consumer research

What is Consumer Research?

Consumer research is a part of market research in which inclination, motivation and purchase behavior of the targeted customers are identified. Consumer research helps businesses or organizations understand customer psychology and create detailed purchasing behavior profiles.

It uses research techniques to provide systematic information about what customers need. Using this information brands can make changes in their products and services, making them more customer-centric thereby increasing customer satisfaction. This will in turn help to boost business.

An organization that has in-depth understanding about customer decision-making process, is most likely to design a product, put a certain price tag to it, establish distribution centers and promote a product based on consumer research insights such that it produces increased consumer interest and purchases.

Consumer Research Objectives

When a brand is developing a new product, consumer research is conducted to understand what consumers want or need in a product, what attributes are missing and what are they looking for?

Consumer research is conducted to improve brand equity. A brand needs to know what consumers think when buying a product or service offered by a brand. Consumer insights are essential to determine brand positioning among consumers.

Consumer research is conducted to boost sales. The objective of consumer research is to look into various territories of consumer psychology and understand their buying pattern, what kind of packaging they like and other similar attributes that help brands to sell their products and services better.

Consumer Research Model

According to a study conducted, till a decade ago, researchers thought differently about the consumer psychology, where little or no emphasis was put on emotions, mood or the situation that could influence a customer’s buying decision.

Many believed marketing was applied economics. Consumers always took decisions based on statistics and math and evaluated goods and services rationally and then selected items from those brands that gave them highest customer satisfaction at the lowest cost.

However, this is no longer the situation. Consumers are very well aware of brands and its competitors. A loyal customer is the one who would not only return to repeatedly purchase from a brand but also, recommend his/her family and friends to buy from the same brand even if the prices are slightly higher but provides an exceptional customer service for products purchased or services offered.

Here is where Net Promoter Score (NPS) helps brands identify brand loyalty and customer satisfaction with their consumers. Net Promoter Score survey uses a single question that is sent to customers to identify their brand loyalty and level of customer satisfaction. Response to this question is measured on a scale between 0-10 and based on this consumers can be identified as:

Detractors: Who have given a score between 0-6.

Passives: Who have given a score between 7-8.

Promoters: Who have given a score between 9-10.

Consumer market research is based on two types of research method:

1. Qualitative Consumer Research

Qualitative research, is descriptive in nature, It’s a method that uses open ended questions, to gain meaningful insights from respondents and heavily relies on the following market research methods:

Focus Groups: Focus groups as the name suggests is a small group of highly validated subject experts who come together to analyze a product or service. Focus group comprises of 6-10 respondents. A moderator is assigned to focus group, who helps facilitate discussions among the members to draw meaningful insights

One-to-one Interview: This is a more conversational method, where the researcher asks open ended questions to collect data from the respondents. This method heavily depends on the expertise of researcher. How much the researcher is able to probe with relevant questions to get maximum insights. This is a time-consuming method and can take more than one attempt to gain the desired insights.

Content/ Text Analysis: Text analysis is a qualitative research method where researchers analyze the social life by decoding words and images from the documents available. Researchers analyze the context in which the images are used and draw conclusions from them. Social media is an example of text analysis. In the last decade or so, inferences are drawn based on consumer behavior on social media.

Learn More: How to conduct Qualitative Research  

2.Quantitative Consumer Research

In the age of technology and information, meaningful data is more precious than platinum. Billion dollar companies have risen and fallen on how well they have been able to collect and analyze data, to draw validated insights.

Qualitative research is all about numbers and statistics. An evolved consumer who purchases regularly can vouch for how customer-centric businesses have become today. It’s all about customer satisfaction, to gain loyal customers. With just one questions companies are able to collect data, that has the power to make or break a company. Net Promoter Score question, “On a scale from 0-10 how likely are you to recommend our brand to your family or friends?”

How organic word-of-mouth is influencing consumer behavior and how they need to spend less on advertising and invest their time and resources to make sure they provide an exceptional customer service.

Online surveys, questionnaires, and polls are the preferred data collection tools. Data that is obtained from consumers is then statistically, mathematically and numerically evaluated to understand consumer preference.

Learn more: How to carry out Quantitative Research

Consumer Research Process

consumer research process

The process of consumer research started as an extension to the process of market research. Like the findings of market research is used to improve decision-making capacity of an organization or business, similar is with consumer research.

Consumer research process can be broken down into following steps:

  1. Develop research objectives: The first step to consumer research process is to clearly define research objective, purpose of research, why is the research being conducted, to understand what? A clear statement of purpose can help emphasize on the purpose.
  1. Collect Secondary data: Collect secondary data first, it helps in understanding if research has been conducted earlier and if there are any pieces of evidence related to the subject matter that can be used by an organization to make informed decisions regarding consumers.
  1. Primary Research: In primary research organizations or businesses collect their own data or employ a third party to collect data on their behalf. This research makes use of various data collection methods (qualitative and quantitative) that helps researchers collect data first hand.
  1. Collect and analyze data: Data is collected and analyzed and inference is drawn to understand consumer behavior and purchase pattern.
  1. Prepare report: Finally, a report is prepared of all the findings by analyzing data collected so that organizations are able to make informed decisions and think of all probabilities related to consumer behavior. By putting the study into practice, organizations can become customer-centric and manufacture products or render services that will help them achieve excellent customer satisfaction.

After Consumer Research Process

Once you have been able to successfully carry out the consumer research process, investigate and break paradigms. What consumers need should be a part of a part of market research and should be carried out regularly. Consumer research provides more in-depth information about the needs, wants, expectations and behavior of clients.  

By identifying this information successfully, strategies that are used to attract consumers can be made better and businesses can make a profit by knowing what consumers want exactly. It is also important to understand and know thoroughly the buying behavior of consumers to know their attitude towards brands and products.

The identification of consumer needs, as well as their preferences, allows a business to adapt to new business and develop a detailed marketing plan that will surely work. The following pointers can help. Completing this process will help you:

  • Attract more customers  
  • Set the best price for your products  
  • Create the right marketing message  
  • Increase the quantity that satisfies the demand of its clients  
  • Increase the frequency of visits of their clients  
  • Increase your sales  
  • Reduce costs  
  • Refine your approach to customer service.  

Consumer Research Methods

Consumers are the reason for a business to run and flourish. Gathering enough information about consumers is never going to hurt any business, in fact, it will only add up to the information a business would need to associate with its consumers and manufacture products that will help their business refine and grow.

Following are consumer research methods that ensure you are in tandem with the consumers and understand their needs:

The studies of customer satisfaction

One can determine the degree of satisfaction of consumers in relation to the quality of products through:

  • Informal methods such as conversations with staff about products and services according to the dashboards.   
  • Past and present questionnaires/surveys that consumers might have filled that identify their needs.   

The investigation of the consumer decision process

It is very interesting to know the consumer’s needs, what motivates them to buy, and how is the decision-making process carried out, though:

  • Deploying relevant surveys and receiving responses from a target audience.

Proof of concept

Businesses can test how well accepted their marketing ideas are by:

  • The use of surveys to find out if current or potential consumer see your products as a rational and useful benefit.  
  • Conducting personal interviews or focus group sessions with clients to understand how they respond to the marketing ideas.

Knowing your market position

You can find out how your current and potential consumers see your products, and how they compare it with your competitors by:

  • Sales figures talk louder than any other aspect, once you get to know the comparison in the sales figures it is easy to understand your market position within the market segment.
  • Attitudes of consumers while making a purchase also helps in understanding the market hold.      

Branding tests and user experience

You can determine how your customers feel with their brands and product names by:

  • The use of focus groups and surveys designed to assess emotional responses to your products and brands.  
  • The participation of researchers to study the performance of their brand in the market through existing and available brand research.   

Price changes

You can investigate how your customers accept or not the price changes by using formulas that measure the revenue – multiplying the number of items you sold, by the price of each item. These tests allow you to calculate if your total income increases or decreases after making the price changes by:

  • Calculation of changes in the quantities of products demanded by their customers, together with changes in the price of the product.   
  • Measure the impact of the price on the demand of the product according to the needs of the client.   

Social media monitoring

Another way to measure feedback and your customer service is by controlling your commitment to social media and feedback. Social networks (especially Facebook) are becoming a common element of the commercialization of many businesses and are increasingly used by their customers to provide information on customer needs, service experiences, share and file complaints. It can also be used to run surveys and test concepts. If handled well, it can be one of the most powerful research tools of the client. I also recommend reading: How to conduct a market research through social networks.

Customer Research Questions

Asking the right question is the most important part of conducting a research. Moreover, if it’s consumer research, questions should be asked in a manner to gather maximum insights from consumers. Here are some consumer research questions for your next research:

  • Who in your household takes purchasing decisions?
  • Where do you go looking for ______________ (product)?
  • How long does it take you to make a buying decision?
  • How far are you willing to travel to buy ___________(product)?
  • What features do you look for when you purchase ____________ (product)?
  • What motivates you to buy_____________ (product)?

See more consumer research survey questions:

Customer satisfaction surveys

Voice of customer surveys

Product surveys

Service evaluation surveys

Importance of Consumer Research

Launching a product or offering new services can be quite an exciting time for a brand. However, there are a lot of aspects that need to be taken into consideration while a band has something new to offer to consumers.

Here is where consumer research plays a pivotal role. The importance of consumer research cannot be emphasized more. Following points summarizes the importance of consumer research:

  1. To understand market readiness: However good a product or service may be, consumers have to be ready to accept it. Creating a product requires investments which in return expect ROI from product or service purchases. However, if a market is mature enough to accept this utility, it has a low chance of succeeding by tapping into market potential. Therefore, before launching a product or service, organizations need to conduct consumer research, to understand if people are ready to spend on the utility it provides.
  1. Identify target consumers: By conducting consumer research, brands and organizations can understand their target market based on geographic segmentation and know who exactly is interested in buying their products. According to the data or feedback received from consumer, research brands can even customize their marketing and branding approach to better appeal to the specific consumer segment.
  1. Product/Service updates through feedback: Conducting consumer research, provides valuable feedback from consumers about attributes and features of products and services. This feedback enables organizations to understand consumer perception and provide a more suitable solution based on actual market needs which helps them tweak their offering to perfection.

Learn More: 250 + FREE survey templates to use for your research

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