveness and ROI.
• Message optimization: Marketing research allows businesses to test and refine their marketing messages based on customer feedback and responses. By understanding how customers perceive and interpret different messages, businesses can optimize their campaigns to deliver the desired impact and achieve marketing objectives.
• Creative direction: Customer insights guide the creative direction of marketing campaigns. By understanding customers’ preferences, values, and aspirations, businesses can create compelling visuals, copy, and storytelling that resonate with the target audience, evoking emotional connections and driving engagement.

Use of marketing research to optimize pricing, promotion, and distribution strategies

Marketing research plays a crucial role in optimizing pricing, promotion, and distribution strategies. Here’s how it helps:

• Pricing strategies: Through market research, businesses can assess customers’ willingness to pay, pricing sensitivities, and perceptions of value. This information enables businesses to determine optimal pricing strategies, such as competitive pricing, value-based pricing, or premium pricing, to maximize profitability and market share.
• Promotion strategies: Marketing research helps businesses identify the most effective promotional channels, messages, and tactics to reach their target audience. It allows businesses to test different promotional strategies , measure their impact, and optimize campaigns for maximum reach and engagement.
• Distribution strategies: Research helps businesses understand customers’ preferred distribution channels and touchpoints. It provides insights into customers’ purchasing behaviors, online vs. offline preferences, and expectations regarding product availability and convenience. This information guides businesses in optimizing their distribution strategies, ensuring products are easily accessible to the target audience.

Examples of successful marketing strategies powered by research

Several successful marketing strategies have been powered by comprehensive market research. Here are a few examples:

• Apple’s “Think Different” campaign: Apple conducted extensive market research to understand the desires and aspirations of its target audience. The research revealed that customers were looking for innovation, creativity, and a break from the status quo. Apple’s “Think Different” campaign, launched in 1997, tapped into these insights and positioned Apple as a brand that champions individuality, innovation, and nonconformity.
• Coca-Cola’s “Share a Coke” campaign: Coca-Cola used market research to understand the growing desire for personalization and connection among consumers. The research revealed that people found personalized experiences more meaningful. Coca-Cola leveraged this insight to create the “Share a Coke” campaign, replacing its logo with popular names on its bottles, and encouraging consumers to share a Coke with friends and loved ones. The campaign resulted in increased sales, engagement, and social media buzz.
• Nike’s “Just Do It” campaign: Nike conducted market research to understand the mindset of its target audience, particularly athletes and sports enthusiasts. The research revealed that many people were hesitant to pursue their goals due to fear and self-doubt. Nike’s iconic “Just Do It” campaign, launched in 1988, tapped into this insight and positioned Nike as a brand that inspires and empowers individuals to overcome obstacles and take action.

These examples highlight the power of marketing research in shaping successful marketing strategies that resonate with consumers, drive engagement, and deliver business results.

V. Anticipating Market Trends and Staying Ahead

Market research plays a crucial role in helping businesses stay ahead of industry trends by providing insights into market dynamics, consumer behavior, and emerging opportunities. In this section, we will discuss the significance of market research in staying ahead of industry trends, explore techniques used to monitor and analyze market trends, highlight the role of marketing research in predicting future consumer behaviors, and showcase case studies of companies that have leveraged market research to their advantage .

Significance of market research in staying ahead of industry trends

Staying ahead of industry trends is essential for businesses to remain competitive and seize emerging opportunities. Market research enables businesses to:

• Identify emerging trends: By conducting market research, businesses can monitor industry trends, technological advancements, and changing consumer preferences. This information allows businesses to anticipate shifts in the market and proactively adapt their strategies to capitalize on emerging trends.
• Understand consumer behavior: Market research provides insights into consumer preferences, buying patterns, and decision-making processes. By understanding how consumers interact with products and services, businesses can identify evolving needs and tailor their offerings to meet changing consumer demands.
• Identify new market opportunities: Market research helps businesses identify untapped market segments, emerging markets, and niche opportunities. By analyzing market gaps and customer pain points, businesses can develop innovative solutions and enter new markets ahead of competitors.
• Stay updated on the competitive landscape: Market research allows businesses to monitor their competitors’ activities, strategies, and market positioning. By understanding competitors’ strengths and weaknesses, businesses can identify areas for differentiation and devise strategies to outperform competitors.

Techniques used to monitor and analyze market trends

To effectively monitor and analyze market trends, businesses employ various techniques and tools. Some commonly used techniques include:

• Surveys and questionnaires: Businesses conduct surveys and questionnaires to gather data directly from consumers. These tools help businesses understand consumer preferences, attitudes, and behaviors, enabling them to identify emerging trends and anticipate future demands.
• Social media monitoring: Social media platforms offer a wealth of real-time information about consumer opinions, preferences, and discussions. By monitoring social media conversations and trends, businesses can gain insights into consumer sentiment, identify emerging topics, and track the popularity of products or services.
• Data analytics: Data analytics involves analyzing large volumes of data to uncover patterns, trends, and correlations. By utilizing advanced analytics techniques, such as predictive modeling and machine learning, businesses can identify emerging trends, forecast future market conditions, and make data-driven decisions.
• Competitive intelligence: Competitive intelligence involves gathering and analyzing information about competitors’ strategies, product offerings, pricing, and market positioning. By monitoring competitors’ activities, businesses can identify emerging trends, benchmark their performance, and stay ahead of industry developments.
• Industry reports and publications: Businesses rely on industry reports, market research studies, and publications to access valuable insights about market trends, consumer behavior, and industry forecasts. These sources provide in-depth analysis and expert opinions, helping businesses make informed decisions.

Role of marketing research in predicting future consumer behaviors

Marketing research plays a vital role in predicting future consumer behaviors by providing businesses with insights into consumer preferences, motivations, and evolving needs. Here’s how marketing research facilitates predicting consumer behaviors:

• Understanding consumer preferences: Marketing research helps businesses understand consumer preferences by analyzing data on past behavior, current trends, and market dynamics. By identifying patterns and correlations, businesses can predict future consumer preferences and tailor their offerings accordingly.
• Consumer segmentation: Through market research, businesses segment the market based on demographic, psychographic, and behavioral characteristics. This segmentation enables businesses to identify distinct consumer groups and predict their future behaviors based on shared characteristics and preferences.
• Trend analysis: Marketing research involves analyzing historical data and market trends to identify patterns and predict future trends. By monitoring shifts in consumer behavior, businesses can anticipate future demands, preferences, and purchasing patterns.
• Consumer feedback and engagement: Market research allows businesses to gather direct feedback from consumers through surveys, focus groups, and interviews. By understanding consumers’ feedback and engaging in ongoing dialogue, businesses can gain insights into their needs, expectations, and evolving behaviors, helping them predict future consumer actions.

Case studies of companies leveraging market research

Several companies have successfully leveraged market research to gain a competitive edge and capitalize on emerging trends. Here are a few examples:

• Netflix: Netflix extensively uses market research to understand customer preferences and behavior. By analyzing viewing patterns, ratings, and feedback, Netflix predicts user preferences and tailors its content offerings to meet evolving consumer demands. This approach has enabled Netflix to stay ahead of industry trends and maintain a dominant position in the streaming market.
• Airbnb: Airbnb leverages market research to identify emerging travel trends and customer preferences. By analyzing user reviews, search data, and market dynamics, Airbnb identifies new travel destinations, experiences, and accommodation types that align with evolving consumer demands. This approach has helped Airbnb expand its offerings and disrupt the traditional hospitality industry.
• Tesla: Tesla utilizes market research to anticipate future trends in the electric vehicle (EV) market. By monitoring consumer preferences, technological advancements, and government regulations, Tesla has been able to develop innovative EVs that meet changing consumer needs. This market research-driven approach has propelled Tesla to become a leader in the EV industry.

These case studies demonstrate how companies that prioritize market research can gain a competitive advantage, identify emerging trends, and deliver products and services that resonate with consumers.

In conclusion, market research plays a significant role in helping businesses stay ahead of industry trends. By monitoring market dynamics, understanding consumer behavior, and leveraging research-driven insights, businesses can proactively adapt their strategies, capitalize on emerging opportunities, and maintain a competitive edge in today’s dynamic business environment.

Market research is the compass that guides businesses toward success in a competitive world. By understanding customers, identifying opportunities, staying ahead of competitors, reducing risks, and setting realistic goals, businesses can make informed decisions and drive their strategies effectively. Invest in market research to gain a competitive edge and thrive in today’s dynamic landscape. Embrace the power of insights and pave the path to future success.

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Module 6: Marketing Information and Research

The importance of marketing information and research, learning objectives.

• Define marketing information
• Explain why organizations use marketing information to provide customer insights

Fresh Customer Insights

Effective marketing starts with a strong knowledge of your customers: the kind of knowledge that gives you unique insights into what they want and how to satisfy them better than the competition. The most reliable source of fresh customer insights is good  marketing information . Useful marketing information may come from a variety of sources both inside and outside your organization. Marketing information is generated by a variety of different activities, including marketing research.

Marketing research is a systematic process for identifying marketing opportunities and solving marketing problems, using customer insights that come out of collecting and analyzing marketing information. The mechanics of marketing research must be controlled so that marketers uncover the relevant facts to answer the problem at hand. Control over this fact-finding process is the responsibility of the marketing research director, who must correctly design the research and carefully supervise its execution, to ensure it yields the customer insights the organization needs.

A marketing information system is a combination of people, technologies, and processes for managing marketing information, overseeing market research activities, and using customer insights to guide marketing decisions and broader management and strategy decisions.

Knowledge Is Power Against the Competition

The business environment is increasingly competitive. With something as simple as a Google search, customers have unprecedented opportunities to explore alternatives to what any single company offers. Likewise, companies have ample opportunity to identify, track, and lure customers away from their less-vigilant competitors. A regular infusion of fresh customer insights can make all the difference between keeping customers and losing them. Marketing information and research are essential tools for marketers and the management team as they align strategy with customer wants and needs.

Consider the following examples:

• Before introducing OnStar, the first-ever embedded wireless service in cars, GM used marketing research to understand what types of applications would make consumers most interested in subscribing to the service and how much they would pay for it. Of all the benefits OnStar could offer, the research helped GM prioritize how the initial service would provide value, focusing on driver assistance and security. Research also helped determine OnStar pricing to help the company build a large subscriber base quickly. [1]
• Enterprise systems provider PeopleSoft recruited a diverse set of universities as early-adopter “Beta” partners to provide input as it designed a new student information system for higher education. This marketing research helped PeopleSoft create a versatile system that could support the needs of a variety of colleges and universities, ultimately leading to strong receptivity and market share when the new system became widely available. [2]
• Marketing research to track brand awareness and perceptions helped the World Wildlife Fund (WWF) understand that it had an image problem. Although millions of people recognized and liked the brand, relatively few of them understood what the nonprofit organization actually does for habitat conservation worldwide. Instead, most thought of it as simply the “endangered species” people. With additional research, the organization found that when it communicated effectively about the full scope of its mission, people felt even stronger positive associations, making them more likely to support or affiliate with the nonprofit. [3]

What Should Marketers Investigate Using Marketing Information?

An easy—and truthful—answer to this question is “everything.” There is no aspect of marketing to which information and research do not apply. Every marketing concept and every element involved in the marketing management process can be subjected to a great deal of careful marketing research and inquiry. Some important questions include:

• Who is the customer?
• What problems is the customer trying to solve with a given purchase?
• What does s/he desire in the way of satisfaction?
• How does the customer get information about available choices?
• Where does s/he choose to purchase?
• Why does s/he buy, or not buy?
• When does s/he purchase?
• How does s/he go about seeking satisfaction in the market?

Seeking answers to these questions yields insights into the customer’s needs, perceptions, and behaviors. Another area in which research is critical is profitability. Organizations need to forecast sales and related costs in order to understand how their operations will be profitable. They also need to plan competitive marketing programs that will produce the desired level of sales at an appropriate cost. The analysis of past sales and interpretation of cost information are important in evaluating performance and providing useful facts for future planning. All these activities rely on marketing information and a rigorous marketing research process to produce insights managers can trust and act on.

When to Use Marketing Information and Research

Many marketing decisions are made without consulting marketing information or the use of formal marketing research. For example, a decision maker may feel she already knows enough to make a good decision. The time required to investigate a question or conduct formal marketing research may not be available. In other cases, the cost of obtaining the data is prohibitive, or the desired data cannot be obtained in reliable form. In a few instances, there may be no choice among alternatives and therefore no decision to make because there is little value in spending time and money to study a problem if there is only one possible solution. But in most business situations, marketers and managers must choose among two or more courses of action. This is where fact-finding, marketing information, and research enter to help make the choice.

Marketing information and research address the need for quicker, yet more accurate, decision making by the marketer. These tools put marketers close to their customers to help them understand who they customers are, what they want, and what competitors are doing. When different stakeholders have very different views about a particular marketing-related decision, objective information and research can inform everyone about the issues in question and help the organization come to agreement about the path forward. Good research should help align marketing with the other areas of the business.

Marketers should always be tapping into regular sources of marketing information about their organization and industry in order to monitor what’s happening generally. For example, at any given time marketers should understand how they are doing relative to sales goals and monitor developments in their industry or competitive set.

Beyond this general level of “tuning in,” additional market research projects may also be justified. As a rule, if the research results can save the company more time, money, and/or risk than it costs to conduct the research, it is wise to proceed. If the cost of conducting the research is more than it will contribute to improving a decision, the research should not be carried out. In practice, applying this cost-test principle can be somewhat complex, but it provides useful guidance about when marketing research is worthwhile. Ultimately, successful marketing executives make decisions on the basis of a blend of facts and intuition.

Fact: Top Performers Research Customer Preferences

In 2010, the management consultancy McKinsey published research about the difference between organizations that produced top-performing products and those that produced under-performing products. The use of marketing research was a striking differentiator:

More than 80 percent of the top performers said they periodically tested and validated customer preferences during the development process, compared with just 43 percent of bottom performers. They were also twice as likely as the laggards to research what, exactly, customers wanted. [4]  

The study also identified other differences between top and bottom performers, but an underlying theme was the emphasis successful projects and companies placed on understanding their customers and adjusting course when necessary to better address customers’ needs. This research provides more than anecdotal evidence that marketing research and well-applied marketing information can make a substantial contribution to an organization’s success.

• Vincent P. Barabba, Surviving Transformation: Lessons from GM's Surprising Turnaround , pp 46–50, https://books.google.com/books?id=VvbDYad7cLoC&pg ↵
• Proquest, "First We Built, Now We Buy: A Sociological Case Study for Enterprise Systems in Higher Education," pp 292–203, https://books.google.com/books?id=rgIAaigKQBIC&pg ↵
• "The Role of Brand in the Nonprofit Sector: Four Case Studies," pp 1–7, http://www.ksghauser.harvard.edu/nonprofit-brand-conference/materials/assets/Case%20Studies%20-%20Dec%208%20Nonprofit%20Brand%20Conference.pdf ↵
• http://www.mckinsey.com/insights/operations/the_path_to_successful_new_products ↵
• Revision and Adaptation. Authored by : Lumen Learning. License : CC BY: Attribution
• Chapter 3: Marketing Research: An Aid to Decision Making, from Introducing Marketing. Authored by : John Burnett. Provided by : Global Text. Located at : http://solr.bccampus.ca:8001/bcc/file/ddbe3343-9796-4801-a0cb-7af7b02e3191/1/Core%20Concepts%20of%20Marketing.pdf . License : CC BY: Attribution
• WWF Hot-Air Balloon in Brazil. Authored by : Josu00e9 Cruz/ABr. Provided by : Wikimedia. Located at : https://commons.wikimedia.org/wiki/File:WWFbalaobrasilia22032007.jpg . License : CC BY: Attribution

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4.3: The importance of market research

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The modern world can feel unpredictable. It is increasingly difficult to keep up with trends, customer needs, popular opinions and competitors. So, how can you keep your brand and products relevant to ensure you are meeting your customers’ needs?

The answer is to conduct market research. Market research helps you make informed business decisions. It involves systematically gathering, recording and analysing data about customers, competitors and the market, and turning this data into insight that can drive marketing strategies, product design and positioning and communications strategies.

Online market research is the process of using digital tools, data and connections to glean valuable insights about a brand’s target audience. In other words, it’s the process of learning about your audience by engaging and observing them online. Technology plays a key role in gathering data and connecting with research participants, and can make the whole process quicker and easier to manage than traditional offline research methods.

Traditional and online market research have the same goals and underlying principles, but online market research has the benefit of using digital technology, which provides a range of benefits.

• The Internet is always on, meaning that data is readily available at any time.
• Many of the processes for finding, gathering and storing data can be automated. For example, you can get an automatic email alert if someone mentions your brand, or you can set up self-administered digital surveys.
• You have access to a large number of participants around the world at the click of a button. A lot of the information you will use is already being automatically collected such as web analytics and social media data all you need to do is access it.

Remember that comments made on social networks cannot represent the views of your entire target market. The validity of any data must be considered in light of your research design.

People are often happy to share their own research, insights and methodologies online, so you can access this trove of resources to inform your own research.

Online market research can be much more cost effective and quick to set up than traditional research techniques.

There are many reasons why you should conduct regular market research:

• What customers want and need from your brand
• What customers like and dislike about the brand
• Why customers buy the brand’s products or services
• Why potential customers might choose your brand over another
• Why (or why not) customers make repeat purchases
• Understand the changes in your industry and business
• Discover new market trends on which you can capitalise
• Find new potential sales avenues, customers, products and more
• Find and engage new audiences
• Allow customers to help steer your business.

If you are able to understand your customers and the greater business context, you will be able to market more effectively, meet their needs better, and drive more positive sentiment around your brand. All of this adds up to happier customers and, ultimately, a healthier bottom line.

What is Marketing Research? Examples and Best Practices

12 min read

Marketing research is essentially a method utilized by companies to collect valuable information regarding their target market. Through the common practice of conducting market research, companies gather essential information that enables them to make informed decisions and develop products that resonate with consumers. It encompasses the gathering, analysis, and interpretation of data, which aids in identifying consumer demands, anticipating market trends, and staying ahead of the competition.

Exploratory research is one of the initial steps in the marketing research process. It helps businesses gain broad insights when specific information is unknown. If you are seeking insight into how marketing research can influence the trajectory of your SaaS, then you have come to the right place!

• Market research is a systematic and objective process crucial for understanding target markets, refining business strategies, and informing decisions, which includes collecting, analyzing, and interpreting data on customers, competitors, and the industry.
• Primary market research gathers specific data directly from the target audience using tools like surveys and focus groups, while secondary market research utilizes existing data from various sources to provide broader market insights.
• Effective market research combines both qualitative methods, which explore consumer motivations, and quantitative methods, which provide measurable statistics, to create comprehensive insights that guide business strategy and decision-making.

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Defining marketing research

Launching a product without knowing what your target audience wants is like walking in the dark. Market research lights the way, helping you collect, analyze, and understand information about your target market. This allows you to refine your business strategies and make decisions based on solid evidence.

Gone are the days when just intuition or subjective judgment was enough. Objective insights from market research help avoid costly mistakes and meet consumer needs by identifying trends and changes in the market. This is crucial for assessing a product’s potential success, optimizing marketing strategies, and preparing for market shifts.

Market research is a systematic approach that provides essential information, helping businesses navigate the complexities of the commercial world. Partnering with market research companies can offer additional benefits, leveraging their expertise in understanding market demands, trends, market size, economic indicators, location, market saturation, and pricing. Whether starting a new business, developing products, or updating marketing plans, understanding how to conduct effective market research is key to success.

To conduct market research effectively, businesses must determine study goals, identify target consumers, collect and analyze data, and use the findings to make informed decisions. This process is vital for evaluating past performance, measuring changes over time, and addressing specific business needs. It guides businesses in product development, marketing strategies, and overall decision-making, ensuring a better ROI and providing an eye-opening view of the market through various research methods, whether conducted in-house or outsourced.

The purpose of marketing research

Conducting marketing research is more than just gathering data; it’s about turning that data into actionable insights to refine your business strategies. This process helps you understand what motivates your customers, enabling you to tailor your products and services to minimize risks from the start. Importantly, market research plays a pivotal role in measuring and enhancing customer satisfaction and loyalty, which are critical for understanding key demographics, improving user experience, designing better products, and driving customer retention. Customer satisfaction is measured as a key outcome, directly linked to the success of marketing strategies and business activities.

For SaaS product managers, market research, including competitive analysis, is crucial. It evaluates past strategies and gauges the potential success of new offerings. This research provides essential insights into brand strength, consumer behavior, and market position, which are vital for teams focused on sales, marketing, and product development.

A key aspect of market research is analyzing customer attitudes and usage. This analysis offers detailed insights into what customers want, the choices they make, and the challenges they face. It helps identify opportunities in the market and aids in formulating effective strategies for market entry.

Overall, market research equips SaaS entrepreneurs with the knowledge to meet their target audience’s needs effectively, guiding product adjustments and innovations based on informed decisions.

Key components of market research

Conducting market research is analogous to preparing a cake, requiring precise ingredients in specific quantities to achieve the intended outcome. Within this realm, necessary components consist of primary and secondary data gathering, thorough analysis, and insightful interpretation.

Primary research techniques such as exploratory studies, product evolution inquiries, estimations of market dimensions and shares, and consumer behavior examinations play a crucial role in collecting targeted information that can be directly applied. These methods afford a deeper understanding of your target demographic, allowing for customized strategy development.

In contrast, secondary research enriches the specificity of primary findings by adding wider context. It taps into external resources encompassing works from other investigators, sector-specific reports, and demographics data, which provide an expansive yet less particularized landscape view of the marketplace.

The subsequent phase involves meticulous analysis of collated data offering unbiased perspectives critical for identifying deficiencies while recognizing emerging patterns. Technological progress now facilitates examination efforts on both structured and unstructured datasets effectively addressing large-scale analytical complexities.

Ultimately, it’s through expert-led interpretation that value transcends raw figures, yielding strategies grounded in deep comprehension. Akin to decoding recipes using selected ingredients—this interpretative step enables crafting optimal business maneuvers just as one would bake their ideal confectionery creation utilizing proper culinary guidance.

Types of market research: primary and secondary

Now that you know the importance of clear research objectives, let’s explore the different types of market research and the techniques available to achieve these goals. Market research methods can be divided into two main categories: primary research and secondary research . The choice between these depends on factors like your budget, time constraints, and whether you need exploratory data or definitive answers.

Primary research involves collecting new data directly from sources. This process is like mining for precious metals, as it requires using various methods to gather fresh insights.

• Surveys (here – in-app survey templates from Userpilot ).

• Interviews.

• Focus groups.
• Product trials.

This approach gives you first-hand insight into your target audience.

Conversely, secondary research uses already established datasets of primary data – which can add depth and reinforcement to your firsthand findings.

Conducting your own market research using primary research tools can be a cost-effective strategy, allowing businesses to gather valuable insights directly and tailor their research to specific needs.

Let’s look a bit deeper into them now.

What is primary market research?

Market research uses primary market research as an essential tool. This involves collecting new data directly from your target audience using various methods, such as surveys , focus groups, and interviews.

Each method has its benefits. For example, observational studies allow you to see how consumers interact with your product.

There are many ways to conduct primary research.

Focus Groups : Hold discussions with small groups of 5 to 10 people from your target audience. These discussions can provide valuable feedback on products, perceptions of your company’s brand name, or opinions on competitors. Additionally, these discussions can help understand the characteristics, challenges, and buying habits of target customers, optimizing brand strategy.

Interviews : Have one-on-one conversations to gather detailed information from individuals in your target audience.

Surveys : These are a common tool in primary market research and can be used instead of focus groups to understand consumer attitudes. Surveys use structured questions and can reach a broad audience efficiently.

Navigating secondary market research

While marketing research using primary methods is like discovering precious metals, secondary market research technique is like using a treasure map. This approach uses data collected by others from various sources, providing a broad industry view. These sources include market analyses from agencies like Statista, historical data such as census records, and academic studies.

Secondary research provides the basic knowledge necessary for conducting primary market research goals but may lack detail on specific business questions and could also be accessible to competitors.

To make the most of secondary market research, it’s important to analyze summarized data to identify trends, rely on reputable sources for accurate data, and remain unbiased in data collection methods.

The effectiveness of secondary research depends significantly on how well the data is interpreted, ensuring that this information complements the insights from primary research.

Qualitative vs quantitative research

Market research employs both qualitative and quantitative methods, offering distinct insights that complement each other. Qualitative research aims to understand consumer behaviors and motivations through detailed analysis, while quantitative research collects measurable data for statistical analysis.

The selection of qualitative or quantitative methods should align with your research goals. If you need to uncover initial insights or explore deep consumer motivations, qualitative techniques like surveys or interviews are ideal.

On the other hand, if you need data that can be measured and analyzed for reliability, quantitative methods are more suitable.

However, these approaches don’t have to be used separately. Combining qualitative and quantitative methods in mixed-method studies allows you to capture both detailed exploratory responses and concrete numerical data. This integration offers a comprehensive view of the market, leveraging the strengths of both approaches to provide a fuller understanding of market conditions.

Implementing market research tools: Userpilot’s role

Similar to how a compass is essential for navigation at sea, businesses need appropriate instruments to carry out effective market research. Userpilot’s suite of product analytics and in-app engagement tools are critical components for this purpose.

Acting as a Buyer Persona Research instrument, Userpilot’s product analytics provide key quantitative research capabilities. This helps clearly define and comprehend the attributes and behaviors of potential customers, providing you with insights into your ICP (Ideal Customer Persona), user preferences, and product-market fit.

Beyond product analytics, Userpilot offers robust in-app engagement features such as modals and surveys that support real time collection of market research information. These interactive features work synergistically with the analytical tools to enable companies to gather detailed data and feedback crucial for informed business decision-making.

Marketing research process: Step-by-step guide

Marketing research conists of several critical stages:

• Defining precise goals.
• Delving into the knowledge of your target demographic.
• Collecting and scrutinizing data.
• Revealing insights that can be translated into tangible actions.

Following these steps allows you to gather critical information that guides business decisions.

An effective research strategy is crucial and involves:

• Properly allocating funds.
• Formulating testable hypotheses.
• Choosing appropriate methods for the study.
• Determining the number of study participants.
• Considering external variables.

A well-planned strategy ensures that your market research is focused, efficient, and produces useful outcomes.

After collecting data, the next step is to analyze it. This involves comparing the data to your initial questions to draw conclusions relevant to your business strategies.

Userpilot makes your data analysis easier by providing handy analytics dashboards for key user metrics such as activation, engagement, core feature adoption, and retention out of the box:

Finally, you report the findings and the process, providing recommendations based on the evidence. This is like solving a puzzle: each piece helps to complete the overall picture.

Challenges and best practices in market research

Delving into market research comes with its own set of hurdles. Those conducting the research must deliver more profound insights within increasingly shorter timespans, and they need to cultivate strategic, continuous research methods to stay abreast of an ever-changing business landscape.

Ensuring high-quality data can be demanding due to issues such as disjointed tools or insufficient analytical expertise. New solutions like Userpilot are surfacing that make these obstacles less daunting by offering accessible and user-friendly options. Maintaining clear lines of communication with your market research team is crucial for achieving both punctuality and quality in outcomes.

The advantages of engaging in marketing research cannot be overstated.

Real-life examples of successful market research

Real-life examples of market research in the SaaS industry often showcase innovative approaches to understanding customer needs and product-market fit.

For instance, Slack, the communication platform, utilized extensive market research to identify gaps in communication tools and understand the workflows of teams. This led to the development of features that seamlessly integrated with other tools and catered to the needs of various team sizes and structures.

Another example is HubSpot, which conducted market research to understand the pain points of small to medium-sized businesses in managing customer relationships. The insights gained helped shape their all-in-one inbound marketing, sales, and service platform, which has become integral to their users’ daily operations. These examples demonstrate how SaaS companies can employ market research to inform product development, improve user experience, and strategically position themselves in a competitive market.

Choosing the right market research tools

For B2B SaaS product managers aiming to do market research, having the right set of tools can make a significant difference. Here’s a list of valuable SaaS tools that can be leveraged for effective market research:

• Userpilot : A comprehensive Product Growth Platform offering in-depth product analytics, a code-free in-app experience builder, bespoke in-app survey capabilities, and robust integration options with platforms like Salesforce and Hubspot. This tool is particularly useful for understanding user behavior, enhancing user engagement, and gathering targeted feedback.
• Qualtrics : Known for its powerful survey tools, Qualtrics helps businesses gather and analyze customer feedback effectively. Its advanced analytics features are ideal for testing market hypotheses and understanding customer sentiments.
• SurveyMonkey : A versatile tool that enables product managers to create, send, and analyze surveys quickly and easily. SurveyMonkey is suitable for gauging customer satisfaction and collecting feedback on potential new features.
• Mixpanel : Specializes in user behavior analytics, offering detailed insights into how users interact with your product. This is essential for identifying patterns and optimizing product features.
• Hotjar : Combines analytics and feedback tools to give teams insights into user behavior and preferences. Hotjar’s heatmaps and session recordings are invaluable for understanding the user experience on a deeper level.
• Tableau : A leading platform for business intelligence and data visualization, Tableau allows product managers to create comprehensive visual reports that can inform strategic decisions based on user data analysis.

Each of these tools provides unique functionalities that can assist SaaS product managers in conducting thorough market research, thereby ensuring that their products are perfectly aligned with user needs and market demands.

Measuring the impact of market research

The pivotal challenge for market research lies in demonstrating its return on investment (ROI) and overall influence on corporate success sufficiently enough to justify regular financial commitment from company leaders. The worth attributed to a market research firm hinges not only on their ability to deliver relevant and high-caliber information, but also on their pricing structures and their contribution towards propelling organizational growth.

To gauge how effectively business choices made based on market research findings succeed, various metrics and key performance indicators (KPIs) are utilized. These numerical tools act as navigational aids directing enterprises toward achieving objectives while simultaneously verifying that efforts invested in conducting market analysis are yielding fruitful guidance.

Throughout our look at market research, we’ve seen its importance and impact. Our discussion covered the basics of market research, its key components, and different types, including both qualitative and quantitative methods, and the role of Userpilot’s tools. We’ve examined the details of the market research process, tackled challenges, identified best practices, and shared success stories. We also provided advice on choosing the right market research partner and how to measure the effectiveness of your market research.

In today’s data-driven world, comprehensive market research is crucial for companies that want to succeed. It acts like a guide, helping businesses navigate the complex market landscape. Start your own detailed research today, supported by insightful analytics to help you succeed.

Frequently asked questions

What is market research and why is it important.

Understanding your target market, honing business strategies, and making informed decisions are all essential components that depend heavily on effective market research. It offers objective insights to help avoid expensive errors and foresees the needs of customers .

What is the difference between primary and secondary market research?

Primary market research is characterized by the direct gathering of data, in contrast to secondary market research which leverages existing information from alternative sources for addressing research inquiries.

Such a distinction can guide you in selecting an approach that aligns with your precise needs for conducting specific research.

What are some examples of successful market research?

Examples of successful market research are evident in the operations of well-known companies such as Starbucks, Apple, and McDonald’s. They have harnessed this tool to fine-tune their business strategies and make decisions based on solid information.

By employing market research, these businesses have managed to gain insight into their customers’ desires and needs, which has contributed significantly to their success.

How can I choose the right market research partner?

Selecting an ideal market research ally involves identifying a firm that resonates with your project requirements, financial plan, and corporate goals while also verifying their track record of dependability and consistency via reviews from previous clients.

Best wishes on your endeavor!

How is the impact of market research measured?

The effectiveness of market research hinges on the precision, representativeness, and pertinence of its data, along with how successful business decisions are when they’re based on the findings from this research. These elements define the impact of the research conducted.

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Why is Market Research so Important .

Firstly, we should clarify “What is Market Research?” It can be described as the action of gathering, analysing and interpreting information to help solve marketing challenges. We use market research for a variety of reasons, it helps us make educated decisions for example determining the feasibility of launching a new product before dedicating time and budget into the new venture.  Market research is a vital element when developing your marketing strategy. When done correctly it can help to enlighten your marketing activities – such as understanding the requirements of your target audience, helping to understand what key messages you should convey and how to convey them.

It should be treated as an ongoing activity – you should always be learning about your business environment, your customers and their needs and preferences. The environment is constantly changing so it’s important to make sure you are researching it and understand what factors are changing that could impact on your marketing plans.

Without market research we are reliant on instinct and anecdotal information to make key business decisions, this is not always accurate.

What types of Market Research can you do?

Ultimately, you want to gain deep insights through market research, there are multiple types of research you can do to get the best insights, depending on what you want to know.  Some of the most common types of market research activities include:

• Brand Research
• Campaign Effectiveness
• Competitor Research
• Consumer Research
• Customer Segmentation research
• Product Development
• Usability testing

Market research involves two central types of research:

Primary Research – this can often be referred to as “field” research and involves gathering new data, first-hand, that has not been collected before.

Secondary Research – is sometimes referred to as “desk” research and involves gathering data that has already been compiled and organised for you. It includes reports, government funded studies, textbooks, historical records and statistical databases.

Within these types of research methods there are a few different types of data collection methodologies that can be used, such as:

• Qualitative research , which is an exploratory approach and uses activities such as focus groups, in-depth interviews and Ethnographic research – which involves participant observation as part of field research.
• Quantitative research uses objective measurements and numerical analysis of data that is collected through research methods such as surveys, polls and questionnaires.

How to conduct Market Research:

You should always ensure the end goals and objectives are clear. Your target audience, business objectives, challenges and end customer should be at the heart of it.

• Set out clear objectives and goals before beginning the research.
• Identify your target audience and market size.
• Make sure your sample size is representative of the audience you are targeting. This means there should be enough respondents in the research sample that reflect, as accurately as possible, the larger target audience population.
• Choose the most suitable market research and data collection methodologies based on objectives.
• Create your research questions – this is applicable regardless of which data collection method you choose.
• Ensure the questionnaire is neutral and is not leading. Remain impartial throughout the process.
• Build in questions that validate other parts of the questionnaire.
• In a qualitative focus group setting include open ended questions and allow for flexibility for respondents to freely speak on a topic that might not have been covered in the questionnaire.
• Once data have been gathered employ robust analysis skills to interrogate and decode the findings.
• When research findings are determined, make sure to not take these in isolation. Examine the macro environment also (such as language, cultural, economic, political situations) to validate the findings.

Does Market Research work?

In short yes, absolutely. There are enough examples out there of product and business failures simply because enough market research was not done from the outset. Planning to launch a new product, or export to a new market without adequate research is a recipe for disaster. You need to really understand your customers and your competitors before making such a leap.

With more and more companies exporting to many global locations it’s important to be aware of the cultural and language differences in those markets. So, while research in one geographic location will yield certain results this may not be replicated in another location.  The famous KFC case, where their company slogan “ Finger Lickin’ Good ” translated as “ Eat Your Fingers Off ” in Chinese is a great example of this.

However as per point 10 above, while market research will help determine our marketing strategy and focus where our marketing efforts should lie, they should not be taken in isolation. Take the famous “ New Coke ” example from the 1980s. While research and focus groups were extremely favourable of the new coke flavour, it failed to understand the significance of the brand affinity and nostalgia that consumers had with the original taste of Coke. In this instance the wider environment and brand impact should have been taken into consideration before making the final business decision.

Used correctly, market research is a powerful tool to help minimise the risks involved when making key business decisions.

How Market research can help your marketing strategy:

Market Research can significantly help your marketing strategy as it helps to provide key insights and information to the business. It can provide a deeper understanding on your customer and competitors. Research will help to understand who is buying your product or service, who is not buying your product or service, what motivates them, and whether they are loyal to your brand – ultimately leading to increased sales over time.

Similarly understanding the wider market environment can help identify new opportunities for your business. As the market changes its important to continue to research and understand ways you can improve on your offering based on the changing consumer preferences or market dynamics.

While there were many factors involved in why Nokia had such a spectacular fall from grace within the electronics market, ultimately, they failed to research and understand the changing market trends. They were late to the market with new innovations, while their competitors, customer preferences and technology were advancing so fast. Others such as Samsung, Sony and Apple iPhone moved in and quickly became some of the leading electronics brands in the world.

Conclusion:

It is clear that market research is vital when developing your marketing strategy. It provides great insights to your business and on the wider marketplace. Market research can identify how customers and potential customers might view your business and identify gaps in customer expectations. This is powerful information to have when completing your marketing strategy. Having good market intelligence helps to minimise risks when making key business decisions.

There are too many benefits to conducting good market research for it to be ignored as part of your marketing strategy.

To learn more about market research, please send an email to [email protected] or feel free to contact us on +353 91 739450

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Breaking Barriers: How Do the Marketing Capabilities of Emerging-Market Micro-Multinationals Drive Social Innovation?

• Research Article
• Open access
• Published: 29 April 2024

Cite this article

You have full access to this open access article

• Huda Khan   ORCID: orcid.org/0000-0002-4962-9526 1 , 2 ,
• Joseph Amankwah-Amaoh 3 ,
• Richard Lee 4 ,
• Gary Knight 5 &
• Nazim Hussain 6 , 7  

Despite the increasing importance of social innovation, research seeking to illuminate how firms engage in social innovation in emerging markets is limited. Utilizing survey data from 143 Pakistani micro-multinational firms operating in other emerging markets, this study examined how these firms undertook social innovation practices in host emerging markets. The findings indicate that the social innovation practices of these firms in host emerging markets are influenced by dynamic marketing capabilities. Furthermore, this influence is mediated by social embeddedness in the host market. Moreover, this mediated influence is positively moderated by a socially supportive culture of the host market. The impact of marketing capabilities on value creation in host emerging markets involves the serial mediation of social embeddedness and social innovation practices. The study demonstrates how resource-constrained emerging-market micro-multinational firms can generate value in host emerging markets, thereby validating the efficacy of dynamic marketing capabilities in the context of social innovation in emerging markets. The study also discusses practical and policy implications.

Avoid common mistakes on your manuscript.

1 Introduction

Social innovation refers to organizational activities or initiatives developed to address the social needs of societies (Crupi et al., 2022 ; Mulgan, 2006 ; Nguyen et al., 2023 ; Phillips et al., 2015 ). Sometimes, social innovation is subsumed as a form of corporate social responsibility (Adomako & Tran, 2022 ; Phillips et al., 2015 ), focusing on how for-profit and non-profit organizations can create value by improving social outcomes for a particular community or stakeholder group. For instance, the Community Fridge project in the United Kingdom establishes networks of fridges in community spaces across the country, bringing together businesses such as Tesco and Sainsbury’s to supply surplus food to people in need (see https://www.hubbub.org.uk/the-community-fridge ). In light of the Sustainable Development Goals program of the United Nations (UNDP, 2015 ), practitioners and policymakers increasingly advocate for creating social impact beyond economic benefits. Although social innovation practices are more prevalent in developed societies (see systematic reviews by Foroudi et al., 2021 ; Phillips et al., 2015 ), they are equally, if not more, important for emerging countries.

Developing countries typically face critical social problems, such as economic inequality, corruption, and poor quality of life. For example, World Vision ( 2023 ), a global humanitarian aid and development organization, recently reported that close to 20% of the world’s population (about 1.2 billion people) in 111 developing countries lived in multidimensional poverty, including living below the poverty line of USD 2.15/day and lacking access to basic amenities, such as clean water and electricity. Scholars and practitioners assert that social innovation can play a crucial role in addressing such social challenges and creating societal impact by improving standards of living (Babu & Pinstrup-Andersen, 2007 ; Cezarino et al., 2022 ).

According to the World Economic Forum ( 2016 ), businesses often use social innovation as a means to enter developing markets; one way to do this is by redesigning products to cater to the unique needs of low-income consumers. Therefore, social innovation in emerging markets may involve developing innovative and creative solutions that differ from traditional approaches to innovation (Adomako & Tran, 2022 ). However, such innovations require suitable and adequate resources, which businesses may not possess. This issue is particularly poignant for micro-multinational corporations (hereafter, mMNCs) from specific emerging markets that operate in other emerging markets; mMNCs are typically resource-constrained and concerned about compromising value creation because they internationalize primarily for growth and profit-maximizing motives.

Despite more research on social innovation and social responsibility practices being undertaken in the internationalization context (Dionisio & de Vargas, 2020 ; Napier et al., 2023 ; Rao-Nicholson et al., 2017 ), scholars lament that research into social innovation by multinational corporations has received little attention (Foroudi et al., 2021 ; Rygh, 2020 ). This knowledge gap is even wider in the context of emerging market mMNCs that operate in emerging markets beyond their own country. Yet, mMNCs from emerging markets may possess capabilities useful to operate in emerging market settings (Henisz & Zelner, 2012 ; Mingo et al., 2018 ). Emerging economies offer a rich learning and experience context for emerging-market multinationals (Pattnaik et al., 2021 ). Similarly, arguments are presented in the literature that emerging market MNCs typically handle similar settings or less distant markets better (Hernandez & Guillén, 2018 ). In particular, a clear omission in research concerning emerging market firms operating in other emerging host markets is the role of the marketing capabilities of a firm in social innovation. This omission is surprising, given that the efficacy of marketing capabilities in driving value creation is well established in other related domains, such as environmental innovation (Yu et al., 2017 ). Hence, this study sought to address a research question that relates to the way the marketing capabilities of mMNCs drive social innovation in emerging markets.

Furthermore, research suggests that social embeddedness—the extent to which firms are connected with other actors that may participate in or influence the activities of the firm—may drive social innovation (Adomako & Tran, 2022 ; Lashitew et al., 2020 ). Marketing capabilities are described as important dynamic capabilities that enable firms to develop social networks, tap knowledge and competence, and access the resources they lack (Dhanaraj et al., 2004 ; Heidenreich, 2012 ). Nordin and Ravald ( 2023 ) assert that marketing decisions foster close, dynamic interrelations between actors. These close relationships mitigate the complexity of modern marketing environments by making available a resource network of insights from people or areas around the actors. These studies hint at the existence of a plausible relationship between marketing capabilities and social embeddedness. Thus, by extending the first research question, we sought to determine whether the effects of marketing capabilities on social innovation were mediated by social embeddedness in the host emerging market.

According to Stephan and Uhlaner ( 2010 ), a socially supportive culture (SSC) is a society in which people support each other in informal networks to foster a society that cherishes a positive social climate and is oriented toward humane behavior. It can be argued that these societies look favorably on social innovations that advance the cause of the collective society. Moreover, multinational corporations deal with heterogeneous social contexts (Heidenreich, 2012 ), and culture inevitably shapes strategies and implementation in different environments (Geppert et al., 2003 ). Hence, whether multinational corporations can socially embed themselves successfully in a host market depends on the supportive culture within which it occurs. The SSC phenomenon is particularly important for understanding the social innovation strategies of mMNCs because these firms require support and appreciation from the host market for their practices if they are to succeed in creating value. Hence, the third and final question of this study addressed how an SSC may moderate the effects of marketing capabilities on social embeddedness and social innovation, a critical issue that no other studies have examined.

In addressing the above three questions, this research contributes to the theory on social innovation and international business literature in the following ways. First, it extends the scant literature on key capabilities of MNCs for social innovation practice (Phillips et al., 2015 ) and value creation in emerging markets. As demonstrated in Table  1 , a review of social innovation research in the international business domain exposed a dearth of scholarly research and empirical studies on this topic. Second, only a small number of studies (e.g., Dimitratos et al., 2003 ; Lu & Beamish, 2001 ; Prashantham, 2011 ) have researched the new breed of small–medium multinational firms called mMNCs, and no study has investigated social innovation. Yet, as the economies of emerging countries develop, mMNCs arising in these markets could be poised to play a key contributing role in social developments (Doh et al., 2023 ). Likewise, this research demonstrates that mMNCs may be able to create a competitively advantageous position in host markets through social impact and activities (e.g., creating new products and services that are beneficial to society and new business developments with social objectives). Third, our study extends dynamic capability theory by demonstrating the efficacy of dynamic marketing capabilities of mMNCs for social innovation in emerging markets. In doing so, we push the boundaries of applicability of the theory, which has been an unexplored domain. Fourth, the study reveals the important roles of social embeddedness and SSC in social innovation practices. Shedding light on these two factors elicits more nuanced explanations for what drives successful social innovation, especially in emerging markets.

The rest of the paper proceeds as follows. First, a review of the literature on social innovation practice will be presented, followed by a description of the research method and data analysis applied. After presenting the findings, we will outline the practical and theoretical implications of the study.

2 Literature Review and Hypothesis Development

Social innovation is defined as the design of innovative activities, processes, and services motivated by a desire to address and meet social problems or shortcomings, encompassing poverty alleviation, inequality, and environmental degradation (Bulut et al., 2013 ; Hagedoorn et al., 2023 ). As social innovation increasingly garners scholarly attention in fields such as entrepreneurship, innovation, and strategy (Dionisio & de Vargas, 2020 ; Maldonado-Mariscal & Alijew, 2023 ), it may entail fostering collaboration with diverse groups and being purely dedicated to addressing social problems, while concurrently centering on vulnerable individuals or groups (Maldonado-Mariscal & Alijew, 2023 ; Vercher et al., 2023 ).

The principle of social innovation represents a departure from traditional and profit-driven problem-solving attempts by focusing on developing creative solutions to address social and environmental problems (Bulut et al., 2013 ; Phills et al., 2008 ; Tracey et al., 2011 ). As the focus on social innovation becomes prominent, it is intertwined with social embeddedness and developing marketing capabilities as mechanisms for developing innovative solutions in emerging markets. In summary, the adoption of social innovation can help reorient the strategies of firms to connect with and address social needs, especially in emerging markets. A review of literature on social innovation in the international business context reveals only a handful of studies (see Table  1 ). Furthermore, very few studies discuss the role of multinational firms in social innovation. The present study considered the role of marketing capabilities of emerging-market mMNCs in social innovation and value creation.

While the efficacy of dynamic capabilities in firm performance has been studied in turbulent market conditions (Teece, 2006 , 2007 ), few studies have examined dynamic capabilities in a supportive/unsupportive culture situation and in relation to social innovation practices. An SSC is a society in which people support each other in informal networks to foster a society that cherishes a positive social climate and is oriented toward humanitarianism (Stephan & Uhlaner, 2010 ). It is also seen as a measure of social capital in the form of goodwill, fellowship, sympathy, and social intercourse (Hanifan, 1916 ; Woolcock & Narayan, 2000 ). The social capital literature extends support for value creation and entrepreneurial activities in SSCs (Adler & Kwon, 2002 ). An SSC facilitates the entrepreneur’s embeddedness in the social network (Stephan & Uhlaner, 2010 ). A culture that is supportive of social innovation can manifest in the form of citizen movements that could be formally structured as non-government organizations (NGOs), which are often less constrained than government organizations regarding their support of social innovation practices (Henderson, 1993 ; Jana Deborah et al., 2022 ). Hence, it is possible for socially supportive societies to be more favorable and receptive towards social innovation practices than societies that are less supportive.

2.1 The Efficacy of Marketing Capabilities on Social Innovation

Marketing capabilities represent intangible resources that empower firms to effectively segment and target the market, implementing creative marketing management processes to gain a competitive advantage over rivals (Khan & Khan, 2021 ; Nordin & Ravald, 2023 ). Sensing and opportunity assessment skills, crucial for social innovation (Herrera, 2015 ), are often acquired through marketing capabilities (Khan, 2020 ). Some authors assert that marketing capabilities are dynamic capabilities, enabling firms to respond to opportunities arising from changing market needs and counter threats from competitors (Khan & Khan, 2021 ). This assertion finds support in studies demonstrating that dynamic capabilities, in general, facilitate successful social innovation (Tabaklar et al., 2021 ; Vézina et al., 2019 ). While Teece’s ( 2007 ) discourse on dynamic capability was initially situated in the context of technological innovation, some recent studies have extended its relevance to social innovation (e.g., Tabaklar et al., 2021 ), reinforcing the perspective that marketing capabilities, as a dynamic capability, are crucial for successful social innovation. This extension to social innovation is unsurprising, considering the established efficacy of marketing capabilities in driving value creation in related domains such as environmental innovation (Yu et al., 2017 ). The significance of marketing capabilities for social innovation becomes even more critical for mMNCs. Unlike their larger counterparts with greater resources, mMNCs, due to their smaller size, must rely on entrepreneurial and creative capabilities to excel in foreign host markets (Dimitratos et al., 2014 ; Prashantham, 2011 ; Shin et al., 2017 ; Vanninen et al., 2017 ). However, evidence regarding the performance of this emerging breed of small and medium multinationals is lacking (Dimitratos et al., 2014 ). To our knowledge, no studies have addressed how the marketing capabilities of mMNCs could influence success in social innovation. Thus, we hypothesize that, for mMNCs operating in foreign host markets:

H1: Marketing capabilities positively influence social innovation.

We contend that marketing capabilities in social innovation enable firms to socially embed in a host market, and in turn, social embeddedness leads to successful social innovations. Social embeddedness refers to 'the indissoluble connection of the actor with his or her social surroundings' (Beckert, 2003 , p. 769) and facilitates social innovation and value creation by firms (Adomako & Tran, 2022 ). For example, Hadjikhani et al., ( 2016 ) report that internationalized firms draw on their ability to develop effective corporate social responsibility initiatives to form networks, which consequently increases their commitment towards society and improves their business legitimacy. Likewise, for mMNCs, marketing capabilities facilitate firms to develop social networks, tap into knowledge and competence, and access resources that they lack (Dhanaraj et al., 2004 ; Heidenreich, 2012 ).

With reference to the situative perspective of cognition and behavior (Greeno, 1998 ), Nordin and Ravald ( 2023 ) assert that embedding marketing decision-makers in the surrounding environment enables decision-makers to tap into their expertise to foster close, dynamic interrelations between actors. Consequently, these close relationships mitigate the complexity of modern marketing environments by making available a resource network of insights from people or the areas around them. Studies have found that embedding themselves socially and developing networks in foreign host markets are effective ways for international firms to overcome challenges and build innovative capabilities in those markets (Hadjikhani et al., 2016 ; London & Hart, 2004 ; Lopez-Vega & Lakemond, 2022 ). For example, an article by Li and Fleury ( 2020 ) asserts that when international firms have poor business networks in a host country, it gives rise to the ‘liability of outsidership,’ which is more salient than the liability of foreignness. Conversely, firms that succeed in developing strong business networks in host countries are likely to be perceived as less of an ‘outsider,’ which, in turn, could facilitate their business operations in a country.

Furthermore, the role of marketing capabilities as a dynamic capability in developing social embeddedness is particularly critical for successful social innovation in emerging markets. While emerging markets are an undeniable source of growth for mMNCs, these markets often pose challenges for foreign MNCs, largely because MNCs are unfamiliar with the local culture or business practices, or because of their inability to tap into needed resources. Social embeddedness enables mMNCs to accept, adapt, and capitalize on market heterogeneity, and it stands at the core of their corporate innovation strategies (Beckert, 2003 ). From a view based on social resources, scholars argue that, in emerging markets, social ties are particularly critical for accessing market-based information (Rivera-Santos et al., 2012 ) and for value creation (Tate & Bals, 2018 ). Supported by the above review, we hypothesize that, for mMNCs operating in foreign emerging markets:

H2: Social embeddedness mediates the influence of marketing capabilities on social innovation.

2.2 The Moderating Effects of a Socially Supportive Culture

Dynamic capabilities prove particularly effective in turbulent environmental conditions because market turbulence presents unforeseen and complex challenges. Firms must demonstrate agility and the ability to respond dynamically to these challenges. While the efficacy of dynamic capabilities in firm performance is well-established (Teece, 2006 , 2007 ), no study, to our knowledge, has examined dynamic capabilities in a situation of supportive or unsupportive culture concerning social innovation. A supportive or unsupportive situation differs from a turbulent one, as the latter may be a periodic occurrence, whereas the former could be largely ingrained as an enduring characteristic of society (Semrau et al., 2016 ). Drawing on Semrau et al. ( 2016 ) and Stephan and Uhlaner ( 2010 ), an SSC refers to a society in which people form networks to support each other, fostering a society that cherishes a positive social climate and is oriented toward humane behavior. In relation to social innovation, SSC can manifest in the form of citizen movements because citizens of a country possess the critical mass needed to influence policies and governance informally yet powerfully to support social innovation (Henderson, 1993 ). SSC can also involve partnerships between firms and NGOs in host countries that respond jointly to and support social innovation causes (Henderson, 1993 ; Jana Deborah et al., 2022 ). Studies have found that an SSC environment is particularly important for fostering entrepreneurial endeavors in social innovations (Makeel et al., 2022 ; Stephan, 2022 ).

Consequently, it can be argued that societies with strong SSC would look favorably on social innovations that can advance the cause of the collective society. An SSC culture inevitably shapes the global strategies of multinational corporations and their implementation across different environments (Geppert et al., 2003 ), implying that the way social embeddedness is constituted and embedded depends on the culture in which it occurs. As Teece ( 2006 ) explains, the essence of a multinational corporation is to adapt to and capitalize on cultural heterogeneity in host countries to capture economies by leveraging certain assets it owns. Marketing capabilities are among the assets of firms. In this regard, we extend hypothesis H2 and contend that the ability of firms to form social networks based on their marketing capability depends on whether a firm is operating in a market whose culture supports forming social relationships that benefit the social innovation cause. Thus, the effectiveness of marketing capabilities in enabling firms to socially embed themselves in host markets depends on whether the host markets have a culture of supporting social innovation (Beckert, 2003 ; Heidenreich, 2012 ). Similarly, the extent to which the social networks that are formed facilitate social innovation development depends on how supportive the networks are. Hence, we offer this hypothesis:

H3: SSCs of host emerging markets positively moderate the mediation of social embeddedness on the relationship between marketing capabilities on social innovation.

2.3 Value Creation from Social Innovation

While social innovation is fundamentally grounded in serving social or societal needs, there is ample conclusive evidence that social innovation creates value for the firms offering the innovations (Crupi et al., 2022 ; Mulgan, 2006 ; Nguyen et al., 2023 ; Phillips et al., 2015 ). According to Maltz and Pierson ( 2022 ), multinational corporations that maximize corporate social innovation can improve shareholder value. Similarly, Allal-Chérif et al. ( 2022 ) contend that social innovation enables firms to create sustainable value, to grow, and to become more profitable. Hence, the positive influence of social innovation on value creation is established and straightforward. Earlier, in hypothesis H2, we posited the mediating relationship of (marketing capabilities > social embeddedness > social innovation). Social innovation leads to value creation, and in extending H2, we would expect that serial mediation would occur, such that the effects of marketing capabilities on value creation are mediated by social embeddedness, and then social innovation. That marketing capabilities eventually lead to value creation is confirmed by studies in commercial innovation settings, where it was established that marketing capabilities enable firms to develop effective marketing strategies, which, in turn, create value for the firms (Day, 2011 ; Nordin & Ravald, 2023 ; Sun et al., 2019 ). While no studies have investigated this relationship for social, rather than commercial innovations, it stands to reason that marketing capabilities should apply to social innovation in a similar way. Thus, as a corollary to H2, we posit that:

H4: The effects of marketing capabilities on value creation are serially mediated by social embeddedness and social innovation.

Figure  1 illustrates the conceptual model of this study.

Conceptual framework of social innovation micro-multinational corporations

3.1 Data Collection Process

The data were collected from Pakistani micro-multinational firms practicing an advanced form of internationalization (beyond merely exporting). The cited studies describe mMNCs as small and medium enterprises that control and manage value-added activities through an advanced form of internationalization by conducting business in more than one country (Dimitratos et al., 2003 ; Lu & Beamish, 2001 ; Prashantham, 2011 ). The manufacturing firms were identified from industry and trade directories and the chamber of commerce, Pakistan. We identified firms continuously exporting and marketing their products in foreign markets. Our inclusion criterion was that the firms had to demonstrate advanced commitment in host markets, particularly through cooperative alliances beyond mere exporting. Anecdotal discussions with managers revealed that many firms in the industry possessed strategic cooperative alliances for gaining market knowledge, resource and capability sharing, sales and distribution, and research and development (R&D) for products and services addressing the societal challenges of the host market. Such cooperative alliances are used for addressing societal problems, as firms have to meet the needs of multiple stakeholders. The current uncertain, volatile, and ambiguous demands require firms not only to seek profit maximization but also to pay attention to societal problems in the markets they operate. In this context, alliances can be useful for resource-constrained emerging market firms, helping them gain valuable commercial and social knowledge for developing both commercial and social innovation. Hence, we applied the criterion of participants having to be micro-multinationals—small and medium enterprises exhibiting greater commitment to internationalization (i.e., cooperative alliances) beyond merely exporting (Dimitratos et al., 2014 ; Prashantham, 2011 ; Shin et al., 2017 ; Vanninen et al., 2017 ). We also ensured that the firms applied the same mode of internationalization in more than one market.

In Pakistan, small and medium enterprises (SMEs) constitute more than 90% of all firms and contribute to economic growth through export and internationalization activities (DailyTimes, 2021 ). The sampled firms were all SMEs with fewer than 250 employees, all using strategic cooperative alliances as a mode of operation in three or more markets. Hence, our inclusion criteria met the definition of micro-multinational firms. Given the extensive challenges these firms faced in foreign markets, such as the liability of foreignness, poor quality perceptions due to country-of-origin effects, and lack of resources to respond to complex foreign market needs (Lu & Beamish, 2001 ; Prashantham, 2011 ), the firms needed to be agile and responsive to market requirements (Khan, 2020 ). Pakistan has a huge trade deficit, amounting to USD 240 million (Trading-Economics, 2023 ). Consequently, micro-multinational firms are under immense pressure to grow their businesses in foreign markets and to establish legitimacy and good reputations in those markets. As emerging markets face institutional voids and grand societal issues that need practitioners’ attention (Adomako & Tran, 2022 ; Lashitew et al., 2020 ), there is a greater need for social innovation practices in emerging markets than in established ones. As a firm’s strategies may differ from one host country to another and to control for country bias, we asked the managers to consider their most important emerging (foreign) market in answering the survey. Our approach was based on expert and senior academic review of and feedback on a survey questionnaire prior to data collection.

Trained research assistants self-administered the survey and collected data in Pakistan. This approach is suggested by numerous studies as being effective for data collection because firms in this market prefer a more personalized form of data collection (Khan et al., 2019 ; Zahoor et al., 2023 ). The respondents were senior managers of the firms—one respondent per firm. Given the possibility of common method bias, we applied both analytical and procedural steps to minimize the effect. Regarding our procedural approach, we ensured that the survey was written in simple language. Moreover, we mixed the scales so that respondents could not guess the plausible relationships. We used Lindell and Whitney's ( 2001 ) marker variable technique that suggests including a theoretically unrelated constructs in the survey to examine plausible common method bias. The details of common method bias testing will be reported in the findings section. We identified 280 firms that met the requirement of being micro-multinational firms, of which 114 firms agreed to participate and completed the questionnaire (response rate of 41% approx.). An additional 29 responses were achieved with the help of managers who helped us to snowball the questionnaire in their networks. As a result, our sample size was 143 micro-multinational firms in the manufacturing industry. The average size of the firms in our sample was 176.10 employees. Data were collected in a single wave in the year 2023.

The survey requested managers to consider their most important (key) foreign emerging markets in answering the questions. This contextualization was important because the social innovation strategies of firms may differ from one market to another. All scales were adapted from those used by other studies.

3.2.1 Marketing Capabilities

The respondents were requested to rate five items on a scale from 1 to 7 (where 1 = strongly disagree; 7 = strongly agree). The scale was adapted from Khan and Khan ( 2021 ), and respondents were required to rate the marketing capabilities of a firm in its key foreign emerging market in terms of marketing planning, segmenting, creative marketing management strategies, and processes for developing and promoting social innovation.

3.2.2 Social Embeddedness

The respondents were requested to rate four items on social embeddedness in the foreign emerging market on a scale from 1 to 7 (where 1 = strongly disagree; 7 = strongly agree). The scale was adapted from a study by Adomako and Tran ( 2022 ). The respondents rated the extent of the firm's focus on utilizing the social networks of the foreign emerging market, including locally influential community members and NGOs, to produce and design products.

3.2.3 Socially Supportive Culture

The nine items on the scale were adopted from Semrau et al. ( 2016 ) and Stephan and Uhlaner ( 2010 ). The respondents were requested to evaluate the extent of SSC in their key foreign emerging markets on a scale from 1 to 7, in relation to whether the people are generally concerned and sensitive about others, friendly, generous, tolerant of mistakes, non-aggressive, non-assertive, non-dominant, and tender.

3.2.4 Social Innovation

The respondents were requested to rate six items regarding their major social innovation for their foreign emerging market on a scale from 1 to 7 (where 1 = strongly disagree; 7 = strongly agree). The scale was adapted from a study by Adomako and Tran ( 2022 ). Specifically, respondents had to rate the extent to which the company develops products that are beneficial to society, serves both material and non-material human needs, solves social problems, improves living standards, and has a social impact.

3.2.5 Value Creation

The respondents were requested to rate six items on their value creation in the foreign  emerging market on a scale of 1 to 7 (where 1 = worse than competitors; 7 = better than competitors). The scale was adapted from a study by Husted et al. ( 2015 ). To operationalize the scale in the context of our study, we requested the respondents to indicate the extent to which a firm has achieved its performance objectives in key foreign emerging markets based on its ability to influence the purchase decisions of customers, developed new businesses with social objectives, obtained new customers, increased profitability, developed new products or services, and opened new markets.

3.2.6 Marker Variable

The respondents were requested to rate four items relating to restaurant performance on a scale from 1 to 7 (where 1 = very dissatisfied; 7 = very satisfied). As other research has done (Zhou et al., 2019 ), this theoretically irrelevant scale was used as a proxy to determine common method bias.

3.2.7 Control Variables

Given firm age, size, and R&D employees, which may confound the results of the model, we controlled for these variables in our study.

4.1 Data Analyses

Before commencing hypothesis testing, we conducted several tests on the data. The factor loadings were determined through exploratory analysis using the maximum likelihood technique. All items loaded into their respective scales; the lowest factor loading was 0.731 (see Table  2 ). We checked for outliers and poor-quality responses before analysis, and finding none, we used the sample as it was. The measurement model also exhibited good fit indices (CFI = 0.97; TLI = 0.97; RMSEA = 0.04; CMIN/df = 1.23, p < 0.01).

All scales were adapted from other studies with adequate reliabilities. The Cronbach alpha for all scales exceeded 0.70 on the threshold of reliability (see Table  3 ). The average variance extracted was > 0.50, and greater than the square of correlation between any two constructs. Hence, all measures were discriminately valid (see Table  3 ).

The marker variable (restaurant performance) did not significantly relate to any of the constructs in our study (see correlations in Table  4 ). This unrelatedness satisfies the condition for the chosen construct to serve as a marker variable (Lindell & Whitney, 2001 ).

Next, we took the lowest correlation of a construct with the marker variable to adjust the correlations between any two main constructs. The adjusted correlations that were significant prior to adjustment remained significant, except for one that can be considered significant at p < 0.10. The findings collectively provide evidence for lack of common method bias (Piercy et al., 2006 ).

Endogeneity arises when a predictor variable is significantly correlated with the error term of the dependent variable (Ebbes et al., 2021 ; Rutz & Watson, 2019 ). As endogeneity may confound the results, giving potentially misleading findings, we systematically examined potential endogeneity problems in two ways. First, we computed the residuals for each regression (using SPSS v28 software). All correlations between the predictor variables and the error terms of the dependent variables were found to be insignificant (all p > 0.602). Next, employing the Gaussian copula approach (Eckert & Hohberger, 2023 ; Park & Gupta, 2012 ), we determined that all Gaussian copulas were statistically insignificant (all p > 0.099) for the moderated mediated model, as illustrated in Fig.  1 (utilizing Smart-PLS v4 software). Consequently, we conclude that endogeneity was absent in our model.

4.2 Hypothesis Testing

To analyse H1–H3 (i.e., moderated mediation hypothesis), we used Process Macro 58 (moderated mediation model) using 5 000 bootstrap samples with a 95% confidence interval. The process macros are widely adopted by international business studies to examine moderated mediation effects (Grappi et al., 2020 ; Kwok et al., 2019 ). Specifically, the macro 58 is used when moderation between an independent variable and mediator, as well as between a mediator and outcome variable, must be examined. Furthermore, for H4, we used Process Macro 6 to examine the mediation-only model for determining the mediating effects on value creation. It generates confidence intervals which are very precise, hence, the model demonstrates precision and predictive validity (Nayak et al., 2021 ). The results of the moderated mediation model are reported in Table  5 and Table  6 .

The results in Table  5 shows that marketing capabilities positively influence social innovation (β = 0.245; LLCI = 0.089; UCLI = 0.401). Hence, we accept H1. The direct regressed influence of marketing capabilities on social innovation is positive and significant (β = 0.332, p < 0.01 level). While the effects of marketing capabilities remained significant on social innovation in the presence of social embeddedness, the effect size was reduced (β = 0.245; LLCI = 0.089; UCLI = 0.401). Moreover, the effects of social embeddedness are positive and significant (β = 0.352; LLCI = 0.192; UCLI = 0.511). Furthermore, we ran the Process Macro 4 to check the indirect effects (i.e., β = 0.071; LLCI = 0.008; UCLI = 0.148). Hence, we can accept H2, which hypothesises that social embeddedness mediates the influence of marketing capabilities on social innovation.

Marketing capabilities interact with SSC to influence social embeddedness (β = 0.199 at p = 0.047 level), and social embeddedness interacts with SSC to influence social innovation (β = 0.138 at p < . 10 level). Other studies have used the p < 0.10 level to examine interactive effects (Khan, 2020 ; Zhou et al., 2019 ). Furthermore, the conditional effects and moderation plots in Fig.  2 , at low, moderate and high levels of SSC, clearly demonstrate significant moderation effects. The effects of marketing capabilities on social embeddedness are significant under moderate (β = 0.169; LLCI = 0.008; UCLI = 0.330) and high (β = 0.408; LLCI = 0.142; UCLI = 0.674) SSC conditions. The moderation plot in Fig.  2 a clearly depicts this moderating effect. The effects of social embeddedness on social innovation are significant under moderate (β = 0.332; LLCI = 0.171; UCLI = 0.495) and high (β = 0.498; LLCI = 0.273; UCLI = 0.723) SSC conditions. The moderation plot in Fig.  2 b attests to this moderating effect. The results in Table  6 show that the conditional indirect effects (MC→ SE → SI) are positive and significant under high SSC conditions (β = 0.203; LLCI = 0.051; UCLI = 0.424). These results confirm that the mediation effect is positively moderated by SSC. Hence, we accept the postulation in H3.

Moderation plot

Table 7 shows the results for the direct effects and mediation-related hypothesis. The first criterion for mediation is that the relationship between the independent variable (i.e. marketing capabilities) and the mediator (i.e. social embeddedness) and that of the independent variable (i.e. marketing capabilities) and mediating variable (i.e. social embeddedness) with the second mediator in the model (i.e. social innovation) should be significant. The results show that marketing capabilities positively impact social embeddedness in host emerging markets (β = 0.193; LLCI = 0.032; ULCI = 0.354). The effects of marketing capabilities on social innovation (β = 0.261; LLCI = 0.106; ULCI = 0.417) and the effects of social embeddedness on social innovation (β = 0.366; LLCI = 0.206; ULCI = 0.525) are also significant.

The second criterion for mediation is that the effects of the independent variable on the dependent variable is reduced in the presence of the mediator, and the mediator should have a positive effect on the dependent variable. The total effects of marketing capabilities on value creation are positive and significant (β = 0.263; LLCI = 0.102; ULCI = 0.425). The effects of marketing capabilities on value creation are insignificant in the presence of social embeddedness (β = 0.157; LLCI = 0.009; ULCI = 0.305) and social innovation (β = 0.501; LLCI = 0.354; ULCI = 0.647). Both social embeddedness and social innovation have positive effects on value creation. This fulfils the criteria for mediation. Table 8 shows that the direct effects of marketing capabilities on value creation are insignificant (β = 0.067; LLCI =  − 0.074; ULCI = 0.207). The indirect effects reveal that social innovation is a mediator between marketing capabilities and value creation: MC → SI → VC (β = 0.131; LLCI = 0.049; ULCI = 0.232), while social embeddedness by itself does not mediate: MC → SE → VC (β = 0.030; LLCI =  − 0.002; UCLI = 0.092). However, the sequential mediation of social embeddedness and social innovation is positive and significant: MC → SE → SI → VC (β = 0.035; LLCI = 0.003; ULCI = 0.081). The total indirect effect of the model is positive and significant (β = 0.197; LLCI = 0.090; ULCI = 0.329), which provides support for mediation effects. Hence, collectively, the mediation results lend support to H4, which states that the effects of marketing capabilities on value creation are serially mediated by social embeddedness and social innovation.

5 Discussion

Despite a substantial body of research on social innovation, a gap persists in the literature regarding the way firms engage in social innovation in host emerging markets. Guided by this gap, the primary objective of this study was to examine how the marketing capabilities of mMNCs drive social innovation in host emerging markets. By drawing on survey data gathered from 143 Pakistani micro-multinational firms operating in emerging markets outside Pakistan, we made several key observations. The study provides support for our theoretical contention that dynamic marketing capabilities influence the social innovation practices of micro-multinational firms in resource-constrained host emerging markets. Additionally, we observed that the effect of marketing capabilities on value creation in host emerging markets involves the serial mediation of social embeddedness and social innovation practices.

5.1 Theoretical Implications

The study offers several contributions to international business research on social innovation in emerging markets. First, by building on prior research on dynamic capability (Baden-Fuller & Teece, 2020 ; Teece et al., 1997 , 2016 ), this research illuminates the effects of social embeddedness and social innovation on value creation in emerging host markets. Thus, the present study contributes by demonstrating the efficacy of dynamic marketing capability in steering social innovation and value creation by emerging-market micro-multinational firms. Furthermore, prior research in social innovation stresses the importance of social resources (London & Hart, 2004 ; Maak, 2007 ; Tate & Bals, 2018 ), and the role of social embeddedness (Adomako & Tran, 2022 ). However, the current stream of research has failed to demonstrate how multinational corporations establish social embeddedness in emerging markets for the purpose of social innovation and value creation. In this regard, the study validates the importance of marketing capabilities for social embeddedness.

In addition, while there is a growing body of research on social innovation, limited scholarly attention has been paid to firms in the context of emerging markets. Addressing this gap is particularly important, given that emerging economies face constraints such as weak legal enforcement mechanisms, a high level of government bureaucracy, and low availability of financial credit (Amankwah-Amoah et al., 2019 ). By capitalizing on data from 143 Pakistani micro-multinational firms operating in other emerging markets, this study addresses an important gap in the literature by highlighting the effects of dynamic capability on fostering social innovation in the resource and institutionally constrained setting of mMNCs in host emerging markets. Because such societies tend to promote goodwill, fellowship, sympathy, and social intercourse (Woolcock & Narayan, 2000 ), value creation could be increased even further through social innovation. Given that such societies possess a greater orientation to humanitarianism and low assertiveness, the climate in such societies is for people to support each other (Stephan & Uhlaner, 2010 ). Despite the increasing importance of social innovation and the vital roles played by multinational corporations in emerging markets (see Dionisio & de Vargas, 2020 ), few studies have examined the role of multinational corporations in social innovation (Dionisio & de Vargas, 2020 ; Eng et al., 2020 ; Gladwin & Walter, 1976 ; Lind et al., 2018 , 2022 ). By examining social innovation, this study also contributes to ongoing scholarly discourse (e.g., Sharmelly & Ray, 2021 ) on various types of innovation by multinational corporations in emerging markets. Doing so goes a long way in providing additional insight into the role of multinational corporations in addressing social problems (Doh et al., 2023 ).

5.2 Practical and Policy Implications

From a managerial standpoint, our findings indicate that managers should focus on developing key marketing skills that can help them identify influential networks facilitating social innovation in host emerging markets. In addition, this study identifies a vital role for dynamic marketing capabilities in advancing social innovation practices in host emerging countries. Accordingly, managers should develop marketing agility for social innovation practices, enabling them to identify cultures that will be more socially supportive and receptive to social innovation practices. Given that mMNCs are generally resource-constrained and concerned about value creation for firms, they should invest in marketing skills to identify potential markets (supportive cultures) for social innovation practices. The findings imply that when firms have a better sense of the market plan, targeting, and promotional and distributional channels for socially innovative products and service offerings, they will be more capable of creating value for the business. It is through marketing skills and capabilities that firms will be able to integrate into influential groups of local societies, such as NGOs in emerging markets, informing their social innovation practices.

Policymakers in emerging markets (e.g., formal institutions such as government and non-formal institutions such as NGOs) should provide informational knowledge and networks to firms to facilitate social innovation practices. By doing so, the host market will not only facilitate the creation of social impact but will also welcome and support foreign firms (i.e., mMNCs) so that they can contribute to the host society by creating products that are beneficial for society while also creating value for the business.

5.3 Limitations and Directions for Future Research

Despite the valuable contributions outlined in this study, limitations were experienced and can be addressed by future studies. First, a limitation of the present study pertains to the small sample size (n = 143) of Pakistani micro-multinational firms operating in emerging markets. The focus on a single country was also a limitation of the study. These limitations present an opportunity for future research to recruit a much larger sample and to include businesses in other countries in the region to help gauge the generalizability of the findings. Future studies can consider other important dynamic capabilities, such as sensing, seizing, reconfiguring, and absorptive capacity for social innovation. Given that NGOs play a role in social innovation activities, another possible domain to which the investigation can be extended is understanding how mMNCs can couple with NGOs and the role of NGOs in activism relating to social innovation in emerging markets. Future studies can also consider the role of institutional factors, such as institutional support and the orientation of mMNCs towards becoming involved in social innovation in emerging markets. The study used survey data. Future studies can consider a mixed method approach because interviews can distil further information on the phenomenon being studied.

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Khan, H., Amankwah-Amaoh, J., Lee, R. et al. Breaking Barriers: How Do the Marketing Capabilities of Emerging-Market Micro-Multinationals Drive Social Innovation?. Manag Int Rev (2024). https://doi.org/10.1007/s11575-024-00538-4

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Launching a New Product? You'll Struggle If You Don't Keep These 4 Positioning Lessons in Mind. Here are four important positioning lessons from the "world's cheapest car."

By Praveen Krishnamurthy • Apr 29, 2024

Key Takeaways

• Understand your customers' emotional motivations beyond mere utility when positioning your product.
• Be mindful of how pricing impacts consumer perceptions of quality. A significantly low price point may unintentionally convey a message of low quality.
• Avoid the pitfall of trying to appeal to a broad, undefined audience. Clearly define your target market, and tailor your messaging to resonate with their specific needs and preferences.
• Respect the insights of marketing professionals, and balance visionary leadership with grounded marketing strategies that combine consumer psychology and positioning.

Opinions expressed by Entrepreneur contributors are their own.

In 2009, Tata Motors, one of India's leading automobile companies, launched Nano, a car priced at about $2500 (or INR 100,000), around half the cost of its nearest rival. It was known as the " world's cheapest car ." The company's website crashed because it received over 40 million hits in a short span, which it was not able to cope with.

Buying a car in India was a luxury back then. For context, the number of cars in India per capita was significantly fewer than in the United States — around 20 in India vs. 800 in the U.S. per 1000 inhabitants. While the Indian passenger car market saw 1.4 million units being sold in 2008, the then lowest-priced car, the Maruti Alto sold 230,000 units, almost 15% of the entire market. As a highly cost-sensitive population, Indians flocked to motorbikes, with 8 million units sold in 2008. Thus, cars at the lowest end of the price range competed with motorbikes and not necessarily with just other cars.

The launch of the Nano was driven by Ratan Tata , Chairman of the Tata Group, who promised a car priced at INR 100,000 (or INR 1 Lakh). Tata zeroed in on this price point, as it is a symbolic benchmark in India, and then on his engineers to build a car that could be sold for this price. He believed that the Nano would democratize car ownership and make the dream of owning a car affordable to a whole new stratum of society, especially those who would have otherwise bought motorbikes.

It was estimated that Tata Nano could expand the Indian car market by 65% . But the Nano underwhelmed — the maximum sales ever achieved was 75,000 units in 2012, with sales declining rapidly thereafter. In fact, in February 2019, just one Tata Nano was sold in the entire country, and the Tatas stopped production of the car in 2020 altogether.

This was a costly misadventure for the Tata Group that holds a lot of valuable lessons for marketers.

So, what positioning lessons can we learn from the Nano?

Related: Why Positioning Is More Important Than Ever

1. Do not overlook your customers' emotional motivations

When you are positioning your product, you need to really understand your consumer and their emotional needs . For Indians, car ownership was a matter of pride, not just utility, and buying a car was a sign that one had arrived in society . This is critical to understand. The previous cheapest car in the market, the Maruti Alto, was a very successful automobile and bought by hundreds of thousands of Indians, but it was never advertised as the cheapest car in the market.

No one who wants to signal to society that they are doing well in life would want to be associated with the "world's cheapest car." But, wittingly or unwittingly, that is unfortunately how the Nano was positioned, and it turned out to be a colossal mistake. As a marketer, you need to fully understand your customer's motivations as that's key to positioning.

2. Remember that price often implies quality

The Indian consumer's preferences had evolved over time: Quality was also a critical element in car purchase decisions, not just the price. They also associated low price with low quality. In this instance, the extraordinarily low price of the Nano was a signal about its quality, and consumers interpreted the 1 Lakh price tag to mean that the Nano was a poorly built car. Reports of the Nano catching fire did nothing to help that perception. In practical terms, the car provided only 36 horsepower and a top speed of 65 mph.

While it was missing many of the things that one would normally expect even in the cheapest automobiles in the Western countries, such as air conditioning, the price point threw into question whether the car's build was compromised and whether the car was any safer than, say, a motorbike. So, be cognizant of what your price point might unintentionally convey to your customer.

Related: How to Define Your Product and Set Your Prices

3. Don't try to be everything for everybody

When launching any product, it is critical to clearly define and understand the target audience — this brings an important focus to your positioning approach. A well-defined market allows a marketer to tailor messaging to resonate better with the target consumer segment. In the Nano's case, it was never clear who the Nano was for. Was it to replace the motorbike for commuting? Was it an aspirational first car for a young driver? Or was it a second car for an affluent family? By trying to cater to everyone, the Nano failed to connect strongly with any specific segment of customers.

4. Respect your marketers' research

Even when the top executive of a company drives a product launch, it might still be worthwhile listening to your marketing manager who will be closer to consumer sentiment, market research and branding pitfalls. Visionary leadership needs to be balanced with grounded marketing strategies that combine consumer psychology and positioning.

When Ratan Tata chose the price point and drove the product design around the price, he unwittingly took away some of the most important levers that Tata's marketers had. The marketing managers at Tata Motors couldn't influence positioning at all. The fact that Tata announced all of this publicly, well before launch, meant that the marketers controlled nothing about messaging and how the product would be perceived. So, as a business leader, respect your marketers' opinions.

Related: 5 Steps to Position Your Brand for Maximum Success

In conclusion, the failure of the Tata Nano offers crucial insights for marketers and highlights the importance of understanding your customers' emotional motivations, perceptions of price and quality, clearly defining your target audience and respecting your marketers' research. By keeping these positioning lessons in mind, you can ensure your next product launch is a success.

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Ten Global Investment Banks and Market Making Firms Join BGC in the Creation of FMX to Launch Premier U.S. Treasury and U.S. Interest Rate Futures Trading Marketplace

April 25, 2024 at 10:05 AM Eastern

FMX closes transaction with strategic investors at a $667 million post-money equity valuation

NEW YORK, NY –   BGC Group, Inc. (Nasdaq: BGC) today announced that Bank of America, Barclays, Citadel Securities, Citi, Goldman Sachs, J.P. Morgan, Jump Trading Group, Morgan Stanley, Tower Research Capital, and Wells Fargo have become minority equity owners of FMX, with a post-money equity valuation of $667 million. FMX combines BGC’s U.S. cash treasuries platform with its spot foreign exchange platform and U.S. interest rate futures exchange, and will leverage BGC’s proven low latency trading infrastructure and global distribution to further support liquidity in the interest rate futures market.  

“We have brought together ten of the most important global investment banks and market making firms to create a premier trading venue for the interest rate markets,” said Howard W. Lutnick, Chairman and CEO of BGC Group and Chairman of FMX . “We offered ownership to this incredible investment group knowing the enormous value they bring to FMX, which will benefit all market participants.”

FMX Futures, which received CFTC approval in January , is expected to launch in September 2024. FMX’s cash U.S. Treasury platform, FMX UST (formerly known as Fenics UST), has grown its Central Limit Order Book market share each sequential quarter. FMX UST ended the first quarter 2024 at 28%, up from 26% in the fourth quarter of 2023.  1

“With support from these leading fnancial firms, we believe FMX will become a rapidly growing futures platform and create important efficiencies for our shared clients,” said Lou Scotto, CEO of FMX . “With our clearing partner, LCH, the largest clearer of interest rate swaps in the world, clients will receive significant portfolio-margining capabilities, creating competitive advantages across U.S. interest rate markets.”   2

“LCH is excited to partner with FMX to deliver product innovation and margin savings, which will enhance the competitiveness of U.S. derivatives markets for its members,” said Isabelle Girolami, CEO of LCH Ltd.

"FMX's unique protocols provide a fresh competitive edge across rates, FX, and futures markets,” said Geoff Weber, Head of G10 Rates Flow Trading at Citi . “The impressive growth in market share that FMX has experienced recently enhances market liquidity and positions FMX as a potential catalyst for increased competition, particularly within the futures market. This innovation not only promises to elevate market dynamics but also aims to lower costs for all market participants, signaling a forward-looking shift."

“FMX is going to drive innovation and competition across the rates, FX and futures markets,” said Kristen Macleod, Head of Americas Macro Distribution and Co-Head of Global FX Distribution at Barclays . “As a key investor, Barclays looks forward to delivering the benefits of our investment to our clients through improved execution and competitive fees.”

Please find additional details about the FMX transaction at www.ir.bgcg.com . BGC will also provide additional information about the FMX transaction on its first quarter 2024 earnings call, scheduled for 10:00 a.m. ET on Tuesday, April 30, 2024.

About BGC Group, Inc.

BGC Group, Inc. (Nasdaq: BGC) is a leading global marketplace, data, and financial technology services company for a broad range of products, including fixed income, foreign exchange, energy, commodities, shipping, equities, and now includes the FMX Futures Exchange. BGC’s clients are many of the world’s largest banks, broker-dealers, investment banks, trading firms, hedge funds, governments, corporations, and investment firms.

BGC and leading global investment banks and market making firms have partnered to create FMX, part of the BGC Group of companies, which includes a U.S. interest rate futures exchange, spot foreign exchange platform and the world’s fastest growing U.S. cash treasuries platform.

For more information about BGC, please visit www.bgcg.com .

Discussion of Forward-Looking Statements about BGC

Statements in this document regarding BGC that are not historical facts are “forward-looking statements” that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements. These include statements about the Company’s business, results, financial position, liquidity and outlook, which may constitute forward-looking statements and are subject to the risk that the actual impact may differ, possibly materially, from what is currently expected. Except as required by law, BGC undertakes no obligation to update any forward-looking statements. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see BGC’s Securities and Exchange Commission ("SEC") filings, including, but not limited to, the risk factors and Special Note on Forward-Looking Information set forth in these filings and any updates to such risk factors and Special Note on Forward-Looking Information contained in subsequent reports on Form 10-K, Form 10-Q or Form 8-K.

Reporters may contact:

Erica Chase Phone: 1.212.610.2419 [email protected]

Sofia Rehman [email protected]

Rekha Jogia-Soni [email protected]

Investors may contact:

Jason Chryssicas Phone: 1.212.610.2426

1 Central Limit Order Book (CLOB) is a mechanism financial exchanges use to facilitate trading between buyers and sellers in financial markets. Source: Coalition Greenwich.

2 Source: Clarus.

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