Consumer Marketing Research: How to Prepare a Research Plan
Anyone who runs a business inevitably deals with the concept of a market. The market is where economic exchange takes place, and that is where the concept of marketing comes from. Companies often make the wrong marketing moves and, as a result, can't take sales to the next level. How do you fix this? How do you plan marketing research that actually works?
What is a market in marketing and how does it work?
In marketing, a market means all buyers who could be involved in purchases in one way or another. It includes not only actual buyers but also potential ones, who share common needs and wants. Market size is the number of buyers who need a particular product.
A market is defined by clear indicators:
- Size;
- Customer needs that drive demand;
- Location.
Markets are classified according to who the customers are and what they need:
Government market. This includes government agencies and state-owned organizations that use goods and services in their operations.
Producer market. These are businesses that use products to keep their own operations running.
International market. This includes buyers located in other countries, both producers and consumers.
Consumer market. These are individual customers who buy goods and services for their own use.
Reseller market. These are individuals and businesses that resell the goods they buy for profit.
As you can see, each type of market has its own characteristics. In the consumer market, the buyer sets the rules, so the seller has to spend extra money to win new customers. This is where marketing research becomes indispensable: it helps you attract new customers.
What is marketing research?
Marketing research helps sellers understand their buyers' needs. It is conducted to study market conditions, consumer behavior, and consumer preferences. Marketing research is the systematic search for, collection, and analysis of data to make the right decisions about how to grow the company. To manufacture and sell products, you need a sound plan.
The purpose of marketing research is to build a growth and sales strategy based on market conditions and the company's prospects. Market research isn't about finding the absolute truth; it's about narrowing down your options. This is especially important in the long term. When the consumer holds the initiative, research reduces the company's risk of making the wrong moves.
Here is how the marketing research process works:
Market research objectives → market analysis plan → timeline and budget → research methods → conducting the research → analysis and conclusions → final review → presentation of results.
Why should a company analyze its market?
This is the marketing manager's job. A detailed study of the market will help you find untapped niches, define your target audience, and identify customer needs.
Before you start the research, you need to define the goals of the analysis, namely:
- Determine where the company's products stand in the market;
- Assess market trends and market potential;
- Study what customers expect from products and services, their main wants, and the level of demand;
- Identify promising market segments and how saturated they are;
- Find untapped niches that can become new sources of sales;
- Analyze competitors: their position in the niche and their strengths and weaknesses;
- Review competitors' pricing strategies.
To avoid unnecessary work, stick to exactly these parameters when you define the objectives of your market research and write your market research report. Clear goals help you focus your efforts in the right direction and avoid wasting time and money. This way, you reduce the cost of finding and processing the information you need.
How to prepare a research plan
Step 1. Set the objectives of the analysis. The more specific you are, the more irrelevant information you can filter out.
Step 2. Research your target audience. You also need to understand which characteristics of a product already on the market need to be improved or changed. On the one hand, the business owner knows what customers currently expect from the product and which features matter to them.
Analysis is needed to identify the product's weaker characteristics compared with competitors' products, so you know what to focus on. A company conducting marketing research should clearly understand why buyers go to competitors. How and where can you find potential buyers? You need to identify a sales territory where you will depend least on competitors.
Step 3. Determine the market size. This means the total number of orders that your company and other companies can receive over a given period, counting only one product line in the region under study. The company must answer the following questions:
- Is demand for its product rising or falling?
- Does this segment have growth potential?
It's important to understand what factors drive demand for a product up or down. First and foremost, demand depends on changes in consumer income.
Step 4. Segment the market. Identify a part of the market where consumers share similar buying behavior and have the same requirements for the product. The company needs to understand which product features buyers value most now and which will soon become more important.
Step 5. Figure out how to sell. Find the most effective marketing methods. Determine which companies could act as intermediaries and where your retail outlets should be.
Step 6. Run an advertising campaign. Identify the most effective advertising channels, run test ads, and figure out in what order to use the different channels to promote your product.
Step 7. Set your pricing. Develop a pricing model for customers and decide what promotions and discounts you are willing to offer. Also set the range for your minimum and maximum prices.
Summary
During the analysis, use only the metrics you can actually process. What matters to you is the result, not a theoretical study, and useful research is possible even on a minimal budget. Draw conclusions after each step, and only then move on to the next one. The analysis should be as efficient and productive as possible. Talk to your sales managers: they have a lot of information about competitors and market conditions.
