Consumer research, sometimes known as market research, is a valuable business tool that can help you understand your customers and what makes them tick. Looking at the driving forces behind customer behavior, consumer psychology and purchase patterns, it uses research techniques to provide objective information that you can use to craft products, marketing programs and advertising campaigns that increase sales and profitability.
TL;DR (Too Long; Didn't Read)
The aim of consumer research is to gather information about consumers' needs and preferences so you can market to them more effectively.
What Is Consumer Research?
Consumer research is the foundation of many marketing departments. The information it provides gives you feedback on products, marketing campaigns and future products or services, for example. Marketing executives rely on the results of timely and effective consumer research to make both day-to-day and long-term strategy decisions. The results of consumer research also help to determine the most effective use of advertising and marketing dollars in a budget.
How Do You Do Customer Research?
Consumer research can be quantitative or qualitative in nature. Quantitative research produces measurable data and statistics; qualitative research may produce less structured results as it focuses on opinions and motivations. Surveys are the most common tool in a researcher's arsenal. You can target them at specific customer segments or you can take a more global focus, depending on your information needs. Other common methods include focus groups, customer interviews and customer-facing employee interviews.
What's the Scope of Product Research?
Consumer research can take different forms such as ad tracking, brand research, consumer satisfaction research, segmentation research, marketing effectiveness research, purchase patterns, consumer needs and concept testing. You can use all forms to try and draw conclusions from customer behavior – this knowledge can help improve marketing activities. For example, segmentation research could show that a specific age group makes more purchases of a particular line of products. You could then run targeted marketing campaigns to enhance sales to this age group on that basis.
How Do You Interpret the Results?
Research results can indicate potential problems, highlight necessary changes, determine new products and services, and develop advertising strategies. At times, the results of customer research can be ambiguous, and you may need additional targeted research. In higher education, research results are aimed more at understanding large patterns of consumer behavior, and the results are general in nature.
Things to Consider in Consumer Marketing
You must consider the trade-off between customer research and the economic benefit to your company. For some businesses, research is simply an ongoing dialogue with customers. Other businesses may need larger consumer research expenditures to understand customer behavior. Marketing departments can make these decisions mathematically through return on investment analysis. This shows the amount of profit returned for marketing expenditures and can help justify spending.