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Types of Market Research Explained and How to Use Them

Kody Wirth

6 min. read

Updated October 29, 2023

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As a small business, you must understand your market, target customers, and brand. 

This knowledge significantly affects your decision-making, marketing effectiveness, and potential for business growth.

And while the steps to do market research are relatively simple—your research options are far more complex.

Let’s explore the different types of market research and how to apply them to your business.

1. Primary research

Primary market research is first-hand information you collect from customers within your market.

For business owners:

Use this method when validating your business idea. Break it down into two result categories — exploratory and specific.

Exploratory is non-quantifiable customer feedback. You’re not looking to measure results but gauge interest or an emotional response.

Now, follow up with very specific questions that can be quantified. Use this to evaluate the value of a product or service, your market direction, and product/market fit. 

Your goal is to come back with numerical (purchases, revenue, estimated sales, etc.) insights to drive and support your decisions.

Research methods:

  • Surveys
  • 1:1 Interviews
  • Focus groups
  • Observations

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2. Secondary research

Secondary research covers every other piece of data you have available. This includes resources such as:

  • Public sources: Typically free and highly accessible information gathered through government-sponsored research projects. 
  • Commercial sources: Research studies conducted by private organizations regarding the state of specific markets, industries, or innovations. 
  • Internal sources: Data you have collected through everyday business operations.

For business owners: 

Secondary research is a cost-effective way to gather existing information on the industry, market trends, and competitors. It helps you benchmark against industry standards and identify potential market opportunities.

Use this research as a starting point. It can inform the direction of more costly primary research methods. 

Research methods:

  • Industry reports
  • Market statistics
  • Academic publications
  • News articles
  • In-house data

3. Qualitative research

Qualitative research is the collection of information that is not reliant on numbers making it difficult to measure. It adds depth or context to quantitative research by measuring sentiment or collecting responses to open-ended questions.

For business owners: 

Qualitative research delves deep into customer psychologies, helping you understand the reasons behind their choices. This can guide product development, branding, and marketing strategies to better resonate with your audience.

Research methods:

  • In-depth interviews
  • Focus groups
  • Case studies

4. Quantitative research

The collection of numerical data can be easily collected and analyzed. It should be seen as exploratory. Your goal is to uncover evidence or trends that can be explored further through qualitative research. 

For business owners: 

Quantitative research provides measurable data that you can then analyze. 

Short-term, it helps you make data-driven decisions, forecast trends, and understand the market size and segmentation. Long-term, it’s your baseline for performance that can be referenced in additional market research efforts. 

Research methods:

  • Surveys
  • Polls
  • Financial data

5. Observational research

Researchers observe and record the actions of participants. This can be done in a formal or informal setting. 

For example, you want to open a coffee shop and need to understand the total foot traffic in a specific area. You could stake out the location and count the number of people that pass by over a set period.

For business owners: 

Observational research offers genuine real-time insights into how customers interact with products or services. 

You can identify potential pain points, understand if features meet expectations, and even improve  

Research methods:

  • Direct observation
  • Participant observation
  • Time-lapse videos
  • Eye-tracking studies

6. Competitive analysis

Research competitors in the market to understand their strategies, strengths, and weaknesses.

For business owners: 

A competitive analysis helps position your business. 

You’ll identify your unique selling points, opportunities to improve, and potential threats to your business. 

Research methods:

  • SWOT analysis
  • Competitor benchmarking
  • Mystery shopping
  • Online monitoring

7. Branding research

This focuses on how a brand is perceived in the market. It relates to your company’s tone, imagery, design, and overall values.

For business owners: 

Branding research can help in creating, managing, or maintaining your brand. 

You can research brand awareness, loyalty, perception, value, and positioning. For this research to be effective, you must have a distinct purpose. 

Typically, you’re attempting to gauge overall performance, identify opportunities to enhance your brand or diminish areas that do not reflect it.   

Research methods:

  • Brand awareness surveys
  • Brand loyalty assessments
  • Social listening (brand mentions, interactions, etc.)

8. Customer research

This involves gathering insights directly from current or potential customers to understand their needs, preferences, and experiences.

For business owners: 

Customer research is pivotal in ensuring your business meets customer needs and expectations. It can guide customer service improvements, enhance loyalty, and increase customer lifetime value.

Research methods:

  • Customer satisfaction surveys
  • Net Promoter Score (NPS) surveys
  • Customer feedback forms
  • Customer interviews

9. Product research

This focuses on evaluating a product’s performance, acceptance, and potential improvements in the market.

For business owners: 

Product research helps refine product features, understand its market fit, and identifying areas for innovation. It ensures that the product meets customer needs and stays competitive.

You can test hypothetical solutions, product features, branding, and marketing collateral. Ideally, you’d test each of these elements in specific phases. And let the results inform the direction of each step.

Research methods:

  • Product usage surveys
  • Product testing and trials
  • Feature preference studies
  • Concept testing

10. Experimental research

Involves manipulating one variable to determine if it causes a change in another.

For business owners: 

Experimental research can help test hypotheses about market behaviors, allowing for optimization of product features, pricing strategies, or marketing campaigns based on actual results.

Research methods:

  • Controlled experiments
  • Field experiments
  • A/B testing
  • Lab experiments

11. Field trials

Testing products, services, or promotions in a real-world setting before a full-scale launch.

For business owners: 

Field trials use a real-world testing ground to gauge the effectiveness of a new product or campaign and make necessary adjustments before a broader rollout.

For physical products, this could be done geographically. Where only a select number of locations receive and sell a given product.

For software or services, you can beta test with a selection of users. Ideally, these are dedicated customers deep in your solution and can provide pointed feedback.

Research methods:

  • Product sampling
  • Test marketing
  • Beta testing
  • Store audits

How to choose the best research method(s) for your business

You’ll end up using several types of market research. You may have even noticed how many of the market research methods overlapped. 

What you start with depends on several factors:

Your goals

Why you’re doing this research and the desired results will influence your chosen methods. 

For those starting a business, focus on getting market data and direct customer insight. You want a broad understanding of the market you’re entering, your competitors, and where you fit. 

You also need to know your target market. Quantitative data is a great starting point, but you won’t have a clear picture without direct conversation.

Budget

Research requires monetary investment. Whether it’s purchasing reports, hiring a research firm, or compensating a tester. You should account for the payroll cost if it’s you or an employee doing the research. 

Research doesn’t have to be expensive. Many online tools offer free or affordable options for surveys and feedback collection. But if you need to go deeper, you’ll likely need to pay more.

Time investment

Research requires time. Time to run, analyze, and report. You need to understand how long a specific method will take and the return you expect.

Remember, it may take time now, but it will ideally save you time (and money) in the future.

Explore more on marketing research

Choosing how you’ll conduct market research is just part of the process. Check out our curated selection of resources to learn more about: 

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Content Author: Kody Wirth

Kody Wirth

Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.