Conducting online market research can be a very effective tool for better understanding your target audience, how people feel about your products, and how you should shape your future marketing strategy. In fact, 53% of consumers do online research on a regular basis, and studies have shown that 95% of people read online reviews before making a purchase.
In this article, we will examine market research methods and the different forms they take, as well as the advantages and disadvantages of different types.
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What Is Online Market Research?
Online market research is market research that uses online data – both your own and that of other companies – to learn more about your target audience and scale your offerings appropriately.
Successful online market research can help your business grow faster and more effectively. It holds several advantages over in-person research, including:
- Much lower costs. Surveys conducted by email, for example, can cost between $3000-5000, as opposed to offline surveys that can cost $100,000 or more. This includes saved costs on facilities, and saved time for participants as they do not have to travel to take part.
- Greater potential representation of people from different time zones or geographical areas.
- Ease of data storage. Asking questions online automatically allows answers to be stored and filed for analysis and archival purposes.
- A greater degree of anonymity and honesty from respondents. Regardless of whether questions are open-ended, multiple choice, or of other sorts, people can feel more comfortable being honest knowing that they can be anonymous.
There are also some disadvantages to conducting market research online, which people should keep in mind:
- People might not place sufficient emphasis on questions to read them carefully if they don’t have a distinct “event” to go to. They could be distracted by other things and simply check off answers for the sake of doing so.
- There is a risk of some participants not fully understanding certain questions. When this happens, people have no recourse to clarify or ask follow-up questions.
Despite the limitations, online market research certainly has enough benefits that it can provide very useful insights into business trends and facts for businesses who conduct it. It can be an effective way of generating behavioral targeting ideas to better understand your consumer base.
Online Market Research Methods
Online market research consists of two different types of approaches depending on whether a company is conducting its own research or using research that has already been conducted by others. They are referred to as primary and secondary methods.
Primary Market Research
Primary market research is research that involves the collection and analysis of a company’s own data. The data that is used in analyses is only visible to the company itself. Primary market research involves the use of methods such as market research surveys, online focus groups, and interviews. Offline primary research also includes the use of observation groups.
In conducting primary market research, you are aiming to gather information about your target audience and their preferences in order to refine your offerings more appropriately.
One of the distinguishing features of primary research is that the groups you collect information from are ones that reflect your target audience. That is, they have similar characteristics in common, and the data that you collect is likely to match that, which will apply to your company.
The advantages of primary market research are the following:
- The research you conduct in using primary research methods is fully your own. You do not have to share it with people outside your company, and in conducting future analyses, you have reliable bases to work from in that you will already be familiar with your existing data.
- In conducting primary research, you have control over how you want to formulate processes, whether they be surveys, interviews, or other methods. The data that you receive will reflect precisely the initial purpose of your research.
- You have the opportunity to focus on your own business’ goals and concerns, as opposed to looking at broader business concerns within your industry, your geographical area, etc. You can delve as deep into your chosen research areas as you want.
There are also some disadvantages to doing this type of research that you should keep in mind:
- There is a significant amount of time involved in planning, carrying out, and analyzing primary research. Some companies don’t have the resources necessary to do this. Although online tools have made it easier in recent years, conducting your own research is still more time consuming than accessing secondary research.
- Having the skill base to know how to conduct a proper research experiment can be complicated. You need to have a thorough understanding of how to carry research out and how to analyze results in order for it to be truly effective.
- Primary research only allows for a narrow sampling of any given group. Even if you choose a target group that you think represents your interests, you still only have your own chosen sample of people/categories/indicators to work with. And this doesn’t necessarily give you an accurate representation of your larger potential audience.
Secondary Market Research
Secondary market research is research that has already been conducted by other groups that you access for your own purposes. For companies that do not have the time, resources, and money to conduct their own research, secondary market research can be useful in illustrating industry trends, demographic information, or other information that affects different aspects of industries.
Secondary market research includes studies conducted by government agencies, trade associations, or larger businesses in a given industry that have sufficient resources to carry out large-scale research themselves.
There are advantages to doing secondary research, rather than primary research:
- Many reports, studies, and other types of articles that have already been concluded are open to the public. This means that you can often access them without excessive difficulty and without having to pay. Many research studies are available online, and you can contact associations or government offices if you see references to studies that you would like to investigate further. Although private companies might require payments to access their information, doing so will still likely be cheaper and easier than conducting the same research yourself.
- Reading and analyzing research studies that have already come out can be beneficial in not only providing data, but bringing to light trends or issues that you might not have been aware of in your industry. They can also help shed light on shifts in industry leaders, changing demographics within your target group, or other valuable information.
There are some disadvantages to relying on this type of research, of course. They include:
- Using other entities’ work as a basis for determining your own strategy can provide an inaccurate foundation for you.
- There could be any number of variables that are different between your company and the ones whose research you review.
- This type of research doesn’t allow you to focus on single products or particular aspects of your business.
Qualitative and Quantitative Market Research
Market research can also be broken down into two types based upon the style of methods that researchers use. They are known as qualitative and quantitative methods, and we will provide an overview of both of them.
Qualitative Market Research
Qualitative market research is a research method that involves asking open-ended questions to groups of people in order to collect their thoughts and opinions on products and services. This type of research usually involves smaller groups of people in online focus groups or interviews.
Both qualitative and quantitative research have distinct advantages to them. In order to really gain a solid understanding of your audience’s feelings about products, you should conduct both types of research.
Qualitative market research can be instrumental in understanding how people feel about different aspects of your business. In other words, you can gain insight into why people prefer certain types of things over others, rather than simply the numbers of them that they consume.
The advantages of using qualitative research methods over quantitative ones include:
- Using smaller groups of people allows for greater depth of answers. If you are looking to refine a product line or understand why your product might be falling in the market, you can learn more through a qualitative research study.
- You have the opportunity to choose a particular group that represents a narrow set of interests if you want to control the number of factors involved.
- Asking open-ended questions not only provides additional insight, but can serve as a basis for future discussions and research projects.
There are also disadvantages to using qualitative research methods:
- Because groups are limited in size, they might not accurately represent the opinions of the larger population.
- Qualitative research only examines particular aspects of the products being discussed, so they do not provide an overall assessment of attitudes towards products as a whole.
- In being asked open-ended questions, people might be reluctant to give honest answers.
Quantitative Research Methods
The other major type of market research is quantitative research. Qualitative research is research that aims to obtain larger-scale information from people using surveys, polls, or questionnaires to uncover trends and larger public sentiment about products or services.
Quantitative research methods offer distinctly different advantages for your business. The distinctive features of quantitative research include the following:
- Larger numbers of respondents. If you have a larger pool of people from whom you can receive responses, your results will likely be more reflective of the population as a whole.
- Quantitative research often involves the use of random samples of the population. Random samples provide a wider representation of society. Also, it reduces the amount of bias that is often present in qualitative studies as open-ended question formation can often be skewed in favor of certain types of answers.
- Quantitative research allows for anonymity. By simply being one of many respondents in a large-scale survey or other research, participants don’t feel as if they are divulging potentially controversial or offensive opinions.
There are also some disadvantages to using quantitative methods:
- Answers might be limited or inaccurate. By not allowing people to complete open-ended questions, and therefore allowing for the inclusion of context, you might be getting skewed or inaccurate results.
- You don’t get the depth of answers that you would get using qualitative methods.
- People might pay less attention as answers are simply easy to check off and they want to get the survey (questionnaire, etc) over with.
How to Do Market Research Online
Let’s now take a closer look at some of the distinct practices involved in online market research. As we will explain, each of these types has particular advantages to it.
Online surveys are surveys that are conducted online for the purpose of gaining insight or information about your target customers in order to better refine your products to conform to their needs.
Conducting online surveys can be useful for various purposes, from assessing the potential popularity of new products to better understanding customer needs regarding existing ones, and learning more about your brand popularity overall.
There are a set of steps that you should follow in conducting an online market survey:
- Figure out what you want to learn. Are you working with new products? Do you want to gauge customer satisfaction levels with a particular existing product or line of products? Do you want to improve the customer experience in general?
- Decide who you want to survey. This will be related to your goals:
- Obviously, if you’re assessing satisfaction with a particular type of toy, for example, your target group will consist of parents.
- If you’re trying to get information on anti-aging cream, you will target women of a certain age group who tend to use these types of creams.
- Determine as accurately as possible other factors related to your potential respondents: geographic location, income bracket, etc. This will help you hone your marketing strategy once you’ve completed the survey, and also give you more accurate results.
3. As surveys usually involve quantitative methodology, you could ask different types of questions to your participants, including:Multiple choice questions:
a. “How satisfied are you with producing X?”
- A. Very satisfied
- B. Somewhat satisfied
- C. Not satisfied
b. Numerical scale questions: “How satisfied are you with this product on a scale of 1-5?”
4. Take circumstances into consideration. With in-person surveys, this would involve things like time of day, location, etc., but of course online surveys don’t include these kinds of factors. So instead you should focus on things like platforms. What are the preferred social media of your target group? If you’re sending your survey out by email, think about whether this is really the best way to reach the group you want. If you determine that your target group is people aged 30-40 who use Facebook more than other platforms, you should consider sending out your survey via a paid post on people’s Facebook pages.
5. Calculate your results. The types of results that you want should be part of your initial design and the goals you set out from the beginning. There are many different kinds of results that you could look for, depending on your goals:
- You could look for the highest number of any given type of response. For example, if you’re trying to find out how the majority of customers feel about a particular product, you could assess what the most popular responses are.
- You could assess how many people either really like or really dislike a given product (how many rate it a 1 or a 5).
- You could rank your respondents’ results against those of the respondents in a secondary research project to compare how a similar demographic feels about a particular product type to yours.
These are just a few of the types of outcomes that you can have as research goals. What you look for all depends on your larger strategic plans and what you want to accomplish in your marketing efforts.
6. Analyze how your results fit into your overall product line and goals. Your results will influence your larger marketing strategy, and possibly individual product lines, as well.
Explore Industry Reports
A secondary research method that you can use to obtain more wide-scale information about your industry as a whole is to explore industry reports. Unlike surveys, industry reports give you information about numerous different aspects of your industry, including:
- large-scale trends in your industry over time
- detailed financial statistics that help you better understand things like consumer spending habits, typical operating costs, etc.
- Information about industry leaders and their individual statistics
- How market share is divided according to different metrics
Although obtaining industry reports can be complicated, as well as expensive, there are places that you can look for them that might save money and effort:
- The Bureau of Economic Analysis
- Dun & Bradstreet
- Trade associations for your industry in particular
Although industry reports might be expensive to obtain copies of (you might pay $3000 or more to access a given report), the costs are far lower than those of conducting your own research.
Using a combination of the broader information to be gained from industry reports, as well as your own primary and secondary research, will together give you a much more complete picture of the particulars of your business, as well as where you stand vis-a-vis the competition and the industry in general.
Start Conversations with Focus Groups
Finally, focus groups are a way to collect potentially even more in-depth qualitative information than any of the above methods. Focus groups generally include up to ten people and involve a series of open-ended questions intended to gain insight into people’s feelings about products, services, or other aspects of business. If you’re looking to gain a deep understanding of what people like or dislike about your products, and why they feel that way, focus groups can be a very effective way to do this.
In conducting a focus group session, it is the job of the moderator to steer the conversation as he or she sees fit. Initial questions could include things like the following:
- “How do you feel about product X?”
- “How often do you use it?”
- “Is there anything you don’t like about this product?”
An effective moderator is one that asks probing follow-up questions to gain additional insight into questions, and to try to include group members that might be reluctant to speak out. Follow-up questions could include things like the following:
- “Is there anything else you’d like to add about the product?”
- “What would need to change for you to buy product X?”
- “We discussed product X in detail, but product Y less so. Is there anything about the product Y you’d like to add?”
Advantages and Disadvantages of Having Focus Groups Online
Although focus groups have traditionally been conducted in person, technology has made it possible for them to be done online by participants logging in from their own locations. This widens the possibilities for participation geographically and saves costs on facilities, transportation, etc.
However, one of the advantages of having in-person focus groups is that group members form a dynamic with each other, and the conversation is one that builds on itself. Members get ideas from other members, and the conversation ends up being a group effort in the end. This can still happen online, although some researchers believe that the lack of in-person contact can limit the natural flow of conversation.
Analysis of Results
Once you’ve completed your research, it will be time for you to analyze it. A careful analysis can provide insights into not only your original questions, but it can also reveal other aspects of your business and/or wider industry that you hadn’t considered before.
Regardless of whether your research is qualitative or quantitative, the results that you obtain can be useful to your product line development overall. Even if you have focused a study on one particular product, for example, answers can give you insight into your larger business.
Research projects can build upon one another. Once you’ve completed a research project on a given subject, you can use the results as a foundation for further studies. And in this way, you can build your products to new levels.
Market research can help your company in innumerable ways. Whether you are a new company, or a more established one, conducting market research can help you grow, understand and resolve problems, and gain a better understanding of your products and your industry overall. Once you have the online market research tools to carry projects out, you will be better equipped to undertake studies yourself.
Conducting market research used to be a time consuming and costly undertaking, but thanks to technological advancements and the growth of online methods, it has become faster, cheaper, and more accessible for a much greater range of companies.