Common Types of Market Research
Clarke Ricks
School of Business, Liberty University
BUSI 690: Policy and Strategy in Global Competition
Dr. Hicks
April 6, 2021
Common Types of Market Research
There are many different types of market research that cover various areas of study,
and as a result are often misunderstood. Whether you’re interested in learning more about
your customer’s buying habits or how much they might pay for a new product, market
research can help (if you use it correctly).
To help you identify which type of market research is right for you, we’re going to
outline the different types, their purposes, and when to use each one. By “types of
research” I don’t necessarily mean how you’re collecting data. Instead I mean the
procedures and methodology used to analyze the data collected.
These procedures include market segmentation, product testing, advertising testing,
key driver analysis for satisfaction and loyalty, usability testing, awareness and usage
research, and pricing research (using techniques such as conjoint analysis), among others.
Market Segmentation
When conducting market segmentation studies we’re generally asking survey questions
aimed at capturing needs, values, attitudes, behaviors and demographics. A B2B company
might also want to investigate firmographic data such as company size, revenues, and
product category that are relevant to the industry in question.
Marketing can’t effectively speak to every type of person or business at the same time,
so one of the main goals of market segmentation is to allow for more efficient and effective
marketing tactics. Without market segmentation companies are shooting in the dark and
wasting valuable bullets. They may hit a customer by accident, but they would miss a lot of
others.
Product Testing
A detailed understanding of how your product meets (or doesn’t meet) your customer’s
needs is crucial both to product development and marketing, so these types of market
research studies need to be conducted throughout a product’s life.
Ultimately you should be able to make informed “go” or “not go” decisions about new
features and products before launch, and thus save capital, time and effort.
Successful product testing should:
Give insight into product/service viability by investigating competing and substitute
alternatives along side customers’ willingness to embrace new products/services.
Determine competitive advantage as well as possible threats from similar
products/services.
Identify the products with the highest revenue potential.
Clarify what improvements should be prioritized before a product launch (or re-
launch).
Pinpoint which product features (both existing and potential) are most important to
your target audience.
Help produce marketing messages to change or enhance existing perceptions about
your products/services.
Advertising Testing
Like product testing, tests of your advertising campaigns can save you valuable time and
resources. By taking potential campaigns directly to your audience and gauging their
response you can focus on creating truly impactful advertising.
Satisfaction and Loyalty Analysis
Satisfied customers aren’t necessarily loyal customers, but consistently measuring
customer satisfaction is a great way to increase customer retention. This type of research is
aimed at identifying key drivers of satisfaction and measuring the likelihood of customers to
continue using a company’s products and services.
The goals of these kinds of studies are:
Determine what factors influence loyalty, advocacy, and repeat purchases, including
product/service attributes, company operation, customer service, price, etc.
Carefully monitor overall satisfaction, recommendation likelihood, and defection
likelihood over time.
Provide early warnings about emerging gaps in product/service performance,
customer service, and processes that might lead to customer defection.
Help identify areas of the product or service that need improvement to meet
changing needs.
Guide the creation and/or ongoing development of customer loyalty and retention
programs.
Signal when organizational changes need to be made to improve operations and
customer retention.
Brand Awareness and Reach
By conducting regular, well-designed brand awareness surveys you can keep tabs on
how effective your marketing campaigns really are.
When done right, a brand awareness survey can help you measure:
Brand Recall: Can a customer spontaneously recall your brand, or do they think first
of a competitor?
Brand Recognition: When presented with a list of brands, does your audience
recognize yours as a reputable option?
Brand Identity: Brand identity is what you as a marketing team create. It’s important
to determine whether these efforts are being successful.
Brand Image: While brand identity is created by the brand itself, a brand’s image is
based in the customer’s perception alone. Tracking disparities in these two can reveal gaps
in your marketing efforts.
Brand Trust: In an era of data breaches, keeping tabs on your levels of brand trust is
key. If your brand doesn’t appear trustworthy, you will have difficulty retaining customers.
Brand Loyalty: Loyal customers can become evangelists, but you need to
consistently track loyalty levels to determine how often this transformation is happening.
Customer Profile: Changes in your core customer base may signal the need for a
pivot, either in the product or your marketing messages (or both).
For more on starting your own brand awareness initiative, see our guide on these
critical marketing surveys.
Pricing Research
Surveys that ask customers to choose between different products with unique features
and price points, typically done via conjoint analysis, can help you identify what features are
most valuable to your audience and what they’d be willing to pay for them.
Combined with some basic research on your competitors’ pricing, these insights can
give you a distinct advantage in pricing your products and services.
Knowing Which Type of Research to Use
When to use each of these different types of market research data collection methods
and types of research depends on the business issues we are dealing with in one or more of
four key areas:
Awareness: let the market know that the product or service exists
Targeting: reach the target segments with the highest profit potential
Acquisition: optimize the marketing message, offer, and price that will close the sale
Retention: generate repeat purchases from current customers
The chart below, which we call the Relevant Wheel, shows when it is most appropriate
and relevant to conduct different types of resOur clients at Relevant Insights often use this
chart as a reference to determine when a particular type of research is needed. Once this is
defined, we then discuss the most appropriate qualitative or quantitative data collection
methods.
Data Collection and Analysis Methods
Here we need to make a distinction between data collection methods and market
research types based on analytical approach, which are often confused. Data collection
methods differ based on whether we want to conduct quantitative or qualitative research.
Qualitative research, which is exploratory in nature, usually uses data collection
methods such as focus groups, triads, dyads, in-depth interviews, uninterrupted
observation, bulletin boards, and ethnographic participation/observation.
Quantitative research, which looks to quantify a problem, collects data through surveys
in different modalities (online, phone, paper), audits, points of purchase (purchase
transactions), and click-streams.
Choose the Market Research Type that Meets Your Needs
Next time you wonder what type of market research to conduct, I invite you to ask
yourself where the particular problem at hand belongs: Awareness, Targeting, Acquisition or
Retention. Then take a look at the Relevance Wheel to find the approach that will help you
answer your specific questions.
If you choose your method carefully market research can give you a big advantage over
your competition.
earch.
