Types of Market Research
According to the Small Business Administration, while 80% of US businesses make it past the first year, only 33% of American businesses survive within the first decade of doing business. This means, the longer businesses are active, the higher the likelihood of being outshone by old, new and emerging competition.
In 2023 – a time characterized by soaring inflation and interest rate hikes in the US – entrepreneurs, startups, SMEs, and businesses re-entering the market after recording past failure need to learn how to navigate the consumer landscape to outdo the competition in the race to reach the top 33%.
According to Forbes, 3 of the top reasons attributed to business failure are lack of market need, failure to keep up with the competition, and a poor pricing strategy that puts potential customers off. While there is a multitude of reasons for business failure, businesses can avoid the pitfalls posed by these top 3 reasons by leveraging market research. Each type of market research can benefit businesses differently and illuminate the once-nebulous path to business success.
Our Founder and CEO, Jenny Karubian breaks down the different types of market research methods in Episode 3 of ‘FAQs with Jenny’. Watch the video or read on to explore the market research ecosystem and learn how each methodology can help inform your business strategy, build your brand, and boost business success.
WHAT ARE THE DIFFERENT TYPES OF MARKET RESEARCH?
Jenny breaks down the types of market research into 3 broad categories: Desk research, Qualitative market research, and Quantitative market research.
Desk research is a process that involves data collection, collation and analysis based on authoritative secondary sources of information. As Jenny shares, desk research ‘can be done from the comfort of home without speaking to respondents directly.’ There are two types of desk research: Competitive analysis and Social listening.
A competitive analysis will provide insights into the competitive landscape within any given industry, elucidating who the industry players are, the key selling points of each of their products or services, their target audiences, and a price point analysis, arming businesses with the wealth of information they need to ensure they limit their losses and strategically invest their capital into projects and plans that optimize their business success in the long run.
Social listening, a low budget market research solution, is all about the consumer. Social listening involves using proprietary software to scour the internet – specifically across social media platforms including everything from Facebook to Instagram, Reddit, Quora and LinkedIn – to tap into consumer sentiments on any given topic. By leveraging intuitive social listening processes, businesses can gain insights into how consumers think and feel about their brand, products or services, their competitors, industry practices, relevant socio-political issues and more. The consumer led findings, ranging from about 100 – 200,000 internet comments, are then hand-coded and synthesized into a comprehensive social listening report that provides powerful actionable insights that inch businesses closer to building a strong brand identity and brand loyalty among target audiences.
Qualitative research involves asking respondents open-ended questions which lead to in-depth insights into any given topic. This type of market research may be conducted in person or online. In person qualitative research may be conducted via focus groups, in-depth interviews (IDI) and telephone depth interviews (TDI), ethnographic studies, shop alongs, and home use tests (HUT), while online qualitative research may be conducted via market research online communities (MROC), and online discussions and bulletin boards. Qualitative research methodologies are highly customizable and involve longer research durations owing to the depth of the data being collated and analyzed, leading to the most in-depth consumer insights.
Quantitative research, on the other hand, involves asking close-ended questions that seek to quantify consumer behavior, opinions and attitudes into tangible statistical insights that illuminate the state of the market holistically. Quantitative research methodologies involve large sample sizes of anywhere between 500 – 1,000 research respondents and surveys which are intuitively designed, curated, and highly customizable to business research needs.
WHICH TYPE OF MARKET RESEARCH IS BEST FOR MY BUSINESS?
When considering which market research methodology to invest in, Jenny advises businesses to take a budget-centric approach.
For startups, up-and-coming entrepreneurs, and any business with a tight budget, Jenny recommends investing in desk research in the form of social listening reports and/or market intelligence reports (MIR). These methodologies are the most cost-effective and economical options for any budding business or entrepreneur as they involve shorter research durations, little to no customization, and do not involve a per-person cost as the data is gathered from secondary sources of information such as social media commentary, third party publications, white papers, journal articles, relevant news reports, as opposed to primary sources. The downside to desk research is that there is a higher likelihood of data limitations when compared to primary market research solutions like quantitative and qualitative research.
The second most affordable type of market research is quantitative research. This methodology offers businesses broad-based insights from large sample sizes, involves comparatively short research durations, and allows businesses to tap into consumer preferences, behavior, purchasing patterns, likes and dislikes and much more.
The final type of market research, qualitative research, requires the highest investment as it involves long research durations, per-person costs that vary based on the type of respondents required and a highly customized approach based on each individual business. Although qualitative research requires a higher investment, it arguably offers the most rewarding insights – in addition to knowing how consumers behave and what they like or dislike – can begin to understand why consumers behave the way they behave and have the opinions they have. Thereby, qualitative research paves the path for businesses to tap into the psychology of branding enabling businesses to design and implement powerful consumer-centric marketing campaigns to help build their brand and business for greater market success.
IN CONCLUSION
The different types of market research – desk research, quantitative research, and qualitative research – provide powerful actionable insights at varying degrees, and each one has the potential to inform business and marketing strategy development that’ll allow businesses to leave its competitors in its wake and sail to the successful shores of the top 33%.
If you want to leverage any one or a combination of the types of market research mentioned above and talk affordable and effective market research strategy, book a consultation here.