The market research process describes the steps that companies take to conduct studies about their customers and factors that affect their business. Read about how companies conduct these studies and present findings to their stakeholders to better understand the markets they do business in.
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The market research process is a series of six steps that companies complete to conduct studies on a target market. Market research can be as simple as a single short-term study such as a customer feedback survey or as complex as a longitudinal study of customer habits over time. Either way, the results of market research provide great insight to companies about their existing customer base and potential new customers.
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Steps in the Market Research Process
Step 1: Research Goals and Objectives
In this step, companies sketch out their goals and objectives for the overall study. Usually by committee, marketers decide what needs to be studied and why. They also sketch out in detail what they expect to learn from the study. Common market research studies focus on customers, factors (such as technical or environmental) that affect business, competition and products.
Step 1a: Project Specifications
Once the goals for the research are outlined, project specifics are drawn up. Here, marketers and project leaders define the project brief, timeline of events and milestones. Budgeting is planned based on the project scope and number of players involved.
Step 2: Research Methodology
An important step in the market research process is the research methodology phase. It is here that market researchers figure out how to conduct the actual study. The decisions made here can greatly influence the overall outcome of the project. Choosing a research methodology that is too difficult to accomplish or one that is too simple will produce results that are unusable. In this phase, researchers may conduct test or pilot studies before the real studies to “feel" out the target audience and determine if the method will yield reliable results. When customers are being studied, focus groups are a common tool used by researchers to run the pilot studies. Companies will also rely on secondary data such as books, newspapers and magazines to get background information on their target before actually commencing the study.
Step 3: Instrument design
In this step, researchers design the instruments needed to collect data. In most cases, researchers will design questionnaires to be given to customers. Some other common tools designed by marketers are email surveys, interviews, scenario-based tests and role-plays.
Step 4: Data Collection
The purpose of this step is to use the market research instrument(s) to collect necessary data for the study. Data collection can be done in one or more phases depending on the complexity of the study. Some common techniques for data collection are filling out surveys online, in-person and telephone interviewing.
Step 5: Interpreting Data
This stage involves interpreting the data from the studies conducted. Depending on the type of data involved, quantitative or qualitative analyses are employed to interpret the data. In the case of questionnaire data, quantitative or statistical analyses can be utilized to describe demographic information or find correlations between study variables. In the case of interview data, transcript or text analysis would be employed to interpret valuable patterns in the data.
Step 6: Presentation Phase
The purpose of this final stage is to present the study findings to internal and external stakeholders. The internal stakeholders may be company executives, board of directors or employees. External stakeholders may be investors, customers or business partners.
Marketers will go back to the study objective at the beginning of the market research process and answer the research objectives first laid out at the beginning of the process. If the data from the study is able to answer the goals and objectives, then the overall study is a success.