You’ve probably read hundreds of articles about market research. Over the past several years, another form of research has also eased into the discussion: user research.
Product managers need both, but at different points and for different purposes over a product’s development and lifecycle. So what is the difference between market research and user research?
Market Research Determines Unmet Consumer Needs
In its purest form, market research is used to determine whether there will be demand for a product, and if so, what potential consumers want from it. Market research helps with the following:
- New product development
- Upgrading an existing product
- Introducing an existing product to new markets
The Small Business Administration (SBA) defines market research as a way for businesses–particularly their product managers and product development teams–to get a realistic snapshot of a potential market. Data can come from trade groups, industry news sites, and government agencies (like the SBA). Careful, detailed research can save product managers a lot of headaches because it often identifies potential risks. Some of these can be overcome through smart design, while others can be part of the decision to shelve an idea. Market research can also identify new opportunities and real gaps waiting to be filled.
Most market researchers look at broad populations, at least in the beginning. Later, they can narrow research to better-defined groups who are more likely to be interested in the product.
Product managers can help market researchers by giving them parameters to base their research upon. They can participate in the research, too, but it may be better for them to hold back because they may be too invested in a product or its potential. For the sake of getting unbiased research, it may be better to have an educated researcher–but not the product manager–involved at this stage.
User Research Studies Actual and Potential Customers
User research often overlaps with market research, particularly for products that compete with others already on the market or are undergoing an upgrade or redesign. It generally looks at narrower populations than those in market research.
Usability.gov describes user research as a way to gain insights into user behaviors, needs, and motivations. It’s used when market research has already found that yes, there is a market out there. User research provides answers to how that market is doing and where it can be improved.
Product managers’ time is better spent in user research than market research. They know how the product is intended to be used and should be open to new information that can lead to improvements. They often identify with users, or at least understand their motivations, which helps them notice and capture more subtle clues about how a product is used and how it can be enhanced.
What’s More Important: Market or User Research?
Smart product managers understand that both user and market research are key for a product’s success.
- Market research provides a scope, a “big picture” of who will use a product. It can also help identify additional customer segments for products going through an upgrade.
- User research helps product managers and their teams see where a product’s appeal can be strengthened. For new products, it’s most useful in the prototype stage and in the after-market stage.
Market research is absolutely essential for new products. Otherwise, the product is set up for failure. A product idea has to be researched before anyone will invest in it. There has to be an unanswered need out there for it. This is why the industry and competition review side of market research is so important.
Market research can also find new customers for redesigned products. Or the same product can be expanded into other markets if market research bears this out.
Case Study: Expanding a Small Industry With Market and User Research
The market for gluten-free food was once pretty sparse; limited to people with Celiac disease, who are unable to process gluten. But because gluten-free diets bar products that also have high carbohydrates, food manufacturers spotted this (no doubt through market research) as another entryway into the very lucrative diet food market. They were right: sales for gluten-free foods rose 34% each year from 2009 – 2014, ending close to the $1 billion mark, according to market research from the firm Packaged Facts and as reported in Food Navigator.
How did food manufacturers grow this market? They conducted customer research (user research) to find out what people new to the gluten-free diet missed most.
The market has become more segmented and lucrative in over the past couple of years. Packaged Facts reports:
- Pizza Hut introduced a gluten-free pizza in early 2015, working closely with the Gluten Intolerance Group, an industry group that certifies gluten-free products.
- 70% of 1,300 chefs with the American Culinary Federation named gluten-free a Hot Trend and listed it as a top (#5) culinary theme in 2015.
- 15% of chain restaurants now offer gluten-free menu items, a seven-fold increase over five years.
This is the kind of user research that fine-tunes new markets and products.
Market and User Research Should Be Ongoing
Both market and user research should be ongoing throughout a product’s lifecycle, Elisabeth Mischel writes in MediaPost.
Mischel, who is vice president of the digital marketing platform Insights, urges product development teams to keep a close eye on what the competition is doing. She also urges them to look at new products that come to market and how customers react to them, a kind of distance version of user research. New products from competitors should be evaluated to see advantages that can be addressed in upcoming product redesigns.
In truth, market and user research overlap a lot as a product ages on the market. Christian Rohrer, writing about user research methods for the Nielsen Norman Group blog, offers a useful model that demonstrates different approaches to user research that also serves as a way to understand where it differs and overlaps with market research. The further “out” you take user research and look at qualitative (why and how to fix) and quantitative (how many and how much) data, the closer you get to market research. Bring it in closer, and there’s more of a mix of user research.
How Market and User Research are Conducted
Market research includes literature review, often conducted through the Internet. As we discussed above, this should include trade and industry journals that may be on the Internet but with limited views to non-members. It can also be helpful to interview experts on the user community who may or may not be part of the group.
Market research isn’t asking too many questions as much as it’s seeking information it can use to justify investing in or passing up on a product’s development. For most companies, it’s about the potential to make money.
User research is often done through focus groups where users/customers, or potential ones, engage with the product or prototype. They offer observations and recommendations. It relies more on individuals being willing to speak with researchers. Since product managers are focused on usability, their input here is valuable to both the company and customers.
But focus groups aren’t easy to arrange and can be expensive. Jakob Nielsen suggests using other methods to “approximate” focus groups, such as email surveys and assessing comments on websites and in newsgroups. He doesn’t necessarily suggest replacing focus groups, but perhaps balancing them against these less expensive methods. While focus groups, generally considered the gold standard in user research, let product managers and teams observe the product in use, they also depend on people reporting accurate information on their experience with it. People don’t always say what they do, Nielsen observes.
It might be useful to think about how people present their products on Shark Tank. Those who have done solid market research and have insights into user research are the ones who will get at least a couple of offers. No market research? You’re dead to Mr. Wonderful and probably Mark Cuban. Poor user research? You’ve lost Mark Herjavec and Barbara Corcoran. Damond John and Lori Greiner rarely jump in alone.