Many of our friends and family aren’t familiar with even the basics of market research, so we thought it might be helpful to write a post on it! We’ll give you a short beginner’s course in the basics of market research.
A quick note: some experts differentiate between marketing research and market research. For our purposes we’re not going to specify, just be aware that marketing research specifically refers to the marketing process, while market research specifically refers to markets. There are a lot of gray areas and cross-over between the two areas of study, which is why we’ll lump them together. There are also a lot of ways of classifying the types of market research. You can differentiate between qualitative and quantitative testing, consumer testing or business testing, SWOT analysis and the list goes on! We won’t cover every single method or differentiation, but know that there are quite a bit of them!
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Simply put, the company identifies specifics within each area analysed. This is a very useful technique to use during the planning/creation of a company or brand but is also a great technique to use at increments during the brand’s lifetime. Here’s a breakdown of what each letter means:
Strengths: characteristics of the business or project that give it an advantage over others;
Weaknesses: characteristics that place the business or project at a disadvantage relative to others;
Opportunities: elements that the project could exploit to its advantage;
Threats: elements in the environment that could cause trouble for the business or project;
It provides basic, one-word guidelines to identify areas for a brand, but is vague enough to allow for interpretation by the analyst. For example; if a local tea shop is promoting a delicious new locally-grown tea, a selling point (or Opportunity) would be that it’s locally grown! A Threat would be a supplier/grower that has (or might have) issues meeting the demands of a popular tea shop.
SWOT analysis also differentiates by internal/external. Strengths and Weaknesses are factors inside the project’s organisation. Opportunities and Threats are from outside the organisation.
Target Market Methodology
As previously mentioned, one way to look at market research is by pairing the differences. Two ways of doing this are to think about market research by markets or by methods. The two markets are business-to-business or consumer research.
The first categorisation, business-to-business research, involves industries that market to other businesses and not the consumer directly, while consumer research does just that.
The second way looks at quantitative research or qualitative research. Quantitative research typically involves the creation of surveys and scales and is dependant on quantifying responders’ answers. Qualitative analysis typically involves much smaller groups of consumers and analyses their choices and thought process.
In relation to a specific brand, quantitative analysis will be a better indicator of what your market’s opinion of your brand as a whole but qualitative analysis will be a better indicator of why your market holds that opinion.
Can I Conduct Market Research Myself?
This is one of the most commonly suggested questions. The short answer is that we don’t recommend attempting market research without experience. Inaccurate conclusions from error-riddled data can actually be damaging to a company’s brand! Here’s a breakdown of common research errors from just surveys:
sample too small
sample not representative
inappropriate sampling method used
data analysis error
sampling frame error
population definition error
question construction error
respondent selection error
inability to respond error
As well as two major hypothesis errors:
type I error (also called alpha error): the study results lead to the rejection of the null hypothesis even though it is actually true;
type II error (also called beta error): the study results lead to the acceptance (non-rejection) of the null hypothesis even though it is actually false;
As you can see, a lot of things can lead to invalid research, that is why analysts and researchers have to be very careful when conducting market research.
If you have any questions about Market Research, feel free to ask us in the comments below, we’re here to help!