How to do a proper market research

Market research is hard. You need to analyze the customer and their needs, get the size or structure of the market right, monitor your competition and employ a host of quantitative and qualitative techniques in order to come up with something commercially useful for you or your company. Thankfully, it's a very old activity that has been tried by millions of people before you so we've written down some basic "market research 101" tips that can help you get your research off the ground and even sweeten the deal by throwing in some free on-trade / HoReCa data useful in your endeavour.

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GET FREE DATA FOR ON-TRADE / HORECA MARKET RESEARCH. NO REGISTRATION NEEDED.

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The 6 key market research methods

There are more than 5 ways to approach market research and every time the process will be influenced by your unique circumstances, but there are 5 general approaches tested by time and accepted by most people.

Digital Data: This one is the newest addition to the batch that wasn't available in many sectors until recently (especially in the on-trade / HoReCa channel). The key here is to have reliable and cross-checked data from many sources. It might be tempting to look just at e. g. Google reviews when looking for the best on-trade outlet (sometimes called a point of sale) to sell your wares, but this way you won't get an unbiased picture as the results will be skewed, there might be duplicities etc. This is exactly what SharpGrid does, providing unbiased and hightly actionable data for on-trade / HoReCa market research with Market Meter and Outlet Census.

Surveys: Classic form-based survey of your customers can take place in person, over a phone, online through an interactive form or via e-mail. Each comes with pros and cons, some of which you can probably guess by yourself (hint: nobody enjoys unwanted phone calls - switching to an online form is less intrusive, less costly, but people also tend to lie more to anonymous forms than to a person) so choose the one best suited for your market research needs.

Personal Interviews: If you need to go deeper or want more subjective answers, go for a personal interviews with your (potential) customers. Thanks to a more lengthy and personal process, you might uncover topics you'd otherwise miss with other market research approaches or get inspired by unexpected answers.

Focus Groups: This one is a bit complicated as you're gonna need a moderator and a some people willing to participate in a group session. The moderator usually asks questions and tries to spark a debate among the participants. Focus Groups tend to take place in a neutral, controlled invironment. They might be captured on camera or take place in a room surrounded by one-way mirrors so the observants can draw conslusions in real time. Focus Groups are very hard to master as you need a really skilled moderator to balance more and less dominant members and at the same time to minimize his/her own influence over the group.

Observation: With more focus on privacy these days, observing unaware customers is becoming less and less prevalent. The goal here is to get rid of bias (e. g. people tend to lie in forms and focus groups to give better impressions of themselves) and really see how people interact with your product when they think no one is watching to get a better sense of their shopping patterns and ways they actually use the product. The easiest thing you can do here is to go to a store where your product is being sold, lean on the wall and just look with your own eyes.

Field Trials: Mostly widely used when testing new products. With this market research approach, you will be selecting a few cooperating stores, websites or other sales channels and placing the product there to see how the visitors react. The prerequisite is to have a good business relationship with the channel owner so they are willing to go through with it as their own reputation is at risk should the product fail to meet their customers' expectations or even anger them in some way.

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User personas in market research

Some researchers prefer to use user personas to make the outcome easy to understand for their colleagues or executives. Market research persona is a "dummy ideal customer" based on several psychological and demographic traits with information about their background, their goals, what they hate and love, how do they live, what are their (shopping) habits, possible objections to buying or using your products etc. The aim is to produce actionable results like:

• "Persona 2 really loves XYZ, let's remodel our product to match that."
• "Persona 5 hates this thing about his/her life. Let's create a product to help with that."
• "Persona 1 doesn't go to shopping malls so let's sell our product exclusively online."

And anything else you can think of that might help your business. Personas don't have to be complicated. In fact, the simpler the better as you're never gonna capture every little detail. Personas should are really just a tool to help you navigate your business, marketing or product development, but they should always be taken with a grain of salt. Don't think that by defining personas you've gotten to know your customers perfectly.

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What is the market research trying to achieve?

The outcome of a proper market research should be answers to a questions like: 

• Who are my customers?
• What do they want and how can I provide that?
• What is the best way to get my products to them?
• What objections they might have to buying or using my products?
• Who are my competitors and how can I overcome them? Click here for an introduction to a Competitor analysis
• What are mine and my competitors' strengths and weaknesses? 
• What pricing strategies or route-to-market approaches do they use?
• What are my competitive advantages and how can I utilize them to get more sales or improve my brand image?

Etc.

To get sound answers to these questions, you need data. Precise, reliable and well-interpreted data specifically. Those can be obtained in several different ways. In the past, the go-to techniques would have been focus groups, questionnaires, interviews and similar approaches. Today you have much better tools at your disposal. 

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Market research in the on-trade / HoReCa / Hospitality sector

The on-trade (or HoReCa / hospitality) sector has many peculiarities when it comes to market research. One of the most important ones is to know exactly what potential each on-trade outlet (or point of sale) holds for your company. 

To properly assess specific outlets, you need to know things like their revenue potential, performance compared to their nearby competitors or the reason why they are popular amongst visitors so you can allocate your products and resources accordingly. In other words, you need to target outlets that will bring you the most in terms of commercial returns.

For example, with SharpGrid Outlet Census you can find a nightclub with high popularity rankings known for its active night entertainment and cocktails that will be an ideal location for spirits producers but not so much for beer brewers who will instead look for highly frequented pubs with tap beer and high volume & value numbers to maximize their ROI.

Then there is the higher-level market research which serves as a basis for creating more general strategies and market tactics. For that you’re going to need a helicopter view of the market, its geographical or outlet type segments, product categories, prices and many other factors to properly allocate your sales team’s time capacities or avoid losing money due to hidden costs of the on-trade market.

For example, with SharpGrid Market Meter you can clearly see in which regions or outlet categories (like hotels, cafés, pubs etc.) are your brands or products performing OK and where you are falling behind your competitors. You can also track price changes of other market players and react to them immediately to outsmart them.

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How to make market research easier

To properly conduct market research you need time, analytical skills and the right tools. It’s hard, no doubt about that. If you’ve ever wondered how to be more effective, save time and come up with better results, contact us about our 2 products Outlet Census and Market Meter designed specifically with your job in mind.