Conducting a Market Research Report- Everything to Know
Market research can give businesses valuable intel regarding their target demographic and identify new markets for financial growth. Chances are, businesses will have to produce a market research report at least once in their early stages. This information may be a requirement when applying for various business funding, especially for business start-up loans.
However, the purpose of market research doesn't end there. Companies wanting to gain a better idea of consumer perceptions regarding their brand or product ahead of introducing a new item must first conduct market research.
The results of this report will inform the company of who their target audience is, as well as the buyer's persona. In essence, it can give businesses a competitive edge and guide management through important decision-making processes.
Primary vs. Secondary Market Research
Market research can be viewed through the lens of primary and secondary research. These methods offer companies different approaches to collect information regarding their products, existing audience, and prospective customers.
As the name implies, primary research seeks to establish primary or immediate information about a business' target audience and customers. Some of the most common examples of this include phone interviews, focus groups, and consumer surveys.
Primary research can be categorized into two categories - exploratory research and specific research.
- Exploratory Research - This is typically conducted through open-ended interviews or surveys of small groups and tends to be very general in nature. Exploratory research is less about finding measurable results and more so about identifying potential issues or roadblocks that the business may not have considered previously.
- Specific Research - Specific research aims to be much more precise and tries to solve any problems or issues presented in the exploratory research. This is often conducted in a more formal setting with structured interviews with small segments of the target audience.
Secondary research allows businesses to draw information from reports and studies that have already been conducted, and reach their own conclusions based on data from these reports. There are three particular types of secondary research that businesses may find useful- public sources, commercial sources, and internal sources.
- Public Sources - Public sources are the most accessible of the three and are commonly found in widely distributed government statistics. The U.S. Census Bureau is a great public source of information.
- Commercial Sources - Commercial sources are often released in market reports and help to reveal valuable industry insights and trends. These reports are often put together by market research firms and are usually available at a cost.
- Internal Sources - Some larger businesses can also turn to the available data they already have on file. Examples of this can include figures related to customer retention rates, average lifetime value of a customer, and other important statistics gathered from previous sales patterns, and historical data.
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How to Create a Market Research Report
Conducting market research is an effective way for businesses to equip themselves with consumer and industry trend data and insight to finetune products or services before a launch. To conduct marketing research, businesses should follow six key steps.
1. Create and Decide on Buyer Personas
It's absolutely critical for businesses to understand who their customers are in order to address their needs. This can be accomplished through the creation of buyer personas. Companies will often create multiple buyer personas to reflect various sets of customers who possess different characteristics. Some of the more notable characteristics of buyer personas include age, gender, location, job title, and income.
2. Choose Who to Engage
Once buyer personas have been established, businesses can then look towards finding a small sample of the personas to engage. This step is important as it allows businesses to get the right respondents for their market research.
There are general guidelines businesses can follow when choosing who to survey for their market research reports. If a business has multiple buyer personas, a good rule of thumb is to assign 10 participants to each persona they have created.
It's also prudent for establishments to reach out to customers that have recently made a purchase from them so that their buying experience is still fresh in their minds, enabling them to give precise details. Lastly, finding a nice blend of participants is an attractive option as it will produce more balanced results.
3. Recruit Research Participants
There are a handful of ways businesses can go about recruiting participants for their market research.
- Customers who made a recent purchase - Businesses can use their own CRM to determine who their current customers are and ask for their participation.
- Customers who did not make a purchase - Customers that engaged with your product or service but ultimately did not make a purchase can also be found in a business' CRM as they would have left their contact information during the sales pipeline.
- Casting call for participants on social media channels - Businesses can engage with their followers on social media in hopes of finding customers that have either previously made a purchase or those who decided not to purchase from the business.
- Incentivize participation - The most valuable commodity is time and many businesses today offer participants an incentive to donate 30 - 45 minutes to participate in a market research study. Depending on the business and their budget, incentives can be monetary or involve exclusive access to an offering.
4. Determine Research Questions
Having a predetermined list of questions is important to get the most out of the participant responses. Those conducting the study should have questions that require thorough responses through the use of open-ended questions. Some common examples of open-ended questions include-
- What factors ultimately influenced your final purchasing decision?
- Who was involved in the final purchasing decision? If there were other people, list them and describe their involvement in the process.
- Tell us about your experience in purchasing this product. Was it positive or negative and why?
5. Identify Primary Competitors
The best way to identify primary competitors is to look within the business' market size and industry. Finding other companies whose products and services are in direct competition is the easiest way to identify them as primary competitors. Within the industry, businesses should try to list off all of the main competitors by turning to an industry report and browsing through social media.
6. Compile the Findings
The final stage of market research is to compile all of the findings and present this information in a report. The final report should contain an executive summary that details the initial goals or purpose of the study, as well as participant information and most notable learnings. The final product should report industry trends, information regarding how consumers arrive at their purchasing decisions and include a clear action plan that outlines a timeline for how the business will utilize this information as well as the effects it will have on sales and operations.
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