Market research: strategies and methods

 

 

Imagine you are planning to develop a smartphone app for simple and efficient accounting. Before you invest budget and resources in the development and programming, analyze the market: Which comparable apps already exist? Which functions are in demand and which features could further improve the apps? To find out, create an overview and analyze strengths and weaknesses. You then use focus groups and interviews to find out which features potential users want and identify challenges that competing products have not yet been able to overcome. In short: for the app to be successful, you need to know what is important to users.

Whether you want to develop a product, establish a marketing strategy or optimize your employer brand: Sound information is the basis for successful business decisions. This is where market research comes into play.

What is market research?

Market research encompasses the entire process of collecting, analyzing and interpreting data on target groups, competitors, trends and relevant market developments. These findings enable companies to make business decisions based on data rather than gut instinct, to recognize potential and to position their brand successfully.

Why is market research important?

Market research is crucial for the growth and success of companies. It is always used when business decisions need to be made on the basis of sound data.

Typical scenarios for the use of market research in companies are

• Product development: Competitive analyses and knowing exactly what customers need and expect from a product helps companies to develop and further optimize products in a user-centric way.
• Marketing: By segmenting target groups, analyzing their needs and applying them to the entire communication journey, companies can design tailor-made campaigns. Market research protects against wrong decisions, minimizes wastage and ensures that the brand message actually reaches the target group.
• Sales: Personalized customer journeys lead to higher conversion rates, qualitative leads and faster sales closure. A solid database, for example on media usage and consumer behaviour, helps to successfully optimize sales strategies.
• Trend scouting: Consumer preferences, social values and people's willingness to pay are constantly changing. Companies that recognize new developments early on can adapt their strategies to the new circumstances.
• Market analysis: With good market research, gaps in the market can be identified more quickly and filled with new products, features or services.
• Recruiting and HR: Market research data helps recruiters to design job advertisements and application processes in a way that appeals to suitable specialists. HR managers benefit from data that helps them to better understand employees in order to retain them in the company.

Areas of market research

The rule: those who invest in market research in good time are often one step ahead of their competitors. However, not all market research is the same. To be successful, companies need to collect precisely the data that is helpful for their goals. To achieve this, it is helpful to develop suitable strategies and select the right methods.

Primary research

Primary research involves direct data collection, for example by a company. Interviews, surveys, focus groups or market analyses result in data that answers specific questions. Primary research can be used to determine what is important to customers when it comes to a specific product or service. The big advantage: the data is tailored precisely to the company's questions. It therefore scores highly in terms of relevance. One disadvantage, however, is the high level of resources and budget required - especially for large-scale tests or surveys.

Secondary research

Secondary research relies on existing data sources, including industry reports, market studies or government statistics, to draw conclusions about the market and consumer behavior. Companies primarily rely on reports from market research institutes, scientific studies or internal sales data to identify trends and make strategic decisions. A major advantage of secondary research is its cost efficiency and quick access to large amounts of data. However, there is a risk that the data is outdated and inaccurate or only partially covers the company's specific question. This can result in data gaps that lead to incorrect decisions.

Brand research

Brand research is a sub-discipline of market research. It examines how certain target groups perceive a brand. Brand research asks how well-known a brand is, how loyal certain target groups are to the brand and what they associate with it. Long-term social media monitoring, surveys and competitor analyses have also proven to be effective methods. Brand research gives companies the opportunity to test and continuously optimize their brand identity.

Customer research

Customer research deals with the needs, behaviors and expectations of customers. It supports companies in the development of customized products and services. Typical methods include customer segmentation, surveys and usage analyses. Data-based buyer personas are considered an important tool in customer research as they summarize data into realistic customer profiles.

Product research

Product research includes product tests, prototypes and A/B tests. These methods help with the introduction of new products by obtaining customer feedback in advance and thus minimizing the risk of bad investments. Although product research is associated with high costs, this strategy is essential in order to successfully position products on the market.

Competitive analysis

Competitive analysis is based on SWOT analyses, benchmarking and web analyses and examines the strengths and weaknesses of the competition. Companies use competitive analyses to analyze their competitors' pricing strategies, product offerings and marketing measures, among other things. Competitive analyses provide information about opportunities on the market and help companies to position themselves optimally. The extensive research is particularly worthwhile for start-ups or companies that want to establish themselves in a new product segment.

Market research methods

Various methods are used in market research. They can be divided into qualitative and quantitative methods. The choice of the right market research method depends on the specific objectives, the budget and the availability of data. While qualitative methods provide in-depth insights, quantitative approaches deliver reliable and statistically robust results. A combination of both often achieves the best results and offers companies valuable decision-making aids.

1. qualitative market research

Qualitative market research is used to gain deeper insights into customer opinions, needs and behavior. It is exploratory and relies on open questions and small samples. It focuses on subjective factors such as opinions, emotions and people's motivation. Qualitative research includes in-depth interviews, focus groups or ethnographic studies. The aim is, for example, to gain detailed insights into the behavior of a specific target group in order to develop more successful marketing and sales strategies. Qualitative research helps to understand complex processes that go beyond mere facts. In this process, companies learn about the values, needs and expectations of certain target groups, although qualitative research is time-consuming. In addition, the results always require subjective interpretation, which can lead to prejudices and thus to distortions in the database.

a) In-depth interviews

In-depth interviews are detailed, individual discussions with customers or experts. They make it possible to record attitudes, motives and decision-making processes in detail.

Areas of application:

• Analysis of purchasing decisions
• Understanding brand perception
• Development of new products
• Analysis of applicant motivation and expectations in recruiting
• Development of employer branding strategies

b) Focus groups

Focus groups consist of six to ten participants who discuss a specific topic under moderation. This makes it possible to identify group opinions and possible purchasing patterns.

Areas of application:

• Product development
• Advertising impact analyses
• Customer satisfaction studies
• Evaluation of company image from the applicant's perspective
• Optimization of recruiting processes

c) Observation

In this method, customers are observed in real or simulated shopping situations in order to analyze their behavior. This can also be done using eye-tracking or mystery shopping .

Areas of application:

• Analysis of purchasing behavior
• Usability tests for websites or apps
• Optimization of store layouts
• Analysis of applicant behavior during assessment centers
• Optimization of workplace design for greater employee satisfaction

2. quantitative market research

Quantitative market research works with standardized procedures and large samples. In contrast to qualitative research, it is based on measurable data. Typical methods include standardized surveys, statistical and big data analyses. For example, a company can use an online survey with several thousand participants to find out which product features are particularly popular with a target group and which are not. The major advantage is the objective measurability of the results. Quantitative data can be used to identify trends and behavioral patterns. However, this type of research can only capture emotional or non-quantifiable factors to a limited extent.

a) Surveys

Surveys are the most frequently used method of market research. They are conducted online, by telephone or in person and provide statistically analyzable data.

Areas of application:

• Customer satisfaction
• Market share analyses
• Opinion research
• Employee satisfaction and engagement measurements
• Analysis of employer attractiveness

b) Experiments & A/B tests

Experiments specifically test how changes affect customer behavior. A/B tests are used in the digital sector in particular, for example to compare different versions of a website or advertisement.

Areas of application:

• Optimization of marketing measures
• Pricing
• Web design tests
• Optimization of job advertisements and career pages
• Improvement of application processes

c) Secondary research

Secondary research is based on existing data, such as market reports, statistics or studies. It is cost-effective and can provide valuable insights into specific areas.

Areas of application:

• Market potential analyses
• Competitive analyses
• Trend research
• Analysis of labor market trends
• Benchmarking of salaries and benefits

3. data-driven personas

A modern method of market research is the development of data-based personas. They combine qualitatively and quantitatively collected data in a profile and take into account results from both primary and secondary research. The persona persona profile therefore incorporates both the company's own data and external market research data. Depending on the company's objective, the combination of data provides a realistic representation of customers (buyer personas), desired candidates (candidate personas) or employees (employee personas). Another advantage: personas bring data to life. Instead of abstract tables, the persona profile provides a realistic insight into the living environment, character and specific needs of the respective target group.

a) Buyer personas

Buyer personas are fictitious but data-based profiles of existing or potential customer groupsbased on market research data, customer surveys, CRM data and demographic analyses. Companies use buyer personas to tailor marketing and sales strategies to the needs, challenges and behaviors of their customers. Data-based buyer personas are therefore an effective tool for developing personalized content, advertising campaigns and product offers to increase purchase intent.

Areas of application:

• Development of targeted marketing strategies
• Optimization of product offerings
• Improving the customer journey

b) Candidate personas

Candidate personas are data-based profiles of potential applicants that companies use for their recruiting strategies. They are based on labor market analyses, surveys of applicants and current employees as well as other external data sources. On this basis, companies develop customized job advertisements, targeted recruiting campaigns and employer branding measures to attract and retain qualified talent in the long term.

Areas of application:

• Optimization of job advertisements
• Targeted personnel marketing strategies
• Improvement of the application process

c) Employee personas

Employee personas help companies to identify existing employee types and develop targeted HR strategies. These personas are based on internal employee surveys, performance data and feedback analysis. Companies can use employee personas to create individual training programs, targeted benefits and tailored career development plans to increase employee satisfaction and productivity.

Areas of application:

• Development of effective employee retention strategies
• Optimization of training and development programs
• Promoting employee satisfaction and motivation

Conclusion: data-driven personas as an effective market research tool

Those who use market research strategically not only strengthen their own market position, but also ensure that decisions are not based on assumptions, but on reliable data. In a dynamic business world, this is a decisive factor for long-term growth and entrepreneurial success.

data-driven personas in particular offer a powerful market research tool by providing a realistic representation of customers, applicants or employees. Instead of abstract data sets, they provide a true-to-life perspective on the needs, behaviors and challenges of the respective target group. Companies can use personas to design more precise marketing strategies, develop tailor-made products and position themselves as a popular employer. The combination of an analytical data basis and practical application makes data-driven personas an indispensable tool for sustainable business success.

Would you like to use data-driven personas for your company and optimize your market research? The Persona Institute supports you with customized analyses and practical strategies for the use of your personas. Contact us and find out how you can understand your target groups even better with data-driven personas.