What is Market Research?
What is Market Research?
Market research is a broad field that covers understanding the people who buy and use your products – your potential customers.
Market research uses lots of tools that include competitor analysis and landscape competitor analysis, but the primary goal is to understand why, how, and what people will buy from you.
Market research includes competitive analysis as part of its area of interest, but market research is more than looking at your competitors.
What are the 3 Main Types of Market Research?
What are the 3 Main Types of Market Research?
The approach and design of market research activities fall into three main types:
• Exploratory
• Descriptive
• Causal
Exploratory Market Research
The start of a market research exercise is to find out about the market – what is happening, and why does it happen that way? Exploratory market research gets insight into how the target audience feels about a problem and what drives their behaviors. An exploratory market research results in facts and opinions gathered through primary contact (interviewing people alone and in groups) and secondary contact through written material. Generally, the information is qualitative.
Descriptive Market Research
Descriptive market research collects hard data, often with closed questions, customer surveys, and other compiling statistical data for decision making. A smaller sample represents the larger market, and you expect to use the results for decision making.
Causal Market Research
Causal market research is about cause and effect – if you do this (change packaging), then what is the impact on sales (up or down). Causal market research is one of the most difficult to quantify because it is difficult to experiment on the market where you isolate one variable as having an impact. Causal market research is useful in small scale trials where you are trying out different branding approaches or developing new product lines. Still, it is not helpful for decision making in isolation. Sometimes the observed effect may be unrelated to your change because human reaction is complicated.
Different Types of Market Research
Different Types of Market Research
Market research answers the “why?” questions about your products, customers, and competitors. Research gives you explanations and reason and is more informative than statistics like 60% of your website visitors leave after 1 minute. Market research explains why they go and lets you form a strategy to change their behavior.
Market research methods involve collecting opinions and facts with standard tools:
• Excellent brands can charge more for their products
and services.
• Surveys – easy, quick, inexpensive, and straightforward to
analyze and present results.
• Interviews – one to one time spent with real people, time-
consuming but gives insights.
• Focus groups – expensive and takes experience to
manage because of the risk of dominant personalities
skewing the results.
• Observation – watching a customer experience is useful,
but you can’t ask questions.
• Variations of these market research tools are useful for
primary and secondary market research as a way of
finding out why people respond to your competitors
and your business.
How to Do Market Research
How to Do Market Research
The starting point for all market research is understanding the product or services target user. Then you can choose the questions to give you the most relevant information for your research.
Personas
Creating a typical user persona helps you identify your target audience. You make them by modeling them on your (or your competitors) current users by finding out:
Who are they?
Main goal of being a user.
Barriers to achieving goal.
You can use a survey on your website and data collection about your site visitors. You keep the survey short (three questions, and most people will answer them, too many, and they disengage) and build a snapshot of your typical customer or visitor.
Observation
The quickest way to find out how well your sales system or product works for a user is to watch them engaging with it in practice. You can either ask for volunteers (overt observation) or adopt the nature watching approach and observe without letting your audience know you are watching (covert observation).
Interviews
Interviews are an opportunity to get direct answers, and you can use phone, video, and face to face approaches. It would be best to listen, persuade them to talk more and keep your opinions to yourself to avoid influencing the outcome. Open-ended questions and follow-up questions tend to gain more information.
Organize the Data
The best way to organize the data depends on your market research. If you are looking into how a customer navigates the website to buy a product, a flow diagram illustrates the events’ sequence. Alternatively, you can group data using an affinity chart or plot a journey map. The way you organize the data will help you “see” what the data reveals about your research topic.
Refine and Repeat
The first collection of data may give you some interesting questions without obvious answers. You can now rework your market research questions and go around the process again, focusing on the gaps in your knowledge.
Common Market Research Methods
Common Market Research Methods
The common methods of market research include:
• Human observation.
• Competitor analysis.
• Talking to individuals and groups.
Getting information from groups of people can involve:
• Direct interviews – traditional market research technique.
• Focus groups – typical of product launches.
• Online forums -self-selected participation by interested users.
• Mobile market research – quick and involves people in a hurry.
• Online surveys – the modern version of the telephone interview.
• Desk research – seeking information collected by other people.
Market research is typically useful for the following activities:
• Brand Research – awareness, positioning, value, loyalty, and reach.
• Advertising effectiveness – reach, influence, and results.
• Customer insights – what do people want, need, and value.
• User experience – how easy is it to engage with your products?
• Targeting – who are you reaching, and who do you want to find?
• Product development – is there a market for this item?
• Customer loyalty – are you keeping your customers happy?
Your reasons for market research and the methods you use to gain answers to your questions are not isolated patches of activity. You mix and match techniques and goals depending on current and future business needs.
Market Research: Competitive Landscape vs. Competitive Analysis
No business exists in a vacuum because all businesses interact with the market – your customers, competitors, investors, partners, suppliers, and everyone else. Companies that thrive and grow are aware of their competitors, their place in the market, and what their customers want and need. Knowledge has always been power, but in the digital age, you get a deluge of data – the analysis tools turn that data into market information. Three of the most useful tools for building your business knowledge are:
Competitive landscape analysis – knowing how you compare in the marketplace.
Competitor analysis – uncovering in-depth detail about your competition.
Market analysis – understanding your customers’ desires, problems, and needs
What is Competitive Analysis?
Competitor analysis helps you build a strategy to dominate the market by learning from your competitors. Your markets research on your competition lets you:
Uncover their strengths and weaknesses.
• Excellent brands can charge more for their products and services.
• Identify gaps in the market.
• Compare your performance for areas to improve.
• Identify potential threats to your business.
• Understanding how you perform through competitor research lets you identify the most effective path
to achieving your business goals.
What is Competitive Landscape Analysis?
Competitive landscape analysis is a form of competitor research, but it looks at the landscape of your market territory by dividing your competitors into areas:
The group that occupies the desirable ground above you in market share and positioning.
Your peers – competitors who are performing about the same level as you. The group that is underperforming in comparison to your market share and branding.
The outliers – the unexpected competitors who can disrupt your landscape. This type of competitive market analysis shows you where you are currently with your direct and indirect competition.
Why Do A Competitor Analysis?
Why Do A Competitor Analysis?
Businesses do competitor analysis because of the benefits you gain from learning about yourself from the analysis. Competitor research gives you:
Understanding of market trends – technology evolves, and customer needs change in response.
Recognition of who you are competing against – there may be some unexpected competitors.
Opportunities – by seeing an example of competitive analysis, you can spot gaps and areas ripe for development.
Threats – find out early if you are lagging the competition or have a challenger for market share.
Strategic insight into how to position your company in the market for greater success.
Competitive analysis is not about copying your competitors (they may be getting it wrong) but about learning about yourself and your position in the market so you can perform better.
Why Competitive Analysis Matters in E-Commerce
Why Competitive Analysis Matters in E-Commerce
When buying online, consumers choose between a range of suppliers; no matter how niche the product when they go looking for a product, they get to compare prices and see alternative solutions to their problems that may suit them better.
For E-commerce competitor analysis, you need to be clear on why your product range meets customer needs. And then, from your competitors, you can find out:
Expected price – most online buyers use price comparison as a significant component of their decision.
Buying channels – market platforms like Amazon provide access to customers and ruthless competition.
Advertising – if your competitors are advertising products, they are in a prime position to attract attention in searches.
Organic search content – most people look at the top two or three results before making their decision, so your position matters.
Competitive intelligence is vital to your E-commerce business because you need to earn your place in the market with every online search and build customer loyalty through expert branding. But you start by seeing what everyone else is doing to carve out your space in the competition landscape.
How to do a Competitive Analysis
How to do a Competitive Analysis
Before you can start a competitor analysis, you need to know yourself. The benefit of a competitive analysis is the benchmarking of your performance to exploit areas where you have the advantage and address possible threats and weaknesses. You can’t compare yourself to your competitors until you know yourself.
The stages of a competitor analysis include:
• Identifying your competitors and choosing three or five for detailed analysis.
• Building a detailed biographical -style profile of each competitor.
• Understand their customer offer – what are they selling and why?
• Studying their methods of customer acquisition – how well do they sell?
• Studying their marketing – what do they do, and is it effective?
• Understanding their customers – are they engaged and loyal?
When you have a complete picture, you can compare your position and form your best strategy and plan for marketing yourself using competitor analysis examples.
Discovering Your Competitors
You don’t need to employ a team of spies to go out and find your competitors; digital tools can provide you with a target list in seconds when you lay the groundwork. Your marketing competitors fall into two categories:
Direct competitors – sell the same product and services and compete for customer spend.
Alternative competitors – these sell products that are different from yours but in the same category.
Discretionary spend competitors – the buyer is looking to spend money (on a gift, for example) and has competing choices.
Indirect competitors – compete for your customers’ attention with their content outperforming yours. You find your direct competitors by focusing on your product and services. You can find your direct competitors through:
Market research – the companies appearing when you go looking for your product type.
Customer’s views – your customers probably researched your competitors before choosing you.
Online conversations – what are people saying about your industry, and who are they talking about? It is relatively straightforward to find your direct competitors because they are trying to sell to your customers, and they are not hiding away. Indirect competitors are potentially more damaging to your marketing because they steal your limelight and divert your potential customers from finding your content. You can find these by seeing who is outranking you for “your” crucial keywords.
Establish Your Competitor's Product Range
Your competitors can sell identical products and services to yours. If you know that their products are the same as yours, you need to find the difference between you that makes customers buy from you and not them or prefer them to you. Your areas of difference can be a combination of:
Price and value-added.
Customer service and reputation.
Marketing and branding.
The products and services may be alternatives to yours – tea instead of coffee, you are still in competition for the customer spend, but you need a different approach. Now you need to sell your product range as superior to the alternatives. Other competitors are competing for a share of your customer’s budget with a completely different offer – read a book or play football? Again, your weapon is marketing to convince your customer that your products and services are more satisfying than the alternatives. Collecting product information is straightforward -brochures and websites will tell you almost everything you need to know. Your market research on your competitors’ products and services is from the customer’s view – how do your competitors meet customer needs, and are there any gaps in the market or your product range.
How Well Does Your Competitor Sell?
This part of your competitor analysis is about sales tactics and results. There is no point in learning a sales tactic that is ineffective. There is no point in copying what your competitors do – because you will always be trying to catch up rather than outperform them. Approaching from the customers’ viewpoint lets you understand why a competitor has more market share, and it may be an area where you can compete. Sometimes it can be too expensive to compete, and you are better choosing a different way to excel.
The most effective sales strategy is to convince the customer that you are offering the best value. When it comes to looking at your competitors selling tactics, you need to look at:
- Value offered – low prices, loyalty points, extra discounts.
- Loyalty – how do they build customer loyalty.
- Storytelling – how do they represent themselves.
- Relevance – how are they meeting customer needs.
- Performance – how easy is it to buy from them.
- Geographical sales areas.
- Sales channels – online, in person.
- Future trends – growing or shrinking.
- Market share and profitability.
- Reviews and customer feedback.
Your competitive market analysis will highlight strengths and weaknesses in your competitors’ sales strategy and yours.
Analyze How Your Competitors Market their Products.
Marketing influences the buying decision. If there is only one brand of bread on the market, then a customer in need of bread will buy the product offered. However, if you have two people offering to sell an identical loaf of bread, the customer will choose and make a decision. The buying decision is not straightforward. There are plenty of value judgments around the simplest buying decision – add in more choices and options, and marketing swings the decision.
Marketing attracts attention and sells a story. The first place to look for competitive market information is your competitor’s website – what are their marketing tools? These include:
• Blogs.
• E-books and whitepapers to download.
• Podcasts, videos, and webinars.
• Static and dynamic elements.
• FAQ and articles.
• Case studies and news.
• Social media links
You can also look at advertising campaigns both in print and online. You are looking at what they are doing and how they are telling their story to potential customers.
What is Your Competitors' Content Strategy?
Content is the digital product your audience consumes on your website and social media feed. Quality content attracts an engaged audience that converts into happy customers, among other marketing goals.
Your competitor research on content strategy looks for:
• Quantity – a sprinkling of blogs or a library of online resources.
• Frequency – how often are they publicizing or is it static.
• Variety – are they providing a mixture of online content or only blogs.
• Quality – is the content worth looking at, and does it have an audience.
• Approach your competitors’ content with a critical eye:
• Accuracy in facts, spelling, and grammar.
• Level of detail – useful or shallow.
• Tone, readability, and layout.
Who is doing the writing?
• Stock photos or unique?
Your competitor’s content is only valuable if it attracts, delights, and retains an audience.
How Engaging is Your Competitor's Content?
Customers and browsers are not shy about sharing their opinion on content if they have the opportunity. You can check comments, reviews, likes, shares, and other interactions with competitor content. Look for:
• Excellent brands can charge more for their
products and services.
• Popular topic content – shared, liked, and
discussed.
• Negative comments and adverse reactions.
• Higher volume of tweets or comments.
• Tone of conversations around content.
The competitor analysis example of audience response gives you insights into those customers’ needs and pain points. It also gives you a starting point for structuring your content to be engaging and valuable to those customers in the format they like best.
How Does Your Competitor Promote their Marketing Content?
Observing how your competitors promote their marketing content and the audience reaction is valuable market research for your marketing content promotion. The elements of the marketing promotion of content include:
• Keywords and phrases – density and type
• Highly shared content
• Active social media presence
• Backlinks from other sites
• Alternative text tags for images
• Internal linking to other pages
From markets research, you find potential new keywords, sites that could link to your content, and the best social media channels for your target audience.
Competitor's Social Media Preferences
You can have a presence on all social media channels with a vast marketing team and an unlimited budget, theoretically. In practice, you want to be on the same social media channels as your target audience. The competitive landscape on social media can give you a head start working out the best places to reward your attention.
Check your competitors’ websites for visible social media links and active promotion with calls to action. Then go looking for your competitor on all the popular social media channels and see how enthusiastic and popular they are on those channels by competitor research:
• How big is their audience of followers and fans?
• How active are they – daily or annual message?
• Are people engaging, or are they speaking to an empty room?
• What is their reach – reshares, retweets, and repins?
• Type of content – unique or from other sources?
Taking all this social media information, try and give your competitors a ranking – top performer, same as you or performing poorly? This ranking can help you focus on the need to compete, best social media channels, and help form your social media strategy to outperform the competition.
Pull it all Together with a SWOT Analysis
The most effective way of getting the full picture of your competitor’s market position relative to yours is a SWOT analysis.
Strengths
Your competitor analysis highlights areas where your competition is strong in their social media presence, branding, and customer satisfaction. You can compare these strengths with yours to see an overlap, gap, or area where you excel.
Weaknesses
Everyone has weaknesses in business, and there are areas where you know you are outperforming your competitors. Some competitors may be outperforming the rest, making this a weakness for those competitors. Evidence of unhappy customers gives you a weakness to exploit if you can find a way to meet a customer’s need or visibly better quality and value.
Opportunities
Looking through customers’ eyes at your competition will show areas where your competition can expand their market share. Recognizing your competitors’ opportunities puts you in a position to gain a competitive advantage and beat them to the target customer.
Threats
Ideally, you are the biggest threat your competition faces. Still, leaving that thought aside, your competitors may face an industry-wide threat like redundant products, scarcity of resources, or the possibility of a hostile takeover. You may share the same risks, or you may be in a secure position – either way, threats facing your competition help you grow stronger.
Why is Market Research so Valuable?
Market research is how you understand your users to figure out how to help them solve their problems and enjoy the user experience your business offers. Market research gives you the ability to:
• Excellent brands can charge more for their products and services.
• Understand what your customer gets from your product – people are inventive and come up with
surprising new uses that can open new markets for your business.
• Deal in facts and real results from your customers rather than listening to assumptions and guesses
from management and staff.
• Avoid the expense of bad decisions by testing customer reaction to new products, branding, and
changes in approach.
Market research allows you to test ideas on a small scale and with real people before investing heavily in a project with little chance of success.
Frequently Asked Questions
How Do You Write a Competitor Analysis Chart?
There are plenty of free templates for recording the results of competitor analysis. The most versatile approach is to use an excel spreadsheet because you can use one column for each company and the rows for recording information. Excel has some straightforward tools so you can search, reorganize, and display the data in useful ways for analysis. Remember to record your own information on the chart so you can compare your business metrics on a line by line basis with your competition. Another plus with using excel is that it is effortless to create updated copies and link the spreadsheet information to standard business reports.
How to Select Competitors for Analysis?
Unless you are in a niche industry, you are likely to have many competitors, and looking at them all is a waste of time and resources when you can learn all you need to know from a representative sample. Ideally, you choose three or five competitors who are your greatest threat because they share your customer base and product range. For a complete picture of your competitive landscape, you want to include some up and coming competitors and perhaps some similar industries that can cross over to yours.
What is Competitive Analysis in Marketing?
From a marketing stance, competitor analysis is about how your competitors acquire and retain their audience. It's about how they tell their story, position their products and services, and engage with their customers.
Marketing competitor analysis is all about the competition. You want to know how they compare to you:
Company details (years in business, number of employees, revenue generation).
Products and services – same, different, better, inferior to yours?
Strengths – what do they do best, and why do their customers like them.
Weaknesses – what do their customers dislike, and can you exploit it?
Opportunities – their opportunities are your potential opportunities if you move quickly.
Threats – what threatens them can be a problem for you, and it helps to be aware.
By analyzing and comparing yourself to your competition, you get a deep insight into running your business to market effectively to your target audience.
What is the Difference between Primary and Secondary Research?
Primary research is the personal collection of original raw data for your market research goal. Secondary research (also known as desk research) uses existing data to answer your market research goals. Primary research is more labor and time-intensive because you need to collect data from your target audience by surveys, interviews, and other ways of engaging with individuals to gain answers and data. Secondary research is quicker, and you can automate it as most of the necessary information is available online, and digital tools locate and analyze the information you need. A combination of secondary research into your target audiences' data rounded with direct primary research helps you gain an accurate and relevant picture of your industry and market conditions for your products and services.
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