What is Market Research?

Market research refers to any research conducted by a company for its marketing activities. Therefore, when looking to understand market research, it is essential to understand its purpose: marketing, itself.

What is Marketing?

So what is marketing?
Marketing can be defined as the simplest and most straightforward way of saying, “creating a system in order to sell.”
To break it down further, it can be described as the activity of creating products or services that consumers truly desire, communicating that information to consumers, and enabling consumers to efficiently obtain those products or services.

If companies adhere to this principle of “creating products or services that consumers truly desire,” they face the following challenges:

• Who are the target customers?
• What kind of value are they seeking?
• What products or services are necessary to meet their needs?

Furthermore, if companies then try to communicate that information to consumers, they face the following challenges:

• Which media or channels should they communicate with?
• What sort of language or messaging should they use?
• What design elements or visual aesthetics will effectively convey their message?

Additionally, to enable consumers to efficiently obtain those products or services, companies face questions such as:

• Where should they sell those products or services?
• At what price should they sell them?

If a company aims to maximize customer acceptance of its products and services and achieve success through marketing activities, it will inevitably encounter various problems and challenges. Market research is conducted precisely to address and find solutions to these issues. The findings obtained from market research play a crucial role in informing decision-making and strategy evaluation. As a result, it is imperative that the answers derived from market research are based on solid foundations and are reliable.

Difference Between Marketing Research and Market Research

Market research refers to understanding the current state of the market through figures and data, while marketing research revolves around predicting and considering future market trends. In other words, while market research pertains to the current situation, marketing research pertains to both the current and future situation. Therefore, market research is a part of marketing research.
Another difference is that in the early stages of the marketing process, there is a strong need to understand the current state of the market, and therefore market research has a heavy importance. In the mid to late stage, however, the need to predict the future of a new product or service under development becomes more important, so then marketing research develops a strong importance as well.

Types of Market Research by Purpose

Various problems and challenges arise in marketing activities, and market research serves as a solution to address them. However, it is crucial to choose the appropriate research methodology that aligns with each specific issue. Which type of research is suitable for each type of problem? In our analysis, we have compiled a comprehensive overview of the common issues that arise in each step of the marketing process, including identifying market opportunities, comprehending and selecting target markets, developing and evaluating concepts, constructing and implementing the 4Ps (product, price, place, promotion), and validating and enhancing strategies. Furthermore, we have provided an array of market research methods that are well-suited for addressing these specific issues.

Market Opportunity Discovery

During the initial stages of the marketing process, businesses face challenges understanding customer complaints and needs, and generating ideas for new product development.
In principle:

• We want to identify consumers’ problems, complaints, and needs.
• We want to confirm the actual use of products.
• We want to generate ideas for new products.

In the case of matters like these, the following surveys are most suitable:

• Needs Exploration Survey
• Lifestyle/Value Exploration Survey
• Survey to ascertain actual usage

Surveys such as these are most suitable.

Understanding and Selecting the Size of the Market

Once consumer dissatisfaction and needs are understood, the next challenge is to identify the characteristics the target audience possess and learn about their lifestyles and values.
In principle:

• We want to know who our target audience is.
• We want to create personas.
• We want to create a customer journey map.

In the case of matters like these, the following surveys are most suitable:

• Lifestyle Exploration Survey
• Persona Creation Survey
• Customer Journey Map Survey

Surveys such as these are most suitable.

Concept Development and Evaluation

Once the characteristics, lifestyles, and values of the target audience have been identified, multiple concepts will naturally emerge. However, the challenge lies in narrowing down these concepts to select the ones that have the potential to be developed into successful products. This involves creating product concepts based on the identified ideas and validating their acceptance among the target audience.

In principle:

• We want to know how to develop a concept.
• We want to know which concept to choose when we have multiple choices.
• We want to know if the final concept will be accepted by the primary target audience.These are the types of issues we encounter.

These are the types of issues we encounter.

In the case of matters like these, the following surveys are most suitable:

• Concept Development Survey
• Concept Screening Survey
• Concept Acceptability Survey

Surveys such as these are most suitable.

Construction and Implementation of the 4Ps

Once we enter the stage of creating prototypes, we encounter various challenges that need to be addressed. These challenges include evaluating the usability and taste of the prototypes, ensuring their alignment with the intended concept, and assessing the effectiveness of package design and branding. Additionally, it is crucial to determine if the pricing, sales channels, and promotional strategies are appropriate for the target audience.

In principle:

• We want to confirm if we can persuade users of competing brands to switch.
• We want to assess the evaluation of the package design.
• We would like to determine an appropriate selling price.

These are the types of issues we face.

In the case of matters like these, the following surveys are most suitable:

• Tasting/Trial Survey
• Package Design Survey
• Price Acceptability Survey

Surveys such as these are most suitable.

Verification and Improvement

After the launch of a product or service, there are several challenges to address, including assessing its market penetration and effectiveness in reaching the primary target audience. It is also crucial to evaluate the trial rate and gather feedback on the satisfaction of trial users. Additionally, conducting a thorough review and verification of the product, pricing, sales channels, and promotion strategies is essential.

In principle:

• We want to determine the extent to which the product has penetrated the market.
• We want to ensure customer satisfaction.
• We want to validate the effectiveness of advertising, such as its contribution to product recognition and driving store visits.

These are the types of issues we face.

For this type of assignment, the following surveys are most suitable:

• Awareness Survey
• Customer Satisfaction Survey
• Advertising Effectiveness Survey

Surveys such as these are most suitable.

Market Research Costs

In this section, we will cover two commonly used research methods: online research, which is the most prevalent form of quantitative research, and group interviews, which are representative of qualitative research.

Cost of Online Research

Market research encompasses various methods, and among them, online research is a relatively affordable approach. The pricing structure typically involves higher fees as the sample size and number of questions increase.

Having a larger number of respondents in surveys helps reduce response bias and leads to more accurate results. However, as the number of respondents increases, the incentives provided to them also increase proportionally.

Additionally, a higher number of questions can impose a greater burden on respondents, so if the number of questions increases, it is necessary to raise the incentives accordingly.

In many cases, screening is conducted to select target participants from the pool of respondents. This survey helps ensure that the rate of eligible participants (i.e., the incidence rate) among the respondents is sufficient, which may require attracting a larger number of respondents. Increasing the number of respondents in this case also implies an increase in incentives.

The cost of market research also varies depending on the type of deliverables. Common deliverables include raw survey data, tabulated and graphed data, and reports with various types of analysis. It is typical to choose the necessary deliverables and incur costs accordingly.

Cost of Group Interviews

Here we will break down the cost of a group interview in a typical case scenario.

The main items are as follows:

• Planning and design costs: These include expenses for researchers to handle tasks such as hypothesis testing and research design.
• Recruiting expenses: This covers the cost of recruiting subjects for the survey.
• Moderator fee: This refers to the cost of hiring a moderator to facilitate the group interviews.
• Secretarial expenses: These are the costs associated with recording the statements made during the group interviews.
• Venue expenses: Typically, a dedicated venue with features such as 2 way mirrors is used.
• Subject incentives: This involves providing a gratuity to the subjects as a token of appreciation for their participation in the survey.
• Operating expenses: This includes administrative costs, including reception duties on the day of the event.
• Report preparation fee: This covers the cost of preparing a report that summarizes the survey results, discussions, and findings.

These items contribute to the overall cost.

In some cases, companies may handle tasks such as planning, design, and report preparation internally, in which case the corresponding expenses would not be necessary.

Costs for Other Research Methods

There are many other types of market research available.