Market Research:
Methods, Steps, and Audience Selection

Market research is the process of gathering and analyzing information about customers, competitors, and a market to guide business decisions, as described in the Australian Government’s market research guide. Use the findings to improve products, focus marketing, and decide whom to serve.

What does market research help you understand?#

The U.S. Small Business Administration’s research guidance identifies six areas to investigate:

• Demand: whether people want the product or service.
• Market size: how many potential customers are in the relevant market.
• Economic conditions: income, employment, and other factors affecting the market.
• Location: where potential customers are and where the business can reach them.
• Market saturation: how many similar options are available.
• Pricing: what customers pay for the alternatives.

Turn these topics into questions tied to a decision. For audience selection, investigate who has the relevant need, how they address it, which alternatives they consider, and how they find information before buying. For an existing offer, investigate the reasons for choosing it or choosing something else.

A useful research result states what the evidence supports, which people it describes, and what action follows. Keep the question narrow enough to answer with the available time and resources.

Types of market research#

Business Queensland distinguishes primary from secondary research and qualitative from quantitative research. The first distinction concerns where the information comes from; the second concerns the form of the evidence.

These categories can overlap: an interview study can be primary and qualitative, while an existing industry dataset can support secondary quantitative research. Choose the combination that addresses the question.

Which market research method should you use?#

Match the method to the information needed. The following methods answer different questions, so specify the intended use before collecting data.

For an unfamiliar problem, begin with conversations that clarify the issues and language to investigate. For a question about frequency or differences between groups, plan how to obtain comparable numerical data. Combine methods when the decision requires both explanations and measurements.

How to conduct market research#

1. Define the decision and research question#

Write down the decision the research must inform: audience selection, product development, pricing, positioning, or market entry. Then identify the uncertainty that prevents that decision.

GOV.UK’s research planning guidance recommends turning unsupported assumptions into research questions and choosing activities that provide relevant evidence.

Prepare a short brief containing:

• The decision and the questions that must be answered.
• The population, category, and geography being studied.
• Existing evidence and the information still missing.
• The method, recruitment approach, budget, and deadline.
• The criteria for interpreting the findings and choosing an action.

Set the criteria before reviewing results. Specify which findings would justify proceeding, changing the offer, or gathering more evidence.

2. Review existing information#

Start with the records and published data relevant to the question. Record the publisher, measure, geography, data period, and collection method for each source. Check these details before comparing figures from different reports.

For U.S. markets, Census Business Builder provides selected demographic and economic data, interactive maps, geographic comparisons, and downloadable reports. Use it to examine the area and population being considered; investigate interest in the specific offer separately.

For Australian markets, the Australian Government’s research resource list points to official statistics and government datasets. Use the equivalent official sources for the country being studied.

Build a competitor comparison alongside this review. Record the customer groups addressed, advertised prices, included features or services, availability, and purchase conditions. Include indirect alternatives and note which information is unavailable. Treat a visible gap as a question to investigate with customers.

3. Define and recruit the people to research#

Specify who qualifies to participate. Use characteristics relevant to the decision, such as location, recent purchasing experience, category use, or access to the service. GOV.UK’s participant guidance recommends explicit recruitment criteria tied to the people and experiences being studied.

For audience discovery, seek views from current customers, competitors’ customers, and relevant nonbuyers. Record how participants were found and which important groups could not be reached.

For a survey, define the population and the way potential respondents can be contacted. AAPOR explains that a sampling frame provides the information used to contact and select respondents. A customer list covers existing customers; an open link recruits people who encounter it and choose to respond. Label findings with that recruitment context, and avoid describing either group as the whole market without a defensible basis.

4. Collect answers with neutral questions#

For interviews, ask about actual experiences. GOV.UK’s interview guidance recommends open, neutral questions and follow-ups about real examples.

Useful questions to adapt to the category include:

• What prompted the most recent purchase or search?
• Where did you look for information?
• Which alternatives did you consider?
• What mattered most when choosing between them?
• What did you pay, and what was included?
• What was difficult or unsatisfactory?
• What led you to postpone or abandon a purchase?

Ask follow-ups to establish the sequence of events and clarify ambiguous answers. Record whether each statement concerns a completed action, a remembered experience, or a future intention.

For surveys, Pew Research Center explains how wording, response options, and question order can influence answers. Ask about one concept at a time, define the period being discussed, and use language respondents understand. Provide appropriate options for people without the relevant experience.

Pretest the questionnaire with relevant respondents before distributing it. Check what they understood, whether the answer choices fit their experience, and whether any question needs clarification.

5. Analyze findings and their limits#

For qualitative evidence, separate what participants said or did from the interpretation attached to it. GOV.UK’s analysis guidance describes organizing observations into themes, developing findings, and deciding actions.

Group interview evidence around needs, alternatives, selection criteria, barriers, and information sources. Keep the underlying observations available so that each finding can be traced back to the research. Examine differences between groups and retain contradictory evidence in the decision record.

For survey results, AAPOR recommends transparent reporting and distinguishing missing responses from substantive answers. Give each percentage a clear respondent base and describe the collection method. Compare relevant groups only with the limitations of their sample sizes in view.

Keep stated purchase intentions separate from recorded transactions. List unanswered questions and missing groups alongside the findings. Use those gaps to decide whether more research is needed before committing to the action.

6. Use the evidence to choose a target audience#

A target audience is a group likely to be receptive to messaging about a particular product or service, according to NielsenIQ’s definition. Audience descriptions can include demographics, interests, and relevant behavior.

Compare candidate groups using the same decision criteria:

Choose the audience whose documented needs and circumstances align with the offer and the business’s ability to deliver it. Identify the remaining uncertainty that could change the choice.

Write the audience definition using supported characteristics: who qualifies, what need the offer addresses, where the audience can be reached, and any service constraints. Keep demographic details that help make or carry out the decision.

Finish with a concise research report containing the question, sources, participants, methods, findings, limitations, recommended action, and the next question to investigate.

Frequently asked questions#