Case Study Examples Retail Marketing Definition

Consumers are no longer solely concerned just with price point. Purchase decisions are now being made with more factors at play, things such as brand differentiation, reputation, and customer-centric return policies.

But it’s hard to read a customer’s mind, and it’s also a challenge for retailers to figure out where they fit when compared with their competition.

Especially for retailers just starting out, it may feel like a lot of decisions are made on guesswork or instinct. Market research can remove much of that uncertainty, by helping you understand your industry, your target customer, your competition, and your product. And when you understand all that, your chances of success are a lot greater.

There are many agencies that you can hire to conduct market research for you, but if you’re on a budget, there are ways you can do it yourself.

What Is Market Research?

In short, market research is the information you gather about consumers’ needs and preferences. But there’s much more to it than that.

Market research helps you understand why consumers want to buy your products.

With that information, you’re able to create products that provide solutions, market to consumers effectively, and increase your chances for success.

When you conduct market research, you’ll gain an understanding of the cultural, societal, socioeconomic, geographic, and personal makeup of your target customers. You’ll understand whether there’s a demand for your product, how big that demand is, and who is generating the demand. It’ll also help you understand the competitive landscape.

There are two types of market research: primary and secondary. Let’s take a closer look at both.

Primary research

Primary market research is when you study the market directly. This is when you conduct the research yourself (more on how to do that later). Examples of primary research include focus groups, customer surveys, and your own sales data.

FURTHER READING: Ready to do your own market research? Check out our guide to hosting your own focus group.

Secondary research

Secondary market research is when you study the market through someone else’s research. You aren’t doing the research yourself — you’re leaning on data someone else has collected to inform your decisions about your products and customers.

Some examples of this include others’ reports, industry trends, and case studies.

Why Is Market Research Important?

Market research essentially serves as validation for your product idea. It also provides the insights you need to make sure people buy your product through effective marketing, smart pricing, and effective brand positioning.

Without market research, you won’t have enough data to tell you who your customers are, what they buy, why they buy it, when they buy it, and what will make them buy it from you.

Market research will tell you where and how to find your customers, and how you can present your product and your brand to them and make them convert. Part of this includes differentiating your brand. Understanding your competition can help you develop your unique selling proposition, which will help you stand out and attract customers.

How to Do Market Research

There are two ways to conduct market research: do it yourself, or hire someone else to do it for you. If you plan to go the DIY route, here’s how:

It’s typically easier to start with your secondary research. Look for research reports, case studies in your industry, and leading publications.

Primary market research requires a different approach to gathering intel. You’ll need to conduct the research yourself. There are many ways you can do this:

  • Customer surveys: These can happen via email, through feedback or survey forms on your website, or polls.
  • In-depth customer interviews: One-on-one telephone or video-chat interviews with customers.
  • Customer reviews: See what people are saying about your brand, your products, your competitors, and similar products.
  • Focus groups: Hire an agency to conduct in-depth research via focus groups.
  • Sales records: Take a look back at the customer and sales information you already have available.
  • Employees: Ask sales associates for their findings on the floor, whether it’s commonly asked questions from customers or observations in customer behavior

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For both types of market research, here are some things you’ll want to define as part of your process:

  • Industry information
    • Statistics and trends on business conditions in your vertical
  • Consumer insights
    • Statistics and trends on consumer behavior, both as it relates to your industry and as it relates to overall purchasing behavior in retail
    • Demographics information that will allow you to segment your audience into targeted groups and market to them better
  • Where your business stands
    • Determine existing customer demand
    • Where your customers are succeeding, and where the gaps exist

Tools to Conduct Your Market Research

There are countless tools to use to conduct market research. Here are just a few:

Nielsen: Nielsen has research reports and studies on consumer behavior across more than 100 countries.

Pew Research Center: Pew also conducts scientific studies, many of which provide insight into consumer behavior and trends.

D&B Hoovers: You can purchase reports from D&B, a company which has researched 85 million corporations, 100 million people, and 1,000 industries. Expect to find insights ranging from consumer behavior to competitive analysis and industry trends.

MarketResearch.com: Much like D&B, MarketResearch.com has tons of independently conducts research and analysis reports you can purchase. Retailers can start by checking out their list of consumer goods reports.

U.S. Census Bureau: The U.S. Census Bureau provides a holistic look at the American economy. You can use it in your market research to understand the state of your industry both in the States and internationally (they have a whole section on retail trade).

Facebook Audience Insights: If you have a business Facebook page, you can use the audience insights tool to understand who your followers are. You’ll learn things like their age, income, lifestyle category (as determined by Facebook), and even spending behavior. The location insights are especially helpful for brick and mortars.

Survey tools: There are many free tools you can use to conduct customer surveys, such as Google Forms and SurveyMonkey. These are helpful if you already have an engaged audience, such as an active email list or social following.

If you need to get the survey out to some more people, you can pay for a service like Google Surveys, which also allows you to add targeting parameters to get more specific and relevant insights.

U.S. Small Business Administration: The SBA offers resources for American-based retailers to understand your target market and current economic conditions. Their free SizeUp tool is a great way to see how you stack up against your competition.

SEO tools: There are tons of SEO tools — both free and paid — that retailers can use to conduct market research. Google Trends can help you determine when topics are popular (and when you should run your promo or launch your new product), and Moz has a suite of robust tools. Read about more helpful SEO tools for retailers.

Bloomberry: Similar to how you would use some of the SEO tools, Bloomberry can help you learn more about what consumers are saying about your industry. Specifically, you can find out questions they’re asking about your products or your competitors’ products. Bloomberry aggregates search results from various forum sites, like Quora and Reddit, to identify trending topics and questions.

Know Your Customer: With this Shopify app, you’ll learn about who’s on your website, where they are, and when they’re browsing.

Customer.guru: This is another Shopify app, and it will provide information about customer satisfaction. It also integrates with Facebook Ads and Google Display Ads, so you can get a holistic view of where your brand stands in the eyes of the customer.

Bureau of Labor: The Bureau of Labor has an abundance of resources to help you learn about employment in the U.S. They provide employment rates and statistics on related topics like “occupational employment and wages, labor demand and turnover, and the dynamic state of the labor market.” If your market is in other countries,

Office for National Statistics: U.K.-based retailers can use the numerous resources here to learn about your industry, the economy, employment information, and consumer demographics.

FedStats: This is another great U.S.-based resource to find statistics and trends that cover a variety of topics and findings from trusted sources.

Consumer Price Index: Simply put, “The Consumer Price Indexes (CPI) program produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services.” This is a great way to learn how to set prices for your products.

Consumer Spending: The U.S. Bureau of Economics has personal consumption expenditures (PCE) resources that you can use to learn about how to price your products, similar to the CPI.

American FactFinder: The U.S. Census Bureau has a whole library of facts that are especially helpful in researching the demographics of your target customers.

Consumer Product Safety Commission: This U.S. agency reports injury statistics based on product category and by hazard category. It helps estimate how many injuries caused by products will be treated in the emergency room each year. You can use this information in a variety of ways, from determining your USP as a safe product provider to understanding how to communicate the safety of your product to customers.

Market Research Never Ends

The key to successfully doing and using market research is to remember that it never ends. You should always conduct market research. The market changes, and you need to be on top of it to stay ahead of the curve.

About the Author

Alexandra Sheehan is a freelance writer/editor and content specialist. She’s worked with retailers ranging from Fortune 100 companies to Etsy shop owners, and is always looking for innovative ways to help her clients.

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The Killer – by Roopam

Last week we started a case study from the online retail industry to learn more about marketing analytics (Read Part 1). Before we continue with the same case, let me share a few factors that enhance the quality of analysis for marketing or customer analytics. The obvious factors, of course, are the analysts’ inclination & expertise toward business problem solving, and love for data, maths, and numbers. Moreover, to understand customers better, analysts also need to have the keenness to understand human behavior. The primary branches of science that enhance our understanding of why humans behave the way they do are psychology, sociology, and neuroscience.

Psychology is the study of an individual’s behavior; sociology, on the other hand, studies the social behavior of humans. Neuroscience has been the game changer in the last few decades for our understanding of human brain and behavior. The advanced imaging techniques like functional magnetic resonance imaging (fMRI) are elucidating the inaccessible areas of the brain and its functions. These are still early days but we are living in exciting times where we are learning so many cool things about human behavior. Let me explore a bit more about human behavior by analyzing the most deviant behavior of all, by analyzing…

Neuroscience of Murder

Murder is a horrible crime, but the most heinous murderers are serial killers or psychopaths. These outliers (thankfully!) in our society are characterized as offenders for the killing of two or more victims in separate events. The worst serial killers like Ted Bundy are responsible killing more than 30 victims, all unknown to them, for no specific reason. Psychopaths often display behavior such as lack of empathy, poor self-control,excessive risk taking, superficial charm, and grandiosity. Let us peek inside the brain to understand the epicenter of these characteristics i.e. lack of empathy, poor self-control. We will come back a little later to other behaviors of psychopaths like excessive risk taking, superficial charm, and grandiosity. In this process, we will learn more about human behavior.

Titanic the Movie

Remember the last scene of the movie Titanic, when Leonardo DiCaprio’s character (Jack Dawson) was about to die in the chilling water of the Atlantic ocean. In this scene, he was urging his girlfriend Rose (Kate Winslet) to go on living a happy and long life. This made some people bawl in the movie-theater, and the remaining audience felt deeply touched by this unfortunate event on the screen. This tendency of human beings to associate and feel other people’s pain and joy is called empathy. Marketers are of course aware of this fact and use this effectively in advertising to make you establish a deeper emotional connect with their product.

Psychopaths or serial killers do not feel empathy. This is the reason it becomes easy for them to torture people to death. The lack of empathy in psychopaths is because of a neurological disorder in their brains. Mirror neurons, part of an intricate and detailed circuitry of  brain neural networks, connect the emotion centers of the brain with sensory organs like eyes etc. Mirror neuron circuitry in psychopaths is found to be impaired hence the emotional centers of their brain don’t get ignited enough for them to feel another person’s pain.

A crucial part of the human brain responsible for our emotions is the frontal lobe (OK I know I am using quite a few jargon here, but this part of the brain is really cool. I will tell you more about the frontal lobe in some later article.). The frontal lobe is also responsible for self-awareness and self-control. For psychopaths the frontal lobe shows much less activity than a normal brain, hence they display the lack of self-control. Marketers and advertisers often test everyone’s self-control through their appealing messages and visual techniques.  We have all bought useless products at various points of our lives while succumbing to lack of self-control. It is interesting how neuroscience is linking our behavior to activities in our brain.

Coming back to serial killers, in analytics and modeling terms, the key determining variables / factors for their aberrant activities are linked to both nature (genetics, brain activities etc.) and nurture (upbringing, parenting, the behavior of society etc.). “Genetics loads the gun and the environment pulls the trigger.” This statement by Francis Collins, director NIH, sums up the role of genetics and society for creating killers.

Human behavior is so complicated as it is an amalgamation of so many factors / variables. It is essential for good marketing analysts to be a keen observer of human behavior. The job of marketing analyst is not just to crunch numbers but to gain a deeper understanding of customer behavior. A good marketing analyst reveals not just how customers behave but also why customers behave the way they do. Keeping this in mind, let’s move back to the marketing analytic case study we started last week:

Marketing Analytics Case Study Example

After the CMO left your office (read the earlier part), you asked your analysts to pull out a few numbers from the company’s data warehouse for the cost of campaigns and profit. Using the data you figured out that the variable cost of running a campaign for each solicitation is around $2.3. Additionally, every customer that uses a marketing catalog is generating around $56 in profit. You did a quick back of the envelope calculation to estimate the profit from the campaigns

 

You could gauge the problem in the above quick and dirty campaign P&L. This bottom line leaves no margin for the CMO to cover the operating cost of campaigns and running his team. He needs to do better on both customer response / conversion rates for the campaigns and revenue generated by customers through the campaigns. This helps you define the immediate objectives i.e

Objective 1: Improve the conversion rate of the campaigns i.e. number of customer buying products from the marketing product catalog

Objective 2: Improve the revenue generated through the converted customers

The above objectives will involve the creation of a couple of models. The first model will estimate probabilities for customers to respond to the campaign catalog by purchasing products from it. The second model will estimate the dollar value each customer will generate if they respond to the campaign. As you could probably notice the first problem is a classification problem. The second problem will involve estimating a continuous variable i.e. dollar value. After the above two objectives are satisfied the net profit should be much better than $5200 generated by last year’s campaigns effort. In the next articles, we will explore more about the process to accomplish the above objectives.

Sign-off Note

We have seen that psychopaths or sociopaths have the following behavioral patterns i.e. lack of empathy, poor self-control,excessive risk taking, superficial charm, and grandiosity. However, I must also point out that not everyone with the above tendency will become a serial killer. There are several examples of people with similar brain structure as psychopaths working in socially benevolent manners. Of course, a good nurture (parenting, support of society etc.) have shaped these humans to behave for the good of the society. There are also examples of people with similar tendencies becoming bankers and politicians, not necessarily working for a good cause. Quite a few investment bankers during the financial crisis of 2007 were also displaying psychopathic behavior of lack of empathy, poor self-control,excessive risk taking, superficial charm, and grandiosity. Phew! human behavior is so complicated. We still have a way to go before we have some decent understanding of human nature. We have made a good start with our scientific investigation but I must say we are nowhere close. We know a lot more about the universe and other physical phenomena than about our own nature and behavior.  See you soon with the next article.

Posted in Marketing Analytics, Retail Case Study Example | Tags: Business Analytics, Marketing Analytics, Predictive Analytics, Retail Analytics, Roopam Upadhyay |

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