Introduction 

The heart of any business is the customer. To aid in the growth and expansion of the company, you’re going to have to know your customers well. Similar to Market Research, Consumer Research follows a series of steps to enable better decision making. In this article, we’ll explore what Consumer Research is, and why it is important in Product Management.

  1. What is Consumer Research?
  2. Process of Consumer Research
  3. Consumer Research Model 
  4. Importance of Consumer Research

1. What is Consumer Research? 

Consumer Research is a study of inclinations, motivations, preferences, and buying behaviors of targeted customers. It also helps the marketer form appropriate Consumer Research methods and select the most suitable target market for the product. To help define Consumer Research better, let’s take an example, an energy company might need to have a better understanding as to what the consumer sentiment is towards the usage of oil and gas versus the usage of renewable energy.

According to data they receive from systematic research they’ll have to decide on whether to invest more into renewable energy or continue on their current path. Ultimately, Consumer research is important to understand the consumer sentiment and cater to their specific needs, which in turn increases profitability and proper usage of resources.

2. Process of Consumer Research 

Consumer Research can take many forms, from a structured and planned sequence of data collection to something as simple as using notes your team takes regularly.

Here we will outline some of the goals and targets necessary to carry out a successful Consumer Research analysis.

  • Define Consumer Research goals and formulate solutions: The first step to the consumer research process is to clearly define your research objectives, the purpose of your research, and to form a working hypothesis.

 Some of the things the research may be conducted to determine are: 

  1. The attitude of the customer towards a specific product,
  2. Change in taste and preferences,
  3. Profitable promotional and sales campaigns,
  4. Analysis of the poor performance of a product
  • Collection of Secondary Data: Collecting and evaluating relevant information related to the research through secondary sources, like the internal data of the company e.g. sales reports, financial reports, performance reports, etc. as well as, external data such as government publications, journals, case studies, etc. The secondary data must be evaluated for its reliability and suitability before it is used.
  • Collection of Primary Data: If the Secondary data collected is insufficient, Primary data is collected. It is collected by research organizations or businesses themselves or a third-party organization is employed to collect data on their behalf. Primary research collected helps a researcher to know:
  1. The needs and motives of a consumer,
  2. The consumers’ awareness of a product,
  3. The buying behavior of consumers.
  • Analysis of the data: When all the data has been compiled, tabulated, and organized, it is then analyzed by the researcher with the use of various statistical tools, and inference is drawn to understand the behavior and purchase pattern of the consumer.
  • Preparation of the report: When all conclusions have been drawn, a research report is prepared and presented.

It must consist of:

  1. The summary of findings,
  2. The methodology of the research,
  3. Primary and Secondary data,
  4. Any recommendations and suggestions

  After analyzing the report and successfully identifying the needs, wants, behaviors, and expectations of the clients, the strategies formulated to attract customers can be improved and businesses can then have a better understanding as to what exactly the consumer requires.

3. Consumer Research Model 

In the past, many researchers and businesses believed that consumers took decisions based on statistics, math, and then proceeded to select goods and services based on the highest consumer satisfaction at the lowest price. However, in today’s day and age, with the advances in Consumer Research, this is no longer the situation. It has been proven that customers are well aware of brands and competitors present in the market. Enhancement of the business is a key goal; hence it is beneficial to create a loyal customer base. This can be achieved through great customer service for products purchased, it can also expand the reach of the business through recommendations of the customer to their friends and family.

Consumer Research is based on two types of research methods,

Qualitative Research: To gain relevant information from respondents, this method uses open-ended questions, such as

  • Focus groups: A small group formed of 6-10 subject experts who come together to aid in the analysis of a product or service. A company asks the group their views and how they feel about a certain product. This information is then gathered and used in making refinements or bettering a product.
  • One-To-One Interviews: As the name suggests, this method involves a researcher asking open-ended questions to respondents to gather data. The interview method has been known to be a controversial form of research as it depends on the experience and expertise of the researcher, as well as how much he can evaluate with relevant questions to gain maximum information. The One-To-One interview process is a long-term and tedious method which normally takes more than one attempt to get the desired results.  
  • Text analysis:  A method used to extract information from available documents, researchers analyse and draw conclusions from these words and images. A great example of text analysis is social media. Conclusions are drawn based on customer behaviour on social media.  

               Quantitative Research: This method revolves around numbers and statistics. Any customer who purchases regularly can vouch for how consumer-centric the market has become. Businesses focus as much as they can on consumer satisfaction. Some of the tools used in quantitative research are;

  • Observational Research: In this method, the consumers are watched by researchers as they purchase a product. It aids the analyst in gaining an in-depth understanding of the relationship present between the customer and the product.
  • Surveys: Surveys are one of the most commonly used tools to get customer feedback mainly because of how much easier it is to get customers to participate in and the simple nature of them. A survey is a method of research in which the analyst interviews respondents to obtain facts, attitudes, and other pertinent data.
  • Questionnaires: Consists of several questions in a particular sequence. The questions can be open-ended, closed, or multiple choice. This is usually an inexpensive tool used in obtaining Primary Data. 

4. Importance of Consumer Research 

To help facilitate the understanding of what this article covers, here is an example of Consumer Research:

A beverage company planned to introduce a new flavored soft drink in three countries, but after conducting data analysis, they concluded that the new product would only sell well in 2 of the 3 countries due to the customers in these 2 countries having a stronger preference towards flavored soft drinks. These consumer insights aided in the understanding of where the product would fail or succeed. Resulting in saved money, effort, and resources.

When conducting in-depth consumer research, you will have a much clearer idea of the demographics that matter to your business. Building your company around factual data will positively impact your growth. By compiling accurate consumer research data, your business can avoid losing revenue, market share, and customers.

Conclusion

Interested to learn all about Product Management from the best minds in the industry? Check out our Product Management Certification. This 6-month-long program takes place online through live instructor-led sessions. It is the only program in India that offers the ‘Bring Your Own Product (BYOP)’ feature so that learners can build their product idea into a full-blown product, and go through an entire Product Development lifecycle. Not only this, but this is the only program in India with a curriculum that conforms to the 5i Framework. Post completion, learners receive a joint certification from the Indian Institute of Management, Indore, and Jigsaw Academy. 

SHARE
share

Are you ready to build your own career?