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How to Do Market Research: The Complete Guide

Learn how to do market research with this step-by-step guide, complete with templates, tools and real-world examples.

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What are your customers’ needs? How does your product compare to the competition? What are the emerging trends and opportunities in your industry? If these questions keep you up at night, it’s time to conduct market research.

Market research plays a pivotal role in your ability to stay competitive and relevant, helping you anticipate shifts in consumer behavior and industry dynamics. It involves gathering these insights using a wide range of techniques, from surveys and interviews to data analysis and observational studies.

In this guide, we’ll explore why market research is crucial, the various types of market research, the methods used in data collection, and how to effectively conduct market research to drive informed decision-making and success.

What is market research?

Market research is the systematic process of gathering, analyzing and interpreting information about a specific market or industry. The purpose of market research is to offer valuable insight into the preferences and behaviors of your target audience, and anticipate shifts in market trends and the competitive landscape. This information helps you make data-driven decisions, develop effective strategies for your business, and maximize your chances of long-term growth.

Why is market research important? 

By understanding the significance of market research, you can make sure you’re asking the right questions and using the process to your advantage. Some of the benefits of market research include:

• Informed decision-making: Market research provides you with the data and insights you need to make smart decisions for your business. It helps you identify opportunities, assess risks and tailor your strategies to meet the demands of the market. Without market research, decisions are often based on assumptions or guesswork, leading to costly mistakes.
• Customer-centric approach: A cornerstone of market research involves developing a deep understanding of customer needs and preferences. This gives you valuable insights into your target audience, helping you develop products, services and marketing campaigns that resonate with your customers.
• Competitive advantage: By conducting market research, you’ll gain a competitive edge. You’ll be able to identify gaps in the market, analyze competitor strengths and weaknesses, and position your business strategically. This enables you to create unique value propositions, differentiate yourself from competitors, and seize opportunities that others may overlook.
• Risk mitigation: Market research helps you anticipate market shifts and potential challenges. By identifying threats early, you can proactively adjust their strategies to mitigate risks and respond effectively to changing circumstances. This proactive approach is particularly valuable in volatile industries.
• Resource optimization: Conducting market research allows organizations to allocate their time, money and resources more efficiently. It ensures that investments are made in areas with the highest potential return on investment, reducing wasted resources and improving overall business performance.
• Adaptation to market trends: Markets evolve rapidly, driven by technological advancements, cultural shifts and changing consumer attitudes. Market research ensures that you stay ahead of these trends and adapt your offerings accordingly so you can avoid becoming obsolete. 

As you can see, market research empowers businesses to make data-driven decisions, cater to customer needs, outperform competitors, mitigate risks, optimize resources and stay agile in a dynamic marketplace. These benefits make it a huge industry; the global market research services market is expected to grow from $76.37 billion in 2021 to $108.57 billion in 2026 . Now, let’s dig into the different types of market research that can help you achieve these benefits.

Types of market research 

• Qualitative research
• Quantitative research
• Exploratory research
• Descriptive research
• Causal research
• Cross-sectional research
• Longitudinal research

Despite its advantages, 23% of organizations don’t have a clear market research strategy. Part of developing a strategy involves choosing the right type of market research for your business goals. The most commonly used approaches include:

1. Qualitative research

Qualitative research focuses on understanding the underlying motivations, attitudes and perceptions of individuals or groups. It is typically conducted through techniques like in-depth interviews, focus groups and content analysis — methods we’ll discuss further in the sections below. Qualitative research provides rich, nuanced insights that can inform product development, marketing strategies and brand positioning.

2. Quantitative research

Quantitative research, in contrast to qualitative research, involves the collection and analysis of numerical data, often through surveys, experiments and structured questionnaires. This approach allows for statistical analysis and the measurement of trends, making it suitable for large-scale market studies and hypothesis testing. While it’s worthwhile using a mix of qualitative and quantitative research, most businesses prioritize the latter because it is scientific, measurable and easily replicated across different experiments.

3. Exploratory research

Whether you’re conducting qualitative or quantitative research or a mix of both, exploratory research is often the first step. Its primary goal is to help you understand a market or problem so you can gain insights and identify potential issues or opportunities. This type of market research is less structured and is typically conducted through open-ended interviews, focus groups or secondary data analysis. Exploratory research is valuable when entering new markets or exploring new product ideas.

4. Descriptive research

As its name implies, descriptive research seeks to describe a market, population or phenomenon in detail. It involves collecting and summarizing data to answer questions about audience demographics and behaviors, market size, and current trends. Surveys, observational studies and content analysis are common methods used in descriptive research. 

5. Causal research

Causal research aims to establish cause-and-effect relationships between variables. It investigates whether changes in one variable result in changes in another. Experimental designs, A/B testing and regression analysis are common causal research methods. This sheds light on how specific marketing strategies or product changes impact consumer behavior.

6. Cross-sectional research

Cross-sectional market research involves collecting data from a sample of the population at a single point in time. It is used to analyze differences, relationships or trends among various groups within a population. Cross-sectional studies are helpful for market segmentation, identifying target audiences and assessing market trends at a specific moment.

7. Longitudinal research

Longitudinal research, in contrast to cross-sectional research, collects data from the same subjects over an extended period. This allows for the analysis of trends, changes and developments over time. Longitudinal studies are useful for tracking long-term developments in consumer preferences, brand loyalty and market dynamics.

Each type of market research has its strengths and weaknesses, and the method you choose depends on your specific research goals and the depth of understanding you’re aiming to achieve. In the following sections, we’ll delve into primary and secondary research approaches and specific research methods.

Primary vs. secondary market research

Market research of all types can be broadly categorized into two main approaches: primary research and secondary research. By understanding the differences between these approaches, you can better determine the most appropriate research method for your specific goals.

Primary market research 

Primary research involves the collection of original data straight from the source. Typically, this involves communicating directly with your target audience — through surveys, interviews, focus groups and more — to gather information. Here are some key attributes of primary market research:

• Customized data: Primary research provides data that is tailored to your research needs. You design a custom research study and gather information specific to your goals.
• Up-to-date insights: Because primary research involves communicating with customers, the data you collect reflects the most current market conditions and consumer behaviors.
• Time-consuming and resource-intensive: Despite its advantages, primary research can be labor-intensive and costly, especially when dealing with large sample sizes or complex study designs. Whether you hire a market research consultant, agency or use an in-house team, primary research studies consume a large amount of resources and time.

Secondary market research 

Secondary research, on the other hand, involves analyzing data that has already been compiled by third-party sources, such as online research tools, databases, news sites, industry reports and academic studies.

Here are the main characteristics of secondary market research:

• Cost-effective: Secondary research is generally more cost-effective than primary research since it doesn’t require building a research plan from scratch. You and your team can look at databases, websites and publications on an ongoing basis, without needing to design a custom experiment or hire a consultant. 
• Leverages multiple sources: Data tools and software extract data from multiple places across the web, and then consolidate that information within a single platform. This means you’ll get a greater amount of data and a wider scope from secondary research.
• Quick to access: You can access a wide range of information rapidly — often in seconds — if you’re using online research tools and databases. Because of this, you can act on insights sooner, rather than taking the time to develop an experiment. 

So, when should you use primary vs. secondary research? In practice, many market research projects incorporate both primary and secondary research to take advantage of the strengths of each approach.

One rule of thumb is to focus on secondary research to obtain background information, market trends or industry benchmarks. It is especially valuable for conducting preliminary research, competitor analysis, or when time and budget constraints are tight. Then, if you still have knowledge gaps or need to answer specific questions unique to your business model, use primary research to create a custom experiment. 

Market research methods

• Surveys and questionnaires
• Focus groups
• Observational research
• Online research tools
• Experiments
• Content analysis
• Ethnographic research

How do primary and secondary research approaches translate into specific research methods? Let’s take a look at the different ways you can gather data: 

1. Surveys and questionnaires

Surveys and questionnaires are popular methods for collecting structured data from a large number of respondents. They involve a set of predetermined questions that participants answer. Surveys can be conducted through various channels, including online tools, telephone interviews and in-person or online questionnaires. They are useful for gathering quantitative data and assessing customer demographics, opinions, preferences and needs. On average, customer surveys have a 33% response rate , so keep that in mind as you consider your sample size.

2. Interviews

Interviews are in-depth conversations with individuals or groups to gather qualitative insights. They can be structured (with predefined questions) or unstructured (with open-ended discussions). Interviews are valuable for exploring complex topics, uncovering motivations and obtaining detailed feedback. 

3. Focus groups

The most common primary research methods are in-depth webcam interviews and focus groups. Focus groups are a small gathering of participants who discuss a specific topic or product under the guidance of a moderator. These discussions are valuable for primary market research because they reveal insights into consumer attitudes, perceptions and emotions. Focus groups are especially useful for idea generation, concept testing and understanding group dynamics within your target audience.

4. Observational research

Observational research involves observing and recording participant behavior in a natural setting. This method is particularly valuable when studying consumer behavior in physical spaces, such as retail stores or public places. In some types of observational research, participants are aware you’re watching them; in other cases, you discreetly watch consumers without their knowledge, as they use your product. Either way, observational research provides firsthand insights into how people interact with products or environments.

5. Online research tools

You and your team can do your own secondary market research using online tools. These tools include data prospecting platforms and databases, as well as online surveys, social media listening, web analytics and sentiment analysis platforms. They help you gather data from online sources, monitor industry trends, track competitors, understand consumer preferences and keep tabs on online behavior. We’ll talk more about choosing the right market research tools in the sections that follow.

6. Experiments

Market research experiments are controlled tests of variables to determine causal relationships. While experiments are often associated with scientific research, they are also used in market research to assess the impact of specific marketing strategies, product features, or pricing and packaging changes.

7. Content analysis

Content analysis involves the systematic examination of textual, visual or audio content to identify patterns, themes and trends. It’s commonly applied to customer reviews, social media posts and other forms of online content to analyze consumer opinions and sentiments.

8. Ethnographic research

Ethnographic research immerses researchers into the daily lives of consumers to understand their behavior and culture. This method is particularly valuable when studying niche markets or exploring the cultural context of consumer choices.

How to do market research

• Set clear objectives
• Identify your target audience
• Choose your research methods
• Use the right market research tools
• Collect data
• Analyze data 
• Interpret your findings
• Identify opportunities and challenges
• Make informed business decisions
• Monitor and adapt

Now that you have gained insights into the various market research methods at your disposal, let’s delve into the practical aspects of how to conduct market research effectively. Here’s a quick step-by-step overview, from defining objectives to monitoring market shifts.

1. Set clear objectives

When you set clear and specific goals, you’re essentially creating a compass to guide your research questions and methodology. Start by precisely defining what you want to achieve. Are you launching a new product and want to understand its viability in the market? Are you evaluating customer satisfaction with a product redesign? 

Start by creating SMART goals — objectives that are specific, measurable, achievable, relevant and time-bound. Not only will this clarify your research focus from the outset, but it will also help you track progress and benchmark your success throughout the process. 

You should also consult with key stakeholders and team members to ensure alignment on your research objectives before diving into data collecting. This will help you gain diverse perspectives and insights that will shape your research approach.

2. Identify your target audience

Next, you’ll need to pinpoint your target audience to determine who should be included in your research. Begin by creating detailed buyer personas or stakeholder profiles. Consider demographic factors like age, gender, income and location, but also delve into psychographics, such as interests, values and pain points.

The more specific your target audience, the more accurate and actionable your research will be. Additionally, segment your audience if your research objectives involve studying different groups, such as current customers and potential leads.

If you already have existing customers, you can also hold conversations with them to better understand your target market. From there, you can refine your buyer personas and tailor your research methods accordingly.

3. Choose your research methods

Selecting the right research methods is crucial for gathering high-quality data. Start by considering the nature of your research objectives. If you’re exploring consumer preferences, surveys and interviews can provide valuable insights. For in-depth understanding, focus groups or observational research might be suitable. Consider using a mix of quantitative and qualitative methods to gain a well-rounded perspective. 

You’ll also need to consider your budget. Think about what you can realistically achieve using the time and resources available to you. If you have a fairly generous budget, you may want to try a mix of primary and secondary research approaches. If you’re doing market research for a startup , on the other hand, chances are your budget is somewhat limited. If that’s the case, try addressing your goals with secondary research tools before investing time and effort in a primary research study. 

4. Use the right market research tools

Whether you’re conducting primary or secondary research, you’ll need to choose the right tools. These can help you do anything from sending surveys to customers to monitoring trends and analyzing data. Here are some examples of popular market research tools:

• Market research software: Crunchbase is a platform that provides best-in-class company data, making it valuable for market research on growing companies and industries. You can use Crunchbase to access trusted, first-party funding data, revenue data, news and firmographics, enabling you to monitor industry trends and understand customer needs.

• Survey and questionnaire tools: SurveyMonkey is a widely used online survey platform that allows you to create, distribute and analyze surveys. Google Forms is a free tool that lets you create surveys and collect responses through Google Drive.
• Data analysis software: Microsoft Excel and Google Sheets are useful for conducting statistical analyses. SPSS is a powerful statistical analysis software used for data processing, analysis and reporting.
• Social listening tools: Brandwatch is a social listening and analytics platform that helps you monitor social media conversations, track sentiment and analyze trends. Mention is a media monitoring tool that allows you to track mentions of your brand, competitors and keywords across various online sources.
• Data visualization platforms: Tableau is a data visualization tool that helps you create interactive and shareable dashboards and reports. Power BI by Microsoft is a business analytics tool for creating interactive visualizations and reports.

5. Collect data

There’s an infinite amount of data you could be collecting using these tools, so you’ll need to be intentional about going after the data that aligns with your research goals. Implement your chosen research methods, whether it’s distributing surveys, conducting interviews or pulling from secondary research platforms. Pay close attention to data quality and accuracy, and stick to a standardized process to streamline data capture and reduce errors. 

6. Analyze data

Once data is collected, you’ll need to analyze it systematically. Use statistical software or analysis tools to identify patterns, trends and correlations. For qualitative data, employ thematic analysis to extract common themes and insights. Visualize your findings with charts, graphs and tables to make complex data more understandable.

If you’re not proficient in data analysis, consider outsourcing or collaborating with a data analyst who can assist in processing and interpreting your data accurately.

7. Interpret your findings

Interpreting your market research findings involves understanding what the data means in the context of your objectives. Are there significant trends that uncover the answers to your initial research questions? Consider the implications of your findings on your business strategy. It’s essential to move beyond raw data and extract actionable insights that inform decision-making.

Hold a cross-functional meeting or workshop with relevant team members to collectively interpret the findings. Different perspectives can lead to more comprehensive insights and innovative solutions.

8. Identify opportunities and challenges

Use your research findings to identify potential growth opportunities and challenges within your market. What segments of your audience are underserved or overlooked? Are there emerging trends you can capitalize on? Conversely, what obstacles or competitors could hinder your progress?

Lay out this information in a clear and organized way by conducting a SWOT analysis, which stands for strengths, weaknesses, opportunities and threats. Jot down notes for each of these areas to provide a structured overview of gaps and hurdles in the market.

9. Make informed business decisions

Market research is only valuable if it leads to informed decisions for your company. Based on your insights, devise actionable strategies and initiatives that align with your research objectives. Whether it’s refining your product, targeting new customer segments or adjusting pricing, ensure your decisions are rooted in the data.

At this point, it’s also crucial to keep your team aligned and accountable. Create an action plan that outlines specific steps, responsibilities and timelines for implementing the recommendations derived from your research. 

10. Monitor and adapt

Market research isn’t a one-time activity; it’s an ongoing process. Continuously monitor market conditions, customer behaviors and industry trends. Set up mechanisms to collect real-time data and feedback. As you gather new information, be prepared to adapt your strategies and tactics accordingly. Regularly revisiting your research ensures your business remains agile and reflects changing market dynamics and consumer preferences.

Online market research sources

As you go through the steps above, you’ll want to turn to trusted, reputable sources to gather your data. Here’s a list to get you started:

• Crunchbase: As mentioned above, Crunchbase is an online platform with an extensive dataset, allowing you to access in-depth insights on market trends, consumer behavior and competitive analysis. You can also customize your search options to tailor your research to specific industries, geographic regions or customer personas.

• Academic databases: Academic databases, such as ProQuest and JSTOR , are treasure troves of scholarly research papers, studies and academic journals. They offer in-depth analyses of various subjects, including market trends, consumer preferences and industry-specific insights. Researchers can access a wealth of peer-reviewed publications to gain a deeper understanding of their research topics.
• Government and NGO databases: Government agencies, nongovernmental organizations and other institutions frequently maintain databases containing valuable economic, demographic and industry-related data. These sources offer credible statistics and reports on a wide range of topics, making them essential for market researchers. Examples include the U.S. Census Bureau , the Bureau of Labor Statistics and the Pew Research Center .
• Industry reports: Industry reports and market studies are comprehensive documents prepared by research firms, industry associations and consulting companies. They provide in-depth insights into specific markets, including market size, trends, competitive analysis and consumer behavior. You can find this information by looking at relevant industry association databases; examples include the American Marketing Association and the National Retail Federation .
• Social media and online communities: Social media platforms like LinkedIn or Twitter (X) , forums such as Reddit and Quora , and review platforms such as G2 can provide real-time insights into consumer sentiment, opinions and trends. 

Market research examples

At this point, you have market research tools and data sources — but how do you act on the data you gather? Let’s go over some real-world examples that illustrate the practical application of market research across various industries. These examples showcase how market research can lead to smart decision-making and successful business decisions.

Example 1: Apple’s iPhone launch

Apple ’s iconic iPhone launch in 2007 serves as a prime example of market research driving product innovation in tech. Before the iPhone’s release, Apple conducted extensive market research to understand consumer preferences, pain points and unmet needs in the mobile phone industry. This research led to the development of a touchscreen smartphone with a user-friendly interface, addressing consumer demands for a more intuitive and versatile device. The result was a revolutionary product that disrupted the market and redefined the smartphone industry.

Example 2: McDonald’s global expansion

McDonald’s successful global expansion strategy demonstrates the importance of market research when expanding into new territories. Before entering a new market, McDonald’s conducts thorough research to understand local tastes, preferences and cultural nuances. This research informs menu customization, marketing strategies and store design. For instance, in India, McDonald’s offers a menu tailored to local preferences, including vegetarian options. This market-specific approach has enabled McDonald’s to adapt and thrive in diverse global markets.

Example 3: Organic and sustainable farming

The shift toward organic and sustainable farming practices in the food industry is driven by market research that indicates increased consumer demand for healthier and environmentally friendly food options. As a result, food producers and retailers invest in sustainable sourcing and organic product lines — such as with these sustainable seafood startups — to align with this shift in consumer values. 

The bottom line? Market research has multiple use cases and is a critical practice for any industry. Whether it’s launching groundbreaking products, entering new markets or responding to changing consumer preferences, you can use market research to shape successful strategies and outcomes.

Market research templates

You finally have a strong understanding of how to do market research and apply it in the real world. Before we wrap up, here are some market research templates that you can use as a starting point for your projects:

• Smartsheet competitive analysis templates : These spreadsheets can serve as a framework for gathering information about the competitive landscape and obtaining valuable lessons to apply to your business strategy.
• SurveyMonkey product survey template : Customize the questions on this survey based on what you want to learn from your target customers.
• HubSpot templates : HubSpot offers a wide range of free templates you can use for market research, business planning and more.
• SCORE templates : SCORE is a nonprofit organization that provides templates for business plans, market analysis and financial projections.
• SBA.gov : The U.S. Small Business Administration offers templates for every aspect of your business, including market research, and is particularly valuable for new startups. 

Strengthen your business with market research

When conducted effectively, market research is like a guiding star. Equipped with the right tools and techniques, you can uncover valuable insights, stay competitive, foster innovation and navigate the complexities of your industry.

Throughout this guide, we’ve discussed the definition of market research, different research methods, and how to conduct it effectively. We’ve also explored various types of market research and shared practical insights and templates for getting started. 

Now, it’s time to start the research process. Trust in data, listen to the market and make informed decisions that guide your company toward lasting success.

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Market Research: A How-To Guide and Template

Discover the different types of market research, how to conduct your own market research, and use a free template to help you along the way.

MARKET RESEARCH KIT

5 Research and Planning Templates + a Free Guide on How to Use Them in Your Market Research

Updated: 02/21/24

Published: 02/21/24

Today's consumers have a lot of power. As a business, you must have a deep understanding of who your buyers are and what influences their purchase decisions.

Enter: Market Research.

Whether you're new to market research or not, I created this guide to help you conduct a thorough study of your market, target audience, competition, and more. Let’s dive in.

Table of Contents

What is market research?

Primary vs. secondary research, types of market research, how to do market research, market research report template, market research examples.

Market research is the process of gathering information about your target market and customers to verify the success of a new product, help your team iterate on an existing product, or understand brand perception to ensure your team is effectively communicating your company's value effectively.

Market research can answer various questions about the state of an industry. But if you ask me, it's hardly a crystal ball that marketers can rely on for insights on their customers.

Market researchers investigate several areas of the market, and it can take weeks or even months to paint an accurate picture of the business landscape.

However, researching just one of those areas can make you more intuitive to who your buyers are and how to deliver value that no other business is offering them right now.

How? Consider these two things:

• Your competitors also have experienced individuals in the industry and a customer base. It‘s very possible that your immediate resources are, in many ways, equal to those of your competition’s immediate resources. Seeking a larger sample size for answers can provide a better edge.
• Your customers don't represent the attitudes of an entire market. They represent the attitudes of the part of the market that is already drawn to your brand.

The market research services market is growing rapidly, which signifies a strong interest in market research as we enter 2024. The market is expected to grow from roughly $75 billion in 2021 to $90.79 billion in 2025 .

Free Market Research Kit

• SWOT Analysis Template
• Survey Template
• Focus Group Template

You're all set!

Click this link to access this resource at any time.

Why do market research?

Market research allows you to meet your buyer where they are.

As our world becomes louder and demands more of our attention, this proves invaluable.

By understanding your buyer's problems, pain points, and desired solutions, you can aptly craft your product or service to naturally appeal to them.

Market research also provides insight into the following:

• Where your target audience and current customers conduct their product or service research
• Which of your competitors your target audience looks to for information, options, or purchases
• What's trending in your industry and in the eyes of your buyer
• Who makes up your market and what their challenges are
• What influences purchases and conversions among your target audience
• Consumer attitudes about a particular topic, pain, product, or brand
• Whether there‘s demand for the business initiatives you’re investing in
• Unaddressed or underserved customer needs that can be flipped into selling opportunity
• Attitudes about pricing for a particular product or service

Ultimately, market research allows you to get information from a larger sample size of your target audience, eliminating bias and assumptions so that you can get to the heart of consumer attitudes.

As a result, you can make better business decisions.

To give you an idea of how extensive market research can get , consider that it can either be qualitative or quantitative in nature — depending on the studies you conduct and what you're trying to learn about your industry.

Qualitative research is concerned with public opinion, and explores how the market feels about the products currently available in that market.

Quantitative research is concerned with data, and looks for relevant trends in the information that's gathered from public records.

That said, there are two main types of market research that your business can conduct to collect actionable information on your products: primary research and secondary research.

Primary Research

Primary research is the pursuit of first-hand information about your market and the customers within your market.

It's useful when segmenting your market and establishing your buyer personas.

Primary market research tends to fall into one of two buckets:

• Exploratory Primary Research: This kind of primary market research normally takes place as a first step — before any specific research has been performed — and may involve open-ended interviews or surveys with small numbers of people.
• Specific Primary Research: This type of research often follows exploratory research. In specific research, you take a smaller or more precise segment of your audience and ask questions aimed at solving a suspected problem.

Secondary Research

Secondary research is all the data and public records you have at your disposal to draw conclusions from (e.g. trend reports, market statistics, industry content, and sales data you already have on your business).

Secondary research is particularly useful for analyzing your competitors . The main buckets your secondary market research will fall into include:

• Public Sources: These sources are your first and most-accessible layer of material when conducting secondary market research. They're often free to find and review — like government statistics (e.g., from the U.S. Census Bureau ).
• Commercial Sources: These sources often come in the form of pay-to-access market reports, consisting of industry insight compiled by a research agency like Pew , Gartner , or Forrester .
• Internal Sources: This is the market data your organization already has like average revenue per sale, customer retention rates, and other historical data that can help you draw conclusions on buyer needs.
• Focus Groups
• Product/ Service Use Research
• Observation-Based Research
• Buyer Persona Research
• Market Segmentation Research
• Pricing Research
• Competitive Analysis Research
• Customer Satisfaction and Loyalty Research
• Brand Awareness Research
• Campaign Research

1. Interviews

Interviews allow for face-to-face discussions so you can allow for a natural flow of conversation. Your interviewees can answer questions about themselves to help you design your buyer personas and shape your entire marketing strategy.

2. Focus Groups

Focus groups provide you with a handful of carefully-selected people that can test out your product and provide feedback. This type of market research can give you ideas for product differentiation.

3. Product/Service Use Research

Product or service use research offers insight into how and why your audience uses your product or service. This type of market research also gives you an idea of the product or service's usability for your target audience.

4. Observation-Based Research

Observation-based research allows you to sit back and watch the ways in which your target audience members go about using your product or service, what works well in terms of UX , and which aspects of it could be improved.

5. Buyer Persona Research

Buyer persona research gives you a realistic look at who makes up your target audience, what their challenges are, why they want your product or service, and what they need from your business or brand.

6. Market Segmentation Research

Market segmentation research allows you to categorize your target audience into different groups (or segments) based on specific and defining characteristics. This way, you can determine effective ways to meet their needs.

7. Pricing Research

Pricing research helps you define your pricing strategy . It gives you an idea of what similar products or services in your market sell for and what your target audience is willing to pay.

8. Competitive Analysis

Competitive analyses give you a deep understanding of the competition in your market and industry. You can learn about what's doing well in your industry and how you can separate yourself from the competition .

9. Customer Satisfaction and Loyalty Research

Customer satisfaction and loyalty research gives you a look into how you can get current customers to return for more business and what will motivate them to do so (e.g., loyalty programs , rewards, remarkable customer service).

10. Brand Awareness Research

Brand awareness research tells you what your target audience knows about and recognizes from your brand. It tells you about the associations people make when they think about your business.

11. Campaign Research

Campaign research entails looking into your past campaigns and analyzing their success among your target audience and current customers. The goal is to use these learnings to inform future campaigns.

• Define your buyer persona.
• Identify a persona group to engage.
• Prepare research questions for your market research participants.
• List your primary competitors.
• Summarize your findings.

1. Define your buyer persona.

You have to understand who your customers are and how customers in your industry make buying decisions.

This is where your buyer personas come in handy. Buyer personas — sometimes referred to as marketing personas — are fictional, generalized representations of your ideal customers.

Use a free tool to create a buyer persona that your entire company can use to market, sell, and serve better.

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What Is Market Research?

• How It Works
• Primary vs. Secondary
• How to Conduct Research

The Bottom Line

• Marketing Essentials

How to Do Market Research, Types, and Example

Joules Garcia / Investopedia

Market research examines consumer behavior and trends in the economy to help a business develop and fine-tune its business idea and strategy. It helps a business understand its target market by gathering and analyzing data.

Market research is the process of evaluating the viability of a new service or product through research conducted directly with potential customers. It allows a company to define its target market and get opinions and other feedback from consumers about their interest in a product or service.

Research may be conducted in-house or by a third party that specializes in market research. It can be done through surveys and focus groups, among other ways. Test subjects are usually compensated with product samples or a small stipend for their time.

Key Takeaways

• Companies conduct market research before introducing new products to determine their appeal to potential customers.
• Tools include focus groups, telephone interviews, and questionnaires.
• The results of market research inform the final design of the product and determine how it will be positioned in the marketplace.
• Market research usually combines primary information, gathered directly from consumers, and secondary information, which is data available from external sources.

Market Research

How market research works.

Market research is used to determine the viability of a new product or service. The results may be used to revise the product design and fine-tune the strategy for introducing it to the public. This can include information gathered for the purpose of determining market segmentation . It also informs product differentiation , which is used to tailor advertising.

A business engages in various tasks to complete the market research process. It gathers information based on the market sector being targeted by the product. This information is then analyzed and relevant data points are interpreted to draw conclusions about how the product may be optimally designed and marketed to the market segment for which it is intended.

It is a critical component in the research and development (R&D) phase of a new product or service introduction. Market research can be conducted in many different ways, including surveys, product testing, interviews, and focus groups.

Market research is a critical tool that companies use to understand what consumers want, develop products that those consumers will use, and maintain a competitive advantage over other companies in their industry.

Primary Market Research vs. Secondary Market Research

Market research usually consists of a combination of:

• Primary research, gathered by the company or by an outside company that it hires
• Secondary research, which draws on external sources of data

Primary Market Research

Primary research generally falls into two categories: exploratory and specific research.

• Exploratory research is less structured and functions via open-ended questions. The questions may be posed in a focus group setting, telephone interviews, or questionnaires. It results in questions or issues that the company needs to address about a product that it has under development.
• Specific research delves more deeply into the problems or issues identified in exploratory research.

Secondary Market Research

All market research is informed by the findings of other researchers about the needs and wants of consumers. Today, much of this research can be found online.

Secondary research can include population information from government census data , trade association research reports , polling results, and research from other businesses operating in the same market sector.

History of Market Research

Formal market research began in Germany during the 1920s. In the United States, it soon took off with the advent of the Golden Age of Radio.

Companies that created advertisements for this new entertainment medium began to look at the demographics of the audiences who listened to each of the radio plays, music programs, and comedy skits that were presented.

They had once tried to reach the widest possible audience by placing their messages on billboards or in the most popular magazines. With radio programming, they had the chance to target rural or urban consumers, teenagers or families, and judge the results by the sales numbers that followed.

Types of Market Research

Face-to-face interviews.

From their earliest days, market research companies would interview people on the street about the newspapers and magazines that they read regularly and ask whether they recalled any of the ads or brands that were published in them. Data collected from these interviews were compared to the circulation of the publication to determine the effectiveness of those ads.

Market research and surveys were adapted from these early techniques.

To get a strong understanding of your market, it’s essential to understand demand, market size, economic indicators, location, market saturation, and pricing.

Focus Groups

A focus group is a small number of representative consumers chosen to try a product or watch an advertisement.

Afterward, the group is asked for feedback on their perceptions of the product, the company’s brand, or competing products. The company then takes that information and makes decisions about what to do with the product or service, whether that's releasing it, making changes, or abandoning it altogether.

Phone Research

The man-on-the-street interview technique soon gave way to the telephone interview. A telephone interviewer could collect information in a more efficient and cost-effective fashion.

Telephone research was a preferred tactic of market researchers for many years. It has become much more difficult in recent years as landline phone service dwindles and is replaced by less accessible mobile phones.

Survey Research

As an alternative to focus groups, surveys represent a cost-effective way to determine consumer attitudes without having to interview anyone in person. Consumers are sent surveys in the mail, usually with a coupon or voucher to incentivize participation. These surveys help determine how consumers feel about the product, brand, and price point.

Online Market Research

With people spending more time online, market research activities have shifted online as well. Data collection still uses a survey-style form. But instead of companies actively seeking participants by finding them on the street or cold calling them on the phone, people can choose to sign up, take surveys, and offer opinions when they have time.

This makes the process far less intrusive and less rushed, since people can participate on their own time and of their own volition.

How to Conduct Market Research

The first step to effective market research is to determine the goals of the study. Each study should seek to answer a clear, well-defined problem. For example, a company might seek to identify consumer preferences, brand recognition, or the comparative effectiveness of different types of ad campaigns.

After that, the next step is to determine who will be included in the research. Market research is an expensive process, and a company cannot waste resources collecting unnecessary data. The firm should decide in advance which types of consumers will be included in the research, and how the data will be collected. They should also account for the probability of statistical errors or sampling bias .

The next step is to collect the data and analyze the results. If the two previous steps have been completed accurately, this should be straightforward. The researchers will collect the results of their study, keeping track of the ages, gender, and other relevant data of each respondent. This is then analyzed in a marketing report that explains the results of their research.

The last step is for company executives to use their market research to make business decisions. Depending on the results of their research, they may choose to target a different group of consumers, or they may change their price point or some product features.

The results of these changes may eventually be measured in further market research, and the process will begin all over again.

Benefits of Market Research

Market research is essential for developing brand loyalty and customer satisfaction. Since it is unlikely for a product to appeal equally to every consumer, a strong market research program can help identify the key demographics and market segments that are most likely to use a given product.

Market research is also important for developing a company’s advertising efforts. For example, if a company’s market research determines that its consumers are more likely to use Facebook than X (formerly Twitter), it can then target its advertisements to one platform instead of another. Or, if they determine that their target market is value-sensitive rather than price-sensitive, they can work on improving the product rather than reducing their prices.

Market research only works when subjects are honest and open to participating.

Example of Market Research

Many companies use market research to test new products or get information from consumers about what kinds of products or services they need and don’t currently have.

For example, a company that’s considering starting a business might conduct market research to test the viability of its product or service. If the market research confirms consumer interest, the business can proceed confidently with its business plan . If not, the company can use the results of the market research to make adjustments to the product to bring it in line with customer desires.

What Are the Main Types of Market Research?

The main types of market research are primary research and secondary research. Primary research includes focus groups, polls, and surveys. Secondary research includes academic articles, infographics, and white papers.

Qualitative research gives insights into how customers feel and think. Quantitative research uses data and statistics such as website views, social media engagement, and subscriber numbers.

What Is Online Market Research?

Online market research uses the same strategies and techniques as traditional primary and secondary market research, but it is conducted on the Internet. Potential customers may be asked to participate in a survey or give feedback on a product. The responses may help the researchers create a profile of the likely customer for a new product.

What Are Paid Market Research Surveys?

Paid market research involves rewarding individuals who agree to participate in a study. They may be offered a small payment for their time or a discount coupon in return for filling out a questionnaire or participating in a focus group.

What Is a Market Study?

A market study is an analysis of consumer demand for a product or service. It looks at all of the factors that influence demand for a product or service. These include the product’s price, location, competition, and substitutes as well as general economic factors that could influence the new product’s adoption, for better or worse.

Market research is a key component of a company’s research and development (R&D) stage. It helps companies understand in advance the viability of a new product that they have in development and to see how it might perform in the real world.

Britannica Money. “ Market Research .”

U.S. Small Business Administration. “ Market Research and Competitive Analysis .”

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How to do market research: The complete guide for your brand

Written by by Jacqueline Zote

Published on  April 13, 2023

Reading time  10 minutes

Blindly putting out content or products and hoping for the best is a thing of the past. Not only is it a waste of time and energy, but you’re wasting valuable marketing dollars in the process. Now you have a wealth of tools and data at your disposal, allowing you to develop data-driven marketing strategies . That’s where market research comes in, allowing you to uncover valuable insights to inform your business decisions.

Conducting market research not only helps you better understand how to sell to customers but also stand out from your competition. In this guide, we break down everything you need to know about market research and how doing your homework can help you grow your business.

Table of contents:

What is market research?

Why is market research important, types of market research, where to conduct market research.

• Steps for conducting market research
• Tools to use for market research

Market research is the process of gathering information surrounding your business opportunities. It identifies key information to better understand your audience. This includes insights related to customer personas and even trends shaping your industry.

Taking time out of your schedule to conduct research is crucial for your brand health. Here are some of the key benefits of market research:

Understand your customers’ motivations and pain points

Most marketers are out of touch with what their customers want. Moreover, these marketers are missing key information on what products their audience wants to buy.

Simply put, you can’t run a business if you don’t know what motivates your customers.

And spoiler alert: Your customers’ wants and needs change. Your customers’ behaviors today might be night and day from what they were a few years ago.

Market research holds the key to understanding your customers better. It helps you uncover their key pain points and motivations and understand how they shape their interests and behavior.

Figure out how to position your brand

Positioning is becoming increasingly important as more and more brands enter the marketplace. Market research enables you to spot opportunities to define yourself against your competitors.

Maybe you’re able to emphasize a lower price point. Perhaps your product has a feature that’s one of a kind. Finding those opportunities goes hand in hand with researching your market.

Maintain a strong pulse on your industry at large

Today’s marketing world evolves at a rate that’s difficult to keep up with.

Fresh products. Up-and-coming brands. New marketing tools. Consumers get bombarded with sales messages from all angles. This can be confusing and overwhelming.

By monitoring market trends, you can figure out the best tactics for reaching your target audience.

Not everyone conducts market research for the same reason. While some may want to understand their audience better, others may want to see how their competitors are doing. As such, there are different types of market research you can conduct depending on your goal.

Interview-based market research allows for one-on-one interactions. This helps the conversation to flow naturally, making it easier to add context. Whether this takes place in person or virtually, it enables you to gather more in-depth qualitative data.

Buyer persona research

Buyer persona research lets you take a closer look at the people who make up your target audience. You can discover the needs, challenges and pain points of each buyer persona to understand what they need from your business. This will then allow you to craft products or campaigns to resonate better with each persona.

Pricing research

In this type of research, brands compare similar products or services with a particular focus on pricing. They look at how much those products or services typically sell for so they can get more competitive with their pricing strategy.

Competitive analysis research

Competitor analysis gives you a realistic understanding of where you stand in the market and how your competitors are doing. You can use this analysis to find out what’s working in your industry and which competitors to watch out for. It even gives you an idea of how well those competitors are meeting consumer needs.

Depending on the competitor analysis tool you use, you can get as granular as you need with your research. For instance, Sprout Social lets you analyze your competitors’ social strategies. You can see what types of content they’re posting and even benchmark your growth against theirs.

Brand awareness research

Conducting brand awareness research allows you to assess your brand’s standing in the market. It tells you how well-known your brand is among your target audience and what they associate with it. This can help you gauge people’s sentiments toward your brand and whether you need to rebrand or reposition.

If you don’t know where to start with your research, you’re in the right place.

There’s no shortage of market research methods out there. In this section, we’ve highlighted research channels for small and big businesses alike.

Considering that Google sees a staggering 8.5 billion searches each day, there’s perhaps no better place to start.

A quick Google search is a potential goldmine for all sorts of questions to kick off your market research. Who’s ranking for keywords related to your industry? Which products and pieces of content are the hottest right now? Who’s running ads related to your business?

For example, Google Product Listing Ads can help highlight all of the above for B2C brands.

The same applies to B2B brands looking to keep tabs on who’s running industry-related ads and ranking for keyword terms too.

There’s no denying that email represents both an aggressive and effective marketing channel for marketers today. Case in point, 44% of online shoppers consider email as the most influential channel in their buying decisions.

Looking through industry and competitor emails is a brilliant way to learn more about your market. For example, what types of offers and deals are your competitors running? How often are they sending emails?

Email is also invaluable for gathering information directly from your customers. This survey message from Asana is a great example of how to pick your customers’ brains to figure out how you can improve your quality of service.

Industry journals, reports and blogs

Don’t neglect the importance of big-picture market research when it comes to tactics and marketing channels to explore. Look to marketing resources such as reports and blogs as well as industry journals

Keeping your ear to the ground on new trends and technologies is a smart move for any business. Sites such as Statista, Marketing Charts, AdWeek and Emarketer are treasure troves of up-to-date data and news for marketers.

And of course, there’s the  Sprout Insights blog . And invaluable resources like The Sprout Social Index™  can keep you updated on the latest social trends.

Social media

If you want to learn more about your target market, look no further than social media. Social offers a place to discover what your customers want to see in future products or which brands are killin’ it. In fact, social media is become more important for businesses than ever with the level of data available.

It represents a massive repository of real-time data and insights that are instantly accessible. Brand monitoring and social listening are effective ways to conduct social media research . You can even be more direct with your approach. Ask questions directly or even poll your audience to understand their needs and preferences.

The 5 steps for how to do market research

Now that we’ve covered the why and where, it’s time to get into the practical aspects of market research. Here are five essential steps on how to do market research effectively.

Step 1: Identify your research topic

First off, what are you researching about? What do you want to find out? Narrow down on a specific research topic so you can start with a clear idea of what to look for.

For example, you may want to learn more about how well your product features are satisfying the needs of existing users. This might potentially lead to feature updates and improvements. Or it might even result in new feature introductions.

Similarly, your research topic may be related to your product or service launch or customer experience. Or you may want to conduct research for an upcoming marketing campaign.

Step 2: Choose a buyer persona to engage

If you’re planning to focus your research on a specific type of audience, decide which buyer persona you want to engage. This persona group will serve as a representative sample of your target audience.

Engaging a specific group of audience lets you streamline your research efforts. As such, it can be a much more effective and organized approach than researching thousands (if not millions) of individuals.

You may be directing your research toward existing users of your product. To get even more granular, you may want to focus on users who have been familiar with the product for at least a year, for example.

Step 3: Start collecting data

The next step is one of the most critical as it involves collecting the data you need for your research. Before you begin, make sure you’ve chosen the right research methods that will uncover the type of data you need. This largely depends on your research topic and goals.

Remember that you don’t necessarily have to stick to one research method. You may use a combination of qualitative and quantitative approaches. So for example, you could use interviews to supplement the data from your surveys. Or you may stick to insights from your social listening efforts.

To keep things consistent, let’s look at this in the context of the example from earlier. Perhaps you can send out a survey to your existing users asking them a bunch of questions. This might include questions like which features they use the most and how often they use them. You can get them to choose an answer from one to five and collect quantitative data.

Plus, for qualitative insights, you could even include a few open-ended questions with the option to write their answers. For instance, you might ask them if there’s any improvement they wish to see in your product.

Step 4: Analyze results

Once you have all the data you need, it’s time to analyze it keeping your research topic in mind. This involves trying to interpret the data to look for a wider meaning, particularly in relation to your research goal.

So let’s say a large percentage of responses were four or five in the satisfaction rating. This means your existing users are mostly satisfied with your current product features. On the other hand, if the responses were mostly ones and twos, you may look for opportunities to improve. The responses to your open-ended questions can give you further context as to why people are disappointed.

Step 5: Make decisions for your business

Now it’s time to take your findings and turn them into actionable insights for your business. In this final step, you need to decide how you want to move forward with your new market insight.

What did you find in your research that would require action? How can you put those findings to good use?

The market research tools you should be using

To wrap things up, let’s talk about the various tools available to conduct speedy, in-depth market research. These tools are essential for conducting market research faster and more efficiently.

Social listening and analytics

Social analytics tools like Sprout can help you keep track of engagement across social media. This goes beyond your own engagement data but also includes that of your competitors. Considering how quickly social media moves, using a third-party analytics tool is ideal. It allows you to make sense of your social data at a glance and ensure that you’re never missing out on important trends.

Email marketing research tools

Keeping track of brand emails is a good idea for any brand looking to stand out in its audience’s inbox.

Tools such as MailCharts ,  Really Good Emails  and  Milled  can show you how different brands run their email campaigns.

Meanwhile, tools like  Owletter  allow you to monitor metrics such as frequency and send-timing. These metrics can help you understand email marketing strategies among competing brands.

Content marketing research

If you’re looking to conduct research on content marketing, tools such as  BuzzSumo  can be of great help. This tool shows you the top-performing industry content based on keywords. Here you can see relevant industry sites and influencers as well as which brands in your industry are scoring the most buzz. It shows you exactly which pieces of content are ranking well in terms of engagements and shares and on which social networks.

SEO and keyword tracking

Monitoring industry keywords is a great way to uncover competitors. It can also help you discover opportunities to advertise your products via organic search. Tools such as  Ahrefs  provide a comprehensive keyword report to help you see how your search efforts stack up against the competition.

Competitor comparison template

For the sake of organizing your market research, consider creating a competitive matrix. The idea is to highlight how you stack up side-by-side against others in your market. Use a  social media competitive analysis template  to track your competitors’ social presence. That way, you can easily compare tactics, messaging and performance. Once you understand your strengths and weaknesses next to your competitors, you’ll find opportunities as well.

Customer persona creator

Finally, customer personas represent a place where all of your market research comes together. You’d need to create a profile of your ideal customer that you can easily refer to. Tools like  Xtensio  can help in outlining your customer motivations and demographics as you zero in on your target market.

Build a solid market research strategy

Having a deeper understanding of the market gives you leverage in a sea of competitors. Use the steps and market research tools we shared above to build an effective market research strategy.

But keep in mind that the accuracy of your research findings depends on the quality of data collected. Turn to Sprout’s social media analytics tools to uncover heaps of high-quality data across social networks.

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Market research is a cornerstone of all successful, strategic businesses. It can also be daunting for entrepreneurs looking to launch a startup or start a side hustle . What is market research, anyway? And how do you…do it?

We’ll walk you through absolutely everything you need to know about the market research process so that by the end of this guide, you’ll be an expert in market research too. And what’s more important: you’ll have actionable steps you can take to start collecting your own market research.

What Is Market Research?

Market research is the organized process of gathering information about your target customers and market. Market research can help you better understand customer behavior and competitor strengths and weaknesses, as well as provide insight for the best strategies in launching new businesses and products. There are different ways to approach market research, including primary and secondary research and qualitative and quantitative research. The strongest approaches will include a combination of all four.

“Virtually every business can benefit from conducting some market research,” says Niles Koenigsberg of Real FiG Advertising + Marketing . “Market research can help you piece together your [business’s] strengths and weaknesses, along with your prospective opportunities, so that you can understand where your unique differentiators may lie.” Well-honed market research will help your brand stand out from the competition and help you see what you need to do to lead the market. It can also do so much more.

The Purposes of Market Research

Why do market research? It can help you…

• Pinpoint your target market, create buyer personas, and develop a more holistic understanding of your customer base and market.
• Understand current market conditions to evaluate risks and anticipate how your product or service will perform.
• Validate a concept prior to launch.
• Identify gaps in the market that your competitors have created or overlooked.
• Solve problems that have been left unresolved by the existing product/brand offerings.
• Identify opportunities and solutions for new products or services.
• Develop killer marketing strategies .

What Are the Benefits of Market Research?

Strong market research can help your business in many ways. It can…

• Strengthen your market position.
• Help you identify your strengths and weaknesses.
• Help you identify your competitors’ strengths and weaknesses.
• Minimize risk.
• Center your customers’ experience from the get-go.
• Help you create a dynamic strategy based on market conditions and customer needs/demands.

What Are the Basic Methods of Market Research?

The basic methods of market research include surveys, personal interviews, customer observation, and the review of secondary research. In addition to these basic methods, a forward-thinking market research approach incorporates data from the digital landscape like social media analysis, SEO research, gathering feedback via forums, and more. Throughout this guide, we will cover each of the methods commonly used in market research to give you a comprehensive overview.

Primary vs. Secondary Market Research

Primary and secondary are the two main types of market research you can do. The latter relies on research conducted by others. Primary research, on the other hand, refers to the fact-finding efforts you conduct on your own.

This approach is limited, however. It’s likely that the research objectives of these secondary data points differ from your own, and it can be difficult to confirm the veracity of their findings.

Primary Market Research

Primary research is more labor intensive, but it generally yields data that is exponentially more actionable. It can be conducted through interviews, surveys, online research, and your own data collection. Every new business should engage in primary market research prior to launch. It will help you validate that your idea has traction, and it will give you the information you need to help minimize financial risk.

You can hire an agency to conduct this research on your behalf. This brings the benefit of expertise, as you’ll likely work with a market research analyst. The downside is that hiring an agency can be expensive—too expensive for many burgeoning entrepreneurs. That brings us to the second approach. You can also do the market research yourself, which substantially reduces the financial burden of starting a new business .

Secondary Market Research

Secondary research includes resources like government databases and industry-specific data and publications. It can be beneficial to start your market research with secondary sources because it’s widely available and often free-to-access. This information will help you gain a broad overview of the market conditions for your new business.

Identify Your Goals and Your Audience

Before you begin conducting interviews or sending out surveys, you need to set your market research goals. At the end of your market research process, you want to have a clear idea of who your target market is—including demographic information like age, gender, and where they live—but you also want to start with a rough idea of who your audience might be and what you’re trying to achieve with market research.

You can pinpoint your objectives by asking yourself a series of guiding questions:

• What are you hoping to discover through your research?
• Who are you hoping to serve better because of your findings?
• What do you think your market is?
• Who are your competitors?
• Are you testing the reception of a new product category or do you want to see if your product or service solves the problem left by a current gap in the market?
• Are you just…testing the waters to get a sense of how people would react to a new brand?

Once you’ve narrowed down the “what” of your market research goals, you’re ready to move onto how you can best achieve them. Think of it like algebra. Many math problems start with “solve for x.” Once you know what you’re looking for, you can get to work trying to find it. It’s a heck of a lot easier to solve a problem when you know you’re looking for “x” than if you were to say “I’m gonna throw some numbers out there and see if I find a variable.”

How to Do Market Research

This guide outlines every component of a comprehensive market research effort. Take into consideration the goals you have established for your market research, as they will influence which of these elements you’ll want to include in your market research strategy.

Secondary Data

Secondary data allows you to utilize pre-existing data to garner a sense of market conditions and opportunities. You can rely on published market studies, white papers, and public competitive information to start your market research journey.

Secondary data, while useful, is limited and cannot substitute your own primary data. It’s best used for quantitative data that can provide background to your more specific inquiries.

Find Your Customers Online

Once you’ve identified your target market, you can use online gathering spaces and forums to gain insights and give yourself a competitive advantage. Rebecca McCusker of The Creative Content Shop recommends internet recon as a vital tool for gaining a sense of customer needs and sentiment. “Read their posts and comments on forums, YouTube video comments, Facebook group [comments], and even Amazon/Goodreads book comments to get in their heads and see what people are saying.”

If you’re interested in engaging with your target demographic online, there are some general rules you should follow. First, secure the consent of any group moderators to ensure that you are acting within the group guidelines. Failure to do so could result in your eviction from the group.

Not all comments have the same research value. “Focus on the comments and posts with the most comments and highest engagement,” says McCusker. These high-engagement posts can give you a sense of what is already connecting and gaining traction within the group.

Social media can also be a great avenue for finding interview subjects. “LinkedIn is very useful if your [target customer] has a very specific job or works in a very specific industry or sector. It’s amazing the amount of people that will be willing to help,” explains Miguel González, a marketing executive at Dealers League . “My advice here is BE BRAVE, go to LinkedIn, or even to people you know and ask them, do quick interviews and ask real people that belong to that market and segment and get your buyer persona information first hand.”

Market research interviews can provide direct feedback on your brand, product, or service and give you a better understanding of consumer pain points and interests.

When organizing your market research interviews, you want to pay special attention to the sample group you’re selecting, as it will directly impact the information you receive. According to Tanya Zhang, the co-founder of Nimble Made , you want to first determine whether you want to choose a representative sample—for example, interviewing people who match each of the buyer persona/customer profiles you’ve developed—or a random sample.

“A sampling of your usual persona styles, for example, can validate details that you’ve already established about your product, while a random sampling may [help you] discover a new way people may use your product,” Zhang says.

Market Surveys

Market surveys solicit customer inclinations regarding your potential product or service through a series of open-ended questions. This direct outreach to your target audience can provide information on your customers’ preferences, attitudes, buying potential, and more.

Every expert we asked voiced unanimous support for market surveys as a powerful tool for market research. With the advent of various survey tools with accessible pricing—or free use—it’s never been easier to assemble, disseminate, and gather market surveys. While it should also be noted that surveys shouldn’t replace customer interviews , they can be used to supplement customer interviews to give you feedback from a broader audience.

Who to Include in Market Surveys

• Current customers
• Past customers
• Your existing audience (such as social media/newsletter audiences)

Example Questions to Include in Market Surveys

While the exact questions will vary for each business, here are some common, helpful questions that you may want to consider for your market survey. Demographic Questions: the questions that help you understand, demographically, who your target customers are:

• “What is your age?”
• “Where do you live?”
• “What is your gender identity?”
• “What is your household income?”
• “What is your household size?”
• “What do you do for a living?”
• “What is your highest level of education?”

Product-Based Questions: Whether you’re seeking feedback for an existing brand or an entirely new one, these questions will help you get a sense of how people feel about your business, product, or service:

• “How well does/would our product/service meet your needs?”
• “How does our product/service compare to similar products/services that you use?”
• “How long have you been a customer?” or “What is the likelihood that you would be a customer of our brand?

Personal/Informative Questions: the deeper questions that help you understand how your audience thinks and what they care about.

• “What are your biggest challenges?”
• “What’s most important to you?”
• “What do you do for fun (hobbies, interests, activities)?”
• “Where do you seek new information when researching a new product?”
• “How do you like to make purchases?”
• “What is your preferred method for interacting with a brand?”

Survey Tools

Online survey tools make it easy to distribute surveys and collect responses. The best part is that there are many free tools available. If you’re making your own online survey, you may want to consider SurveyMonkey, Typeform, Google Forms, or Zoho Survey.

Competitive Analysis

A competitive analysis is a breakdown of how your business stacks up against the competition. There are many different ways to conduct this analysis. One of the most popular methods is a SWOT analysis, which stands for “strengths, weaknesses, opportunities, and threats.” This type of analysis is helpful because it gives you a more robust understanding of why a customer might choose a competitor over your business. Seeing how you stack up against the competition can give you the direction you need to carve out your place as a market leader.

Social Media Analysis

Social media has fundamentally changed the market research landscape, making it easier than ever to engage with a wide swath of consumers. Follow your current or potential competitors on social media to see what they’re posting and how their audience is engaging with it. Social media can also give you a lower cost opportunity for testing different messaging and brand positioning.

SEO Analysis and Opportunities

SEO analysis can help you identify the digital competition for getting the word out about your brand, product, or service. You won’t want to overlook this valuable information. Search listening tools offer a novel approach to understanding the market and generating the content strategy that will drive business. Tools like Google Trends and Awario can streamline this process.

Ready to Kick Your Business Into High Gear?

Now that you’ve completed the guide to market research you know you’re ready to put on your researcher hat to give your business the best start. Still not sure how actually… launch the thing? Our free mini-course can run you through the essentials for starting your side hustle .

About Mary Kate Miller

Mary Kate Miller writes about small business, real estate, and finance. In addition to writing for Foundr, her work has been published by The Washington Post, Teen Vogue, Bustle, and more. She lives in Chicago.

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How to do market research in 4 steps: a lean approach to marketing research

From pinpointing your target audience and assessing your competitive advantage, to ongoing product development and customer satisfaction efforts, market research is a practice your business can only benefit from.

Learn how to conduct quick and effective market research using a lean approach in this article full of strategies and practical examples. 

Last updated

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A comprehensive (and successful) business strategy is not complete without some form of market research—you can’t make informed and profitable business decisions without truly understanding your customer base and the current market trends that drive your business.

In this article, you’ll learn how to conduct quick, effective market research  using an approach called 'lean market research'. It’s easier than you might think, and it can be done at any stage in a product’s lifecycle.

How to conduct lean market research in 4 steps

What is market research, why is market research so valuable, advantages of lean market research, 4 common market research methods, 5 common market research questions, market research faqs.

We’ll jump right into our 4-step approach to lean market research. To show you how it’s done in the real world, each step includes a practical example from Smallpdf , a Swiss company that used lean market research to reduce their tool’s error rate by 75% and boost their Net Promoter Score® (NPS) by 1%.

Research your market the lean way...

From on-page surveys to user interviews, Hotjar has the tools to help you scope out your market and get to know your customers—without breaking the bank.

The following four steps and practical examples will give you a solid market research plan for understanding who your users are and what they want from a company like yours.

1. Create simple user personas

A user persona is a semi-fictional character based on psychographic and demographic data from people who use websites and products similar to your own. Start by defining broad user categories, then elaborate on them later to further segment your customer base and determine your ideal customer profile .

How to get the data: use on-page or emailed surveys and interviews to understand your users and what drives them to your business.

How to do it right: whatever survey or interview questions you ask, they should answer the following questions about the customer:

Who are they?

What is their main goal?

What is their main barrier to achieving this goal?

Pitfalls to avoid:

Don’t ask too many questions! Keep it to five or less, otherwise you’ll inundate them and they’ll stop answering thoughtfully.

Don’t worry too much about typical demographic questions like age or background. Instead, focus on the role these people play (as it relates to your product) and their goals.

How Smallpdf did it: Smallpdf ran an on-page survey for a couple of weeks and received 1,000 replies. They learned that many of their users were administrative assistants, students, and teachers.

Next, they used the survey results to create simple user personas like this one for admins:

Who are they? Administrative Assistants.

What is their main goal? Creating Word documents from a scanned, hard-copy document or a PDF where the source file was lost.

What is their main barrier to achieving it? Converting a scanned PDF doc to a Word file.

💡Pro tip: Smallpdf used Hotjar Surveys to run their user persona survey. Our survey tool helped them avoid the pitfalls of guesswork and find out who their users really are, in their own words. 

You can design a survey and start running it in minutes with our easy-to-use drag and drop builder. Customize your survey to fit your needs, from a sleek one-question pop-up survey to a fully branded questionnaire sent via email. 

We've also created 40+ free survey templates that you can start collecting data with, including a user persona survey like the one Smallpdf used.

2. Conduct observational research

Observational research involves taking notes while watching someone use your product (or a similar product).

Overt vs. covert observation

Overt observation involves asking customers if they’ll let you watch them use your product. This method is often used for user testing and it provides a great opportunity for collecting live product or customer feedback .

Covert observation means studying users ‘in the wild’ without them knowing. This method works well if you sell a type of product that people use regularly, and it offers the purest observational data because people often behave differently when they know they’re being watched. 

Tips to do it right:

Record an entry in your field notes, along with a timestamp, each time an action or event occurs.

Make note of the users' workflow, capturing the ‘what,’ ‘why,’ and ‘for whom’ of each action.

Don’t record identifiable video or audio data without consent. If recording people using your product is helpful for achieving your research goal, make sure all participants are informed and agree to the terms.

Don’t forget to explain why you’d like to observe them (for overt observation). People are more likely to cooperate if you tell them you want to improve the product.

💡Pro tip: while conducting field research out in the wild can wield rewarding results, you can also conduct observational research remotely. Hotjar Recordings is a tool that lets you capture anonymized user sessions of real people interacting with your website. 

Observe how customers navigate your pages and products to gain an inside look into their user behavior . This method is great for conducting exploratory research with the purpose of identifying more specific issues to investigate further, like pain points along the customer journey and opportunities for optimizing conversion .

With Hotjar Recordings you can observe real people using your site without capturing their sensitive information

How Smallpdf did it: here’s how Smallpdf observed two different user personas both covertly and overtly.

Observing students (covert): Kristina Wagner, Principle Product Manager at Smallpdf, went to cafes and libraries at two local universities and waited until she saw students doing PDF-related activities. Then she watched and took notes from a distance. One thing that struck her was the difference between how students self-reported their activities vs. how they behaved (i.e, the self-reporting bias). Students, she found, spent hours talking, listening to music, or simply staring at a blank screen rather than working. When she did find students who were working, she recorded the task they were performing and the software they were using (if she recognized it).

Observing administrative assistants (overt): Kristina sent emails to admins explaining that she’d like to observe them at work, and she asked those who agreed to try to batch their PDF work for her observation day. While watching admins work, she learned that they frequently needed to scan documents into PDF-format and then convert those PDFs into Word docs. By observing the challenges admins faced, Smallpdf knew which products to target for improvement.

“Data is really good for discovery and validation, but there is a bit in the middle where you have to go and find the human.”

3. Conduct individual interviews

Interviews are one-on-one conversations with members of your target market. They allow you to dig deep and explore their concerns, which can lead to all sorts of revelations.

Listen more, talk less. Be curious.

Act like a journalist, not a salesperson. Rather than trying to talk your company up, ask people about their lives, their needs, their frustrations, and how a product like yours could help.

Ask "why?" so you can dig deeper. Get into the specifics and learn about their past behavior.

Record the conversation. Focus on the conversation and avoid relying solely on notes by recording the interview. There are plenty of services that will transcribe recorded conversations for a good price (including Hotjar!).

Avoid asking leading questions , which reveal bias on your part and pushes respondents to answer in a certain direction (e.g. “Have you taken advantage of the amazing new features we just released?).

Don't ask loaded questions , which sneak in an assumption which, if untrue, would make it impossible to answer honestly. For example, we can’t ask you, “What did you find most useful about this article?” without asking whether you found the article useful in the first place.

Be cautious when asking opinions about the future (or predictions of future behavior). Studies suggest that people aren’t very good at predicting their future behavior. This is due to several cognitive biases, from the misguided exceptionalism bias (we’re good at guessing what others will do, but we somehow think we’re different), to the optimism bias (which makes us see things with rose-colored glasses), to the ‘illusion of control’ (which makes us forget the role of randomness in future events).

How Smallpdf did it: Kristina explored her teacher user persona by speaking with university professors at a local graduate school. She learned that the school was mostly paperless and rarely used PDFs, so for the sake of time, she moved on to the admins.

A bit of a letdown? Sure. But this story highlights an important lesson: sometimes you follow a lead and come up short, so you have to make adjustments on the fly. Lean market research is about getting solid, actionable insights quickly so you can tweak things and see what works.

💡Pro tip: to save even more time, conduct remote interviews using an online user research service like Hotjar Engage , which automates the entire interview process, from recruitment and scheduling to hosting and recording.

You can interview your own customers or connect with people from our diverse pool of 200,000+ participants from 130+ countries and 25 industries. And no need to fret about taking meticulous notes—Engage will automatically transcribe the interview for you.

4. Analyze the data (without drowning in it)

The following techniques will help you wrap your head around the market data you collect without losing yourself in it. Remember, the point of lean market research is to find quick, actionable insights.

A flow model is a diagram that tracks the flow of information within a system. By creating a simple visual representation of how users interact with your product and each other, you can better assess their needs.

You’ll notice that admins are at the center of Smallpdf’s flow model, which represents the flow of PDF-related documents throughout a school. This flow model shows the challenges that admins face as they work to satisfy their own internal and external customers.

Affinity diagram

An affinity diagram is a way of sorting large amounts of data into groups to better understand the big picture. For example, if you ask your users about their profession, you’ll notice some general themes start to form, even though the individual responses differ. Depending on your needs, you could group them by profession, or more generally by industry.

We wrote a guide about how to analyze open-ended questions to help you sort through and categorize large volumes of response data. You can also do this by hand by clipping up survey responses or interview notes and grouping them (which is what Kristina does).

“For an interview, you will have somewhere between 30 and 60 notes, and those notes are usually direct phrases. And when you literally cut them up into separate pieces of paper and group them, they should make sense by themselves.”

Pro tip: if you’re conducting an online survey with Hotjar, keep your team in the loop by sharing survey responses automatically via our Slack and Microsoft Team integrations. Reading answers as they come in lets you digest the data in pieces and can help prepare you for identifying common themes when it comes time for analysis.

Hotjar lets you easily share survey responses with your team

Customer journey map

A customer journey map is a diagram that shows the way a typical prospect becomes a paying customer. It outlines their first interaction with your brand and every step in the sales cycle, from awareness to repurchase (and hopefully advocacy).

The above  customer journey map , created by our team at Hotjar, shows many ways a customer might engage with our tool. Your map will be based on your own data and business model.

📚 Read more: if you’re new to customer journey maps, we wrote this step-by-step guide to creating your first customer journey map in 2 and 1/2 days with free templates you can download and start using immediately.

Next steps: from research to results

So, how do you turn market research insights into tangible business results? Let’s look at the actions Smallpdf took after conducting their lean market research: first they implemented changes, then measured the impact.

Implement changes

Based on what Smallpdf learned about the challenges that one key user segment (admins) face when trying to convert PDFs into Word files, they improved their ‘PDF to Word’ conversion tool.

We won’t go into the details here because it involves a lot of technical jargon, but they made the entire process simpler and more straightforward for users. Plus, they made it so that their system recognized when you drop a PDF file into their ‘Word to PDF’ converter instead of the ‘PDF to Word’ converter, so users wouldn’t have to redo the task when they made that mistake. 

In other words: simple market segmentation for admins showed a business need that had to be accounted for, and customers are happier overall after Smallpdf implemented an informed change to their product.

Measure results

According to the Lean UX model, product and UX changes aren’t retained unless they achieve results.

Smallpdf’s changes produced:

A 75% reduction in error rate for the ‘PDF to Word’ converter

A 1% increase in NPS

Greater confidence in the team’s marketing efforts

"With all the changes said and done, we've cut our original error rate in four, which is huge. We increased our NPS by +1%, which isn't huge, but it means that of the users who received a file, they were still slightly happier than before, even if they didn't notice that anything special happened at all.”

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Market research (or marketing research) is any set of techniques used to gather information and better understand a company’s target market. This might include primary research on brand awareness and customer satisfaction or secondary market research on market size and competitive analysis. Businesses use this information to design better products, improve user experience, and craft a marketing strategy that attracts quality leads and improves conversion rates.

David Darmanin, one of Hotjar’s founders, launched two startups before Hotjar took off—but both companies crashed and burned. Each time, he and his team spent months trying to design an amazing new product and user experience, but they failed because they didn’t have a clear understanding of what the market demanded.

With Hotjar, they did things differently . Long story short, they conducted market research in the early stages to figure out what consumers really wanted, and the team made (and continues to make) constant improvements based on market and user research.

Without market research, it’s impossible to understand your users. Sure, you might have a general idea of who they are and what they need, but you have to dig deep if you want to win their loyalty.

Here’s why research matters:

Obsessing over your users is the only way to win. If you don’t care deeply about them, you’ll lose potential customers to someone who does.

Analytics gives you the ‘what’, while research gives you the ‘why’. Big data, user analytics , and dashboards can tell you what people do at scale, but only research can tell you what they’re thinking and why they do what they do. For example, analytics can tell you that customers leave when they reach your pricing page, but only research can explain why.

Research beats assumptions, trends, and so-called best practices. Have you ever watched your colleagues rally behind a terrible decision? Bad ideas are often the result of guesswork, emotional reasoning, death by best practices , and defaulting to the Highest Paid Person’s Opinion (HiPPO). By listening to your users and focusing on their customer experience , you’re less likely to get pulled in the wrong direction.

Research keeps you from planning in a vacuum. Your team might be amazing, but you and your colleagues simply can’t experience your product the way your customers do. Customers might use your product in a way that surprises you, and product features that seem obvious to you might confuse them. Over-planning and refusing to test your assumptions is a waste of time, money, and effort because you’ll likely need to make changes once your untested business plan gets put into practice.

Lean User Experience (UX) design is a model for continuous improvement that relies on quick, efficient research to understand customer needs and test new product features.

Lean market research can help you become more...

Efficient: it gets you closer to your customers, faster.

Cost-effective: no need to hire an expensive marketing firm to get things started.

Competitive: quick, powerful insights can place your products on the cutting edge.

As a small business or sole proprietor, conducting lean market research is an attractive option when investing in a full-blown research project might seem out of scope or budget.

There are lots of different ways you could conduct market research and collect customer data, but you don’t have to limit yourself to just one research method. Four common types of market research techniques include surveys, interviews, focus groups, and customer observation.

Which method you use may vary based on your business type: ecommerce business owners have different goals from SaaS businesses, so it’s typically prudent to mix and match these methods based on your particular goals and what you need to know.

1. Surveys: the most commonly used

Surveys are a form of qualitative research that ask respondents a short series of open- or closed-ended questions, which can be delivered as an on-screen questionnaire or via email. When we asked 2,000 Customer Experience (CX) professionals about their company’s approach to research , surveys proved to be the most commonly used market research technique.

What makes online surveys so popular?  

They’re easy and inexpensive to conduct, and you can do a lot of data collection quickly. Plus, the data is pretty straightforward to analyze, even when you have to analyze open-ended questions whose answers might initially appear difficult to categorize.

We've built a number of survey templates ready and waiting for you. Grab a template and share with your customers in just a few clicks.

💡 Pro tip: you can also get started with Hotjar AI for Surveys to create a survey in mere seconds . Just enter your market research goal and watch as the AI generates a survey and populates it with relevant questions. 

Once you’re ready for data analysis, the AI will prepare an automated research report that succinctly summarizes key findings, quotes, and suggested next steps.

An example research report generated by Hotjar AI for Surveys

2. Interviews: the most insightful

Interviews are one-on-one conversations with members of your target market. Nothing beats a face-to-face interview for diving deep (and reading non-verbal cues), but if an in-person meeting isn’t possible, video conferencing is a solid second choice.

Regardless of how you conduct it, any type of in-depth interview will produce big benefits in understanding your target customers.

What makes interviews so insightful?

By speaking directly with an ideal customer, you’ll gain greater empathy for their experience , and you can follow insightful threads that can produce plenty of 'Aha!' moments.

3. Focus groups: the most unreliable

Focus groups bring together a carefully selected group of people who fit a company’s target market. A trained moderator leads a conversation surrounding the product, user experience, or marketing message to gain deeper insights.

What makes focus groups so unreliable?

If you’re new to market research, we wouldn’t recommend starting with focus groups. Doing it right is expensive , and if you cut corners, your research could fall victim to all kinds of errors. Dominance bias (when a forceful participant influences the group) and moderator style bias (when different moderator personalities bring about different results in the same study) are two of the many ways your focus group data could get skewed.

4. Observation: the most powerful

During a customer observation session, someone from the company takes notes while they watch an ideal user engage with their product (or a similar product from a competitor).

What makes observation so clever and powerful?

‘Fly-on-the-wall’ observation is a great alternative to focus groups. It’s not only less expensive, but you’ll see people interact with your product in a natural setting without influencing each other. The only downside is that you can’t get inside their heads, so observation still isn't a recommended replacement for customer surveys and interviews.

The following questions will help you get to know your users on a deeper level when you interview them. They’re general questions, of course, so don’t be afraid to make them your own.

1. Who are you and what do you do?

How you ask this question, and what you want to know, will vary depending on your business model (e.g. business-to-business marketing is usually more focused on someone’s profession than business-to-consumer marketing).

It’s a great question to start with, and it’ll help you understand what’s relevant about your user demographics (age, race, gender, profession, education, etc.), but it’s not the be-all-end-all of market research. The more specific questions come later.

2. What does your day look like?

This question helps you understand your users’ day-to-day life and the challenges they face. It will help you gain empathy for them, and you may stumble across something relevant to their buying habits.

3. Do you ever purchase [product/service type]?

This is a ‘yes or no’ question. A ‘yes’ will lead you to the next question.

4. What problem were you trying to solve or what goal were you trying to achieve?

This question strikes to the core of what someone’s trying to accomplish and why they might be willing to pay for your solution.

5. Take me back to the day when you first decided you needed to solve this kind of problem or achieve this goal.

This is the golden question, and it comes from Adele Revella, Founder and CEO of Buyer Persona Institute . It helps you get in the heads of your users and figure out what they were thinking the day they decided to spend money to solve a problem.

If you take your time with this question, digging deeper where it makes sense, you should be able to answer all the relevant information you need to understand their perspective.

“The only scripted question I want you to ask them is this one: take me back to the day when you first decided that you needed to solve this kind of problem or achieve this kind of a goal. Not to buy my product, that’s not the day. We want to go back to the day that when you thought it was urgent and compelling to go spend money to solve a particular problem or achieve a goal. Just tell me what happened.”

— Adele Revella , Founder/CEO at Buyer Persona Institute

Bonus question: is there anything else you’d like to tell me?

This question isn’t just a nice way to wrap it up—it might just give participants the opportunity they need to tell you something you really need to know.

That’s why Sarah Doody, author of UX Notebook , adds it to the end of her written surveys.

“I always have a last question, which is just open-ended: “Is there anything else you would like to tell me?” And sometimes, that’s where you get four paragraphs of amazing content that you would never have gotten if it was just a Net Promoter Score [survey] or something like that.”

What is the difference between qualitative and quantitative research?

Qualitative research asks questions that can’t be reduced to a number, such as, “What is your job title?” or “What did you like most about your customer service experience?” 

Quantitative research asks questions that can be answered with a numeric value, such as, “What is your annual salary?” or “How was your customer service experience on a scale of 1-5?”

 → Read more about the differences between qualitative and quantitative user research .

How do I do my own market research?

You can do your own quick and effective market research by 

Surveying your customers

Building user personas

Studying your users through interviews and observation

Wrapping your head around your data with tools like flow models, affinity diagrams, and customer journey maps

What is the difference between market research and user research?

Market research takes a broad look at potential customers—what problems they’re trying to solve, their buying experience, and overall demand. User research, on the other hand, is more narrowly focused on the use (and usability ) of specific products.

What are the main criticisms of market research?

Many marketing professionals are critical of market research because it can be expensive and time-consuming. It’s often easier to convince your CEO or CMO to let you do lean market research rather than something more extensive because you can do it yourself. It also gives you quick answers so you can stay ahead of the competition.

Do I need a market research firm to get reliable data?

Absolutely not! In fact, we recommend that you start small and do it yourself in the beginning. By following a lean market research strategy, you can uncover some solid insights about your clients. Then you can make changes, test them out, and see whether the results are positive. This is an excellent strategy for making quick changes and remaining competitive.

Net Promoter, Net Promoter System, Net Promoter Score, NPS, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld, and Satmetrix Systems, Inc.

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How To Do Market Research: Definition, Types, Methods

Jan 2, 2024

11 min. read

Market research isn’t just collecting data. It’s a strategic tool that allows businesses to gain a competitive advantage while making the best use of their resources. Research reveals valuable insights into your target audience about their preferences, buying habits, and emerging demands — all of which help you unlock new opportunities to grow your business.

When done correctly, market research can minimize risks and losses, spur growth, and position you as a leader in your industry. 

Let’s explore the basic building blocks of market research and how to collect and use data to move your company forward:

Table of Contents

What Is Market Research?

Why is market research important, market analysis example, 5 types of market research, what are common market research questions, what are the limitations of market research, how to do market research, improving your market research with radarly.

Market Research Definition: The process of gathering, analyzing, and interpreting information about a market or audience.

Market research studies consumer behavior to better understand how they perceive products or services. These insights help businesses identify ways to grow their current offering, create new products or services, and improve brand trust and brand recognition .

You might also hear market research referred to as market analysis or consumer research .

Traditionally, market research has taken the form of focus groups, surveys, interviews, and even competitor analysis . But with modern analytics and research tools, businesses can now capture deeper insights from a wider variety of sources, including social media, online reviews, and customer interactions. These extra layers of intel can help companies gain a more comprehensive understanding of their audience.

With consumer preferences and markets evolving at breakneck speeds, businesses need a way to stay in touch with what people need and want. That’s why the importance of market research cannot be overstated.

Market research offers a proactive way to identify these trends and make adjustments to product development, marketing strategies , and overall operations. This proactive approach can help businesses stay ahead of the curve and remain agile as markets shift.

Market research examples abound — given the number of ways companies can get inside the minds of their customers, simply skimming through your business’s social media comments can be a form of market research.

A restaurant chain might use market research methods to learn more about consumers’ evolving dining habits. These insights might be used to offer new menu items, re-examine their pricing strategies, or even open new locations in different markets, for example.

A consumer electronics company might use market research for similar purposes. For instance, market research may reveal how consumers are using their smart devices so they can develop innovative features.

Market research can be applied to a wide range of use cases, including:

• Testing new product ideas
• Improve existing products
• Entering new markets
• Right-sizing their physical footprints
• Improving brand image and awareness
• Gaining insights into competitors via competitive intelligence

Ultimately, companies can lean on market research techniques to stay ahead of trends and competitors while improving the lives of their customers.

Market research methods take different forms, and you don’t have to limit yourself to just one. Let’s review the most common market research techniques and the insights they deliver.

1. Interviews

3. Focus Groups

4. Observations

5. AI-Driven Market Research

One-on-one interviews are one of the most common market research techniques. Beyond asking direct questions, skilled interviewers can uncover deeper motivations and emotions that drive purchasing decisions. Researchers can elicit more detailed and nuanced responses they might not receive via other methods, such as self-guided surveys.

Interviews also create the opportunity to build rapport with customers and prospects. Establishing a connection with interviewees can encourage them to open up and share their candid thoughts, which can enrich your findings. Researchers also have the opportunity to ask clarifying questions and dig deeper based on individual responses.

Market research surveys provide an easy entry into the consumer psyche. They’re cost-effective to produce and allow researchers to reach lots of people in a short time. They’re also user-friendly for consumers, which allows companies to capture more responses from more people.

Big data and data analytics are making traditional surveys more valuable. Researchers can apply these tools to elicit a deeper understanding from responses and uncover hidden patterns and correlations within survey data that were previously undetectable.

The ways in which surveys are conducted are also changing. With the rise of social media and other online channels, brands and consumers alike have more ways to engage with each other, lending to a continuous approach to market research surveys.

3. Focus groups

Focus groups are “group interviews” designed to gain collective insights. This interactive setting allows participants to express their thoughts and feelings openly, giving researchers richer insights beyond yes-or-no responses.

One of the key benefits of using focus groups is the opportunity for participants to interact with one another. They spark discussions while sharing diverse viewpoints. These sessions can uncover underlying motivations and attitudes that may not be easily expressed through other research methods.

Observing your customers “in the wild” might feel informal, but it can be one of the most revealing market research techniques of all. That’s because you might not always know the right questions to ask. By simply observing, you can surface insights you might not have known to look for otherwise.

This method also delivers raw, authentic, unfiltered data. There’s no room for bias and no potential for participants to accidentally skew the data. Researchers can also pick up on non-verbal cues and gestures that other research methods may fail to capture.

5. AI-driven market research

One of the newer methods of market research is the use of AI-driven market research tools to collect and analyze insights on your behalf. AI customer intelligence tools and consumer insights software like Meltwater Radarly take an always-on approach by going wherever your audience is and continuously predicting behaviors based on current behaviors.

By leveraging advanced algorithms, machine learning, and big data analysis , AI enables companies to uncover deep-seated patterns and correlations within large datasets that would be near impossible for human researchers to identify. This not only leads to more accurate and reliable findings but also allows businesses to make informed decisions with greater confidence.

Tip: Learn how to use Meltwater as a research tool , how Meltwater uses AI , and learn more about consumer insights and about consumer insights in the fashion industry .

No matter the market research methods you use, market research’s effectiveness lies in the questions you ask. These questions should be designed to elicit honest responses that will help you reach your goals.

Examples of common market research questions include:

Demographic market research questions

• What is your age range?
• What is your occupation?
• What is your household income level?
• What is your educational background?
• What is your gender?

Product or service usage market research questions

• How long have you been using [product/service]?
• How frequently do you use [product/service]?
• What do you like most about [product/service]?
• Have you experienced any problems using [product/service]?
• How could we improve [product/service]?
• Why did you choose [product/service] over a competitor’s [product/service]?

Brand perception market research questions

• How familiar are you with our brand?
• What words do you associate with our brand?
• How do you feel about our brand?
• What makes you trust our brand?
• What sets our brand apart from competitors?
• What would make you recommend our brand to others?

Buying behavior market research questions

• What do you look for in a [product/service]?
• What features in a [product/service] are important to you?
• How much time do you need to choose a [product/service]?
• How do you discover new products like [product/service]?
• Do you prefer to purchase [product/service] online or in-store?
• How do you research [product/service] before making a purchase?
• How often do you buy [product/service]?
• How important is pricing when buying [product/service]?
• What would make you switch to another brand of [product/service]?

Customer satisfaction market research questions

• How happy have you been with [product/service]?
• What would make you more satisfied with [product/service]?
• How likely are you to continue using [product/service]?

Bonus Tip: Compiling these questions into a market research template can streamline your efforts.

Market research can offer powerful insights, but it also has some limitations. One key limitation is the potential for bias. Researchers may unconsciously skew results based on their own preconceptions or desires, which can make your findings inaccurate.

• Depending on your market research methods, your findings may be outdated by the time you sit down to analyze and act on them. Some methods struggle to account for rapidly changing consumer preferences and behaviors.
• There’s also the risk of self-reported data (common in online surveys). Consumers might not always accurately convey their true feelings or intentions. They might provide answers they think researchers are looking for or misunderstand the question altogether.
• There’s also the potential to miss emerging or untapped markets . Researchers are digging deeper into what (or who) they already know. This means you might be leaving out a key part of the story without realizing it.

Still, the benefits of market research cannot be understated, especially when you supplement traditional market research methods with modern tools and technology.

Let’s put it all together and explore how to do market research step-by-step to help you leverage all its benefits.

Step 1: Define your objectives

You’ll get more from your market research when you hone in on a specific goal : What do you want to know, and how will this knowledge help your business?

This step will also help you define your target audience. You’ll need to ask the right people the right questions to collect the information you want. Understand the characteristics of the audience and what gives them authority to answer your questions.

Step 2: Select your market research methods

Choose one or more of the market research methods (interviews, surveys, focus groups, observations, and/or AI-driven tools) to fuel your research strategy.

Certain methods might work better than others for specific goals . For example, if you want basic feedback from customers about a product, a simple survey might suffice. If you want to hone in on serious pain points to develop a new product, a focus group or interview might work best.

You can also source secondary research via secondary research companies , such as industry reports or analyses from large market research firms. These can help you gather preliminary information and inform your approach.

Step 3: Develop your research tools

Prior to working with participants, you’ll need to craft your survey or interview questions, interview guides, and other tools. These tools will help you capture the right information , weed out non-qualifying participants, and keep your information organized.

You should also have a system for recording responses to ensure data accuracy and privacy. Test your processes before speaking with participants so you can spot and fix inefficiencies or errors.

Step 4: Conduct the market research

With a system in place, you can start looking for candidates to contribute to your market research. This might include distributing surveys to current customers or recruiting participants who fit a specific profile, for example.

Set a time frame for conducting your research. You might collect responses over the course of a few days, weeks, or even months. If you’re using AI tools to gather data, choose a data range for your data to focus on the most relevant information.

Step 5: Analyze and apply your findings

Review your findings while looking for trends and patterns. AI tools can come in handy in this phase by analyzing large amounts of data on your behalf.

Compile your findings into an easy-to-read report and highlight key takeaways and next steps. Reports aren’t useful unless the reader can understand and act on them.

Tip: Learn more about trend forecasting , trend detection , and trendspotting .

Meltwater’s Radarly consumer intelligence suite helps you reap the benefits of market research on an ongoing basis. Using a combination of AI, data science, and market research expertise, Radarly scans multiple global data sources to learn what people are talking about, the actions they’re taking, and how they’re feeling about specific brands.

Our tools are created by market research experts and designed to help researchers uncover what they want to know (and what they don’t know they want to know). Get data-driven insights at scale with information that’s always relevant, always accurate, and always tailored to your organization’s needs.

Learn more when you request a demo by filling out the form below:

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What Are Consumer Insights? Meaning, Examples, Strategy

How Coca-Cola Collects Consumer Insights

Market Intelligence 101: What It Is & How To Use It

9 Top Consumer Insights Tools & Companies

15 Best market research tools in 2024

Last updated

3 April 2024

Reviewed by

Whether you're launching a new product or service, looking to increase customer engagement, or boosting brand loyalty, it’s always necessary to turn to data and insights to understand what’s going on. This research can give a picture of current and potential customers in the marketplace and help validate an action you want to take to increase sales.

Fortunately, we’ve done the hard work to find some of the best research tools to use in 2023. Let’s explore!

Market analysis template

Save time, highlight crucial insights, and drive strategic decision-making

• What are market research tools?

Market research tools are designed to simplify the process of gathering, storing, and understanding data and information.

They can help a team to clearly identify a market for their product or service, as well as gain key feedback from current and potential customers.

A broad range of market research tools is useful at various stages of the research process. Some tools help speed up the process of gathering data. Others are helpful once you’ve collected data, as they allow you to easily view and manage information and then draw valuable insights.

Ultimately, market research tools can help make the research process easier and more straightforward.

• Why are market research tools important for business?

The right market research tools in a business can streamline the research phases while helping to ensure a new product or service succeeds. 

There are a range of ways market research tools can help businesses. These include: 

Reducing manual processes . Manual research tasks can be highly time-consuming for teams. Tools can reduce the time it takes to complete research tasks, helping move projects forwards.

Increased accuracy . With large amounts of data, it’s easy for people to make mistakes. The wrong insights, after all, can prove highly damaging for a business. However, the right tool can improve the accuracy of data collected, ensuring that you base your decision-making on facts.

Removes bias . When teams rely too heavily on assumptions, they miss the chance to discover what users are really thinking and feeling. By relying more on market research tools, you reduce bias from team members and gain clarity on what the research is showing.

Faster data collection . Collecting data can take a long time and involve multiple team members. With the use of tools, there’s the chance to automate many tasks, making the process much faster and simpler.

Better accessibility . Outsourcing market research to independent firms can be time-consuming and costly. However, a business might not have the resources to conduct, collate, and draw meaningful insights from research. Market research tools better enable businesses to conduct research without person power—making the process accessible even to a small business.

• Types of market research tools

Market research tools are becoming increasingly common. Choosing the right tool(s) will depend largely on your needs, goals, and overall business strategy.

Before deciding, it’s helpful to consider the different types of tools and how they might help your research.

The most common types of research tools include:

Customer relationship management (CRM) software

CRM tools record key customer data to help build a picture of customer engagement and loyalty. This is very useful as a deep understanding of your customers is essential when releasing new products, services, and features.

Survey tools

Surveys are one of the most common research techniques, as they help a business team deeply understand what customers want and need. Survey tools can hasten the process of gathering data, increase the chances of completion, and improve accuracy.

Data analysis software

Data tools can help you efficiently collect and store data. They’re also helpful for analyzing that data and quickly gaining valuable insights from a vast range of sources.

Social media monitoring

Social tools help businesses to draw insights about social campaigns and statistics to drive interest online. They can also analyze trends and allows teams to understand their current and potential customers better.

Competitive intelligence tools

Competitor tools help a team to understand what their competitors are doing. By analyzing competitors' profits, sales, trends, and customers, you gain a better chance to understand market needs and wants, giving you the opportunity to offer something new and innovative.

Business intelligence tools

To help businesses plan more accurately, business intelligence tools help with forecasting, goal setting, and business strategies. 

• The best market research platforms and tools for accurate analysis

Below are some of the best market research tools in 2023.

Accurate market and consumer data should drive business decisions—not assumptions made by teams.

That’s where Statista can help. Statista is an online platform focused on consumer and market data. With access to data from 150+ countries and regions, their market insights help stakeholders to forecast growth, revenue, sales, and more. 

You can also find trending statistics, current popular topics, and expert research, which can all build a deep understanding of your market. 

Statista offers their starter plan at $39 per month, though they do have a free introduction plan to allow users to get to know the platform first. 

SurveyMonkey

Surveys are an important market research tool. They give your customers, or potential customers, a chance to make their voices heard. Those insights are ones a business can act upon to make improvements and release better products or services. 

SurveyMonkey enables business teams to quickly create and send surveys, quizzes, and polls through email, web links, or embedded forms. From there, they can receive responses from key people, gain insights, and take action on feedback. 

The platform has hundreds of templates to choose from, meaning that you don’t have to build a survey from scratch or need any design nous to get started. 

SurveyMonkey also offers a free option, which caps surveys at ten questions. This is an attractive option for small businesses and teams wanting to start conducting surveys. 

Google Trends

Curious about what people are or aren’t interested in at the moment? Jumping on trends and creating things that are wanted now is one important way to secure market share. 

Google Trends is a tool that anyone from a journalist to a business founder or UX Specialist can benefit from. It visualizes what search terms people are using on the internet, almost in real time.

The tool has featured insights, a search engine option to see what’s currently popular, and the chance to dive deeper into data. You can also compare one topic to another to see the interest over time—with information dating back to 2004. 

Regardless of what you’re developing, Google Trends is a tool every team releasing new products can benefit from. Even better, it’s a free tool, making it accessible to all. 

Marketing revenue engine SpyFu helps businesses to understand and take the guesswork out of search engine optimization (SEO) and pay-per-click (PPC) marketing. 

Through competitor analysis, rank tracking, and keyword research, SpyFu helps companies create content with better SEO. And with a Google Ads analyzer, ad templates, and competitor analysis, they can also boost success with marketed ads. 

SpyFu also has competitor software that allows customers to see ranks, ads, backlinks, and keywords to better understand the competition. To help stakeholders to track and improve success, they also provide detailed reporting tools. 

Basic plans for SpyFu start at $16 per month with options to upgrade for greater access. 

Designed with public relations professionals and content marketers in mind, BuzzSumo enables users to see what’s in the news, find trends, track company mentions, and gain ideas for new content. 

The tool helps people to discover popular content, uncover top stories from competitors, and see what their customers are interested in. It also allows stakeholders to quickly react to negative mentions, competitors' comments, or industry announcements. 

With a huge library of data and content, BuzzSumo is a powerful tool popular with creatives and marketers alike. 

The tool does come at a price, with a single-user plan costing ​​$119 per month. 

Think With Google

Think With Google provides key data and insight to help businesses understand shifts in beliefs, behaviors, and needs in geographic regions. 

These consumer insights and market trends can provide interesting perspectives for the forecasting and planning of marketing strategies.  

Using Think With Google can boost business ideas, drive business decisions, and help marketers succeed in a competitive marketplace. And similar to Google Trends, Think With Google is a free tool. 

Completing a survey isn’t always a fun or desirable activity for a busy potential or current customer. Surveys take time to fill out, and many customers would prefer to get on with their day. 

With that in mind, Typeform created people-friendly surveys, forms, and quizzes that are enjoyable to complete. 

With dedicated designs that aren’t only aesthetically pleasing but simple to use, stakeholders can create something unique and appealing for consumers without the need for design work. 

Typeform also has a video feature to allow more in-depth questions—something that can be very useful for some projects. 

A basic plan with Typeform starts at $25 per month. 

Semrush helps companies improve their SEO, PPC, competitor research, and content marketing. 

It does this by offering SEO audits, actionable tips, traffic analysis, and a keyword research tool to drive successful marketing. It’s also a social media scheduling tool with post analysis to boost successful social marketing. 

When it comes to competitor research, Semrush also provides competitor analysis through tracking and assessing other websites, visibility on competitor promotion strategies, and access to keyword and backlink gaps, which you can use to grow market share. 

Semrush’s base plans start at $119.95 per month. 

US Census Bureau

When developing new products and services, you want to get as much information about your target market as possible. What better way than looking at the Census Bureau data? 

The Census data gives accurate and detailed information about the American public and economy, which is critical to understanding the potential market for a product or service. This sort of data gives you the ‘big picture’ of your customer base and is often the backbone or initial supporting data for your market research project. Participation in the US Census is mandatory, ensuring that you have access to a huge dataset of accurate information. 

It does have some limitations. Given the Census is only taken every ten years, the information can become outdated quickly. Also, it may not be specific or detailed enough to relate to your particular project. 

But given it’s free for all to access, it’s a great starting point for general research. 

Competitor analysis is an essential part of any successful market research journey. Similarweb allows users to analyze any website or app to understand how competitors are positioning themselves in the market by measuring their digital traffic. 

Insights include total visits, global rank, country rank, pages per visit, and bounce rate. Within the platform, you can also easily find similarly ranked sites to compare and contrast to your own. 

Importantly, Similarweb provides traffic and engagement analysis with demographic information, other visited websites, and audience interests. This provides a vast amount of information to accurately compare your website and app with competitors, giving you a much clearer picture of what your customers are interested in and where you stand in the marketplace.

Similarweb offers plenty of free tools and business quotes for those interested in paid plans. 

Business intelligence tool, Tableau, is designed to help companies gain helpful insights from data. Those insights can drive business decisions, generate accurate planning, and improve forecasting. 

A visual analytics platform, the tool is useful for data management, visual storytelling, and collaboration between team members. 

With a dedicated dashboard, providing a range of key analytics, discovering how your business is performing (and where it could do better) is straightforward. They also offer end-to-end data for a complete picture. 

Individual plans with Tableau start at $70 per month. 

Facebook Audience Insights

For some businesses, Facebook advertising drives campaigns, boosts sales, and grows customer engagement. 

Facebook Audience Insights help business owners discover more than just what their competitors are doing. The tool provides aggregated information to show data from those who are already connected to the business and another set to provide information about those generally on Facebook. This key information can drive awareness of new customers and increase the chances of boosting interest and growing a customer base.

Specifically, Facebook Audience Insights provides demographic information, key interests, and lifestyle data to build a picture of your current and potential customers. Even better, the tool is free to use. 

Question and answer platform, Quora, isn’t technically a research tool. Because it holds an incredible amount of information, it can help content marketers and product developers uncover key topics of interest. 

This platform is also free for everyone to use. 

BrandMentions

When wanting to increase brand loyalty and engagement—not only do you need an accurate tool to track that data—you also need to understand who’s talking about your business and where. 

BrandMentions does just that. The tool helps businesses manage their brand reputation, acquire new customers, and retain current ones, all while engaging with customers and key influencers.

With BrandMentions, it’s simpler to accurately measure the success of campaigns, track social media mentions and performance, measure brand performance, and monitor hashtags.

Plans with BrandMentions start at $99 per month.

The list wouldn’t be complete without mentioning Dovetail. Dovetail ensures that you can store customer research, feedback, and insights in one streamlined place—all to empower your team with accurate decision-making.

Regardless of whether the user data came through a survey, a focus group, usability testing, or product feedback, Dovetail also enables you to analyze your market research data and generate insights that can help you understand your customer and competition.

The platform also has templates for anything from analyzing competitors to gaining feedback or running an employee engagement survey. Dovetail can help you complete research that’ll have a real impact.

Get started today

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Home Market Research

Market Research: What it Is, Methods, Types & Examples

Would you like to know why, how, and when to apply market research? Do you want to discover why your consumers are not buying your products? Are you interested in launching a new product, service, or even a new marketing campaign, but you’re not sure what your consumers want?

LEARN ABOUT: Market research vs marketing research

To answer the questions above, you’ll need help from your consumers. But how will you collect that data? In this case and in many other situations in your business, market research is the way to get all the answers you need.

In this ultimate guide about market research, you’ll find the definition, advantages, types of market research, and some examples that will help you understand this type of research. Don’t forget to download the free ebook available at the end of this guide!

LEARN ABOUT: Perceived Value

Content Index

Three key objectives of market research

Why is market research important.

• Types of Market Research: Methods and Examples

Steps for conducting Market Research

Benefits of an efficient market research, 5 market research tips for businesses, why does every business need market research, free market research ebook, what is market research.

Market research is a technique that is used to collect data on any aspect that you want to know to be later able to interpret it and, in the end, make use of it for correct decision-making.

Another more specific definition could be the following:

Market research is the process by which companies seek to collect data systematically to make better decisions. Still, its true value lies in the way in which all the data obtained is used to achieve a better knowledge of the market consumer.

The process of market research can be done through deploying surveys , interacting with a group of people, also known as a sample , conducting interviews, and other similar processes.  

The primary purpose of conducting market research is to understand or examine the market associated with a particular product or service to decide how the audience will react to a product or service. The information obtained from conducting market research can be used to tailor marketing/ advertising activities or determine consumers’ feature priorities/service requirement (if any).

LEARN ABOUT: Consumer Surveys

Conducting research is one of the best ways of achieving customer satisfaction , reducing customer churn and elevating business. Here are the reasons why market research is important and should be considered in any business:

• Valuable information: It provides information and opportunities about the value of existing and new products, thus, helping businesses plan and strategize accordingly.
• Customer-centric: It helps to determine what the customers need and want. Marketing is customer-centric and understanding the customers and their needs will help businesses design products or services that best suit them. Remember that tracing your customer journey is a great way to gain valuable insights into your customers’ sentiments toward your brand.
• Forecasts: By understanding the needs of customers, businesses can also forecast their production and sales. Market research also helps in determining optimum inventory stock.
• Competitive advantage: To stay ahead of competitors market research is a vital tool to carry out comparative studies. Businesses can devise business strategies that can help them stay ahead of their competitors.

LEARN ABOUT: Data Analytics Projects

Types of Market Research: Market Research Methods and Examples

Whether an organization or business wishes to know the purchase behavior of consumers or the likelihood of consumers paying a certain cost for a product segmentation , market research helps in drawing meaningful conclusions.

LEARN ABOUT: Behavioral Targeting

Depending on the methods and tools required, the following are the types:

1. Primary Market Research (A combination of both Qualitative and Quantitative Research):

Primary market research is a process where organizations or businesses get in touch with the end consumers or employ a third party to carry out relevant studies to collect data. The data collected can be qualitative data (non-numerical data) or quantitative data (numerical or statistical data).

While conducting primary market research, one can gather two types of information: Exploratory and Specific. Exploratory research is open-ended, where a problem is explored by asking open ended questions in a detailed interview format usually with a small group of people, also known as a sample. Here the sample size is restricted to 6-10 members. Specific research, on the other hand, is more pinpointed and is used to solve the problems that are identified by exploratory research.

LEARN ABOUT: Marketing Insight

As mentioned earlier, primary market research is a combination of qualitative market research and quantitative market research. Qualitative market research study involves semi-structured or unstructured data collected through some of the commonly used qualitative research methods like:

Focus groups :

Focus group is one of the commonly used qualitative research methods. Focus group is a small group of people (6-10) who typically respond to online surveys sent to them. The best part about a focus group is the information can be collected remotely, can be done without personally interacting with the group members. However, this is a more expensive method as it is used to collect complex information.

One-to-one interview:

As the name suggests, this method involves personal interaction in the form of an interview, where the researcher asks a series of questions to collect information or data from the respondents. The questions are mostly open-ended questions and are asked to facilitate responses. This method heavily depends on the interviewer’s ability and experience to ask questions that evoke responses.

Ethnographic research :

This type of in-depth research is conducted in the natural settings of the respondents. This method requires the interviewer to adapt himself/herself to the natural environment of the respondents which could be a city or a remote village. Geographical constraints can be a hindering market research factor in conducting this kind of research. Ethnographic research can last from a few days to a few years.

Organizations use qualitative research methods to conduct structured market research by using online surveys , questionnaires , and polls to gain statistical insights to make informed decisions.

LEARN ABOUT: Qualitative Interview

This method was once conducted using pen and paper. This has now evolved to sending structured online surveys to the respondents to gain actionable insights. Researchers use modern and technology-oriented survey platforms to structure and design their survey to evoke maximum responses from respondents.

Through a well-structured mechanism, data is easily collected and reported, and necessary action can be taken with all the information made available firsthand.

Learn more: How to conduct quantitative research

2. Secondary Market Research:

Secondary research uses information that is organized by outside sources like government agencies, media, chambers of commerce etc. This information is published in newspapers, magazines, books, company websites, free government and nongovernment agencies and so on. The secondary source makes use of the following:

• Public sources: Public sources like library are an awesome way of gathering free information. Government libraries usually offer services free of cost and a researcher can document available information.
• Commercial sources: Commercial source although reliable are expensive. Local newspapers, magazines, journal, television media are great commercial sources to collect information.
• Educational Institutions: Although not a very popular source of collecting information, most universities and educational institutions are a rich source of information as many research projects are carried out there than any business sector.

Learn more: Market Research Example with Types and Methods

A market research project may usually have 3 different types of objectives.

• Administrative : Help a company or business development, through proper planning, organization, and both human and material resources control, and thus satisfy all specific needs within the market, at the right time.
• Social : Satisfy customers’ specific needs through a required product or service. The product or service should comply with a customer’s requirements and preferences when consumed.
• Economical : Determine the economical degree of success or failure a company can have while being new to the market, or otherwise introducing new products or services, thus providing certainty to all actions to be implemented.

LEARN ABOUT:  Test Market Demand

Knowing what to do in various situations that arise during the investigation will save the researcher time and reduce research problems . Today’s successful enterprises use powerful market research survey software that helps them conduct comprehensive research under a unified platform, providing actionable insights much faster with fewer problems.

LEARN ABOUT:  Market research industry

Following are the steps to conduct effective market research.

Step #1: Define the Problem

Having a well-defined subject of research will help researchers when they ask questions. These questions should be directed to solve problems and must be adapted to the project. Make sure the questions are written clearly and that the respondents understand them. Researchers can conduct a marketing test with a small group to know if the questions are going to know whether the asked questions are understandable and if they will be enough to gain insightful results.

Research objectives should be written in a precise way and should include a brief description of the information that is needed and the way in which it will obtain it. They should have an answer to this question “why are we doing the research?”

Learn more: Interview Questions

Step #2: Define the Sample

To carry out market research, researchers need a representative sample that can be collected using one of the many sampling techniques . A representative sample is a small number of people that reflect, as accurately as possible, a larger group.

• An organization cannot waste their resources in collecting information from the wrong population. It is important that the population represents characteristics that matter to the researchers and that they need to investigate, are in the chosen sample.
• Take into account that marketers will always be prone to fall into a bias in the sample because there will always be people who do not answer the survey because they are busy, or answer it incompletely, so researchers may not obtain the required data.
• Regarding the size of the sample, the larger it is, the more likely it is to be representative of the population. A larger representative sample gives the researcher greater certainty that the people included are the ones they need, and they can possibly reduce bias. Therefore, if they want to avoid inaccuracy in our surveys, they should have representative and balanced samples.
• Practically all the surveys that are considered in a serious way, are based on a scientific sampling, based on statistical and probability theories.

There are two ways to obtain a representative sample:

• Probability sampling : In probability sampling , the choice of the sample will be made at random, which guarantees that each member of the population will have the same probability of selection bias and inclusion in the sample group. Researchers should ensure that they have updated information on the population from which they will draw the sample and survey the majority to establish representativeness.
• Non-probability sampling : In a non-probability sampling , different types of people are seeking to obtain a more balanced representative sample. Knowing the demographic characteristics of our group will undoubtedly help to limit the profile of the desired sample and define the variables that interest the researchers, such as gender, age, place of residence, etc. By knowing these criteria, before obtaining the information, researchers can have the control to create a representative sample that is efficient for us.

When a sample is not representative, there can be a margin of error . If researchers want to have a representative sample of 100 employees, they should choose a similar number of men and women.

The sample size is very important, but it does not guarantee accuracy. More than size, representativeness is related to the sampling frame , that is, to the list from which people are selected, for example, part of a survey.

LEARN ABOUT: Behavioral Research If researchers want to continue expanding their knowledge on how to determine the size of the sample consult our guide on sampling here.

Step #3: Carry out data collection

First, a data collection instrument should be developed. The fact that they do not answer a survey, or answer it incompletely will cause errors in research. The correct collection of data will prevent this.

Step #4: Analyze the results

Each of the points of the market research process is linked to one another. If all the above is executed well, but there is no accurate analysis of the results, then the decisions made consequently will not be appropriate. In-depth analysis conducted without leaving loose ends will be effective in gaining solutions. Data analysis will be captured in a report, which should also be written clearly so that effective decisions can be made on that basis.

Analyzing and interpreting the results is to look for a wider meaning to the obtained data. All the previous phases have been developed to arrive at this moment. How can researchers measure the obtained results? The only quantitative data that will be obtained is age, sex, profession, and number of interviewees because the rest are emotions and experiences that have been transmitted to us by the interlocutors. For this, there is a tool called empathy map that forces us to put ourselves in the place of our clientele with the aim of being able to identify, really, the characteristics that will allow us to make a better adjustment between our products or services and their needs or interests. When the research has been carefully planned, the hypotheses have been adequately defined and the indicated collection method has been used, the interpretation is usually carried out easily and successfully. What follows after conducting market research?

Learn more: Types of Interviews

Step #5: Make the Research Report

When presenting the results, researchers should focus on: what do they want to achieve using this research report and while answering this question they should not assume that the structure of the survey is the best way to do the analysis. One of the big mistakes that many researchers make is that they present the reports in the same order of their questions and do not see the potential of storytelling.

To make good reports, the best analysts give the following advice: follow the inverted pyramid style to present the results, answering at the beginning the essential questions of the business that caused the investigation. Start with the conclusions and give them fundamentals, instead of accumulating evidence. After this researchers can provide details to the readers who have the time and interest.

Step #6: Make Decisions

An organization or a researcher should never ask “why do market research”, they should just do it! Market research helps researchers to know a wide range of information, for example,  consumer purchase intentions, or gives feedback about the growth of the target market. They can also discover valuable information that will help in estimating the prices of their product or service and find a point of balance that will benefit them and the consumers.

Take decisions! Act and implement.

Learn more: Quantitative Research

• Make well-informed decisions: The growth of an organization is dependent on the way decisions are made by the management. Using market research techniques, the management can make business decisions based on obtained results that back their knowledge and experience. Market research helps to know market trends, hence to carry it out frequently to get to know the customers thoroughly.

LEARN ABOUT: Research Process Steps

• Gain accurate information: Market research provides real and accurate information that will prepare the organization for any mishaps that may happen in the future. By properly investigating the market, a business will undoubtedly be taking a step forward, and therefore it will be taking advantage of its existing competitors.
• Determine the market size: A researcher can evaluate the size of the market that must be covered in case of selling a product or service in order to make profits.
• Choose an appropriate sales system: Select a precise sales system according to what the market is asking for, and according to this, the product/service can be positioned in the market.
• Learn about customer preferences: It helps to know how the preferences (and tastes) of the clients change so that the company can satisfy preferences, purchasing habits, and income levels. Researchers can determine the type of product that must be manufactured or sold based on the specific needs of consumers.
• Gather details about customer perception of the brand: In addition to generating information, market research helps a researcher in understanding how the customers perceive the organization or brand.
• Analyze customer communication methods: Market research serves as a guide for communication with current and potential clients.
• Productive business investment: It is a great investment for any business because thanks to it they get invaluable information, it shows researchers the way to follow to take the right path and achieve the sales that are required.

LEARN ABOUT: Total Quality Management

The following tips will help businesses with creating a better market research strategy.

Tip #1: Define the objective of your research.

Before starting your research quest, think about what you’re trying to achieve next with your business. Are you looking to increase traffic to your location? Or increase sales? Or convert customers from one-time purchasers to regulars? Figuring out your objective will help you tailor the rest of your research and your future marketing materials. Having an objective for your research will flesh out what kind of data you need to collect.

Tip #2: Learn About Your Target Customers.

The most important thing to remember is that your business serves a specific kind of customer. Defining your specific customer has many advantages like allowing you to understand what kind of language to use when crafting your marketing materials, and how to approach building relationships with your customer. When you take time to define your target customer you can also find the best products and services to sell to them.

You want to know as much as you can about your target customer. You can gather this information through observation and by researching the kind of customers who frequent your type of business. For starters, helpful things to know are their age and income. What do they do for a living? What’s their marital status and education level?

Learn more: Customer Satisfaction

Tip #3: Recognize that knowing who you serve helps you define who you do not.

Let’s take a classic example from copywriting genius Dan Kennedy. He says that if you’re opening up a fine dining steakhouse focused on decadent food, you know right off the bat that you’re not looking to attract vegetarians or dieters. Armed with this information, you can create better marketing messages that speak to your target customers.

It’s okay to decide who is not a part of your target customer base. In fact, for small businesses knowing who you don’t cater to can be essential in helping you grow. Why? Simple, if you’re small your advantage is that you can connect deeply with a specific segment of the market. You want to focus your efforts on the right customer who already is compelled to spend money on your offer.

If you’re spreading yourself thin by trying to be all things to everyone, you will only dilute your core message. Instead, keep your focus on your target customer. Define them, go deep, and you’ll be able to figure out how you can best serve them with your products and services.

Tip #4: Learn from your competition.

This works for brick-and-mortar businesses as well as internet businesses because it allows you to step into the shoes of your customer and open up to a new perspective of your business. Take a look around the internet and around your town. If you can, visit your competitor’s shops. For example, if you own a restaurant specializing in Italian cuisine, dine at the other Italian place in your neighborhood or in the next township.

As you experience the business from the customer’s perspective, look for what’s being done right and wrong.

Can you see areas that need attention or improvement? How are you running things in comparison? What’s the quality of their product and customer service ? Are the customers here pleased? Also, take a close look at their market segment. Who else is patronizing their business? Are they the same kinds of people who spend money with you? By asking these questions and doing in-person research, you can dig up a lot of information to help you define your unique selling position and create even better offers for your customers.

Tip #5: Get your target customers to open up and tell you everything.

A good customer survey is one of the most valuable market research tools because it gives you the opportunity to get inside your customer’s head. However, remember that some feedback may be harsh, so take criticism as a learning tool to point you in the right direction.

Creating a survey is simple. Ask questions about what your customer thinks you’re doing right and what can be improved. You can also prompt them to tell you what kinds of products and services they’d like to see you add, giving you fantastic insight into how to monetize your business more. Many customers will be delighted to offer feedback. You can even give customers who fill out surveys a gift like a special coupon for their next purchase.

Bonus Tip: Use an insight & research repository

An insight & research repository is a consolidated research management platform to derive insights about past and ongoing market research. With the use of such a tool, you can leverage past research to get to insights faster, build on previously done market research and draw trendlines, utilize research techniques that have worked in the past, and more.

Market research is one of the most effective ways to gain insight into your customer base , competitors , and the overall market. The goal of conducting market research is to equip your company with the information you need to make informed decisions.

It is especially important when small businesses are trying to determine whether a new business idea is viable, looking to move into a new market, or are launching a new product or service.  Read below for a more in-depth look at how market research can help small businesses.

• COMPETITION According to a study conducted by Business Insider, 72% of small businesses focus on increasing revenue. Conducting research helps businesses gain insight into competitor behavior. By learning about your competitor’s strengths and weaknesses, you can learn how to position your product or offering. In order to be successful, small businesses need to have an understanding of what products and services competitors are offering, and their price point.

Learn more: Trend Analysis

• CUSTOMERS Many small businesses feel they need to understand their customers, only to conduct market research and learn they had the wrong assumptions. By researching, you can create a profile of your average customer and gain insight into their buying habits, how much they’re willing to spend, and which features resonate with them. Additionally, and perhaps more importantly, you can learn what will make someone use your product or service over a competitor.

Learn more: Customer Satisfaction Survey

• OPPORTUNITIES Potential opportunities, whether they are products or services, can be identified by conducting market research. By learning more about your customers, you can gather insights into complementary products and services. Consumer needs change over time, influenced by new technology and different conditions, and you may find new needs that are not being met, which can create new opportunities for your business.

Learn more: SWOT Analysis 

• FORECAST A small business is affected by the performance of the local and national economy, as are its’ customers. If consumers are worried, then they will be more restrained when spending money, which affects the business. By conducting research with consumers, businesses can get an idea of whether they are optimistic or apprehensive about the direction of the economy, and make adjustments as necessary. For example, a small business owner may decide to postpone a new product launch if it appears the economic environment is turning negative.

Learn more: 300+ Market Research Survey Questionnaires

Market research and market intelligence may be as complex as the needs that each business or project has. The steps are usually the same. We hope this ultimate guide helps you have a better understanding of how to make your own market research project to gather insightful data and make better decisions.

LEARN ABOUT: Projective Techniques

We appreciate you taking the time to read this ultimate guide. We hope it was helpful! 

You can now download our free ebook that will guide you through a market research project, from the planning stage to the presentation of the outcomes and their analysis.

Sign up now, and download our free ebook: The Hacker’s Guide to Advanced Research Methodologies 

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The 8 types of market research: definitions, uses and examples.

13 min read What are the different types of market research that can help you stay ahead of the curve with your marketing strategy? Understand how to use each type, and what the advantages and disadvantages are.

Market research (also called marketing research) is the action or activity of gathering information about market needs and preferences. This helps companies understand their target market — how the audience feels and behaves.

There are 8 types of market research, each with their own methods and tools:

• Primary research
• Secondary research
• Qualitative research
• Quantitative research
• Branding research
• Customer research
• Competitor research
• Product research

Let’s start our list by exploring primary and secondary research first.

Free eBook: How to rethink and reinvent market research

1. Primary research

Primary research is research that you collect yourself but going directly to the target market through a range of methods. Because it is data you create, you own the data set.

Two types of results — exploratory information (determines the nature of a problem that hasn’t yet been clearly defined) and conclusive information (carried out to solve a problem that exploratory research identified) — from participants are collected as raw data and then analyzed to gather insights from trends and comparisons.

This method is good for getting the views of a lot of people at one time, especially when time is short, but it comes with its own management issues. The interviewer must prepare a way to gather answers and record these, while engaging in conversation with many people.

Participants may be affected by the group setting, either from acquiescence bias (the desire to say yes to please the interviewer), dominance bias (stronger participants can alter the results from less dominant participants) or researcher bias (where the research leads or impacts the participant responses indirectly).

This provides a structured setting where the interviewer can listen to what’s being said and investigate further into an answer. The interviewer can also pick up on non-verbal cues from body language can help the interview understand where to deep-dive and broaden their understanding.

However, some of the same biases (acquiescence and researcher) still exit in this format. The method is time consuming to do the interviews and collect the data afterwards.

A survey is an excellent method for carrying out primary research as participants do need to be physically present with the interviewer to carry it out. The survey can be completed anywhere there is an internet connection, meaning there is flexibility for the participants to use different devices and for interviewers to contact participants in different geographical time-zones.Preparation is key, however, as the researchers must segment the market and create a list of participants to send the survey to. Hiring a panel or using existing marketing lists can help with this.

2. Secondary research

Secondary research is the use of data that has previously been collected, analysed and published (and therefore you do not own this data). An example of this for market research is:

Most information is freely available, so there are less costs associated with this kind of secondary research over primary research methods.

Secondary research can often be the preparation for primary research activities, providing a knowledge base. The information gathered may not provide the specific information to explain the results, which is where primary market research would be used to enhance understanding.

There is also a logistics planning need for a recording solution that can handle large datasets, since manual management of the volumes of information can be tricky.

Both primary and secondary research have its advantages and disadvantages, as we’ve seen, but they are best used when paired together. Combined, the data can give you the confidence to act knowing that any hypothesis you have is backed up.

Learn more about primary vs secondary research methods

The next market research types can be defined as qualitative and quantitative research types:

3. Qualitative research

Qualitative market research is the collection of primary or secondary data that is non-numerical in nature, and therefore hard to measure.

Researchers collect this market research type because it can add more depth to the data.

This kind of market research is used to summarise and infer, rather than pin-points an exact truth held by a target market. For example, qualitative market research can be done to find out a new target market’s reaction to a new product to translate the reaction into a clear explanation for the company.

4. Quantitative research

Quantitative research is the collection of primary or secondary data that is numerical in nature, and so can be collected more easily.

Researchers collect this market research type because it can provide historical benchmarking, based on facts and figures evidence.

There are a number of ways to collect this data — polls, surveys, desk research, web statistics, financial records — which can be exploratory in nature without a lot of depth at this stage.

Quantitative market research can create the foundation of knowledge needed by researchers to investigate hypotheses further through qualitative market research.

The next four variations of market research are specific to topics areas, that bring about specific information.:

5. Branding research

Branding market research assists a company to create, manage and maintain the company brand. This can relate to the tone, branding, images, values or identity of the company.

Research can be carried out through interviews, focus groups or surveys. For example, brand awareness surveys will ask your participants whether the brand is known to them and whether it is something they would be interested in buying.

Additional areas for brand research is also around brand loyalty, brand perception , brand positioning , brand value and brand identity .

The aim of research will be to understand how to know if:

• Your brand is performing in relation to other competitors
• There are areas to improve your brand activities
• There are positives to showcase to enhance your brand’s image

6. Customer research

Customer market research looks at the key influences on your target customers and how your company can make changes to encourage sales.

The aim of this research is to know your customer inside out, and continuously learn about how they interact with the company. Some themes covered by this include:

• Customer satisfaction – Exploring what keeps customers happy, as higher customer satisfaction is more likely to lead to increased customer retention.
• Customer loyalty – This looks at what experiences have happened to lead to greater customer loyalty across the customer lifecycle.
• Customer segmentation research – Discovering who the customers are, what their behaviour and preferences are and their shared characteristics.

Relevant desk research may look at historical purchase records, customer journey mapping , customer segmentation, demographics and persona templates.

Primary research, such as NPS and customer satisfaction surveys , or customer satisfaction interviews at the end of customer support calls, can also give more details.

7. Competitor research

Competitor market research is about knowing who your competition is and understanding their strengths and weaknesses, in comparison to your organization. It can also be about your competitive offering in the market, or how to approach a new market.

The aim of this research is to find ways to make your organization stand out and future planning through horizon scanning and listening to customer preferences.

For example, for competitive analysis, researchers would create a SWOT for your business and your competitors, to see how your business compares.

Primary research could interview customers about their buying preferences, while secondary sources would look at competitor’s market dominance, sales, structure and so on. With this thorough analysis, you can understand where you can change to be more competitive, and look for ideas that make you stand out.

8. Product research

Product market research is a key way to make sure your products and services are fit for launching in the market, and are performing as well as they can.

The aim of this research is to see how your product is perceived by customers, if they are providing value and working correctly. Ideas can also be formed about upgrades and future product development.

There are a number of avenues within product research:

• Product branding – Does the product brand and design attract customers in the intended way?
• Product feature testing – this can happen at various stages of development with target markets (in early development, between versions, before product launch, etc.) to check if there are positive reaction to new or improved features
• Product design thinking – what solutions would solve your customers’ current or future problems?
• Product marketing – Do the marketing messages help your product’s memorability and saleability, or can they be improved?

Primary research methods have a clear advantage in this kind of market research: Surveys can ask for rankings on the popularity or usefulness of features or conduct conjoint analysis, while in-person observation interviews (where the participant can handle a product) can be particularly useful in seeing what customers do with the product in real time.

How to use market research types in your company

In a good marketing strategy, it’s preferable to have a mixture of data across:

• Qualitative and quantitative research
• Primary and secondary research
• Your specific topic area or area of focus

With these three components, you can make sure your market strategy gives you a complete picture of your market’s operational data and experience data , — what your market does and why .

Economical experience data (O data)

This type of experience data is quantitative in nature (including operations, featuring sales data, finance data and HR data ). As it can be quantified into numerical values, it can be measured over and over, providing datasets.

There is the opportunity to use a data-driven approach to understanding the results and making predictions based on historical trends.

This sort of data can be measured more easily than emotions and feelings. But it can only tell you about past activities and what happened. It can’t tell you what will happen in the future and why things will happen — this is where X data comes in.

Emotional experience data (X data)

This type of experience data seeks to find reasons to explain emotional decisions and how brands ‘sit’ in people’s minds. In this way, this data is qualitative in nature.

Companies that have X data have a ‘mental advantage’ over other companies,  as they are able to understand the perceptions of the customer, their needs and values.

When you have tangible insights on the audience’s needs, you can then take steps to meet those needs and solve problems. This mitigates the risk of an experience gap – which is what your audience expects you deliver versus what you actually deliver.

Related resources

Market intelligence 10 min read, marketing insights 11 min read, ethnographic research 11 min read, qualitative vs quantitative research 13 min read, qualitative research questions 11 min read, qualitative research design 12 min read, primary vs secondary research 14 min read, request demo.

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• What Is Market Research?

Summary: Market research is a structured process to identify, gather, and analyze information to support business decisions. Market research can provide insights into the customer journey and guide decisions related to product development, marketing strategy, pricing strategy, and points of sales (online and offline) to create a customer experience that supports customer acquisition and retention.

8 minutes to read. By author Michaela Mora on July 10, 2021 Topics: Relevant Methods & Tips , Business Strategy , Market Research

Market research is a discipline with roots in psychology and sociology and involves the identification, collection, analysis, and use of information to make business decisions.

Market research and marketing research are so connected that the nuances are lost and both terms are used interchangeably in practice. For this article, I’ll use the term market research.

We use market research to identify and solve problems in different business areas, often connected to the four Ps in marketing:

• Place (distribution, point of sale)
• Promotion (advertising)

Overall, these four aspects of any product or service are drivers of the customer experience as customers interact with each of them through the customer journey from product development, pre-sale, point-of-sale, and post-sale.

Market Research to Identify Problems

The use of market research to identify problems aims at the discovery of what we don’t know. It is often called “generative research” in the context of product development as we look for new product ideas. At a very high level is exploratory in its goals and it can use qualitative and quantitative data collection and analysis techniques.

We use market research for problem discovery when we design research to:

• Identify unmet market needs and their market potential.
• Size the market share for specific products or services.
• Monitor brand image issues of our brand and competitors.
• Profile market segments.
• Analyze sales trends.
• Forecast future trends.
• Identify business trends.

Market Research to Solve Problems

Once a business discovers market opportunities through an understanding of unmet needs, or issues related to its branding, pricing of distribution that may impact the customer experience, the next step is to generate solutions and validate them.

The solutions may be new products and services, new product features to improve the customer experience, a pricing strategy, a brand positioning, a marketing strategy including customization of marketing messages and content for different marketing channels, a redesign of points of sales (online and offline), an internal reorganization to align systems and employees with the customer experience, etc.

For each need or issue discovered there are many potential solutions limited by resources available to the business. The more limited the resources are, the higher the need to use them effectively. Market research can help design solutions for high business impact.

We use market research to solve problems when we design research to:

• Identify actionable market segments for products or services (digital or physical)
• Develop new products (digital or physical)
• Establish a pricing strategy and identify optimal price points.
• Determine effective ways to advertise products and services and optimize marketing channels.
• Identify distribution issues and barriers to the path to purchase.
• Improve customer experience to support customer acquisition and retention strategies.

The Market Research Process

For any given market research project, the process usually includes six major steps:

• Business problem definition and translation to a research problem
• Development of an approach to the research problem
• Research design selection
• Data collection or fieldwork
• Data processing
• Analysis and reporting

Market Research Design Categories

There are different ways to categorize market research depending on:

• The focus on the problem at hand: Primary vs. Secondary.
• The research design goal: Exploratory vs. Descriptive, vs. Causal
• The type of data and collection methods used: Qualitative vs. Quantitative.

Each of these categories helps us guide how to select different research designs, data collection methods, and analysis techniques to gather the information we need to help solve the research problem and provide insights to support business decisions.

Primary Vs. Secondary

First, we try to determine whether we need to conduct secondary or primary research.

Primary research is based on data collection designed to address specific problems.

Secondary research is based on data that have already been collected for other purposes but may be related to the topic at hand. Secondary research should be a prerequisite to the collection of primary data, which would be appropriate when the secondary data sources have been exhausted or yield minimal returns.

Exploratory vs. Descriptive vs. Causal

Exploratory research designs are used to provide insights into problems we don’t fully understand or have not been discovered yet. This is often the type of research we start with when we use market research to identify problems.

We conduct descriptive market research when we try to describe characteristics of target markets or segments of interest, frequency of certain behaviors, attitudes, and perceptions, market trends, etc.

Causal market research, on the other hand, tries to find evidence of cause-and-effect relationships to understand which variables are the cause of behaviors, attitudes, perceptions , or other phenomena of interest.

Qualitative vs. Quantitative

This categorization helps us separate data collection and analysis methods based on their:

• Objectives.
• Sample design.
• Type of data and analysis they allow.
• Type of decisions they support.

Generally, qualitative research helps us explore and get a deeper understanding of a problem, while we use quantitative research to quantify and validate findings and test hypotheses. The latter may come from qualitative research, secondary research, or just assumptions made by the business.

Note that different combinations of the four criteria mentioned may render a research design qualitative or quantitative. For example, surveys with small samples may provide only directional results more appropriate for qualitative analysis.

Primary Market Research Data Collection Methods

As describe above, once we decide to design research to answer a specific business and research problem, we are on our way to conduct primary research.

We use a myriad of data collection methods in primary market research depending on the research objectives and research design selected.

Ideally, we should combine qualitative and quantitative methods since they provide different types of data and insights.

Qualitative Research

Qualitative Research is one type of exploratory market research methodology based on semi-structured or unstructured data collection. Data collection methods used in primary qualitative research can be classified as direct or indirect .

Direct methods are those in which we disclose the research objective to participants. These data collection methods include:

• In-depth Interviews (IDIs) – Online , In-person, Phone
• Focus Groups , Online, In-person
• Online bulletin boards
• Diary Studies
• Usability Testing , Online, In-person
• Usability Expert Reviews
• Contextual inquiry
• Shop-alongs
• Ethnographic observation

Indirect methods are those for which the true purpose of the research is not disclosed to participants. These are based on projective techniques, which are unstructured questioning techniques to encourage respondents to reveal underlying motivations, beliefs, attitudes, and feelings regarding particular issues.

These techniques are usually embedded into direct data collection methods and are classified into four major groups:

• Association
• Construction

Quantitative Research

Primary quantitative data collection methods include surveys and observational methods .

Surveys involve the administration of a questionnaire through different modes (online, phone, mail, in-person) to groups of interest. As a best practice, we try to always use qualitative research to design good surveys .

We use the survey format, particularly in the online mode, to implement many different question types that sometimes are considered “research methods” by those new to research, especially in the UX field. Surveys used in online unmoderated, remote usability tests are an example.

These are just surveys with very special question formats for very specific purposes.

Observation, on the other hand, doesn’t include communicating with the people being observed and can be conducted through different structured and unstructured, direct and indirect methods and performed in natural or lab environments.

Quantitative observational methods include:

• Digital transaction/behavior tracking (e.g., sales tracking, web traffic tracking, A/B testing).
• Biometric measurement
• Audit and inventory analysis.
• Content analysis.
• Trace analysis from past behaviors.

Although these data collection methods are very different, they should not be seen as mutually exclusive. Each method has advantages and disadvantages and can be used productively in combination.

Market Research Career

To emphasize the value of market research in supporting business decisions and get away from being mainly associated with data collection, the market research industry went through a rebranding process a few years ago. The American Market Research Association is now called the Insights Association , and many market researchers have changed their titles to “Insights” professionals.

You will find insights professionals in research agencies, like ours, and in nonprofit and profit organizations. The latter group is often referred to as corporate researchers. They often in a group within the marketing department or as independent centralized function serving other departments or functional areas in a company. Nowadays, this group goes by names such as “Customer Insights,” “Insights & Analytics,” “Voice of the Customer,” “Consumer Insights,” and the like.

As of 2021, many digital-first companies don’t have a market research/consumer insight group. These companies tend to be organized around digital products (app, software, online service) and prioritize UX research if any research is conducted at all.

Unfortunately, many don’t understand that UX research is a specific application of market research used to solve a particular set of problems.

Market researchers in agencies or inside organizations are involved with all or some steps of the research process depending on whether they do the work themselves or partner with other research vendors in the market research ecosystem.

Market Research Ecosystem

There are many specialists in the market research echo system offering services in line with different steps of the research process or servicing specific industries.

Overall, the market research ecosystem includes providers in areas such as:

• Participant sample (online panels, phone list, mail lists, qualitative panels)
• Data collection tools for different modes (online survey tools, online qualitative tools, phone surveys, mail surveys, eye tracking, biometrics, usability testing tools)
• In-person interviewing services (for onsite, intercept interviews at public places, stores, etc.)
• Mystery shopping services
• Facilities for in-person research (focus groups, interviews, food testing, product testing)
• Data aggregators (syndicated data services, omnibus services)
• Qualitative moderation (focus group moderators, in-depth interview moderators)
• Analytic software tools (Tools for statistical analyses, crosstabulations, advanced procedures, text analytics )
• Panel and community technology platforms (to create proprietary panels and branded research communities)
• Recruitment services (for qualitative research and hard to reach audiences)
• Open-ended question coding services
• Transcription services
• Data and reporting visualization tools
• Software development for specific applications and methodologies

I hope this summary gives you an idea of what the market research/insights profession is about and how this discipline can be used to find information needed to support business decisions.

Many who are not familiar with the field confuse market research with specific data collection methods (e.g., surveys, focus groups) and tools that facilitate data collection (e.g., online survey tools), but market research is more than its tools.

As researchers, we need to have expertise in research methodology to avoid providing biased insights. This knowledge of methodology is applied in the context of business problems related to product development, customer experience, branding, and financial outcomes. Our goal is to guide decisions that have a business impact.

To read more about how to use market research, check the article 10 Key Pieces of Advice On How to Do And Use Market Research .

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13 Market Research Tools: Best in Class for 2023

Most market research tools are designed to make it quicker and easier to find relevant data . Whatever the market, product, or purpose, the right research tools can do just that.

But, let’s be honest, some do it far better than others.

Whether you’re an enterprise firm with complex needs and a budget to suit or a smaller business needing free market research tools, read on to discover which online tools for market research are hot right now.

Note: The top market research tools list has been collated using review platforms like G2 , along with direct feedback I collected from over 500 business leaders in June, 2o22.

#1 Best overall market research tool: Similarweb Digital Research Intelligence

Most-loved feature: The Benchmarking tool

We might be a little biased, but this really is the fastest way to see how you measure up against competitors in any sector or location. Analyze market leaders and rising stars to unpack and track their digital success instantly.

Quick Explainer

Similarweb Research Intelligence is a single source of truth for the online world. Giving any business the ability to quickly analyze the online aspects of any industry or market in an instant. It displays critical insights in a way that makes it easy to view trends, competitive performance, audience insights, growth opportunities, and more. It’s the only market research analysis tool that brings together data from desktop, mobile web, and apps to provide a complete view of the digital landscape.

Key abilities

• Competitive benchmarking
• Market research
• Company research tool
• Audience analysis
• Consumer journey tracker
• Mobile app intelligence

Freemium Version: Yes, there is a lite version of the product that provides limited data for a single user, and a single location.

Free Trial: Yes, there’s a 7-day trial available. Try it out here .

Ongoing Subscription: Yes, you can pay monthly or annually for a subscription. Different levels are available, and each package is tailored. Review pricing and plans for Similarweb here.

Like what you’ve seen so far?

See our market-leading digital research tool in action in this quick 2-minute clip.

#2 Best free market research tool: Think with Google

Most-loved feature: Find my Audience

A way to discover new audiences on YouTube based on things like habits, interests, and intended plans to purchase.

Think with Google is a suite of digital research tools that curate resources from a huge pool of data across the web. It presents them as insights that aren’t typically available elsewhere. It’s a unique way to view trends, insights, and stats. Data isn’t offered in real-time but serves more as a library of figures and facts that take the form of articles, videos, interviews, case studies, and more. In addition to being a place people can go for forward-looking perspectives and data, there are several tools designed to help marketers.

Key functions

• High-level insights into most local or national markets
• Behind the scenes look at cross-platform digital campaigns
• Consumer insights
• Deck-ready stats (not in real-time)
• A range of tools to inform marketing objectives and actions

Freemium Version: The entire suite of market intelligence tools is free.

Free Trial: As a free market research tool, no trial is needed.

Ongoing Subscription: You can subscribe to a newsletter, but not the product.

#3 Best digital research tool for content and FAQ development: Answer the Public

Most-loved feature: Search listening alerts

A pro feature that sends you weekly emails that indicate how search behaviors shift over time. It takes the specific phrase or keywords you’re tracking in the platform and updates you weekly.

Quick Explainer 

Discover the questions people are asking online about key terms, products, or services. It’s designed to help content teams and website owners develop new content ideas, and relevant FAQs that are based on the types of queries people ask online.

• Track important keywords and phrases
• Get weekly emails about changes in search behavior
• Enter any keyword to uncover relevant questions or search terms
• Folders to help organize your research

Freemium Version: Yes. You get a limited number (3) of searches per day.

Free Trial: No.

Ongoing Subscription: Yes. You can pay monthly or annually for this service. Pay-monthly fees are a flat rate of $99. Discounts are offered for yearly subscriptions.

#4 Best tool for market research surveys: SurveyMonkey

Most-loved feature: Question bank

A library of hundreds of questions, pre-written by survey methodologists.

As far as market research surveys go, it’s the leading online research tool for surveys worldwide. With plans to suit the individual through to the enterprise, it’s a feature-rich, easy-to-use platform that encompasses creation, collection, and analysis under one roof. Surveys are optimized for any device and integrate with platforms like Zoom, Salesforce, Marketo, and more.

Key functions 

• Create and send unlimited surveys, quizzes, and polls
• Pop-up online surveys
• Mobile app access to create, send and analyze surveys on-the-go
• Team collaboration function (unlocked with a team plan)
• Survey builder
• Customization and branded surveys (available with advantage or premier plans only)

Freemium Version: Yes

Free Trial: Occasionally, free trials are offered for premium plans.

Ongoing Subscription: Yes, you can pay annually or monthly. There are three different plans to choose from, ranging from $25 to $129 per month.

Helpful: Check out our blog and see 18 different ways to use market research surveys .

#5 Best online research tool for marketplaces: Similarweb Shopper Intelligence

Most-loved feature: Cross-shopping analysis

Cross-shopping analysis shows you how loyal a segment of customers is to a brand, along with what other brands they browsed or bought from. Uncover competitors and discover new partnership opportunities; these are game-changing insights if you sell on any marketplace.

Similarweb Shopper Intelligence is a type of online market research tool that helps you uncover and analyze browsing and buying behavior across marketplaces. Using its data, businesses can track category, product, and brand performance with ease. It helps ecommerce organizations to detect potential threats, unearth new product or category opportunities, discover new potential partnerships, and optimize search strategy and performance.

• Monitor consumer demand for any product, brand, or category
• Retail search strategy optimization
• Consumer behavior insights
• Track cross-shopping, loyalty, and purchase frequency
• Analyze brand awareness

Note: This solution uses a unique data methodology via multiple networks and partnerships. At the time of writing, there is no other consumer behavior insights tool for market research that offers this quality of data for marketplaces.

Freemium Version: No.

Free Trial: Yes. There is usually a 7-day trial available here .

Ongoing Subscription: The price is determined by things like the number of categories and/or domains you want to access. Each quote is customized to a client’s specific needs.

Want to know a little more?

Watch this quick clip to see the best ecommerce digital market research tool in action.

#6 Best market research tool for brand tracking: Latana

Most-loved feature: MoE (margin of error) Readings

To deliver transparency on data confidence levels, Latana’s dashboard includes a feature that allows clients to toggle-on, or toggle-off, margin of error (MoE) readings on all data points. These are highlighted using a traffic-light system of confidence (red=low confidence, orange=medium confidence, and green=high confidence). This small feature makes a big impact — it helps clients to correctly interpret the data and to visibly see quality shortcomings.

Latana is a B2C brand tracking tool that provides granular insights about online audiences. It helps organizations understand how key segments of consumers feel about brands and portrays relevant standings vs. industry rivals.

• Focus on niche consumer segments that matter to your business
• Uncover rival’s audience data and identify opportunities to grow
• Understand brand perception, and track how it changes over time
• Discover the most well-known brands in your industry
• Track rival’s brand awareness across gender, age income, location, and education
• Find out the main purchase drivers for your industry
• Infrastructure gives reach to over 6 billion smartphone users globally for representative brand opinions

I caught up with Latana’s CMO, Angeley Mullens. Here’s what she has to say about their offering.

Ongoing Subscription: Pricing for Latana isn’t available online. All packages are tailored to individual brands and their specific needs.

Enjoy 360 Visibility 24/7

Get the data you need to adapt to market changes and industry trends in an instant.

#7  Best research tool for social media listening: Hootsuite

Most-loved feature: Multi-channel insights

It’s a legacy feature, but one which makes it the best online research tool for social listening and monitoring. Having the ability to easily schedule posts, ad campaigns, and handle responses for every social media channel from within a single platform is what makes this a market-leading digital research tool.

Hootsuite continues to claim the number 1 spot on G2’s list of digital research tools for social media monitoring . It’s a tool to help you manage all aspects of business social media, across multiple channels, in a single platform. As well as being able to manage your socials, it also keeps you up-to-date with the latest trends and activities of your rival’s social media channels.

• Publish and schedule social media posts
• Measure cross-platform results
• Message management
• Social media trend analysis
• Social media ad-campaign management

Freemium Version: Yes. You can get a free version that supports 2 social accounts and 1 user.

Free Trial: Yes. A 30-day free trial is available here .

Ongoing Subscription: There are four plans; professional, team, business, and enterprise; ranging from $49-$739.

#8 Best digital research tool for prospecting: Similarweb Sales Intelligence

Most-loved feature: Insights generator tool

The insights generator shows you unique facts for your prospects and accounts; with complete visibility into their digital strategy and performance. It’s ideal for refining sales and marketing efforts while staying focused on growth.

Similarweb Sales Intelligence helps organizations find viable prospects by showing you who to reach out to, when to do it, and how to capture their attention. The lead generator tool helps you find the right prospects, and key insights help create engaging outreach emails. For sales departments, ecommerce and mar-tech sectors, this type of digital research tool can take prospecting and engagement to a completely new level; along with revenue and growth.

Key functions: 

• Lead generation and enrichment
• Digital insights for 100M+ ecommerce websites, publishers, and advertisers
• Fraud detection
• Sales engagement
• SFDC integration

Free Trial: Yes, if you would like a free trial, please request that here.

Ongoing Subscription: Prices for this digital market research tool varies depending on the package and options chosen. Grab a live demo of the product and get a tailored quote here .

Insightful : If you’re looking at market research tools for the ecommerce industry, bookmark our Ecommerce Trends and Predictions for 2023 to read later.

#9 Best market research analysis tool for data visualization: Tableau

Most-loved feature : Connects to almost any data source

As a clear market leader, and a no-brainer for larger organizations with business intelligence analytics and teams. Tableau leads the way in online research tools for data visualization. It connects to a huge range of data sources and pulls information into a highly-appealing dashboard that is designed to make it easier and faster to explore and manage data. It takes data from platforms like Similarweb, then combines it with other data sources before presenting crisp, clear, insights that have the power to shape strategies and drive key transformations.

• Lightning-fast analytics
• Smart dashboards for richer insights
• Live connection to almost any data source, with automatic updates
• Drag-and-drop style UI: easy to use

Freemium Version: No. However, students and teachers get a year’s free access to the platform.

Free Trial: Yes. You can subscribe to a free 30-day trial.

Ongoing Subscription: Most plans are offered annually, with prices ranging from $15 per month upwards. The price depends on whether you use their hosted or on-premise versions, the number of users, and the inclusion of specific plugins.

#10 Best market research tool for UX testing: Loop11

Most-loved feature: Online usability testing

This feature analyzes the usability of a website with users performing live tasks on a site. It helps you understand user behavior, and shows how and why a website is used.

Loop11 is a market research tool that provides usability testing to help organizations build better websites and products. It comes with a pack of useful features that provide both moderated and unmoderated testing, helping businesses to find the right audience to test prototypes and products. It’s designed to help you see how appealing a product is to a particular audience, determine their preferences, then build these insights into a design.

• Ability to test across multiple devices, including tablet, mobile, or desktop
• User-friendly test builder that requires no coding
• Easy-to-add surveys that collect psychographic and demographic data
• Provides useful metrics like time on task, task completion rates, and NPS
• Mapping of customer journeys during a test period

Free Trial: Yes, a 14-day trial is available here .

Ongoing Subscription: All plans come with the option to pay monthly or annually. Prices range from $199-$599 per month.

#11 Best research tool for measuring customer experience: Temper

Most-loved feature: Rating stream

See real-time feedback as customers respond to questions via website or email channels. The stream provides a detailed view of ratings, comments, locations, referrers, email addresses, and more.

Temper allows any company to find out how customers feel about their product at all times. It directly provides first-party data to a business, preventing the need to design and distribute complex surveys. It can be placed as a widget on the site or in emails, and questions are asked to gain real-time feedback from visitors and customers alike.

• Easily deploy questions across website and email channels
• Quickly spot poor experiences to identify problematic areas of a business or product
• The rating graph gives you a real-time view of results for any question asked
• Public rating wall shows how you’re performing, instilling confidence and trust
• Ratings come with open text fields to give additional context to responses
• Referrer data gives you the ability to segment feedback and relative performance
• Tracking variables let you send data with ratings, such as order numbers, user IDs, etc.
• User targeting lets you determine who sees questions and how often they see them

Freemium Version: There is no freemium version. However, their hobby plan gives you a slimmed-down version of the product and costs $12 per month.

Ongoing Subscription: Four plans are available, ranging from hobbyist to enterprise. The lowest pricing tier starts at $12 monthly, and their top-tier solution costs $199 monthly. All plans are pay-monthly, with a 60-day money-back guarantee.

#12 Best online market research tool for focus groups: Remesh

Most-loved feature: Common topics

In just a few clicks, you can view the themes and topics that are most common with your focus group across an entire session. It groups similar responses, specific phrases, and interesting responses in seconds.

Remesh facilitates live, qualitative conversations with focus groups of up to 1000 people at a time. Replicating the focus group format online delivers powerful segmentation and dynamic capabilities that speed up your time to insight and let you hold a real-time conversation at scale.

• Launch a live conversation with up to 1000 people at a time
• Organize and analyze responses in an instant
• Segment your audience based on demographic and response data
• Share visuals and text-based content with the group to get instant feedback
• The algorithm analyzes open-ended responses in real-time

Freemium Version: No

Free Trial: Yes. However, you must first book a demo with a member of their team.

Ongoing Subscription: Remesh provides custom pricing plans that can only be obtained once you’ve taken a demonstration of their platform with a member of their team.

#13 Top collaboration and documentation tool for market research: BIT.AI

Most-loved feature: Content library + smart search

While it sounds quite basic; in essence, this tool for market research professionals makes it quicker and easier to keep track, share, and store key data. Forget trawling through emails, slack, and g-docs to find files; the smart search feature helps you locate files in an instant.

A dynamic platform that helps researchers collaborate, track, share, and manage research data in a single place. This is one of the best online market research tools for those who need a place to bring together resources like websites, PDFs, articles, images, infographics, blogs, reports, videos, etc. it’s low-cost and connects to some of the most widely used tools. Being able to share multidimensional data with others, or simply keeping track of secondary market research in a single place makes it a firm favorite.

• Over 100 integrations with applications like Tableau, Miro, G-docs, Onedrive, and more
• Real-time editing and live collaboration
• Content Library
• Smart search
• Supports a huge range of content and file types

Freemium Version: Yes. Available for teams of up to 5 collaborators.

Free Trial: Yes, a free trial is available here .

Ongoing Subscription: A range of packages are available, costing between $8-$20 monthly.

Best market research tools for startups

There is another often-forgotten set of tools used for market research that are ideal for startups. If you’ve got zero budget and a little time on your hands, you can do most types of desk research for free. Sources include:

• Company reports, case studies, and whitepapers
• Research and trade associations
• Media coverage
• Internal sales or usage reports
• Academic or scientific journals
• Government and non-government agencies
• Public library records
• Competitor websites
• Educational institutions

Helpful: Check out this article about how to do market research for a startup .

Wrapping up….

With cost and time key considerations for anyone looking at tools for market research, it’s vital to choose wisely. While free market research tools are all good and well, they won’t always serve you when you’re on a deadline or require key insights on a specific competitor, market, or product.

Similarweb helps companies win in the digital world. Whatever the market, goal, or business size, its solutions are designed to help organizations understand their market and compete and beat rivals.

Take it for a test run today. Trial any Similarweb solution free for the first 7-days using this link .

Need to know more about the ROI of Similarweb? 

What are the best market research tools for secondary research?

The internet is probably the best tool for market research there is. It’s a goldmine of secondary market research data. But beware of data validity and check your information is coming from a trusted source.

What are the best market research tools for surveys?

Survey monkey is considered the best online market research tool for surveys, but key players like Typeform and Zoho follow closely behind. Budget and features usually determine the right tool for your needs.

What are the best free market research tools?

The best free tools for market research include: Answer the Public, Think with Google, Similarweb lite, SurveyMonkey’s basic plan, and Hootsuite’s free plan.

What are the best market research tools for qualitative research?

Qualitative research includes things like focus groups, open-ended surveys, case studies, and observation research. As such, the best tool for online research like this would be something like BIT.ai’s documentation and collaboration tool. Another useful tool for qualitative market research would be an online survey provider, like SurveyMonkey, Typeform, or Google Forms.

What are the best market research tools for quantitative research?

As this type of research is focused more on numbers, the best quantitative market research tools include things like Similarweb Digital Research Intelligence and Tableau. Each performs a different function but works together to collect, analyze, and present data in the most useful way possible.

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10.1: Marketing Information Systems

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Learning Objectives

• Describe the components of a marketing information system and each component’s purpose.
• Explain the situations in which marketing research should be used versus market intelligence.
• Describe the limitations of market intelligence and its ethical boundaries.
• Explain when marketing research should and should not be used.

A certain amount of marketing information is being gathered all the time by companies as they engage in their daily operations. When a sale is made and recorded, this is marketing information that’s being gathered. When a sales representative records the shipping preferences of a customer in a firm’s customer relationship management (CRM) system, this is also marketing information that’s being collected. When a firm gets a customer complaint and records it, this too is information that should be put to use. All this data can be used to generate consumer insight. However, truly understanding customers involves not just collecting quantitative data (numbers) related to them but qualitative data, such as comments about what they think.

Interview with Joy Mead

http://app.wistia.com/embed/medias/c89771530a

Recall from Chapter 3 that Joy Mead is an associate director of marketing with Procter & Gamble. Listen to this clip to hear Mead talk about the research techniques and methods Procter & Gamble uses to develop consumer insight. You will learn that the company isn’t just interested in what consumers want now but also years in the future.

The trick is integrating all the information you collect so it can be used by as many people as possible in your organization to make good decisions. Unfortunately, in many organizations, information isn’t shared very well among departments. Even within departments, it can be a problem. For example, one group in a marketing department might research a problem related to a brand, uncover certain findings that would be useful to other brand managers, but never communicate them.

A marketing information system (MIS) is a way to manage the vast amount of information firms have on hand—information marketing professionals and managers need to make good decisions. Marketing information systems range from paper-based systems to very sophisticated computer systems. Ideally, however, a marketing information system should include the following components:

• A system for recording internally generated data and reports
• A system for collecting market intelligence on an ongoing basis
• Marketing analytics software to help managers with their decision making
• A system for recording marketing research information

Internally Generated Data and Reports

As we explained, an organization generates and records a lot of information as part of its daily business operations, including sales and accounting data, and data on inventory levels, back orders, customer returns, and complaints. Firms are also constantly gathering information related to their Web sites, such as clickstream data. Clickstream data is data generated about the number of people who visit a Web site and its various pages, how long they dwell there, and what they buy or don’t buy. Companies use clickstream data in all kinds of ways. They use it to monitor the overall traffic of visitors that a site gets, to see which areas of the site people aren’t visiting and explore why, and to automatically offer visitors products and promotions by virtue of their browsing patterns. Software can be used to automatically tally the vast amounts of clickstream data gathered from Web sites and generate reports for managers based on that information. Netflix recently awarded a $1 million prize to a group of scientists to plow through Web data generated by millions of Netflix users so as to improve Netflix’s predictions of what users would like to rent (Baker, 2009). (That’s an interesting way to conduct marketing research, don’t you think?)

Being able to access clickstream data and other internally generated information quickly can give a company’s decision makers a competitive edge. Remember our discussion in Chapter 9 about how Walmart got a leg up on Target after 9/11? Walmart’s inventory information was updated by the minute (the retailer’s huge computing center rivals the Pentagon’s, incidentally); Target’s was only updated daily. When Walmart’s managers noticed American flags began selling rapidly immediately following the terrorist attacks on 9/11, the company quickly ordered as many flags as possible from various vendors—leaving none for Target.

Click on the following link to watch a fascinating documentary about how Walmart, the world’s most powerful retailer, operates: www.hulu.com/watch/103756/cnb...ls-the-new-age -of-walmart.

Many companies make a certain amount of internal data available to their employees, managers, vendors, and trusted partners via intranets. An intranet looks like the Web and operates like it, but only an organization’s employees have access to the information. So, for example, instead of a brand manager asking someone in accounting to run a report on the sales of a particular product, the brand manager could look on her firm’s intranet for the information.

However, big companies with multiple products, business units, and databases purchased and installed in different places and at different times often have such vast amounts of information that they can’t post it all on an intranet. Consequently, getting hold of the right information can be hard. The information could be right under your nose and you might not know it. Meet people like Gary Pool: Pool works for BNSF Railway and is one of BNSF’s “go-to” employees when it comes to gathering marketing data. Pool knows how to access different databases and write computer programs to extract the right information from the right places at BNSF, a process known as data mining. Combining data into one location is called data warehousing, and makes Pool’s analysis easier. He then captures the information and displays it in dashboards, screens on the computer that make the data easily understood so that managers can detect marketing trends. While a dashboard may display a piece of information, such as the number of carloads sold in West Virginia, the manager can click on the number and get more detail.

Analytics Software

Increasingly, companies are purchasing analytics software to help them pull and make sense of internally generated information. Analytics software allows managers who are not computer experts to gather all kinds of different information from a company’s databases—information not produced in reports regularly generated by the company. The software incorporates regression models, linear programming, and other statistical methods to help managers answer “what if” types of questions. For example, “If we spend 10 percent more of our advertising on TV ads instead of magazine ads, what effect will it have on sales?” Oracle Corporation’s Crystal Ball is one brand of analytical software.

The camping, hunting, fishing, and hiking retailer Cabela’s has managed to refine its marketing efforts considerably using analytics software developed by the software maker SAS. “Our statisticians in the past spent 75 percent of their time just trying to manage data. Now they have more time for analyzing the data with SAS, and we have become more flexible in the marketplace,” says Corey Bergstrom, director of marketing research and analysis for Cabela’s. “That is just priceless” (Zarello, 2009).

The company uses the software to help analyze sales transactions, market research, and demographic data associated with its large database of customers. It combines the information with Web browsing data to gain a better understanding of the individual customers marketing channel preferences as well as other marketing decisions. For example, does the customer prefer Cabela’s’ one-hundred-page catalogs or the seventeen-hundred-page catalogs? The software has helped Cabela’s employees understand these relationships and make high-impact data-driven marketing decisions (Zarello, 2009).

Market Intelligence

A good internal reporting system can tell a manager what happened inside his firm. But what about what’s going on outside the firm? What is the business environment like? Are credit-lending terms loose or tight, and how will they affect what you and your customers are able to buy or not buy? How will rising fuel prices and alternate energy sources affect your firm and your products? Do changes such as these present business obstacles or opportunities? Moreover, what are your competitors up to?

Not gathering market intelligence leaves a company vulnerable. Remember Encyclopedia Britannica, the market leader in print encyclopedia business for literally centuries? Encyclopedia Britannica didn’t see the digital age coming and nearly went out of business as a result. (Suffice it to say, you can now access Encyclopedia Britannica online.) By contrast, when fuel prices hit an all-time high in 2008, unlike other passenger airline companies, Southwest Airlines was prepared. Southwest had anticipated the problem, and early on locked in contracts to buy fuel for its planes at much lower prices. Other airlines weren’t as prepared and lost money because their fuel expenses skyrocketed. Meanwhile, Southwest Airlines managed to eke out a profit. Collecting market intelligence can also help a company generate ideas or product concepts that can then be tested by conducting market research.

Gathering market intelligence involves a number of activities, including scanning newspapers, trade magazines, and economic data produced by the government to find out about trends and what the competition is doing. In big companies, personnel in a firm’s marketing department are primarily responsible for their firm’s market intelligence and making sure it gets conveyed to decision makers. Some companies subscribe to news service companies that regularly provide them with this information. LexisNexis is one such company. It provides companies with news about business and legal developments that could affect their operations. Other companies subscribe to mystery shopping services, companies that shop a client and/or competitors and report on service practices and service performance. Let’s now examine some of the sources of information you can look at to gather market intelligence.

Search Engines and Corporate Web Sites

An obvious way to gain market intelligence is by examining your competitors’ Web sites as well as doing basic searches with search engines like Google. If you want to find out what the press is writing about your company, your competitors, or any other topic you’re interested in, you can sign up to receive free alerts via e-mail by going to Google Alerts at http://www.google.com/alerts . Suppose you want to monitor what people are saying about you or your company on blogs, the comment areas of Web sites, and social networks such as Facebook and Twitter. You can do so by going to a site like WhosTalkin.com, typing a topic or company name into the search bar, and voilà! All the good (and bad) things people have remarked about the company or topic turn up. What a great way to seek out the shortcomings of your competitors. It’s also a good way to spot talent. For example, designers are using search engines like WhosTalkin.com to search the blogs of children and teens who are “fashion forward” and then involve them in designing new products.

WhosTalkin.com and Radian6 (a similar company) also provide companies with sentiment analysis. Sentiment analysis is a method of examining content in blogs, tweets, and other online media (other than news media) such as Facebook posts to determine what people are thinking at any given time. Some companies use sentiment analysis to determine how the market is reacting to a new product. The Centers for Disease Control (CDC) uses sentiment analysis to track the progress of flu; as people post or tweet how sick they are, the CDC can determine where the flu is increasing or decreasing.

Publications

The Economist , the Wall Street Journal , Forbes , Fortune , BusinessWeek , the McKinsey Report , Sales and Marketing Management , and the Financial Times are good publications to read to learn about general business trends. All of them discuss current trends, regulations, and consumer issues that are relevant for organizations doing business in the domestic and global marketplace. All of the publications are online as well, although you might have to pay a subscription fee to look at some of the content. If your firm is operating in a global market, you might be interested to know that some of these publications have Asian, European, and Middle Eastern editions.

Other publications provide information about marketplace trends and activities in specific industries. Consumer Goods and Technology provides information consumer packaged-goods firms want to know. Likewise, Progressive Grocer provides information on issues important to grocery stores. Information Week provides information relevant to people and businesses working in the area of technology. World Trade provides information about issues relevant to organizations shipping and receiving goods from other countries. Innovation: America’s Journal of Technology Commercialization provides information about innovative products that are about to hit the marketplace.

Trade Shows and Associations

Trade shows are another way companies learn about what their competitors are doing. (If you are a marketing professional working a trade show for your company, you will want to visit all of your competitors’ booths and see what they have to offer relative to what you have to offer.) And, of course, every field has a trade association that collects and disseminates information about trends, breakthroughs, new technology, new processes, and challenges in that particular industry. The American Marketing Association, Food Marketing Institute, Outdoor Industry Association, Semiconductor Industry Association, Trade Promotion Management Association, and Travel Industry Association provide their member companies with a wealth of information and often deliver them daily updates on industry happenings via e-mail.

Salespeople

A company’s salespeople provide a vital source of market intelligence. Suppose one of your products is selling poorly. Will you initially look to newspapers and magazines to figure out why? Will you consult a trade association? Probably not. You will first want to talk to your firm’s salespeople to get their “take” on the problem.

Salespeople are the eyes and ears of their organizations. Perhaps more than anyone else, they know how products are faring in the marketplace, what the competition is doing, and what customers are looking for.

A system for recording this information is crucial, which explains why so many companies have invested in customer relationship management (CRM) systems. Some companies circulate lists so their employees have a better idea of the market intelligence they might be looking for. Textbook publishers are an example. They let their sales representatives know the types of books they want to publish and encourage their representatives to look for good potential textbook authors among the professors they sell to.

Suppliers and Industry Experts

Your suppliers can provide you with a wealth of information. Good suppliers know which companies are moving a lot of inventory. And oftentimes they have an idea why. In many instances, they will tell you, if the information you’re looking for is general enough so they don’t have to divulge any information that’s confidential or that would be unethical to reveal—an issue we’ll talk more about later in the book. Befriending an expert in your industry, along with business journalists and writers, can be helpful, too. Often these people are “in the know” because they get invited to review products (Gardner, 2009).

Lastly, when it comes to market intelligence don’t neglect observing how customers are behaving. They can provide many clues, some of which you will be challenged to respond to. For example, during the latest economic downturn, many wholesalers and retailers noticed consumers began buying smaller amounts of goods—just what they needed to get by during the week. Seeing this trend, and realizing that they couldn’t pass along higher costs to customers (because of, say, higher fuel prices), a number of consumer-goods manufacturers “shrank” their products slightly rather than raise prices. You have perhaps noticed that some of the products you buy got smaller—but not cheaper.

Can Market Intelligence Be Taken Too Far?

Can market intelligence be taken too far? The answer is yes. In 2001, Procter & Gamble admitted it had engaged in “dumpster diving” by sifting through a competitors’ garbage to find out about its hair care products. Although the practice isn’t necessarily illegal, it cast P&G in a negative light. Likewise, British Airways received a lot of negative press in the 1990s after it came to light that the company had hacked into Virgin Atlantic Airways’ computer system 1 .

Gathering corporate information illegally or unethically is referred to as industrial espionage. Industrial espionage is not uncommon. Sometimes companies hire professional spies to gather information about their competitors and their trade secrets or even bug their phones. Former and current employees can also reveal a company’s trade secret either deliberately or unwittingly. Microsoft recently sued a former employee it believed had divulged trade secrets to its competitors 2 . It’s been reported that for years professional spies bugged Air France’s first-class seats to listen in on executives’ conversations (Anderson, 1995).

Video Clip: Spying at Work—Espionage: Who, How, Why, and How to Stop It. To learn more about the hazards of industrial espionage and how it’s done, check out this YouTube video. https://youtu.be/kooznkqQ1GQ

To develop standards of conduct and create respect for marketing professionals who gather market intelligence, the Society of Competitive Intelligence Professionals has developed a code of ethics. It is as follows:

• To continually strive to increase the recognition and respect of the profession.
• To comply with all applicable laws, domestic and international.
• To accurately disclose all relevant information, including one’s identity and organization, prior to all interviews.
• To avoid conflicts of interest in fulfilling one’s duties.
• To provide honest and realistic recommendations and conclusions in the execution of one’s duties.
• To promote this code of ethics within one’s company, with third-party contractors and within the entire profession.
• To faithfully adhere to and abide by one’s company policies, objectives and guidelines 3 .

Marketing Research

Marketing research is what a company has to resort to if it can’t answer a question by using any of the types of information we have discussed so far—market intelligence, internal company data, or analytics software applied to data. As we have explained, marketing research is generally used to answer specific questions. The name you should give your new product is an example. Unless your company has previously done some specific research on product names—what consumers think of them, good or bad—you’re probably not going to find the answer to that question in your internal company data. Also, unlike internal data, which is generated on a regular basis, marketing research is not ongoing. Marketing research is done on an as-needed or project basis. If an organization decides that it needs to conduct marketing research, it can either conduct marketing research itself or hire a marketing research firm to do it.

So when exactly is marketing research needed? Keep in mind marketing research can be expensive. You therefore have to weigh the costs of the research against the benefits. What questions will the research answer, and will knowing the answer result in the firm earning or saving more money than the research costs?

Marketing research can also take time. If a quick decision is needed for a pressing problem, it might not be possible to do the research. Lastly, sometimes the answer is obvious, so there is no point in conducting the research. If one of your competitors comes up with a new offering and consumers are clamoring to get it, you certainly don’t need to undertake a research study to see if such a product would survive in the marketplace.

Alex J. Caffarini, the president and founder of the marketing research firm Analysights, believes there are a number of other reasons companies mistakenly do marketing research. Caffarini’s explanations (shown in parentheses) about why a company’s executives sometimes make bad decisions are somewhat humorous. Read through them:

• “We’ve always done this research .” (The research has taken on a life of its own; this particular project has continued for years and nobody questioned whether it was still relevant.)
• “Everyone’s doing this research .” (Their competitors are doing it, and they’re afraid they’ll lose competitive advantage if they don’t; yet no one asks what value the research is creating.)
• “The findings are nice to know .” (Great—spend a lot of money to create a wealth of useless information. If the information is nice to know, but you can’t do anything with it, you’re wasting money.)
• “If our strategy fails, having done the research will show that we made our best educated guess .” (They’re covering their butts. If things go wrong, they can blame the findings, or the researcher.)
• “We need to study the problem thoroughly before we decide on a course of action .” (They’re afraid of making a tough decision. Conducting marketing research is a good way to delay the inevitable. In the meantime, the problem gets bigger, or the window of opportunity closes.)
• “The research will show that our latest ad campaign was effective .” (They’re using marketing research to justify past decisions. Rarely should marketing research be done after the fact) (Caffarini).

Is Marketing Research Always Correct?

To be sure, marketing research can help companies avoid making mistakes. Take Tim Hortons, a popular coffee chain in Canada, which has been expanding in the United States and internationally. Hortons recently opened some self-serve kiosks in Ireland, but the service was a flop. Why? Because cars in Ireland don’t have cup holders. Would marketing research have helped? Probably. So would a little bit of market intelligence. It would have been easy for an observer to see that trying to drive a car and hold a cup of hot coffee at the same time is difficult.

That said, we don’t want to leave you with the idea that marketing research is infallible. As we indicated at the beginning of the chapter, the process isn’t foolproof. In fact, marketing research studies have rejected a lot of good ideas. The idea for telephone answering machines was initially rejected following marketing research. So was the hit sitcom Seinfeld , a show that in 2002 TV Guide named the number-one television program of all time. Even the best companies, like Coca-Cola, have made mistakes in marketing research that have led to huge flops. In the next section of this chapter, we’ll discuss the steps related to conducting marketing research. As you will learn, many things can go wrong along the way that can affect the results of research and the conclusions drawn from it.

Key Takeaway

Many marketing problems and opportunities can be solved by gathering information from a company’s daily operations and analyzing it. Market intelligence involves gathering information on a regular, ongoing basis to stay in touch with what’s happening in the marketplace. Marketing research is what a company has to resort to if it can’t answer a question by using market intelligence, internal company data, or analytical software. Marketing research is not infallible, however.

Review Questions

• Why do companies gather market intelligence and conduct marketing research?
• What activities are part of market intelligence gathering?
• How do marketing professionals know if they have crossed a line in terms of gathering marketing intelligence?
• How does the time frame for conducting marketing intelligence differ from the time frame in which marketing research data is gathered?

1 “P&G Admits to Dumpster Diving,” PRWatch.org , August 31, 2001, http://www.prwatch.org/node/663 (accessed December 14, 2009).

2 “Microsoft Suit Alleges Ex-Worker Stole Trade Secrets,” CNET , January 30, 2009, https://www.cnet.com/news/microsoft-suit-alleges-ex-worker-stole-trade-secrets/ (accessed December 14, 2009).

3 “SCIP Code of Ethics for CI Professionals,” Society of Competitive Intelligence Professionals, www.scip.org/About/content.cf...ItemNumber=504 (accessed December 14, 2009).

Anderson, J., “Bugging Air France First Class,” Ellensburg Daily News , March 25, 1995, 3, news.google.com/newspapers?nid=860&dat =19950320&id=ddYPAAAAIBAJ&sjid=F48DAAAAIBAJ&pg=4554,2982160 (accessed December 12, 2009).

Baker, S., “The Web Knows What You Want,” BusinessWeek , July 24, 2009, https://www.bloomberg.com/news/articles/2009-07-16/the-web-knows-what-you-want (accessed December 14, 2009).

Caffarini, A. J., “Ten Costly Marketing Mistakes and How to Avoid Them,” Analysights, LLC.

Gardner, J., “Competitive Intelligence on a Shoestring,” Inc ., September 24, 2001, http://www.inc.com/articles/2001/09/23436.html (accessed December 14, 2009).

Nemes, J., “Dumpster Diving: From Garbage to Gold,” Greenbiz.com , January 16, 2009, http://www.businessgreen.com/bg/analysis/1805796/dumpster-diving-from-garbage-gold (accessed December 14, 2009).

Zarello, C., “Hunting for Gold in the Great Outdoors,” Retail Information Systems News , May 5, 2009, https://risnews.com/hunting-gold-great-outdoors (accessed December 14, 2009).

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Marketing Information System vs. Marketing Research: Understanding Data Strategies

In today’s fast-paced and data-driven business world, marketing information systems and marketing research play vital roles in helping companies make informed decisions and gain a competitive edge. However, these two terms are often used interchangeably, causing confusion among marketers. While both involve the collection and analysis of data, they differ in their focus and approach. To truly understand the difference between marketing information systems and marketing research, let’s dive deeper into their unique data strategies.

The Difference in Data Strategies: Understanding Marketing Information Systems

In essence, a marketing information system (MIS) is a systematic approach to gathering, organizing, and interpreting data to support marketing activities and decision-making. It serves as the backbone of a company’s marketing efforts by providing relevant and timely information to marketers. A marketing information system typically consists of four main components: internal records, marketing intelligence, marketing research, and marketing decision support systems.

Internal Records: Harnessing Internal Data

Internal records refer to data generated from within the organization, such as sales figures, customer databases, and inventory levels. These records provide valuable insights into customer behavior, purchase history, and market trends. By analyzing internal records, companies can identify patterns, understand consumer preferences, and tailor their marketing strategies accordingly. For example, a clothing retailer can use internal sales data to determine the popularity of different clothing styles and sizes, enabling them to optimize their inventory and better meet customer demands.

Marketing Intelligence: Traversing the External Landscape

Marketing intelligence involves gathering and analyzing data from external sources, such as industry reports, market surveys, and competitor analyses. It focuses on monitoring and understanding the broader market landscape, including industry trends, competitor strategies, and consumer preferences. By keeping a close eye on the competition and staying informed about market dynamics, companies can make informed decisions regarding product development, pricing, and promotional activities. For instance, a smartphone manufacturer can use marketing intelligence to identify emerging trends in the mobile industry and adjust their product offerings accordingly.

Marketing Research: Uncovering Customer Insights

Marketing research is a systematic process of collecting, analyzing, and interpreting data to understand consumer behavior, preferences, and perceptions. It involves conducting surveys, interviews, focus groups, and experiments to gather primary data directly from consumers. By conducting market research, companies can gain valuable insights into customer needs, evaluate the performance of their products or services, and identify opportunities for improvement. For example, a food delivery service can conduct research to understand consumer preferences regarding cuisine choices, delivery options, and pricing, enabling them to tailor their offerings and attract more customers.

Marketing Decision Support Systems: Enhancing Decision-Making

Marketing decision support systems (MDSS) aid marketers in making data-driven decisions by providing tools, models, and analytics to analyze and interpret data. These systems leverage advanced technologies, such as machine learning and predictive analytics, to generate insights and recommendations. By utilizing MDSS, companies can optimize their marketing strategies, allocate resources effectively, and make informed decisions to achieve their business objectives. For instance, an e-commerce platform can use a decision support system to analyze customer browsing patterns and recommend personalized product suggestions, thereby enhancing the shopping experience.

Understanding the Role of Marketing Research

While marketing research is a component of marketing information systems, it deserves a closer look due to its unique role in gathering customer insights. Marketing research involves a systematic and scientific approach to collecting, analyzing, and interpreting data to solve marketing problems and make informed decisions.

Quantitative Research: The Power of Numbers

Quantitative research involves the collection and analysis of numerical data, often through surveys or experiments, to uncover patterns and trends. It aims to measure, quantify, and generalize findings to a larger population. This type of research provides valuable statistical insights, enabling companies to make data-driven decisions. For example, a software company can conduct quantitative research to determine the satisfaction levels of its users by administering a survey with a Likert scale. The results can then be statistically analyzed to identify areas for improvement and measure the impact of changes implemented.

Qualitative Research: Uncovering Customer Narratives

In contrast, qualitative research focuses on understanding the underlying motivations, attitudes, and perceptions of individuals through methods like interviews, focus groups, and observations. It aims to capture rich and descriptive data rather than numerical measurements. Qualitative research provides deep insights into consumer behavior, allowing companies to understand the “why” behind customer actions. For instance, a cosmetic brand can conduct qualitative research to explore the reasons behind a particular group of consumers’ preferences for natural skincare products. Through in-depth interviews, the company can gain a better understanding of the underlying emotions and beliefs that drive their purchasing decisions.

Mixed Methods Research: A Holistic Approach

In some cases, marketers may adopt a mixed methods research approach, combining both quantitative and qualitative research methods to gain a comprehensive understanding of their target audience. This approach allows for triangulation, where multiple data sources and perspectives are used to validate findings and provide a more robust and nuanced understanding of consumer behavior. A mixed methods study could involve conducting a survey to gather quantitative data on consumer preferences, followed by in-depth interviews to explore the underlying reasons behind those preferences. This approach offers a holistic view of the market and enables marketers to gain a deeper understanding of complex consumer behaviors.

The Synergy between Marketing Information Systems and Marketing Research

While marketing information systems and marketing research have distinct characteristics, they are not mutually exclusive. In fact, they work in harmony and complement each other to enhance decision-making and marketing strategies.

Marketing information systems provide the infrastructure and tools necessary for collecting, organizing, and analyzing data. They leverage internal records, external market intelligence, and marketing research findings to generate valuable insights. These insights, in turn, inform marketing research initiatives by identifying knowledge gaps, research questions, and areas requiring further exploration.

On the other hand, marketing research plays a crucial role within the broader marketing information system. It provides primary data, consumer insights, and a deep understanding of customer behavior. These inputs enrich the information available within the marketing information system and serve as a springboard for decision-making.

In essence, marketing information systems inform marketing research, while marketing research feeds back into the marketing information system. This symbiotic relationship ensures that companies have accurate, up-to-date, and relevant data to support their strategic marketing decisions.

In the dynamic and data-driven world of marketing, understanding the difference between marketing information systems and marketing research is essential. While both involve data collection and analysis, they have distinct focuses and approaches.

Marketing information systems provide a holistic framework for gathering, organizing, and interpreting data, utilizing internal records, marketing intelligence, marketing research, and marketing decision support systems. These systems serve as the foundation of a company’s marketing efforts, enabling them to make informed decisions and optimize their strategies.

Marketing research, as a component of marketing information systems, focuses on understanding consumer behavior, preferences, and perceptions. It involves both quantitative and qualitative research methods to gather primary data directly from consumers. By uncovering customer insights, marketing research plays a vital role in guiding decision-making and shaping marketing strategies.

Understanding the synergy between marketing information systems and marketing research is crucial for marketers seeking to harness the power of data-driven decision-making. By leveraging the strengths of both approaches, companies can gain a competitive edge, better understand their target audience, and drive business growth.

So, the next time you come across the terms “marketing information system” and “marketing research,” remember the unique roles they play in helping businesses navigate the complex world of data and make strategic marketing decisions.

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• Key Differences

Know the Differences & Comparisons

Difference Between Market Research and Marketing Research

Market research should not be confused with marketing reasearch , which is the scientific and objective study of the overall marketing process which involves collection, analysis, communication and utilization of information, so as to help the management in the process of decision making and also resolving marketing problems.

Check out the article provided below, in which we have discussed the substantial differences between market research and marketing research.

Content: Market Research Vs Marketing Research

Comparison chart, definition of market research.

Market Research, as its name suggests, it is the study of the target market. It is an act of collecting information about the marketplace and consumers within that market. It is used to ascertain and analyse the market structure, size, recent trends, major players, customer needs, taste, preferences, buying behaviour.

Market Research acts as a guide, that helps you to know about your customers, competitors, needs, products, markets, etc.. The research helps in determining the viability of the new product in the target market. Various techniques are employed to know the chances of success, such as product testing. It can be conducted by the organization itself or by an external agency. A number of steps are followed to conduct market research which is as under:

• Identifying the problem
• Ascertain the party who will conduct the research.
• Choosing an appropriate technique for research.
• Gathering information
• Organization, interpretation and analysis of the result.

Definition of Marketing Research

By the term ‘marketing research’ we mean a well-planned study of the whole marketing process to collect, analyse and report information. The research is undertaken to find out a perfect solution to a marketing situation facing the company. The research plays a major role in identifying the consumer demand and their expectation from a particular product or service along with an efficient way of satisfying those needs. It involves an array of activities which are provided as under:

• Market and Customer Research
• Product Research
• Pricing Research
• Distribution Channel Research
• Promotion Research
• Sales Research
• Advertising Research

Marketing Research is aimed at providing facts and directions to the managers who need the accurate and authentic information for making important marketing decisions. The process of marketing research is explained in the following steps:

• Identify the problem, decision alternative and research objectives.
• Developing plans for research
• Organization and analysis of information
• Presentation
• Decision making

Key Differences Between Market Research and Marketing Research

The distinction between market research and marketing research can be drawn clearly on the following grounds:

• Market Research refers to the study of the entire market and consumer behavior, within that market. Marketing research implies well planned and rational study, analysis, and interpretation of marketing problems undertaken for actionable decision making.
• Market research is a branch of marketing research, whereas marketing research is a component of marketing information system.
• The scope of market research is limited as it studies about the aspects of market and consumer behavior only. On the other hand, marketing research involves the study of the whole marketing process, i.e. the research of advertising, pricing, packaging, policymaking and the market as well.
• Market research is specific in nature, i.e. the research gives and understanding about the particular market which is not applicable to other markets. Conversely, marketing research is generic in nature, i.e. the study can be helpful in solving various marketing problems.
• Marketing research is dependent while marketing research is independent.
• Market research is conducted to check the viability of the product in the target market. Unlike marketing research is carried out to make effective decisions regarding marketing activities and to keep control on the marketing of economic output i.e. goods and services.
• Market research involves research of the marketplace and the buyer’s behavior within that market. In contrast to marketing research, that involves the study, of all aspects of marketing.

After the above discussion, it can be said that marketing research is a wider term than market research. In fact, the market research itself is a part of marketing research. Both the researches involve quantitative and qualitative techniques to gather information like focus groups, surveys (telephonic conversation or face to face communication), interviews, questionnaires.

Moreover, the researches are very helpful for the business startups and the existing businesses to take effective decisions regarding the business such as product or service you serve your customers, place of doing business, distribution channels to be employed by the business, promotional channels and so on.

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Krystal says

October 26, 2016 at 8:36 pm

This is a very clear for understanding the differences. Many thanks for this article

Prince musty says

August 9, 2018 at 2:19 pm

This is good precisely expression to understand always keep it up

salmon ahmed says

September 20, 2019 at 6:37 am

Clearly discussed in easy way,thanks.

Parag Prakash Lad says

June 29, 2020 at 1:17 am

Thanks for easy and clear differentiation between Marketing Research and Marketing Research. It helped me lot in competing my project on Information gathering – Primary & Secondary an overview.

Nafeesah ibrahim says

May 6, 2023 at 8:42 pm

Thanks for the answers

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Marketing Research System - Definition & Meaning

What is marketing research system.

Marketing research relates to information and data collection methods which provide a coherent representation of a need and its potential solutions. The system may be used for ongoing monitoring of the marketplace or on a step by step evaluation of a product concept.

According to American Marketing Association (AMA), “Marketing Research relates to the systematic collection, recording and carefully analyzing the data about problems related to the marketing of goods and services.” According to Philip Kotler, “Marketing research is a systematic problem analysis, model building and fact finding for the purpose of improved decision-making and control in the marketing of goods and services.”

Features of Marketing Research

• Wide and comprehensive scope - Marketing research has a very wide scope. It includes product research, pricing research, market research, packaging research, sales research, etc. It is used to solve marketing problems and to take marketing decisions. It is used to make marketing policies. It is also used to introduce new products in the market and to identify new markets. Marketing research is used to identify channels of distribution and select them, in advertising strategy as in for sales promotion measures.

• Systematic and scientific - Marketing research follows a step-by-step process. It is conducted in an ordered manner. Therefore, it is systematic. Marketing research uses scientific methods. Hence, it is also scientific.

• Science and art: A Science collects knowledge (data) while an Art uses this knowledge for solving problems. Marketing research first collects data. It then uses this data for solving marketing problems. Therefore, it is both, a Science and an Art.

• Collects and analyzes data - Marketing research gathers data accurately and objectively. It first collects reliable data and then analyses it systematically and critically.

• Continuous and dynamic process - The Company faces marketing problems throughout the year. So, marketing research is conducted continuously. It continuously collects up-to-date data for solving the marketing problems. Therefore, marketing research is a continuous process. It is a dynamic process because it goes on changing according to market related information. It does not remain static (the same). It uses new methods and techniques for collecting, recording and analyzing the data.

• Tool for decision-making - The marketing manager has to take many decisions. For this, he requires a lot of data. Marketing research provides correct and up-to-date data to the marketing manager. This helps him to take quick and correct decisions. Therefore, marketing research is an important tool for decision-making.

Functions of marketing research

The various functions of marketing research are as follows -

Hence, this concludes the definition of Marketing Research System along with its overview.

This article has been researched & authored by the Business Concepts Team . It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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Research: How Ratings Systems Shape User Behavior in the Gig Economy

• Arne De Keyser,
• Christophe Lembregts,
• Jeroen Schepers

A study reveals surprising differences between displaying an average score or individual reviews.

Platform providers typically display ratings information to the user in two ways. Incremental rating systems, employed by platforms like TaskRabbit and Airbnb, offer a detailed view by listing and often providing insights into every individual review score. Averaged rating systems, used by platforms such as Uber, Lyft, and DoorDash, present an overall score that aggregates all individual ratings. Over a series of nine experiments, researchers found that the way low ratings are communicated shapes user experience and behavior in a number of ways. Their findings offer implications for companies choosing between incremental or average ratings systems.

Rating systems, integral to the platform economy, profoundly influence human behavior and choice. Platforms like Uber, Airbnb, Turo, and Upwork rely on these systems not just as reflections of past performance, but as proactive tools for ensuring quality and encouraging proper conduct on both sides of a transaction from service providers (such as drivers and hosts) and users (like riders and guests).

• AK Arne De Keyser is a professor of marketing at EDHEC Business School. His research focuses on customer experience, frontline service technologies, and circular services.
• CL Christophe Lembregts is an associate professor of marketing at RSM Erasmus University. His research focuses on facilitating informed decision-making by investigating responses to quantitative information.
• JS Jeroen Schepers is an associate professor of frontline service and innovation at Eindhoven University of Technology. His research centers on frontline employees, artificial intelligence, and service robots.

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• Published: 17 April 2024

The economic commitment of climate change

• Maximilian Kotz   ORCID: orcid.org/0000-0003-2564-5043 1 , 2 ,
• Anders Levermann   ORCID: orcid.org/0000-0003-4432-4704 1 , 2 &
• Leonie Wenz   ORCID: orcid.org/0000-0002-8500-1568 1 , 3  

Nature volume  628 ,  pages 551–557 ( 2024 ) Cite this article

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• Environmental economics
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Global projections of macroeconomic climate-change damages typically consider impacts from average annual and national temperatures over long time horizons 1 , 2 , 3 , 4 , 5 , 6 . Here we use recent empirical findings from more than 1,600 regions worldwide over the past 40 years to project sub-national damages from temperature and precipitation, including daily variability and extremes 7 , 8 . Using an empirical approach that provides a robust lower bound on the persistence of impacts on economic growth, we find that the world economy is committed to an income reduction of 19% within the next 26 years independent of future emission choices (relative to a baseline without climate impacts, likely range of 11–29% accounting for physical climate and empirical uncertainty). These damages already outweigh the mitigation costs required to limit global warming to 2 °C by sixfold over this near-term time frame and thereafter diverge strongly dependent on emission choices. Committed damages arise predominantly through changes in average temperature, but accounting for further climatic components raises estimates by approximately 50% and leads to stronger regional heterogeneity. Committed losses are projected for all regions except those at very high latitudes, at which reductions in temperature variability bring benefits. The largest losses are committed at lower latitudes in regions with lower cumulative historical emissions and lower present-day income.

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Climate economics support for the UN climate targets

Martin C. Hänsel, Moritz A. Drupp, … Thomas Sterner

Projections of the macroeconomic damage caused by future climate change are crucial to informing public and policy debates about adaptation, mitigation and climate justice. On the one hand, adaptation against climate impacts must be justified and planned on the basis of an understanding of their future magnitude and spatial distribution 9 . This is also of importance in the context of climate justice 10 , as well as to key societal actors, including governments, central banks and private businesses, which increasingly require the inclusion of climate risks in their macroeconomic forecasts to aid adaptive decision-making 11 , 12 . On the other hand, climate mitigation policy such as the Paris Climate Agreement is often evaluated by balancing the costs of its implementation against the benefits of avoiding projected physical damages. This evaluation occurs both formally through cost–benefit analyses 1 , 4 , 5 , 6 , as well as informally through public perception of mitigation and damage costs 13 .

Projections of future damages meet challenges when informing these debates, in particular the human biases relating to uncertainty and remoteness that are raised by long-term perspectives 14 . Here we aim to overcome such challenges by assessing the extent of economic damages from climate change to which the world is already committed by historical emissions and socio-economic inertia (the range of future emission scenarios that are considered socio-economically plausible 15 ). Such a focus on the near term limits the large uncertainties about diverging future emission trajectories, the resulting long-term climate response and the validity of applying historically observed climate–economic relations over long timescales during which socio-technical conditions may change considerably. As such, this focus aims to simplify the communication and maximize the credibility of projected economic damages from future climate change.

In projecting the future economic damages from climate change, we make use of recent advances in climate econometrics that provide evidence for impacts on sub-national economic growth from numerous components of the distribution of daily temperature and precipitation 3 , 7 , 8 . Using fixed-effects panel regression models to control for potential confounders, these studies exploit within-region variation in local temperature and precipitation in a panel of more than 1,600 regions worldwide, comprising climate and income data over the past 40 years, to identify the plausibly causal effects of changes in several climate variables on economic productivity 16 , 17 . Specifically, macroeconomic impacts have been identified from changing daily temperature variability, total annual precipitation, the annual number of wet days and extreme daily rainfall that occur in addition to those already identified from changing average temperature 2 , 3 , 18 . Moreover, regional heterogeneity in these effects based on the prevailing local climatic conditions has been found using interactions terms. The selection of these climate variables follows micro-level evidence for mechanisms related to the impacts of average temperatures on labour and agricultural productivity 2 , of temperature variability on agricultural productivity and health 7 , as well as of precipitation on agricultural productivity, labour outcomes and flood damages 8 (see Extended Data Table 1 for an overview, including more detailed references). References  7 , 8 contain a more detailed motivation for the use of these particular climate variables and provide extensive empirical tests about the robustness and nature of their effects on economic output, which are summarized in Methods . By accounting for these extra climatic variables at the sub-national level, we aim for a more comprehensive description of climate impacts with greater detail across both time and space.

Constraining the persistence of impacts

A key determinant and source of discrepancy in estimates of the magnitude of future climate damages is the extent to which the impact of a climate variable on economic growth rates persists. The two extreme cases in which these impacts persist indefinitely or only instantaneously are commonly referred to as growth or level effects 19 , 20 (see Methods section ‘Empirical model specification: fixed-effects distributed lag models’ for mathematical definitions). Recent work shows that future damages from climate change depend strongly on whether growth or level effects are assumed 20 . Following refs.  2 , 18 , we provide constraints on this persistence by using distributed lag models to test the significance of delayed effects separately for each climate variable. Notably, and in contrast to refs.  2 , 18 , we use climate variables in their first-differenced form following ref.  3 , implying a dependence of the growth rate on a change in climate variables. This choice means that a baseline specification without any lags constitutes a model prior of purely level effects, in which a permanent change in the climate has only an instantaneous effect on the growth rate 3 , 19 , 21 . By including lags, one can then test whether any effects may persist further. This is in contrast to the specification used by refs.  2 , 18 , in which climate variables are used without taking the first difference, implying a dependence of the growth rate on the level of climate variables. In this alternative case, the baseline specification without any lags constitutes a model prior of pure growth effects, in which a change in climate has an infinitely persistent effect on the growth rate. Consequently, including further lags in this alternative case tests whether the initial growth impact is recovered 18 , 19 , 21 . Both of these specifications suffer from the limiting possibility that, if too few lags are included, one might falsely accept the model prior. The limitations of including a very large number of lags, including loss of data and increasing statistical uncertainty with an increasing number of parameters, mean that such a possibility is likely. By choosing a specification in which the model prior is one of level effects, our approach is therefore conservative by design, avoiding assumptions of infinite persistence of climate impacts on growth and instead providing a lower bound on this persistence based on what is observable empirically (see Methods section ‘Empirical model specification: fixed-effects distributed lag models’ for further exposition of this framework). The conservative nature of such a choice is probably the reason that ref.  19 finds much greater consistency between the impacts projected by models that use the first difference of climate variables, as opposed to their levels.

We begin our empirical analysis of the persistence of climate impacts on growth using ten lags of the first-differenced climate variables in fixed-effects distributed lag models. We detect substantial effects on economic growth at time lags of up to approximately 8–10 years for the temperature terms and up to approximately 4 years for the precipitation terms (Extended Data Fig. 1 and Extended Data Table 2 ). Furthermore, evaluation by means of information criteria indicates that the inclusion of all five climate variables and the use of these numbers of lags provide a preferable trade-off between best-fitting the data and including further terms that could cause overfitting, in comparison with model specifications excluding climate variables or including more or fewer lags (Extended Data Fig. 3 , Supplementary Methods Section  1 and Supplementary Table 1 ). We therefore remove statistically insignificant terms at later lags (Supplementary Figs. 1 – 3 and Supplementary Tables 2 – 4 ). Further tests using Monte Carlo simulations demonstrate that the empirical models are robust to autocorrelation in the lagged climate variables (Supplementary Methods Section  2 and Supplementary Figs. 4 and 5 ), that information criteria provide an effective indicator for lag selection (Supplementary Methods Section  2 and Supplementary Fig. 6 ), that the results are robust to concerns of imperfect multicollinearity between climate variables and that including several climate variables is actually necessary to isolate their separate effects (Supplementary Methods Section  3 and Supplementary Fig. 7 ). We provide a further robustness check using a restricted distributed lag model to limit oscillations in the lagged parameter estimates that may result from autocorrelation, finding that it provides similar estimates of cumulative marginal effects to the unrestricted model (Supplementary Methods Section 4 and Supplementary Figs. 8 and 9 ). Finally, to explicitly account for any outstanding uncertainty arising from the precise choice of the number of lags, we include empirical models with marginally different numbers of lags in the error-sampling procedure of our projection of future damages. On the basis of the lag-selection procedure (the significance of lagged terms in Extended Data Fig. 1 and Extended Data Table 2 , as well as information criteria in Extended Data Fig. 3 ), we sample from models with eight to ten lags for temperature and four for precipitation (models shown in Supplementary Figs. 1 – 3 and Supplementary Tables 2 – 4 ). In summary, this empirical approach to constrain the persistence of climate impacts on economic growth rates is conservative by design in avoiding assumptions of infinite persistence, but nevertheless provides a lower bound on the extent of impact persistence that is robust to the numerous tests outlined above.

Committed damages until mid-century

We combine these empirical economic response functions (Supplementary Figs. 1 – 3 and Supplementary Tables 2 – 4 ) with an ensemble of 21 climate models (see Supplementary Table 5 ) from the Coupled Model Intercomparison Project Phase 6 (CMIP-6) 22 to project the macroeconomic damages from these components of physical climate change (see Methods for further details). Bias-adjusted climate models that provide a highly accurate reproduction of observed climatological patterns with limited uncertainty (Supplementary Table 6 ) are used to avoid introducing biases in the projections. Following a well-developed literature 2 , 3 , 19 , these projections do not aim to provide a prediction of future economic growth. Instead, they are a projection of the exogenous impact of future climate conditions on the economy relative to the baselines specified by socio-economic projections, based on the plausibly causal relationships inferred by the empirical models and assuming ceteris paribus. Other exogenous factors relevant for the prediction of economic output are purposefully assumed constant.

A Monte Carlo procedure that samples from climate model projections, empirical models with different numbers of lags and model parameter estimates (obtained by 1,000 block-bootstrap resamples of each of the regressions in Supplementary Figs. 1 – 3 and Supplementary Tables 2 – 4 ) is used to estimate the combined uncertainty from these sources. Given these uncertainty distributions, we find that projected global damages are statistically indistinguishable across the two most extreme emission scenarios until 2049 (at the 5% significance level; Fig. 1 ). As such, the climate damages occurring before this time constitute those to which the world is already committed owing to the combination of past emissions and the range of future emission scenarios that are considered socio-economically plausible 15 . These committed damages comprise a permanent income reduction of 19% on average globally (population-weighted average) in comparison with a baseline without climate-change impacts (with a likely range of 11–29%, following the likelihood classification adopted by the Intergovernmental Panel on Climate Change (IPCC); see caption of Fig. 1 ). Even though levels of income per capita generally still increase relative to those of today, this constitutes a permanent income reduction for most regions, including North America and Europe (each with median income reductions of approximately 11%) and with South Asia and Africa being the most strongly affected (each with median income reductions of approximately 22%; Fig. 1 ). Under a middle-of-the road scenario of future income development (SSP2, in which SSP stands for Shared Socio-economic Pathway), this corresponds to global annual damages in 2049 of 38 trillion in 2005 international dollars (likely range of 19–59 trillion 2005 international dollars). Compared with empirical specifications that assume pure growth or pure level effects, our preferred specification that provides a robust lower bound on the extent of climate impact persistence produces damages between these two extreme assumptions (Extended Data Fig. 3 ).

Estimates of the projected reduction in income per capita from changes in all climate variables based on empirical models of climate impacts on economic output with a robust lower bound on their persistence (Extended Data Fig. 1 ) under a low-emission scenario compatible with the 2 °C warming target and a high-emission scenario (SSP2-RCP2.6 and SSP5-RCP8.5, respectively) are shown in purple and orange, respectively. Shading represents the 34% and 10% confidence intervals reflecting the likely and very likely ranges, respectively (following the likelihood classification adopted by the IPCC), having estimated uncertainty from a Monte Carlo procedure, which samples the uncertainty from the choice of physical climate models, empirical models with different numbers of lags and bootstrapped estimates of the regression parameters shown in Supplementary Figs. 1 – 3 . Vertical dashed lines show the time at which the climate damages of the two emission scenarios diverge at the 5% and 1% significance levels based on the distribution of differences between emission scenarios arising from the uncertainty sampling discussed above. Note that uncertainty in the difference of the two scenarios is smaller than the combined uncertainty of the two respective scenarios because samples of the uncertainty (climate model and empirical model choice, as well as model parameter bootstrap) are consistent across the two emission scenarios, hence the divergence of damages occurs while the uncertainty bounds of the two separate damage scenarios still overlap. Estimates of global mitigation costs from the three IAMs that provide results for the SSP2 baseline and SSP2-RCP2.6 scenario are shown in light green in the top panel, with the median of these estimates shown in bold.

Damages already outweigh mitigation costs

We compare the damages to which the world is committed over the next 25 years to estimates of the mitigation costs required to achieve the Paris Climate Agreement. Taking estimates of mitigation costs from the three integrated assessment models (IAMs) in the IPCC AR6 database 23 that provide results under comparable scenarios (SSP2 baseline and SSP2-RCP2.6, in which RCP stands for Representative Concentration Pathway), we find that the median committed climate damages are larger than the median mitigation costs in 2050 (six trillion in 2005 international dollars) by a factor of approximately six (note that estimates of mitigation costs are only provided every 10 years by the IAMs and so a comparison in 2049 is not possible). This comparison simply aims to compare the magnitude of future damages against mitigation costs, rather than to conduct a formal cost–benefit analysis of transitioning from one emission path to another. Formal cost–benefit analyses typically find that the net benefits of mitigation only emerge after 2050 (ref.  5 ), which may lead some to conclude that physical damages from climate change are simply not large enough to outweigh mitigation costs until the second half of the century. Our simple comparison of their magnitudes makes clear that damages are actually already considerably larger than mitigation costs and the delayed emergence of net mitigation benefits results primarily from the fact that damages across different emission paths are indistinguishable until mid-century (Fig. 1 ).

Although these near-term damages constitute those to which the world is already committed, we note that damage estimates diverge strongly across emission scenarios after 2049, conveying the clear benefits of mitigation from a purely economic point of view that have been emphasized in previous studies 4 , 24 . As well as the uncertainties assessed in Fig. 1 , these conclusions are robust to structural choices, such as the timescale with which changes in the moderating variables of the empirical models are estimated (Supplementary Figs. 10 and 11 ), as well as the order in which one accounts for the intertemporal and international components of currency comparison (Supplementary Fig. 12 ; see Methods for further details).

Damages from variability and extremes

Committed damages primarily arise through changes in average temperature (Fig. 2 ). This reflects the fact that projected changes in average temperature are larger than those in other climate variables when expressed as a function of their historical interannual variability (Extended Data Fig. 4 ). Because the historical variability is that on which the empirical models are estimated, larger projected changes in comparison with this variability probably lead to larger future impacts in a purely statistical sense. From a mechanistic perspective, one may plausibly interpret this result as implying that future changes in average temperature are the most unprecedented from the perspective of the historical fluctuations to which the economy is accustomed and therefore will cause the most damage. This insight may prove useful in terms of guiding adaptation measures to the sources of greatest damage.

Estimates of the median projected reduction in sub-national income per capita across emission scenarios (SSP2-RCP2.6 and SSP2-RCP8.5) as well as climate model, empirical model and model parameter uncertainty in the year in which climate damages diverge at the 5% level (2049, as identified in Fig. 1 ). a , Impacts arising from all climate variables. b – f , Impacts arising separately from changes in annual mean temperature ( b ), daily temperature variability ( c ), total annual precipitation ( d ), the annual number of wet days (>1 mm) ( e ) and extreme daily rainfall ( f ) (see Methods for further definitions). Data on national administrative boundaries are obtained from the GADM database version 3.6 and are freely available for academic use ( https://gadm.org/ ).

Nevertheless, future damages based on empirical models that consider changes in annual average temperature only and exclude the other climate variables constitute income reductions of only 13% in 2049 (Extended Data Fig. 5a , likely range 5–21%). This suggests that accounting for the other components of the distribution of temperature and precipitation raises net damages by nearly 50%. This increase arises through the further damages that these climatic components cause, but also because their inclusion reveals a stronger negative economic response to average temperatures (Extended Data Fig. 5b ). The latter finding is consistent with our Monte Carlo simulations, which suggest that the magnitude of the effect of average temperature on economic growth is underestimated unless accounting for the impacts of other correlated climate variables (Supplementary Fig. 7 ).

In terms of the relative contributions of the different climatic components to overall damages, we find that accounting for daily temperature variability causes the largest increase in overall damages relative to empirical frameworks that only consider changes in annual average temperature (4.9 percentage points, likely range 2.4–8.7 percentage points, equivalent to approximately 10 trillion international dollars). Accounting for precipitation causes smaller increases in overall damages, which are—nevertheless—equivalent to approximately 1.2 trillion international dollars: 0.01 percentage points (−0.37–0.33 percentage points), 0.34 percentage points (0.07–0.90 percentage points) and 0.36 percentage points (0.13–0.65 percentage points) from total annual precipitation, the number of wet days and extreme daily precipitation, respectively. Moreover, climate models seem to underestimate future changes in temperature variability 25 and extreme precipitation 26 , 27 in response to anthropogenic forcing as compared with that observed historically, suggesting that the true impacts from these variables may be larger.

The distribution of committed damages

The spatial distribution of committed damages (Fig. 2a ) reflects a complex interplay between the patterns of future change in several climatic components and those of historical economic vulnerability to changes in those variables. Damages resulting from increasing annual mean temperature (Fig. 2b ) are negative almost everywhere globally, and larger at lower latitudes in regions in which temperatures are already higher and economic vulnerability to temperature increases is greatest (see the response heterogeneity to mean temperature embodied in Extended Data Fig. 1a ). This occurs despite the amplified warming projected at higher latitudes 28 , suggesting that regional heterogeneity in economic vulnerability to temperature changes outweighs heterogeneity in the magnitude of future warming (Supplementary Fig. 13a ). Economic damages owing to daily temperature variability (Fig. 2c ) exhibit a strong latitudinal polarisation, primarily reflecting the physical response of daily variability to greenhouse forcing in which increases in variability across lower latitudes (and Europe) contrast decreases at high latitudes 25 (Supplementary Fig. 13b ). These two temperature terms are the dominant determinants of the pattern of overall damages (Fig. 2a ), which exhibits a strong polarity with damages across most of the globe except at the highest northern latitudes. Future changes in total annual precipitation mainly bring economic benefits except in regions of drying, such as the Mediterranean and central South America (Fig. 2d and Supplementary Fig. 13c ), but these benefits are opposed by changes in the number of wet days, which produce damages with a similar pattern of opposite sign (Fig. 2e and Supplementary Fig. 13d ). By contrast, changes in extreme daily rainfall produce damages in all regions, reflecting the intensification of daily rainfall extremes over global land areas 29 , 30 (Fig. 2f and Supplementary Fig. 13e ).

The spatial distribution of committed damages implies considerable injustice along two dimensions: culpability for the historical emissions that have caused climate change and pre-existing levels of socio-economic welfare. Spearman’s rank correlations indicate that committed damages are significantly larger in countries with smaller historical cumulative emissions, as well as in regions with lower current income per capita (Fig. 3 ). This implies that those countries that will suffer the most from the damages already committed are those that are least responsible for climate change and which also have the least resources to adapt to it.

Estimates of the median projected change in national income per capita across emission scenarios (RCP2.6 and RCP8.5) as well as climate model, empirical model and model parameter uncertainty in the year in which climate damages diverge at the 5% level (2049, as identified in Fig. 1 ) are plotted against cumulative national emissions per capita in 2020 (from the Global Carbon Project) and coloured by national income per capita in 2020 (from the World Bank) in a and vice versa in b . In each panel, the size of each scatter point is weighted by the national population in 2020 (from the World Bank). Inset numbers indicate the Spearman’s rank correlation ρ and P -values for a hypothesis test whose null hypothesis is of no correlation, as well as the Spearman’s rank correlation weighted by national population.

To further quantify this heterogeneity, we assess the difference in committed damages between the upper and lower quartiles of regions when ranked by present income levels and historical cumulative emissions (using a population weighting to both define the quartiles and estimate the group averages). On average, the quartile of countries with lower income are committed to an income loss that is 8.9 percentage points (or 61%) greater than the upper quartile (Extended Data Fig. 6 ), with a likely range of 3.8–14.7 percentage points across the uncertainty sampling of our damage projections (following the likelihood classification adopted by the IPCC). Similarly, the quartile of countries with lower historical cumulative emissions are committed to an income loss that is 6.9 percentage points (or 40%) greater than the upper quartile, with a likely range of 0.27–12 percentage points. These patterns reemphasize the prevalence of injustice in climate impacts 31 , 32 , 33 in the context of the damages to which the world is already committed by historical emissions and socio-economic inertia.

Contextualizing the magnitude of damages

The magnitude of projected economic damages exceeds previous literature estimates 2 , 3 , arising from several developments made on previous approaches. Our estimates are larger than those of ref.  2 (see first row of Extended Data Table 3 ), primarily because of the facts that sub-national estimates typically show a steeper temperature response (see also refs.  3 , 34 ) and that accounting for other climatic components raises damage estimates (Extended Data Fig. 5 ). However, we note that our empirical approach using first-differenced climate variables is conservative compared with that of ref.  2 in regard to the persistence of climate impacts on growth (see introduction and Methods section ‘Empirical model specification: fixed-effects distributed lag models’), an important determinant of the magnitude of long-term damages 19 , 21 . Using a similar empirical specification to ref.  2 , which assumes infinite persistence while maintaining the rest of our approach (sub-national data and further climate variables), produces considerably larger damages (purple curve of Extended Data Fig. 3 ). Compared with studies that do take the first difference of climate variables 3 , 35 , our estimates are also larger (see second and third rows of Extended Data Table 3 ). The inclusion of further climate variables (Extended Data Fig. 5 ) and a sufficient number of lags to more adequately capture the extent of impact persistence (Extended Data Figs. 1 and 2 ) are the main sources of this difference, as is the use of specifications that capture nonlinearities in the temperature response when compared with ref.  35 . In summary, our estimates develop on previous studies by incorporating the latest data and empirical insights 7 , 8 , as well as in providing a robust empirical lower bound on the persistence of impacts on economic growth, which constitutes a middle ground between the extremes of the growth-versus-levels debate 19 , 21 (Extended Data Fig. 3 ).

Compared with the fraction of variance explained by the empirical models historically (<5%), the projection of reductions in income of 19% may seem large. This arises owing to the fact that projected changes in climatic conditions are much larger than those that were experienced historically, particularly for changes in average temperature (Extended Data Fig. 4 ). As such, any assessment of future climate-change impacts necessarily requires an extrapolation outside the range of the historical data on which the empirical impact models were evaluated. Nevertheless, these models constitute the most state-of-the-art methods for inference of plausibly causal climate impacts based on observed data. Moreover, we take explicit steps to limit out-of-sample extrapolation by capping the moderating variables of the interaction terms at the 95th percentile of the historical distribution (see Methods ). This avoids extrapolating the marginal effects outside what was observed historically. Given the nonlinear response of economic output to annual mean temperature (Extended Data Fig. 1 and Extended Data Table 2 ), this is a conservative choice that limits the magnitude of damages that we project. Furthermore, back-of-the-envelope calculations indicate that the projected damages are consistent with the magnitude and patterns of historical economic development (see Supplementary Discussion Section  5 ).

Missing impacts and spatial spillovers

Despite assessing several climatic components from which economic impacts have recently been identified 3 , 7 , 8 , this assessment of aggregate climate damages should not be considered comprehensive. Important channels such as impacts from heatwaves 31 , sea-level rise 36 , tropical cyclones 37 and tipping points 38 , 39 , as well as non-market damages such as those to ecosystems 40 and human health 41 , are not considered in these estimates. Sea-level rise is unlikely to be feasibly incorporated into empirical assessments such as this because historical sea-level variability is mostly small. Non-market damages are inherently intractable within our estimates of impacts on aggregate monetary output and estimates of these impacts could arguably be considered as extra to those identified here. Recent empirical work suggests that accounting for these channels would probably raise estimates of these committed damages, with larger damages continuing to arise in the global south 31 , 36 , 37 , 38 , 39 , 40 , 41 , 42 .

Moreover, our main empirical analysis does not explicitly evaluate the potential for impacts in local regions to produce effects that ‘spill over’ into other regions. Such effects may further mitigate or amplify the impacts we estimate, for example, if companies relocate production from one affected region to another or if impacts propagate along supply chains. The current literature indicates that trade plays a substantial role in propagating spillover effects 43 , 44 , making their assessment at the sub-national level challenging without available data on sub-national trade dependencies. Studies accounting for only spatially adjacent neighbours indicate that negative impacts in one region induce further negative impacts in neighbouring regions 45 , 46 , 47 , 48 , suggesting that our projected damages are probably conservative by excluding these effects. In Supplementary Fig. 14 , we assess spillovers from neighbouring regions using a spatial-lag model. For simplicity, this analysis excludes temporal lags, focusing only on contemporaneous effects. The results show that accounting for spatial spillovers can amplify the overall magnitude, and also the heterogeneity, of impacts. Consistent with previous literature, this indicates that the overall magnitude (Fig. 1 ) and heterogeneity (Fig. 3 ) of damages that we project in our main specification may be conservative without explicitly accounting for spillovers. We note that further analysis that addresses both spatially and trade-connected spillovers, while also accounting for delayed impacts using temporal lags, would be necessary to adequately address this question fully. These approaches offer fruitful avenues for further research but are beyond the scope of this manuscript, which primarily aims to explore the impacts of different climate conditions and their persistence.

Policy implications

We find that the economic damages resulting from climate change until 2049 are those to which the world economy is already committed and that these greatly outweigh the costs required to mitigate emissions in line with the 2 °C target of the Paris Climate Agreement (Fig. 1 ). This assessment is complementary to formal analyses of the net costs and benefits associated with moving from one emission path to another, which typically find that net benefits of mitigation only emerge in the second half of the century 5 . Our simple comparison of the magnitude of damages and mitigation costs makes clear that this is primarily because damages are indistinguishable across emissions scenarios—that is, committed—until mid-century (Fig. 1 ) and that they are actually already much larger than mitigation costs. For simplicity, and owing to the availability of data, we compare damages to mitigation costs at the global level. Regional estimates of mitigation costs may shed further light on the national incentives for mitigation to which our results already hint, of relevance for international climate policy. Although these damages are committed from a mitigation perspective, adaptation may provide an opportunity to reduce them. Moreover, the strong divergence of damages after mid-century reemphasizes the clear benefits of mitigation from a purely economic perspective, as highlighted in previous studies 1 , 4 , 6 , 24 .

Historical climate data

Historical daily 2-m temperature and precipitation totals (in mm) are obtained for the period 1979–2019 from the W5E5 database. The W5E5 dataset comes from ERA-5, a state-of-the-art reanalysis of historical observations, but has been bias-adjusted by applying version 2.0 of the WATCH Forcing Data to ERA-5 reanalysis data and precipitation data from version 2.3 of the Global Precipitation Climatology Project to better reflect ground-based measurements 49 , 50 , 51 . We obtain these data on a 0.5° × 0.5° grid from the Inter-Sectoral Impact Model Intercomparison Project (ISIMIP) database. Notably, these historical data have been used to bias-adjust future climate projections from CMIP-6 (see the following section), ensuring consistency between the distribution of historical daily weather on which our empirical models were estimated and the climate projections used to estimate future damages. These data are publicly available from the ISIMIP database. See refs.  7 , 8 for robustness tests of the empirical models to the choice of climate data reanalysis products.

Future climate data

Daily 2-m temperature and precipitation totals (in mm) are taken from 21 climate models participating in CMIP-6 under a high (RCP8.5) and a low (RCP2.6) greenhouse gas emission scenario from 2015 to 2100. The data have been bias-adjusted and statistically downscaled to a common half-degree grid to reflect the historical distribution of daily temperature and precipitation of the W5E5 dataset using the trend-preserving method developed by the ISIMIP 50 , 52 . As such, the climate model data reproduce observed climatological patterns exceptionally well (Supplementary Table 5 ). Gridded data are publicly available from the ISIMIP database.

Historical economic data

Historical economic data come from the DOSE database of sub-national economic output 53 . We use a recent revision to the DOSE dataset that provides data across 83 countries, 1,660 sub-national regions with varying temporal coverage from 1960 to 2019. Sub-national units constitute the first administrative division below national, for example, states for the USA and provinces for China. Data come from measures of gross regional product per capita (GRPpc) or income per capita in local currencies, reflecting the values reported in national statistical agencies, yearbooks and, in some cases, academic literature. We follow previous literature 3 , 7 , 8 , 54 and assess real sub-national output per capita by first converting values from local currencies to US dollars to account for diverging national inflationary tendencies and then account for US inflation using a US deflator. Alternatively, one might first account for national inflation and then convert between currencies. Supplementary Fig. 12 demonstrates that our conclusions are consistent when accounting for price changes in the reversed order, although the magnitude of estimated damages varies. See the documentation of the DOSE dataset for further discussion of these choices. Conversions between currencies are conducted using exchange rates from the FRED database of the Federal Reserve Bank of St. Louis 55 and the national deflators from the World Bank 56 .

Future socio-economic data

Baseline gridded gross domestic product (GDP) and population data for the period 2015–2100 are taken from the middle-of-the-road scenario SSP2 (ref.  15 ). Population data have been downscaled to a half-degree grid by the ISIMIP following the methodologies of refs.  57 , 58 , which we then aggregate to the sub-national level of our economic data using the spatial aggregation procedure described below. Because current methodologies for downscaling the GDP of the SSPs use downscaled population to do so, per-capita estimates of GDP with a realistic distribution at the sub-national level are not readily available for the SSPs. We therefore use national-level GDP per capita (GDPpc) projections for all sub-national regions of a given country, assuming homogeneity within countries in terms of baseline GDPpc. Here we use projections that have been updated to account for the impact of the COVID-19 pandemic on the trajectory of future income, while remaining consistent with the long-term development of the SSPs 59 . The choice of baseline SSP alters the magnitude of projected climate damages in monetary terms, but when assessed in terms of percentage change from the baseline, the choice of socio-economic scenario is inconsequential. Gridded SSP population data and national-level GDPpc data are publicly available from the ISIMIP database. Sub-national estimates as used in this study are available in the code and data replication files.

Climate variables

Following recent literature 3 , 7 , 8 , we calculate an array of climate variables for which substantial impacts on macroeconomic output have been identified empirically, supported by further evidence at the micro level for plausible underlying mechanisms. See refs.  7 , 8 for an extensive motivation for the use of these particular climate variables and for detailed empirical tests on the nature and robustness of their effects on economic output. To summarize, these studies have found evidence for independent impacts on economic growth rates from annual average temperature, daily temperature variability, total annual precipitation, the annual number of wet days and extreme daily rainfall. Assessments of daily temperature variability were motivated by evidence of impacts on agricultural output and human health, as well as macroeconomic literature on the impacts of volatility on growth when manifest in different dimensions, such as government spending, exchange rates and even output itself 7 . Assessments of precipitation impacts were motivated by evidence of impacts on agricultural productivity, metropolitan labour outcomes and conflict, as well as damages caused by flash flooding 8 . See Extended Data Table 1 for detailed references to empirical studies of these physical mechanisms. Marked impacts of daily temperature variability, total annual precipitation, the number of wet days and extreme daily rainfall on macroeconomic output were identified robustly across different climate datasets, spatial aggregation schemes, specifications of regional time trends and error-clustering approaches. They were also found to be robust to the consideration of temperature extremes 7 , 8 . Furthermore, these climate variables were identified as having independent effects on economic output 7 , 8 , which we further explain here using Monte Carlo simulations to demonstrate the robustness of the results to concerns of imperfect multicollinearity between climate variables (Supplementary Methods Section  2 ), as well as by using information criteria (Supplementary Table 1 ) to demonstrate that including several lagged climate variables provides a preferable trade-off between optimally describing the data and limiting the possibility of overfitting.

We calculate these variables from the distribution of daily, d , temperature, T x , d , and precipitation, P x , d , at the grid-cell, x , level for both the historical and future climate data. As well as annual mean temperature, \({\bar{T}}_{x,y}\) , and annual total precipitation, P x , y , we calculate annual, y , measures of daily temperature variability, \({\widetilde{T}}_{x,y}\) :

the number of wet days, Pwd x , y :

and extreme daily rainfall:

in which T x , d , m , y is the grid-cell-specific daily temperature in month m and year y , \({\bar{T}}_{x,m,{y}}\) is the year and grid-cell-specific monthly, m , mean temperature, D m and D y the number of days in a given month m or year y , respectively, H the Heaviside step function, 1 mm the threshold used to define wet days and P 99.9 x is the 99.9th percentile of historical (1979–2019) daily precipitation at the grid-cell level. Units of the climate measures are degrees Celsius for annual mean temperature and daily temperature variability, millimetres for total annual precipitation and extreme daily precipitation, and simply the number of days for the annual number of wet days.

We also calculated weighted standard deviations of monthly rainfall totals as also used in ref.  8 but do not include them in our projections as we find that, when accounting for delayed effects, their effect becomes statistically indistinct and is better captured by changes in total annual rainfall.

Spatial aggregation

We aggregate grid-cell-level historical and future climate measures, as well as grid-cell-level future GDPpc and population, to the level of the first administrative unit below national level of the GADM database, using an area-weighting algorithm that estimates the portion of each grid cell falling within an administrative boundary. We use this as our baseline specification following previous findings that the effect of area or population weighting at the sub-national level is negligible 7 , 8 .

Empirical model specification: fixed-effects distributed lag models

Following a wide range of climate econometric literature 16 , 60 , we use panel regression models with a selection of fixed effects and time trends to isolate plausibly exogenous variation with which to maximize confidence in a causal interpretation of the effects of climate on economic growth rates. The use of region fixed effects, μ r , accounts for unobserved time-invariant differences between regions, such as prevailing climatic norms and growth rates owing to historical and geopolitical factors. The use of yearly fixed effects, η y , accounts for regionally invariant annual shocks to the global climate or economy such as the El Niño–Southern Oscillation or global recessions. In our baseline specification, we also include region-specific linear time trends, k r y , to exclude the possibility of spurious correlations resulting from common slow-moving trends in climate and growth.

The persistence of climate impacts on economic growth rates is a key determinant of the long-term magnitude of damages. Methods for inferring the extent of persistence in impacts on growth rates have typically used lagged climate variables to evaluate the presence of delayed effects or catch-up dynamics 2 , 18 . For example, consider starting from a model in which a climate condition, C r , y , (for example, annual mean temperature) affects the growth rate, Δlgrp r , y (the first difference of the logarithm of gross regional product) of region r in year y :

which we refer to as a ‘pure growth effects’ model in the main text. Typically, further lags are included,

and the cumulative effect of all lagged terms is evaluated to assess the extent to which climate impacts on growth rates persist. Following ref.  18 , in the case that,

the implication is that impacts on the growth rate persist up to NL years after the initial shock (possibly to a weaker or a stronger extent), whereas if

then the initial impact on the growth rate is recovered after NL years and the effect is only one on the level of output. However, we note that such approaches are limited by the fact that, when including an insufficient number of lags to detect a recovery of the growth rates, one may find equation ( 6 ) to be satisfied and incorrectly assume that a change in climatic conditions affects the growth rate indefinitely. In practice, given a limited record of historical data, including too few lags to confidently conclude in an infinitely persistent impact on the growth rate is likely, particularly over the long timescales over which future climate damages are often projected 2 , 24 . To avoid this issue, we instead begin our analysis with a model for which the level of output, lgrp r , y , depends on the level of a climate variable, C r , y :

Given the non-stationarity of the level of output, we follow the literature 19 and estimate such an equation in first-differenced form as,

which we refer to as a model of ‘pure level effects’ in the main text. This model constitutes a baseline specification in which a permanent change in the climate variable produces an instantaneous impact on the growth rate and a permanent effect only on the level of output. By including lagged variables in this specification,

we are able to test whether the impacts on the growth rate persist any further than instantaneously by evaluating whether α L  > 0 are statistically significantly different from zero. Even though this framework is also limited by the possibility of including too few lags, the choice of a baseline model specification in which impacts on the growth rate do not persist means that, in the case of including too few lags, the framework reverts to the baseline specification of level effects. As such, this framework is conservative with respect to the persistence of impacts and the magnitude of future damages. It naturally avoids assumptions of infinite persistence and we are able to interpret any persistence that we identify with equation ( 9 ) as a lower bound on the extent of climate impact persistence on growth rates. See the main text for further discussion of this specification choice, in particular about its conservative nature compared with previous literature estimates, such as refs.  2 , 18 .

We allow the response to climatic changes to vary across regions, using interactions of the climate variables with historical average (1979–2019) climatic conditions reflecting heterogenous effects identified in previous work 7 , 8 . Following this previous work, the moderating variables of these interaction terms constitute the historical average of either the variable itself or of the seasonal temperature difference, \({\hat{T}}_{r}\) , or annual mean temperature, \({\bar{T}}_{r}\) , in the case of daily temperature variability 7 and extreme daily rainfall, respectively 8 .

The resulting regression equation with N and M lagged variables, respectively, reads:

in which Δlgrp r , y is the annual, regional GRPpc growth rate, measured as the first difference of the logarithm of real GRPpc, following previous work 2 , 3 , 7 , 8 , 18 , 19 . Fixed-effects regressions were run using the fixest package in R (ref.  61 ).

Estimates of the coefficients of interest α i , L are shown in Extended Data Fig. 1 for N  =  M  = 10 lags and for our preferred choice of the number of lags in Supplementary Figs. 1 – 3 . In Extended Data Fig. 1 , errors are shown clustered at the regional level, but for the construction of damage projections, we block-bootstrap the regressions by region 1,000 times to provide a range of parameter estimates with which to sample the projection uncertainty (following refs.  2 , 31 ).

Spatial-lag model

In Supplementary Fig. 14 , we present the results from a spatial-lag model that explores the potential for climate impacts to ‘spill over’ into spatially neighbouring regions. We measure the distance between centroids of each pair of sub-national regions and construct spatial lags that take the average of the first-differenced climate variables and their interaction terms over neighbouring regions that are at distances of 0–500, 500–1,000, 1,000–1,500 and 1,500–2000 km (spatial lags, ‘SL’, 1 to 4). For simplicity, we then assess a spatial-lag model without temporal lags to assess spatial spillovers of contemporaneous climate impacts. This model takes the form:

in which SL indicates the spatial lag of each climate variable and interaction term. In Supplementary Fig. 14 , we plot the cumulative marginal effect of each climate variable at different baseline climate conditions by summing the coefficients for each climate variable and interaction term, for example, for average temperature impacts as:

These cumulative marginal effects can be regarded as the overall spatially dependent impact to an individual region given a one-unit shock to a climate variable in that region and all neighbouring regions at a given value of the moderating variable of the interaction term.

Constructing projections of economic damage from future climate change

We construct projections of future climate damages by applying the coefficients estimated in equation ( 10 ) and shown in Supplementary Tables 2 – 4 (when including only lags with statistically significant effects in specifications that limit overfitting; see Supplementary Methods Section  1 ) to projections of future climate change from the CMIP-6 models. Year-on-year changes in each primary climate variable of interest are calculated to reflect the year-to-year variations used in the empirical models. 30-year moving averages of the moderating variables of the interaction terms are calculated to reflect the long-term average of climatic conditions that were used for the moderating variables in the empirical models. By using moving averages in the projections, we account for the changing vulnerability to climate shocks based on the evolving long-term conditions (Supplementary Figs. 10 and 11 show that the results are robust to the precise choice of the window of this moving average). Although these climate variables are not differenced, the fact that the bias-adjusted climate models reproduce observed climatological patterns across regions for these moderating variables very accurately (Supplementary Table 6 ) with limited spread across models (<3%) precludes the possibility that any considerable bias or uncertainty is introduced by this methodological choice. However, we impose caps on these moderating variables at the 95th percentile at which they were observed in the historical data to prevent extrapolation of the marginal effects outside the range in which the regressions were estimated. This is a conservative choice that limits the magnitude of our damage projections.

Time series of primary climate variables and moderating climate variables are then combined with estimates of the empirical model parameters to evaluate the regression coefficients in equation ( 10 ), producing a time series of annual GRPpc growth-rate reductions for a given emission scenario, climate model and set of empirical model parameters. The resulting time series of growth-rate impacts reflects those occurring owing to future climate change. By contrast, a future scenario with no climate change would be one in which climate variables do not change (other than with random year-to-year fluctuations) and hence the time-averaged evaluation of equation ( 10 ) would be zero. Our approach therefore implicitly compares the future climate-change scenario to this no-climate-change baseline scenario.

The time series of growth-rate impacts owing to future climate change in region r and year y , δ r , y , are then added to the future baseline growth rates, π r , y (in log-diff form), obtained from the SSP2 scenario to yield trajectories of damaged GRPpc growth rates, ρ r , y . These trajectories are aggregated over time to estimate the future trajectory of GRPpc with future climate impacts:

in which GRPpc r , y =2020 is the initial log level of GRPpc. We begin damage estimates in 2020 to reflect the damages occurring since the end of the period for which we estimate the empirical models (1979–2019) and to match the timing of mitigation-cost estimates from most IAMs (see below).

For each emission scenario, this procedure is repeated 1,000 times while randomly sampling from the selection of climate models, the selection of empirical models with different numbers of lags (shown in Supplementary Figs. 1 – 3 and Supplementary Tables 2 – 4 ) and bootstrapped estimates of the regression parameters. The result is an ensemble of future GRPpc trajectories that reflect uncertainty from both physical climate change and the structural and sampling uncertainty of the empirical models.

Estimates of mitigation costs

We obtain IPCC estimates of the aggregate costs of emission mitigation from the AR6 Scenario Explorer and Database hosted by IIASA 23 . Specifically, we search the AR6 Scenarios Database World v1.1 for IAMs that provided estimates of global GDP and population under both a SSP2 baseline and a SSP2-RCP2.6 scenario to maintain consistency with the socio-economic and emission scenarios of the climate damage projections. We find five IAMs that provide data for these scenarios, namely, MESSAGE-GLOBIOM 1.0, REMIND-MAgPIE 1.5, AIM/GCE 2.0, GCAM 4.2 and WITCH-GLOBIOM 3.1. Of these five IAMs, we use the results only from the first three that passed the IPCC vetting procedure for reproducing historical emission and climate trajectories. We then estimate global mitigation costs as the percentage difference in global per capita GDP between the SSP2 baseline and the SSP2-RCP2.6 emission scenario. In the case of one of these IAMs, estimates of mitigation costs begin in 2020, whereas in the case of two others, mitigation costs begin in 2010. The mitigation cost estimates before 2020 in these two IAMs are mostly negligible, and our choice to begin comparison with damage estimates in 2020 is conservative with respect to the relative weight of climate damages compared with mitigation costs for these two IAMs.

Data availability

Data on economic production and ERA-5 climate data are publicly available at https://doi.org/10.5281/zenodo.4681306 (ref. 62 ) and https://www.ecmwf.int/en/forecasts/datasets/reanalysis-datasets/era5 , respectively. Data on mitigation costs are publicly available at https://data.ene.iiasa.ac.at/ar6/#/downloads . Processed climate and economic data, as well as all other necessary data for reproduction of the results, are available at the public repository https://doi.org/10.5281/zenodo.10562951  (ref. 63 ).

Code availability

All code necessary for reproduction of the results is available at the public repository https://doi.org/10.5281/zenodo.10562951  (ref. 63 ).

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Acknowledgements

We gratefully acknowledge financing from the Volkswagen Foundation and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the Government of the Federal Republic of Germany and Federal Ministry for Economic Cooperation and Development (BMZ).

Open access funding provided by Potsdam-Institut für Klimafolgenforschung (PIK) e.V.

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Extended data figures and tables

Extended data fig. 1 constraining the persistence of historical climate impacts on economic growth rates..

The results of a panel-based fixed-effects distributed lag model for the effects of annual mean temperature ( a ), daily temperature variability ( b ), total annual precipitation ( c ), the number of wet days ( d ) and extreme daily precipitation ( e ) on sub-national economic growth rates. Point estimates show the effects of a 1 °C or one standard deviation increase (for temperature and precipitation variables, respectively) at the lower quartile, median and upper quartile of the relevant moderating variable (green, orange and purple, respectively) at different lagged periods after the initial shock (note that these are not cumulative effects). Climate variables are used in their first-differenced form (see main text for discussion) and the moderating climate variables are the annual mean temperature, seasonal temperature difference, total annual precipitation, number of wet days and annual mean temperature, respectively, in panels a – e (see Methods for further discussion). Error bars show the 95% confidence intervals having clustered standard errors by region. The within-region R 2 , Bayesian and Akaike information criteria for the model are shown at the top of the figure. This figure shows results with ten lags for each variable to demonstrate the observed levels of persistence, but our preferred specifications remove later lags based on the statistical significance of terms shown above and the information criteria shown in Extended Data Fig. 2 . The resulting models without later lags are shown in Supplementary Figs. 1 – 3 .

Extended Data Fig. 2 Incremental lag-selection procedure using information criteria and within-region R 2 .

Starting from a panel-based fixed-effects distributed lag model estimating the effects of climate on economic growth using the real historical data (as in equation ( 4 )) with ten lags for all climate variables (as shown in Extended Data Fig. 1 ), lags are incrementally removed for one climate variable at a time. The resulting Bayesian and Akaike information criteria are shown in a – e and f – j , respectively, and the within-region R 2 and number of observations in k – o and p – t , respectively. Different rows show the results when removing lags from different climate variables, ordered from top to bottom as annual mean temperature, daily temperature variability, total annual precipitation, the number of wet days and extreme annual precipitation. Information criteria show minima at approximately four lags for precipitation variables and ten to eight for temperature variables, indicating that including these numbers of lags does not lead to overfitting. See Supplementary Table 1 for an assessment using information criteria to determine whether including further climate variables causes overfitting.

Extended Data Fig. 3 Damages in our preferred specification that provides a robust lower bound on the persistence of climate impacts on economic growth versus damages in specifications of pure growth or pure level effects.

Estimates of future damages as shown in Fig. 1 but under the emission scenario RCP8.5 for three separate empirical specifications: in orange our preferred specification, which provides an empirical lower bound on the persistence of climate impacts on economic growth rates while avoiding assumptions of infinite persistence (see main text for further discussion); in purple a specification of ‘pure growth effects’ in which the first difference of climate variables is not taken and no lagged climate variables are included (the baseline specification of ref.  2 ); and in pink a specification of ‘pure level effects’ in which the first difference of climate variables is taken but no lagged terms are included.

Extended Data Fig. 4 Climate changes in different variables as a function of historical interannual variability.

Changes in each climate variable of interest from 1979–2019 to 2035–2065 under the high-emission scenario SSP5-RCP8.5, expressed as a percentage of the historical variability of each measure. Historical variability is estimated as the standard deviation of each detrended climate variable over the period 1979–2019 during which the empirical models were identified (detrending is appropriate because of the inclusion of region-specific linear time trends in the empirical models). See Supplementary Fig. 13 for changes expressed in standard units. Data on national administrative boundaries are obtained from the GADM database version 3.6 and are freely available for academic use ( https://gadm.org/ ).

Extended Data Fig. 5 Contribution of different climate variables to overall committed damages.

a , Climate damages in 2049 when using empirical models that account for all climate variables, changes in annual mean temperature only or changes in both annual mean temperature and one other climate variable (daily temperature variability, total annual precipitation, the number of wet days and extreme daily precipitation, respectively). b , The cumulative marginal effects of an increase in annual mean temperature of 1 °C, at different baseline temperatures, estimated from empirical models including all climate variables or annual mean temperature only. Estimates and uncertainty bars represent the median and 95% confidence intervals obtained from 1,000 block-bootstrap resamples from each of three different empirical models using eight, nine or ten lags of temperature terms.

Extended Data Fig. 6 The difference in committed damages between the upper and lower quartiles of countries when ranked by GDP and cumulative historical emissions.

Quartiles are defined using a population weighting, as are the average committed damages across each quartile group. The violin plots indicate the distribution of differences between quartiles across the two extreme emission scenarios (RCP2.6 and RCP8.5) and the uncertainty sampling procedure outlined in Methods , which accounts for uncertainty arising from the choice of lags in the empirical models, uncertainty in the empirical model parameter estimates, as well as the climate model projections. Bars indicate the median, as well as the 10th and 90th percentiles and upper and lower sixths of the distribution reflecting the very likely and likely ranges following the likelihood classification adopted by the IPCC.

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Kotz, M., Levermann, A. & Wenz, L. The economic commitment of climate change. Nature 628 , 551–557 (2024). https://doi.org/10.1038/s41586-024-07219-0

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Received : 25 January 2023

Accepted : 21 February 2024

Published : 17 April 2024

Issue Date : 18 April 2024

DOI : https://doi.org/10.1038/s41586-024-07219-0

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Main article content, management control systems and strategy: trends, gaps and opportunities for future research, asmamaw getie, padakanti laxmikantham, abebaw kassie.

The relationship between management control systems and strategy is widely researched with varied conceptualization of the relationship and diverse range of theories, methods, and contexts. This paper is an analytical review of literature aimed at documenting an understanding of the relationship between management control systems and strategies to comprehend existing knowledge, identify gaps, and sketch future research directions. Articles were located using keywords from the Scopus database and Google Scholar search engine for the period from 1997 to 2022. The review was conducted by classifying studies in the research context, theory, research approach with its paradigm, and understanding of the relationship between management control system and strategy. After classification, the contributions of research to the field and the lessons learned from these studies are discussed. The findings revealed that prior research mainly focused on the business sector of the developed market context, mainly illuminated by contingency and institutional theories, philosophical divides of realism and interpretive, and most of them assume a one-directional relationship between management control systems and strategy. The findings imply that further study can enhance understanding by researching in a different context, using robust alternative theories, a critical realist view of mixed methods research, and a bidirectional conceptualization of the relationship between Management control systems and Strategy.

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West Michigan Industrial Market Report | Q1 2024

Market Remains Competitive as a Regional Contender

The West Michigan industrial market maintains its competitiveness and affordability compared to Metro Detroit and national averages. Lease rates showed a slight uptick to $6.74 per square foot, and although the vacancy rate increased 20 basis points to 2.8%, expectations are for ongoing growth and opportunities, particularly with the influx of high-tech manufacturing and R&D companies entering the market.

Key Takeaways 

• Rental rates experienced a slight increase to $6.74 per square foot NNN.
• Negative net absorption of 183,151 square feet contributed to a slight uptick in the overall vacancy rate, reaching 2.8%.
• No new supply was delivered to the market and the construction pipeline remains constrained.

Download our full report today to read more.

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Scientists Say They've Found More Evidence of Hidden Planet in Our Solar System

There may be a ninth planet after all., beyond neptune.

Scientists have long been hunting for a hidden planet out in the furthest reaches of our Solar System — and new research suggests with even more credibility that it actually is out there.

In two new papers — one published in the Astronomical Journal and another shared but not yet peer-reviewed  — the scientists responsible for popularizing the theory of a so-called " Planet 9 " argue that the hidden world may have been right under our noses this whole time.

The crux of the theory, as Caltech planetary researchers and paper coauthors Caltech's Konstantin Batygin and Mike Brown have long claimed, relies on what are known as "trans-Neptunian objects," or TNOs, that lie beyond the planet of Neptune in the outer edges of our solar system.

As  Scientific American notes in its reporting on the new research, the most important of these TNOs is Sedna, a dwarf planet  Caltech researchers discovered in 2004 that's considered the most distant object ever discovered in the Solar System. It has a very wonky orbit respective to the other things that make their way around our Sun, and as scientists began to discover more of these sorts of objects , a pattern emerged that suggested that something was affecting their elliptical axes.

Planetary Gambit

Named as a bit of a joke in the direction of planetary scientists chagrined at the de-planetification of Pluto in 2006, Planet 9 — or P9 as it's affectionately called — arose as a sort of Schrodinger's Planet, SciAm  explains. What if, as the Caltech researchers began to wonder, a planet was affecting the orbits of TNOs?

Thus far, nobody has directly observed such a planet, but in the new papers that both deal with the search for P9, Batygin and Brown maintain that after looking at more and more TNOs, the best and simplest explanation for their strange orbits is that they're caught up in the "gravitational perturbations" of a planet we haven't yet spotted.

The next steps, as the researchers behind the papers urge, is to utilize the power of the next generations of space observatories to try to find it — though as they caution, it still may be a while before P9, or whatever is affecting the TNOs, is detected.

In particular, Batygin, Brown, et al are excited about the upcoming Vera C Rubin Observatory in Chile, which is slated to be turned on in 2025 and will "be sensitive to all but the faintest and most northern predicted positions," as they predict in the Astronomical Journal .

"This upcoming phase of exploration," they wrote in the arXiv paper, "promises to provide critical insights into the mysteries of our solar system’s outer reaches."

More on our home galaxy: Ancient Structures Wound Together to Form Our Galaxy, Astronomers Find

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