Market research process: 6 steps to success
What is market research process?
Market research process: 6 steps to success
Market research process is a systematic method to collect and provide information for decision making in businesses.
Market research process
Market research is a complicated task and can be costly. Therefore, to define a market research process plays an utterly important role in carrying out market research effectively, avoiding inefficiencies and providing effective information for decision making in businesses. The process is illustrated in a 6-step diagram as follows:
Step 1. Identify objectives and “issues”
In market research, the most important step is to identify project objectives. Its core is to clarify the root causes which need information from market research. Typically, a critical issue (or an opportunity) is raised to start the conduct of a market research project, but the information is insufficient to make decisions; then market research’s role is to make those decisions with solid data proof.
Clearly understanding business issues helps market research stay concentrated and effective. At this stage of the process, before a market research is conducted, making a complete output image is essential to answer business questions. Enterprises can approach by simulating a market research report with hypothetical data and asking interviewees: “If this is a market research report, is this informative enough for enterprises?” If the anwer is yes, then enterprises can start the real data collection. Otherwise, they should continue discussing with clients to clearly define objectives.
Step 2: Determine research method
After research objectives are identified, next comes the determination on the most appropriate research methods so as to collect necessary information. The research must be considered as a detailed action plan. In this step, firstly, enterprises have to decide which types of research will be used: survey, Focus Group discussion etc. Enterprises ought to specify sampling methods: which customer groups are targeted, where to find them, how to encourage them etc. And in which ways the research will be conducted will be decided: via phone call, direct interview, post mail, online etc. Next, it is important to pay attention to the format design of the market research report, hence to determine the way of data analysis and structure of questions: executive summary, advanced regression analysis etc.
There are 3 types of market research, which is chosen based on desired data enterprises want to collect:
Exploratory research – This type is applied when the inquiry is abstract and not fully understood, hypotheses are vague and background knowlegde is trivial. Exploratory research helps enterprises to collect information broadly, narrow down the focus of the research and discover the most essential points for further deep research. Exploratory research techniques include secondary data research, Focus Group Discussion and In-depth Interview. Exploratory research is qualitative.
Descriptive research – In case market research’s objectives require data at specified levels, enterprises must carry out quantitative research. Descriptive research’s purpose is to measure a number of surveyed sectors by quantitative parameters. Survey/questionnaire is the most popular tool in descriptive research.
Causal research – The most sophisticated research that is often conducted by studies, field trials or experiments. In this case, enterprises are to identify causal relationships between researched elements. For instance, does music genre played in restaurants increase revenue of desserts – Is there any causal relationship between music and revenue?
Step 3 – Design and prepare tools/equipment
In this step, enterprises design proper market research tools. After survey is chosen as suitable research method (in step 2), enterprises start to outline questionnaire design. If choosing Focus Group Discussion, then enterprises have to prepare discussion guide and other necessary equipment for the moderator. This is the planning step for the whole market research process.
Step 4 – Collect data
This is the core of a market research project. Enterprises spread the questionnaire on the field, or conduct group discussions, in-depth interviews, field trials etc. All questions, answers, observations are recognized and recorded, usually in a data sheet containing rows and columns. Every piece of information is crucial and contributes to the final conclusion of market research.
Step 5 – Analyze data
From step 4 (Collect data), enterprises may catch a viewpoint and deeper understanding about collected data. If data is recorded unsystematically, analysts must synthesize it. If data is recorded systematically, it needs proper processing and analyzing. A number of software like Excel, SPSS, Minitab etc. can be used to create tables, graphs, charts; to divide data, segment respondents into insightful groups by age, gender etc. in order to identify the prominent tendency in the data. This is the beginning of forming an output for the presentation and conclusion.
Step 6: Visualize data and present output
You have spent many hours analyzing data, making tables, charts and graphs. It is time to summarize all most useful information in an understandable market research report or presentation. One good way to present data is to start with research objectives and business issues which are identified in step 1. Re-present business questions, then recommendations based on data to resolve those issues.
When presenting output, remember to share about knowledge, solutions and recommendations rather than only focusing on charts and tables. When putting a graph in a market research report, ask yourself “What is its meaning and effects?” This way of critical thinking helps the final report become more insightful and practical.
Whereas it’s important to stick to “answering original questions”, keep in mind that market research is one of the inputs (usually an important input) for business decision making, but not the only one.
Above is the market research process. The image below demonstrates an example of implementing this process in practice, in which the business issue is “How should we price this new component?”.
Above is the market research process. The image below demonstrates an example of implementing this process in practice, in which the business issue is “How should we price this new component?”.
Contact HOSHA through our email: hosha@hosha.vn
or hotline: 0906 358 114 Mr. Son Ha (for any inquiry).
Website: hosha.vn
Leave a Reply