If you’re a solopreneur or small business owner, you’ve probably heard that market research is essential for success. But what is market research? Let’s get some clarity by first breaking down the concept and examining the parts that form its foundation. Then we’ll explore some broad areas within market research to provide practical context for what it can mean for you.
Understanding “Market Research”
The term “market research” consists of two words – “market” and “research”. Examined on their own, they reveal a picture of what the overall concept entails. We’ll start by considering the word “market”.
What Is a Market?
A market is a place where business, the exchange of goods or services, is conducted. At its simplest form, it includes all of the people selling and all of the people buying or potentially buying.
What Is Research?
Next up, consider the word “research”. Research is the investigation and gathering of information in an effort to determine facts about something or to come to an informed conclusion.
Putting It Together: What Is Market Research?
Having broken both words down, we can look at how they work together. At a simple level, “market research” is the gathering of information to determine facts about the businesses (your business, your competition) and the buyers (existing and potential customers) that make up a market, a place where the exchange of goods or services is conducted.
A clear definition helps, but explaining a concept is only the start to understanding what market research really is. In practice it actually covers a lot of ground. The good news is small businesses can engage in many of these areas to make better decisions, leveraging market research along the way. Let’s explore some of these areas next.
Areas That Fall Within Market Research
Theoretically you know what market research is, but concepts don’t grow a business. The more valuable question becomes “what is market research in practice, and how can my small business benefit from it?” The following are some areas that fall within market research. Each one represents an opportunity for you to use it to better understand your market and make strategic choices.
Competitive Research: Understanding Your Market
One of the very first areas of market research you are likely to engage with is competitive research. It includes:
- Understanding who the competition is, both direct (those who provide a similar product or service) and indirect (those with an offering that might be a little different, but which serves the same needs for your customers and “compete” for the same dollars).
- Determining the competitions’ strengths and weaknesses in brand reputation, product variety, pricing, operations, and technology capabilities – and knowing how those strengths and weaknesses compare to your own business.
- Gathering general market intelligence about industry trends, current events and new technologies.
Customer Research: Knowing Your Buyers
Another early opportunity for market research for any business involves customer research. Knowing who your best customers are, the ones who find the greatest value in what you offer and are willing to pay the most and talk about you with others, is the key to any successful company. This area includes:
- Usage and attitude research (U&A) to understand consumer behavior and motivations
- Buyer journeys to explore the path-to-purchase customers take
- Segmentation and persona profiles development to aid in targeted strategies
- Customer satisfaction and loyalty to help the business grow
Brand Research: Shaping Perceptions of Your Business
If you exist in a market, and you must if you have any kind of business, you have a brand. Your brand is the unique set of perceptions, emotions and attitudes people have when they think about your company. It includes:
- Overall brand awareness
- Your business identity and position compared to others in the market
- The company’s reputation and perceived values
- You can conduct brand research at the overall company level, or for smaller, individual brands within the company.
Product Research: Defining Your Solutions
Having a business means you’re selling something and product research explores opportunities to test and refine your offering. It includes:
- Concept or product design testing before something is sold in the market
- Feature testing to determine customer interest in a particular product feature
- Pricing research to support revenue optimizing
- Packaging research which can support distribution or customer ease of use
- Website usability testing to ensure your website is working for you (both functionally and strategically)
Advertising & Reach Research: Measuring Awareness and Impact
You can have the best offering in the world, but if your potential customers don’t know about it, your business can’t flourish. This area explores:
- Campaign Reach to determine if your desired target audience is aware of your efforts
- Effectiveness to measure if your target audience is taking the action you intended after seeing your campaign (purchasing, talking about you, or just leaving an overall positive and lasting impression).
These are areas where market research is commonly used to help companies of all sizes get answers to key business questions. The benefits of market research are not exclusive to larger organizations. Each area offers opportunities for you to capture insights unique to your business, helping you make smarter, data-driven decisions that keep you growing.
Tapping Into the Benefits of Market Research
Whether you’re launching a new business or growing an existing one, including market research in your strategy helps you make informed choices. It offers guidance on what customers are looking for and why. It can provide feedback on what products or services to offer and how they can be optimized. It tells you who your competition is, how your business compares, and what new trends you should know about to stay ahead. Finally, it can offer a view into how effective your marketing strategy is, so customers can discover you and return for more.
With so much ground to cover, a small business may find the prospect of doing their own market research intimidating. The good news is, with so many areas to explore, there’s plenty you can do to start tapping into its many benefits. Just pick an area – the competition, your buyers, your business reputation, your products, your messaging – and think of ways you can get more information about it.
What To Do Next: DIY Strategies to Get Started
As a small business owner, you’re likely dealing with limited time and limited resources. That doesn’t mean gaining the benefits of market research are out of reach. Here are some next steps you can take to get your market research strategies going.
Find a few good blogs or newsletters specific to your industry
If you don’t already subscribe, connect to them wherever you readily consume information (your inbox or your social accounts). Dedicate at least 15 minutes a week to read about trends in your industry.
Broaden your scope: Consider adding market-research specific sources to your list
A few good ones are Pew Research Center, EMARKETER Chart of the Day, and The Week in Charts series by McKinsey & Company. These resources offer quick information in visual format that’s easy to digest.
Ask yourself “What are 1 to 3 questions I have about my business?”
Think about the market research areas one at a time (competition, customers, brand, etc.) to frame the kinds of questions you might have. Then consider if the answer to your question might already be available from an existing source (like industry trends or everyday consumer attitudes about AI), or if it’s something more specific and not readily available (like who is paying any attention to that YouTube video you launched). Taking time to just consider what you want to know more about gives you a starting point to move forward from.
Recognize there will be some things you can do yourself, but some things require more support
Similarly, there will be insights you get for free, and some (particularly when you’re looking for answers specific to your company) that may take more resources. Knowing when you can go it alone versus when it’s time to turn to an expert (a consultant, a traditional market research firm, a marketing agency) helps you focus your energy so you can start seeing those market research benefits sooner.
The Takeaway
Market research doesn’t have to be overwhelming and confusing. Understanding what it is and how it can serve your company’s growth objectives is one of many steps along your path towards success. Small businesses are always challenged with limited resources, but there are things you can do yourself to obtain the benefits that market research can offer. Aliterwise can help you get started.
Alisha Torres, Aliterwise Founder
An experienced market research and consumer insights leader, Alisha began Aliterwise out of a desire to help small businesses and entrepreneurs develop growth strategies based on solid research. Before Aliterwise she worked at various traditional market research firms and consumer intelligence agencies including GfK, Nielsen, Experian and MRI-Simmons. She has helped companies of all types develop data-driven strategies in the areas of consumer behavior, product development, advertising effectiveness, brand management and customer satisfaction. Find out more about Alisha.
