Let’s say, you decide to conduct market research without understanding the nature of various market research methods. What is likely to happen?
Chances are, you’ll waste resources, decline competitive advantage, or make decisions based on misleading insights. Why is this the case? Each type of market research method comes with a tailored approach and is designed for distinct purposes.
Yes, you may get the approach right. However, aligning a market research method with the wrong purpose leads to missed opportunities, development of ineffective strategies, or even damaged reputation.
So, to help you understand how to align a market research method with the right purpose or objective, here is an in-depth look into the nature of types of market research methods.
To make this clearer, we’ve divided the research methods into two major categories — primary and secondary research methods.
Primary Research Methods
All primary research methods involve you collecting data directly from the source (potential buyers, customers, or stakeholders). This data collection approach grants you access to up-to-date data for analysis, giving you a competitive edge.
Even though you collect and analyze highly specific, relevant, and actionable data to satisfy unique needs, these methods can be demanding. They are often resource-intensive, time-consuming, and costly compared to secondary methods of obtaining data for a market research.
Here are the two main types of primary market research methods you should know:
1. Qualitative Market Research
Want rich, specific, and detailed personal insights directly from the source? Use a qualitative market research approach.
In applying this approach, you define objectives, compose open-ended questions, and allow the respondents to freely share their thoughts.
This is often done through interviews or focus groups. Either way, the goal is to gain personal insights from exploring the participant’s detailed experiences, perceptions, motivations, and more. However, there’s a caveat!
Qualitative market research usually involves a small sample size, making the findings more subjective and less generalizable. This more human-centered approach makes it suitable for an exploratory study to generate ideas, spot new opportunities, or develop hypotheses.
Through qualitative market research, you are also likely to identify trends that a quantitative research approach might miss.
2. Quantitative Market Research
Unlike qualitative market research, quantitative market research aims to quantify customer or stakeholder behavior or preferences.
You use closed-ended questions, allowing respondents to answer questions by selecting from predefined answers. Then, you collect findings and use various statistical methods to analyze them.
Popular quantitative research techniques include surveys, questionnaires, and customer feedback forms. They are all prepared to present structured questions with predefined answers to targeted groups to fulfill a specific purpose.
For example, customer feedback forms contain questions tailored around customer experience to collect data used to understand customer preferences and satisfaction.
Due to its nature, quantitative market research allows for sample size scaling and insight-generalization. This makes it suitable for measuring market size, identifying trends, and validating hypotheses with a greater level of precision.
Despite not offering in-depth insights as qualitative research does, quantitative market research offers invaluable measurable and reliable insights.
With the help of these insights, you can identify market opportunities, optimize existing and new strategies, and make optimal data-driven decisions.
Secondary Research Methods
While primary research entails collecting new or up-to-date data from the source, secondary research methods involve obtaining data collected by others for analysis. It could also be data you collected before but did not analyze.
As highlighted, secondary research methods are cost-effective. They are also time-saving because you don’t spend money and time on the data collection process. Nonetheless, finding data that perfectly aligns with your objectives is usually not easy. Moreover, the quality of the data is highly dependent on the original data collection strategy.
To make the most of existing data, focus on mastering these two key secondary research methods:
1. Internal Secondary Research
While running the business, you do collect data including customer, financial, operational, and behavioral data. Mostly, you collect and store the data as backup or for future use.
Well, that’s the data used when conducting internal secondary research. Analyzing the data readily available in your CRM systems or databases helps optimize internal processes, customer satisfaction, and enhances business growth.
A good example is collecting and analyzing customer purchases and preferences data from the CRM to improve customer retention or personalize marketing. Or, assessing website analytics to determine the most visited pages to track customer interests.
You could also use internal secondary research to set the path for primary research. Before conducting primary research, you can conduct an internal secondary research first to inform the planned primary research and refine research questions.
2. External Secondary Research
If you are exploring a new industry or market, start here to help with initial decision-making. External secondary research entails collecting third-party data and analyzing it to study various aspects of a market before taking action. For instance, studying competitor advantages and performance.
You may source data for an external secondary study from:
- Open data sources: Academic institutions, organizations, and governments do create and share datasets for reuse or repurposing by anyone with access. These datasets include relevant documentation and metadata to enhance transparency. Moreover, they are suitable for small-and-large scale secondary research.
- Data providers: These are organizations that collect and process, and distribute data for an incentive. You can purchase historical or up-to-data from them. Also, some offer to tweak the data based on your needs.
- Industry analysis reports: These reports are developed by market research firms that dig deep into topics like market size, competition levels, and emerging trends in a particular industry. The reports may be free or proprietary.
Closing Words
Market research is critical both before and after launching a business. It is a long-term commitment to spot growth opportunities and gain a competitive advantage. However, a lot could go wrong if you decide to use any research method for a specific purpose.
Remember, each market research method covered in this blog post is designed for a particular purpose or objective. Take your time to master the nature of each research method and whenever you want to use either, research further to ascertain it aligns with your purpose.
