5 Minute Read

Types of market research

  • Exploratory market research is geared toward uncovering new ideas and testing assumptions.
  • Primary market research is when you use various techniques to directly collect data from a large number of participants. 
  • Secondary market research (also: “dark research) uses existing sources of information to build a more complete understanding of the topic being researched.
  • Prediction market research helps companies understand how new trends will develop, enabling them to forecast the size of the market and understand future demand for their products.

 

If you’re new to the field of competitive intelligence, it can be tough to learn all the different types of market research that exist. But before you embark upon your market research project, it’s crucial that you understand what each type is, as well as how and when you use them.

Of course, market research isn’t a language you become fluent in overnight. But today, we’re going to put you well on your way to developing that fluency with a 30,000-foot bird’s-eye view of the different types of market research you have at your disposal in your competitive intelligence toolbox. 

How this market research guide works

For each of the four types of market research discussed, we’ll explain how and when to use them, explore the insights you can gain from each type, and share the dos and don’ts you need to keep in mind.

By the time you’re done reading this, you’ll have a solid understanding of the different types of market research. You’ll know which techniques are best suited to helping you conduct your own research, and we’ll point you in the right direction to all kinds of other resources that will further your understanding.

Throughout this guide, we’ll use the example of a beer company that’s interested in launching a hard seltzer product. They are commissioning you to perform market research for this new product, and we’ll explore how you might use each type of market research in this scenario.

1. Exploratory Market Research

The majority of market research starts with exploratory research. In this type of research, researchers aim to uncover new ideas which they can explore further, and loosely test the ideas that they already hold. In this stage, there typically isn’t a lot of structure, and researchers might use small focus groups or interviews to explore their initial hypotheses. 

Consider our example of the beer company looking to launch a hard seltzer. The exploratory research phase will take the form of a few small focus groups that seek to discover whether existing customers would be interested in a seltzer, what flavors they might enjoy, when they might drink such a product, and other related issues. 

The learnings from these initial exploratory conversations will then be tested more rigorously using both primary and secondary research techniques. 

When conducting exploratory market research, remember:

  • Do go into the process with an open mindset, with a willingness to let go of assumptions that don’t pan out as expected. 
  • Do conduct research using methods like focus groups and informal interviews.
  • Don’t make conclusions based on this research alone: you need to test these ideas more rigorously.
  • Don’t create too much structure. Instead, give researchers the flexibility to explore different ideas. 

2. Primary Market Research

When you think of market research, primary research is most likely what comes to mind. With this type of market research, you use various techniques to directly collect data from a large number of participants. 

The best primary research blends quantitative and qualitative research techniques: 

  • Quantitative research collects and analyzes structured data using a range of techniques that produce raw data researchers can measure numerically.
  • Qualitative research collects and analyzes unstructured data using interviews, focus groups, and observational methods, providing contextual information around the reasons for certain findings.

 

More simply put, quantitative research tells researchers the what, and qualitative research tells them the why. 

🔎 Related: Qualitative vs. quantitative market research

For the beer company, one element of primary research could be a survey, sent to thousands of people, asking them to rate different flavor concepts, serving sizes, or brand names. They might rank these numerically (quantitative), and then be asked to explain their choices (qualitative).

When conducting primary market research, remember:

  • Do structure your research to achieve both quantitative and qualitative insights.
  • Do select a large sample of participants that’s representative of your target audience.
  • Don’t ask leading questions which could affect participant responses.
  • Don’t reveal the identity of your organization to participants – keep the research anonymous.

3. Secondary Market Research

Secondary market research––also known as desk research––uses existing sources of information to build a more complete understanding of the topic being researched. 

In practice, that means consulting a wide variety of materials, including industry reports, government databases, academic studies, financial reports, and more. It’s important to only use high-quality data sources that you can rely on. Consider working with third-party vendors with expertise in different areas. 

One of the greatest challenges of secondary market research is sourcing, organizing, and analyzing the huge volume of data required. Consider using a platform like Knowledge360Ⓡ, which has integrations with more than 50 high-quality data sources, and uses advanced Artificial Intelligence (AI) technology to discover, analyze, and highlight key secondary market research insights. 

Our beer company may well hire a market research organization to conduct detailed secondary research into the hard seltzer market. This organization will analyze the financial reports of competitors, share industry reports from sources like Mintel or IBISWorld, and present conclusions back to the beer company in a formal report. 

When conducting secondary market research, remember:

  • Do consider partnering with external research organizations if you lack in-house expertise.
  • Do use software to help you source, organize, and analyze large volumes of data – attempting to go it alone often leads to failure. 
  • Don’t use data sources which you’re unable to verify the veracity of – robust, clean data is vital in this type of market research. 
  • Don’t rely solely on secondary research: insights can be outdated, and it’s always important to use primary research conducted directly with your target audience. 

4. Prediction Market Research

The development of prediction market research techniques has been one of the most exciting recent advancements in the field of market research. Prediction market research helps companies understand how new trends will develop, enabling them to forecast the size of the market and understand future demand for their products. 

In this type of market research, participants are asked to predict how people similar to them would act in a given situation, indicate their level of confidence in their prediction, and then explain the rationale behind their choice. 

Prediction market research has been adopted by so many organizations for a couple of main reasons: it’s significantly more accurate, and it can be completed three to five times faster than traditional research. 

In our example, the beer company would use prediction market research to understand the level of market demand there would be for their new hard seltzer product. They’d be able to understand how the consumer adoption of seltzers might play out, helping them plan a perfect launch timeline. They’d even be able to use prediction market research to test different price points and advertising campaigns. 

🔎 Related: How (And Why) to Use Prediction Market Research in Your Strategic Planning

Prediction market research is a relatively new concept, so it’s important you bear these best practices in mind:

  • Do use prediction market research to understand future trends and market potential.
  • Do take a balanced approach: prediction market research should only be one component of your overall market research process.
  • Don’t try to build your own prediction market research infrastructure: work with a pre-built platform like HUUNU Futures. 
  • Don’t rely solely on the results of a prediction market: validate them with additional primary and secondary market research. 

🔎 Related: See how prediction market research is done! Book a demo.

Partner with a Team of Market Research Experts

If you’re new to the world of market research, it can be easy to get lost in the various different types of research. That’s why it’s important you have a trusted advisor you can turn to for advice. 

At Cipher, we’ve built out a wide range of market research resources to help you learn. If you want to dig deeper into the different types of market research, our Ultimate Guide to Market Research is the best place to start. If you need more in-depth support, our team of market research specialists are here to help. Book a call with them today to get started on your next market research project.